In the Matter Of: Mary Anne Zurn, Debtor-Appellant. Aldo E. Botti, Creditors-Appellees

290 F.3d 861, 2002 U.S. App. LEXIS 9163, 2002 WL 987911
CourtCourt of Appeals for the Seventh Circuit
DecidedMay 15, 2002
Docket01-2930
StatusPublished
Cited by14 cases

This text of 290 F.3d 861 (In the Matter Of: Mary Anne Zurn, Debtor-Appellant. Aldo E. Botti, Creditors-Appellees) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In the Matter Of: Mary Anne Zurn, Debtor-Appellant. Aldo E. Botti, Creditors-Appellees, 290 F.3d 861, 2002 U.S. App. LEXIS 9163, 2002 WL 987911 (7th Cir. 2002).

Opinions

EASTERBROOK, Circuit Judge.

“Only a belief that bankruptcy is forever could produce a case such as this.” That sentiment, which opens the opinion in Pettibone Corp. v. Easley, 935 F.2d 120, 121 [862]*862(7th Cir.1991), is equally applicable to this long-running dispute.

Aldo Botti and his former client, Mary Anne Zurn, have spent the last decade debating the quality of legal work Botti provided to Zurn during divorce litigation, and torts that Zurn believes Botti to have committed during the course of his representation. Zurn’s suit in Illinois was met by a request for sanctions; Botti also argued in a countersuit that Zurn still owed money for legal fees. When the dust settled in the state’s trial court, Botti emerged with a judgment of about $180,000. To avoid paying, Zurn filed a federal bankruptcy proceeding. It soon became clear that' the bankruptcy court would not allow Zurn to retain the stakes without accruing interest during an appeal in state court, nor would the bankruptcy court take over the appellate function and decide the matter itself. After the bankruptcy court formally decided to abstain from any role in the ongoing state litigation, Zurn filed a plan promising full payment to all creditors, including Botti. She paid the sums he claimed as a creditor, her plan was approved, and the federal proceedings were dismissed in April 1996.

Meanwhile the litigation continued in Illinois. In March 1998 the state’s appellate court reversed the judgments to the extent that they had required Zurn to pay Botti. With respect to Zurn’s claims against Bot-ti, the appellate court decided three in Botti’s favor but held that Zurn’s claim for battery had been dismissed improperly. At this point Botti should have returned the money Zurn had paid to satisfy the judgments. Buzz Barton & Associates, Inc. v. Giannone, 108 Ill.2d 373, 381-82, 91 Ill.Dec. 636, 483 N.E.2d 1271, 1275 (1985). See also Richardson v. Penfold, 900 F.2d 116, 118 (7th Cir.1990); Palmer v. Chicago, 806 F.2d 1316, 1319 (7th Cir.1986). Yet he did not do so, though it is hard to see how he could be entitled to keep the money after the reversal. The appellate decision left each side with unresolved legal claims against the other, but neither took timely steps to resume the litigation in the trial court. Illinois requires a litigant that wants to continue the proceedings after an appeal to act within a reasonable period after the appellate mandate (which issued in November 1998). See Ill. S. Ct. R. 369(c); Illinois v. Eidel, 319 Ill.App. 496, 253 Ill.Dec. 613, 745 N.E.2d 736 (2001). Botti has never attempted to reinstate his suit seeking legal fees. Apparently Botti believes that, because he holds the money paid under the reversed judgment, it is no longer necessary to establish a legal entitlement to these funds.

For her part, Zurn allowed 13 months to pass and then moved to reopen, not the state litigation, but the bankruptcy proceeding. She asked the bankruptcy judge to order Botti to return the money that had been paid under the plan. A few weeks later (in January 2000) she tried to reinstate the litigation in the state’s trial court. Both the bankruptcy judge and the state judge said no. The state judge concluded that Zurn’s request was untimely, and after initially granting some of the relief Zurn had requested the bankruptcy judge changed his mind. The details of events in the bankruptcy court do not matter. Ultimately, Bankruptcy Judge Wed-off concluded that Zurn had not supplied adequate cause to reopen the proceedings under 11 U.S.C. § 350(b), that it was not possible to “enforce the plan” (as Zurn had requested in a separate motion) because the plan had been carried out to the letter, and that state rather than federal tribunals offer the right forums for final resolution of the disputes between Zurn and Botti.

Zurn did not appeal within the state system, but she did ask a district judge to review the bankruptcy judge’s decision. [863]*863The district judge agreed with the bankruptcy judge’s bottom line but gave different reasons. He concluded, first, that reopening is barred by the Rooker-Feldman doctrine, see Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), and, second, that Zurn has no remaining state remedies and thus is not entitled to restitution. Bankruptcy courts implement entitlements under state law, see Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979), and if as a matter of Illinois law Zurn has lost her right to restitution then there is no claim to vindicate in bankruptcy. Dismayed by this turn of events — the bankruptcy judge sent her claim to state court, while the district judge wiped it out — Zurn has appealed to us.

The district court characterized its decision as one affirming the bankruptcy judge’s decision to abstain rather than interfere with state litigation. If that is the right understanding, then 28 U.S.C. § 1334(d) blocks appellate review. But the district judge’s use of language was imprecise. The bankruptcy judge discussed abstention (particularly the consequences of the 1995 decision to abstain), but his judgment in these proceedings was not one of abstention. Instead the bankruptcy judge denied Zurn’s motion to enforce the plan, a decision that is not abstention of any flavor. Indeed, it would have been possible to abstain in 2000 only after first reopening the bankruptcy. Judge Wedoff rescinded his initial act of reopening; the district court affirmed. That is incompatible with abstention. Moreover, by the time this dispute returned to the district judge, all proceedings in state court were over. There was nothing to abstain in favor of — nor was there any pending bankruptcy case that would proceed while the state courts handled the matters from which the federal court had abstained. The questions on the table in 2000 concerned the consequences of decisions the state courts already had rendered. Because the federal court was not asked in 2000 to interfere with or take over a pending state suit in order to value a claim in bankruptcy, it also could not “abstain” within the meaning of § 1334(c). What the court actually did was decline to reopen a bankruptcy proceeding under § 350(b) and hold that the plan did not need “enforcement” because no one had departed from its provisions. Because that decision ended the litigation in the district court, we have jurisdiction under 28 U.S.C. § 158(d).

Neither of the district judge’s substantive reasons is correct. The

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290 F.3d 861, 2002 U.S. App. LEXIS 9163, 2002 WL 987911, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-the-matter-of-mary-anne-zurn-debtor-appellant-aldo-e-botti-ca7-2002.