Salem, Maurice J. v. Neshewat, Michael

465 F.3d 767, 71 Fed. R. Serv. 518, 2006 U.S. App. LEXIS 25288, 2006 WL 2864049
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 10, 2006
Docket05-1914
StatusPublished
Cited by151 cases

This text of 465 F.3d 767 (Salem, Maurice J. v. Neshewat, Michael) 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
Salem, Maurice J. v. Neshewat, Michael, 465 F.3d 767, 71 Fed. R. Serv. 518, 2006 U.S. App. LEXIS 25288, 2006 WL 2864049 (7th Cir. 2006).

Opinion

WOOD, Circuit Judge.

This longstanding family dispute about the ownership of a rental house has spawned years of litigation in both this circuit and the Second, occupying innumerable hours of bankruptcy, district, and circuit court time. At this point, the question is simple: did the bankruptcy court for the Northern District of Illinois err when it dismissed the petition of Maurice J. Salem, the debtor, or when it made various rulings in conjunction with the case? Defending the court’s judgment is Michael Neshewat, the creditor and brother of Salem. We conclude, as did the district court before us, that the bankruptcy court’s actions were correct, and we therefore affirm. 1

I

Briefly put, the current bankruptcy proceeding arose out of litigation between the brothers that took place in the state courts of New York. In 1999, Neshewat obtained a state-court judgment in the amount of $166,884.86 against his brother; that judgment was recorded against a rental house Salem owned located at 7 Gellatly Drive, Wappinger Falls, New York. Salem responded with a Chapter 7 bankruptcy petition in New York in 2000, the adjudication of which involved two appeals to the Southern District of New York and the Court of Appeals for the Second Circuit. One outcome of those proceedings was a holding that Neshewat’s judgment against Salem is nondischargeable. See In re Salem, 290 B.R. 479, 485-86 (S.D.N.Y.2003), aff'd 94 Fed.Appx. 24 (2d Cir.2004) (unpublished).

Following the termination of his Chapter 7 petition in New York, Salem, now identifying himself as an Illinois resident, filed a Chapter 13 petition in the Northern District of Illinois. The plan he offered was a “zero percent plan” 1 that made no provision for payments to unsecured creditors and treated Neshewat’s judgment as unsecured. Neshewat objected, claiming that Salem had sufficient equity in the Gellatly *771 Drive house to permit Neshewat’s judgment to attach to it, thereby making the claim secured but unaccounted for in the plan. Within the Chapter 13 petition proceedings, Salem filed a motion to “convert” his Chapter 7 petition from New York into his Illinois Chapter 13 case, which the bankruptcy court denied. Then, in a separate decision months later, the bankruptcy court found that the house had sufficient value to make Neshewat’s claim secured. It therefore rejected the Chapter 13 plan for failing to account for the secured claim and dismissed the case. We explain more about the progression of this case below, as needed.

II

Before proceeding to the merits, we must address a question of appellate jurisdiction noticed by the panel. See Doctor’s Assocs., Inc. v. Duree, 375 F.3d 618, 621-22 (7th Cir.2004); Wingerter v. Chester Quarry Co., 185 F.3d 657, 660 (7th Cir.1998). This court has jurisdiction over appeals from final judgments of the district courts. 28 U.S.C. § 1291. In the bankruptcy context, “[t]he general rule is that a court of appeals has jurisdiction over a bankruptcy appeal only if the bankruptcy court’s original order and the district court’s order reviewing the bankruptcy court’s original order are both final.” In re Rimsat, Ltd., 212 F.3d 1039, 1044 (7th Cir.2000). A judgment affirming a bankruptcy court’s decision to deny confirmation of a Chapter 13 plan and dismiss a case is typically a final order of the bankruptcy court, as there are no proceedings left to occur. However, procedural oddities within this case might lead one to think that this appeal comes too late. We therefore explain here why we have concluded that the judgment issued March 30, 2005, by the district court is final.

We begin with the New York cases; we take judicial notice of these dockets and opinions. See, e.g., Radaszewski ex rel. Radaszewski v. Maram, 383 F.3d 599, 600 (7th Cir.2004) (taking judicial notice of administrative findings); Menominee Indian Tribe of Wis. v. Thompson, 161 F.3d 449, 456 (7th Cir.1998) (“Judicial notice of historical documents, documents contained in the public record, and reports of administrative bodies is proper.”)

On April 12, 1999, Salem filed an action under 42 U.S.C. §§ 1983 and 1985 against several defendants, including Neshewat; Neshewat’s attorney, Paul Goldstein; and named public officials. Salem’s basic contention was that these individuals abused the judicial process in the litigation resolved by the default judgment that led in turn to the lien on the Gellatly Drive house. Salem separately filed a Chapter 7 petition in the Southern District of New York on February 23, 2000. On May 2, 2000, Salem filed an adversary proceeding complaint as part of his bankruptcy case, seeking injunctive relief and damages. See Salem v. Paroli, 260 B.R. 246, 252 (S.D.N.Y.2001). The bankruptcy court dismissed the adversary complaint. After Salem appealed to the district court, the court consolidated the bankruptcy case with the civil rights suit. It affirmed the bankruptcy court’s decision, id. at 256-57, and dismissed the civil rights claim under the Rooker-Feldman doctrine, which divests federal district and appellate courts of subject matter jurisdiction over a case if the result of the case could be the reversal or modification of a state court judgment, id. at 253-55. Salem appealed, and the Second Circuit affirmed. 79 Fed.Appx. 455 (2d Cir.2003) (unpublished). Meanwhile, the Chapter 7 petition continued, and the bankruptcy court held on August 8, 2002, that Neshewat’s default judgment was not dischargeable. The district court affirmed on March 5, 2003, see 290 B.R. at 485-86, and the Second Circuit affirmed on April 8, 2004, see 94 Fed.Appx. 24. The *772 mandate issued May 4, 2004, and was received by the district court on May 11, 2004. According to the bankruptcy court’s docket, that court took no action after March 11, 2003, when the case closed, and March 13, 2003, when a final decree issued.

While Salem’s second appeal was pending before the Second Circuit, his wife Clodia filed a Chapter 7 petition in the Northern District of Illinois, which was docketed at No. 03-25681 and assigned to Bankruptcy Judge Sonderby. Salem, who is an attorney, represented his wife. The dispute in that ease also related to whether the property on Gellatly Drive would be sold. In the adjudication of Clodia’s petition, the bankruptcy court ordered the property auctioned off.

In the meantime, in November 2002, Neshewat sued Salem in the Supreme Court of New York seeking to set aside as fraudulent Salem’s conveyance of a half-interest in the Gellatly Drive house and a car to his wife.

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465 F.3d 767, 71 Fed. R. Serv. 518, 2006 U.S. App. LEXIS 25288, 2006 WL 2864049, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salem-maurice-j-v-neshewat-michael-ca7-2006.