Baker v. Lyon
MEMORANDUM OPINION & ORDER: (1) GRANTING Appellee's 7 Motion to Lift the Order Holding Appeal in Abeyance & to Dismiss; (2) DENYING Appellant's 9 Motion for a Continuance of the Abeyance & Suspension of Deadlines; (3) DISMISSING Appellant's appeal; (4) matter is STRICKEN from the docket. Signed by Judge Joseph M. Hood on 8/11/11.(KJR)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
In re: CLASSICSTAR, LLC
JAMES D. LYON,
Chapter 7 Trustee for
Civil Action No. 11-184-JMH
Bankruptcy Court No. 09-5155
MEMORANDUM OPINION AND ORDER
This matter is before the Court upon Appellee James D. Lyon’s
Motion to Lift the Order Holding Appeal in Abeyance and to Dismiss
the Appeal [DE 7], as well as Appellant Neil Baker’s Motion for a
Continuance of the Abeyance and Suspension of Deadlines [DE 9] and
Response and Objection to Appellee’s Motion to Lift the Order
Holding Appeal in Abeyance and to Dismiss the Appeal [DE 11].
light of the threshold nature of the jurisdictional inquiry urged
by Appellee, the Court concludes that it is appropriate at this
time to lift the stay in this matter, set in place by the Court’s
Order of June 10, 2011 [DE 6], and consider whether this Court has
jurisdiction over the appeal.
Having carefully considered the
arguments of the parties, the applicable case law, and the record
below, the Court concludes that it does not have jurisdiction over
this appeal for the reasons stated below and that this appeal
should be dismissed.
Under 28 U.S.C. § 158(a)(1), this Court has jurisdiction to
hear appeals of the Bankruptcy Court’s “final judgments, orders,
“Judgment” is defined to include “a decree and any
order from which an appeal lies.
A judgment should not include
recitals of pleadings, a master’s report, or a record of prior
Fed. R. Civ. P. 54(a).
Further, “[e]very judgment
. . . must be set out in a separate document . . . .,”
Civ. P. 58(a), and a court – including the Bankruptcy Court – “may
direct entry of a final judgment as to one or more, but fewer than
all, claims or parties only if the court expressly determines that
there is no just reason for delay.”
Fed. R. Civ. P. 54(b).
54(b) continues, as follows:
Otherwise, any order or other decision,
however designated, that adjudicates fewer
than all the claims or the rights and
liabilities of fewer than all the parties does
not end the action as to any of the claims or
parties and may be revised at any time before
the entry of a judgment adjudicating all the
claims and all the parties’ rights and
The present appeal arises out of an adversary proceeding filed
in the Bankruptcy Court in which Appellee alleged that Appellant
benefitted from an alleged fraudulent transfer by the debtor.
Bankruptcy Court held a trial of the matter on January 11, 2011,
and entered a Memorandum Opinion on March 14, 2011, in which it
concluded that a fraudulent transfer occurred.
In connection with that Memorandum Opinion and also on March
14, 2011, the Bankruptcy Court entered an Order of Judgment which
read as follows:
The Court having conducted a trial on
this proceeding on January 11, 2011 [Doc.
108], and having entered its Memorandum
Opinion with its findings of fact and
conclusions of law, IT IS HEREBY ORDERED
that JUDGMENT shall be entered for the
Trustee in the amount of $801,558.70.
The parties shall file simultaneous
briefs addressing the issue of whether
the Trustee is entitled to pre- and postjudgment
reasonable attorneys’ fees incurred by
the Trustee in connection with the
investigation and prosecution fo the
instant action in the record within 14
days of entry of this Order.
Appellee then filed a brief requesting prejudgment interest,
an award of all costs of litigation, and attorneys fees, among
While the issue of judgment, costs, and fees was
pending, Appellee sought to execute on the Order of Judgment.
Appellant took the position that it was premature to do so, since
not all issues were resolved, and filed a Motion to Stay Execution
on April 21, 2011.
On April 22, 2011, the Bankruptcy Court entered an Order which
read, in its entirety, as follows:
The Court having entered judgment for the
Trustee and having ordered the parties to file
simultaneous briefs addressing the issue of
whether the Trustee is entitled to pre- and
post judgment interest, plus costs and
reasonable attorneys’ fees [Doc. 118], and the
Court having considered the arguments of
IT IS HEREBY ORDERED that the Trustee’s
request for post-judgment interest is GRANTED.
The Trustee is entitled to post-judgment
interest from the date of entry of the
judgment at .25% as set forth in 28 U.S.C.
§1961. It is further ordered that the
Trustee’s request for pre-judgment interest,
attorneys’ fees, and costs is DENIED.
