Security Pacific Bank Washington v. Steinberg (In re Westwood Shake & Shingle, Inc.)

971 F.2d 387, 92 Cal. Daily Op. Serv. 6601, 92 Daily Journal DAR 10564, 1992 U.S. App. LEXIS 17356
CourtCourt of Appeals for the Ninth Circuit
DecidedJuly 30, 1992
DocketNo. 91-35174
StatusPublished
Cited by14 cases

This text of 971 F.2d 387 (Security Pacific Bank Washington v. Steinberg (In re Westwood Shake & Shingle, Inc.)) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Security Pacific Bank Washington v. Steinberg (In re Westwood Shake & Shingle, Inc.), 971 F.2d 387, 92 Cal. Daily Op. Serv. 6601, 92 Daily Journal DAR 10564, 1992 U.S. App. LEXIS 17356 (9th Cir. 1992).

Opinion

ALARCON, Circuit Judge:

Security Pacific Bank Washington (“Security Pacific”) appeals from the district court’s affirmance of the bankruptcy court’s order appointing the law firm of Sirianni & Youtz (“Sirianni”) as special counsel to the trustee of debtor Westwood Shake & Shingle, Inc. (“Westwood”) in the state court litigation instituted by Security Pacific against Westwood and its principals, Steven Yonich and Pamela Yonich.

Security Pacific seeks reversal on the ground that the record discloses a conflict of interest between Sirianni’s duty to the trustee and Westwood’s principals. We dismiss because we lack jurisdiction to consider an appeal from the district court’s affirmance of an interlocutory order of the bankruptcy court.

I.

PERTINENT FACTS

On January 5, 1990, the bankruptcy court entered an order, pursuant to 11 U.S.C. § 327, approving the appointment of Sirianni as special counsel to represent Westwood’s trustee in an action pending in state court. In the state court proceedings, Security Pacific is seeking damages from Westwood and its principals on their guarantee of a note. Westwood intends to file a counterclaim against Security Pacific seeking damages for bad faith and wrongful termination of credit. The Yoniches intend to file personal injury counterclaims seeking damages for slander.

Security Pacific objected to the appointment of Sirianni by the bankruptcy court to represent Westwood in the state court litigation because Sirianni already represented Steven and Pamela Yonich in that litigation. Security Pacific argued that the Yo-niches and the trustee have adverse positions before the bankruptcy court. The trustee requested the appointment of the Sirianni firm because of its expertise in lender liability litigation and the mutuality of interest of Westwood and its principals in recovering damages from Security Pacific in the state court proceedings. The district court determined, however, that if set[389]*389tlement negotiations were initiated in the state court proceeding, the conflict would become “overwhelming,” and the parties would be required to obtain separate counsel.

Security Pacific timely appealed to this court. We requested the parties to brief the question whether this court has jurisdiction to review the order appointing counsel under 28 U.S.C. § 158(d).

II.

DISCUSSION

Security Pacific contends that we have jurisdiction over this appeal on two theories. First, Security Pacific argues that a more flexible standard of finality is used for bankruptcy appeals under 28 U.S.C. § 158(d) than the standard used for non-bankruptcy appeals under 28 U.S.C. § 1291. Alternatively, Security Pacific argues that the collateral order doctrine of Cohen v. Beneficial Life should apply to permit review of this appeal.

A. Jurisdiction Over Appeals From Bankruptcy Court Orders Appointing Counsel

This court has jurisdiction over final orders of the district courts reviewing bankruptcy court decisions. 28 U.S.C. § 158(d); United States v. Technical Knockout Graphics (In re Technical Knockout Graphics), 833 F.2d 797, 800 (9th Cir.1987). The United States Court of Appeals do not have discretion to hear interlocutory appeals under section 158(d). See Mason v. Integrity Ins. Co. (In re Mason), 709 F.2d 1313, 1315 & n. 1 (9th Cir.1983) (holding that interlocutory orders are not appealable to the court of appeals under 28 U.S.C. § 1293, the predecessor of 28 U.S.C. § 158(d)); Suburban Bank v. Riggsby (Matter of Riggsby), 745 F.2d 1153, 1154-55 (7th Cir.1984) (concluding that section 158(d) had substantially the same provisions and effect as former section 1293 and therefore a district court’s decision on an interlocutory appeal from a bankruptcy court was not final and therefore not appealable to the courts of appeal). To determine whether a district court order is final, we must look to the nature of the underlying bankruptcy court order. Foster Secs. Inc. v. Sandoz (In Re Delta Servs. Indus.), 782 F.2d 1267, 1268 (5th Cir.1986). If the underlying bankruptcy court order is interlocutory, so is the district court order affirming or reversing it. See Belo Broadcasting v. Rubin (In re Rubin), 693 F.2d 73, 76 (9th Cir.1982) (district court decisions on interlocutory appeals from bankruptcy court are interlocutory orders under 28 U.S.C. § 1293); Adams v. First Fin. Dev. Corp. (Matter of First Fin. Dev. Corp.), 960 F.2d 23, 25 (5th Cir.1992) (district court orders reviewing interlocutory orders from bankruptcy court are not final orders under 28 U.S.C. § 158(d)).

We must reject Security Pacific’s argument that a more flexible, “pragmatic” standard of finality for appeals employed under section 158(d) permits us to exercise jurisdiction over an appeal from a district court’s decision reviewing a bankruptcy court’s appointment of counsel. Where the underlying bankruptcy court order involves the appointment or disqualification of counsel, courts have uniformly found that such orders are interlocutory even in the more flexible bankruptcy context. Delta Servs. Indus., 782 F.2d at 1272 (discerning “no basis for granting greater appealability to orders denying motions to disqualify counsel in bankruptcy cases than ... in ordinary civil cases”); Intercontinental Enters., Inc. v. Keller (In re Blinder Robinson & Co.), 132 B.R. 759, 763 (D.Colo.1991) (disqualification of counsel order not final order); Deutsche Credit Corp. v. Rosania (In re Nucor, Inc.), 118 B.R. 786, 788 (D.Colo.1990) (same). We are persuaded by the reasoning set forth in these decisions and hold that we lack jurisdiction under 28 U.S.C. § 158(d) to review a district court’s affirmance of a bankruptcy court’s interlocutory order concerning the appointment of counsel.

B. Collateral Order Doctrine

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971 F.2d 387, 92 Cal. Daily Op. Serv. 6601, 92 Daily Journal DAR 10564, 1992 U.S. App. LEXIS 17356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/security-pacific-bank-washington-v-steinberg-in-re-westwood-shake-ca9-1992.