Appellant’s Motion to Stay Execution of Judgment on April 28, 2011,
after which hearing it entered an Order which read in its entirety
This matter having come before the Court on
the Defendant’s Motion for Order Staying
Execution by Plaintiff [Doc. 123] on Order of
Judgment [Doc. 118], the Court having reviewed
the record and considered arguments of
IT IS HEREBY ORDERED that the Defendant’s
Motion to stay the execution of the March 14,
2011 Order for Judgment [Doc. 123] is DENIED.
In his Motion to Lift the Order Holding Appeal in Abeyance and
to Dismiss the Appeal, the Trustee argues that Appellant’s appeal
– dated May 4, 2011 – is untimely because the Order of Judgment
entered on March 14, 2011, was the final judgment from which
Appellant’s time to appeal ran, meaning that the time for filing a
notice of appeal expired on March 28, 2011.
[See Fed. R. Bankr.
Proc. 8002 (providing that “notice of appeal shall be filed with
the clerk within 14 days of the date of the entry of the judgment,
order, or decree appealed from”.]
Appellant responds that, since that Order of Judgment reserved
ruling on pre- and post-judgment interest, attorneys’ fees and
costs sought by the Appellee, the Order of Judgment did not dispose
of all disputed issues and was not final.
Appellant argues, as
well, that since the Order of Judgment resolved only some of the
dispute between the parties, i.e., one, but fewer than all claims,
and it lacked any express statement that “there [was] no just
reason for delay” of entry of a final judgment, then it could not
Memorandum Opinion of March 14, 2011.
Finally, Appellant argues
that, because the Order of Judgment contained a second paragraph
which directed the parties to file additional briefing after its
entry, it was not a separate document as required of judgments in
Fed. R. Civ. P. 58(a) and could not serve as a judgment.
The Court concludes, however, that the Bankruptcy Court’s
Order of Judgment, dated March 14, 2011, was a final judgment with
respect to the sole claim between the parties as it was addressed
in its Memorandum Opinion of the same date.
First, the Order of
Judgment fully disposed of the dispute raised by the single count
of the Complaint with the entry of an award of $801,558.70. Second
and as a general matter, a judgment is final for appeal purposes
even though attorneys’ fees have not been determined.
Becton Dickinson and Co., 486 U.S. 196, 200 (1988);
Sheraton Corp. v. Kirkley, 614 F.2d 131, 133 (6th Cir. 1980).
Further, the Court recognizes that, where a court reserves judgment
on the amount of interest due, an order resolving the principal
dispute might be interlocutory instead of final where the interest
sought is based on the terms of a contract which is the subject of
a dispute, see Memphis Sheraton Corp., 614 F.2d at 133, but that is
not the case here.
Rather, in this action the issues of interest
and even attorneys’ fees were discretionary, i.e., they were not
based on an agreement of the parties or a statutory provision such
that they might have been considered part of the “corpus” of the
On the facts of this case, there is nothing which
changes the final nature of the Order of Judgment simply because
attorneys’ fees or interest should be awarded for another day. The
amount of liability with respect to the principal dispute had been
determined in toto and was forth with finality in the Order of
Next, the Order of Judgment is clearly a “separate document”
as required by Fed. R. Civ. P. 58(a).
Indeed, the Memorandum
Opinion from which it springs states that the Court would enter a
“separate Judgment consistent [t]herewith,” and that is what the
Bankruptcy Court did in the Order of Judgment.
The case law upon
which Appellant relies to urge this Court to conclude otherwise is
See, e.g., United States v. Indrelunas, 411
U.S. 216, 218-219 (1973) (clerk’s notation on civil docket did not
qualify as a “separate document”); United States v. Dean, 519 F.2d
624, 625 (6th Cir. 1975) (statement that summary judgment was
conclusions of law did not a final judgment make because it was not
a “separate document”); United States v. Woods, 885 F.2d 352, 353
(6th Cir. 1989) (notation in margin of motion for summary judgment
that motion was granted was not a “separate document” which
constituted a final and appealable judgment).
Ultimately, the Court agrees with Appellee that the Bankruptcy
Court’s decision to defer a decision on the question of whether to
award pre- and post-judgment interest or attorney fees and in what
amounts did not change the final nature of the Order of Judgment
with respect to its decision on the merits of the claim raised by
The issues of interest, costs, and attorneys fees were
not part and parcel of the fraudulent transfer claim in the
Trustee’s Complaint, were not based on contract, and were not
provided for the prevailing party under either §§ 548 or 550 of the
Rather, those items are collateral, sought
separately, and completely discretionary with the trial court.
Having determined that Bankruptcy Court’s March 14, 2011,
Order of Judgment was a final order of judgment from which the time
to appeal ran, Appellant’s May 4, 2011, Notice of Appeal was, thus,
out of time.
See Saleem v. Toombs, 875 F.2d 867 (6th Cir. 1989)
(“An appellant's failure to file a timely notice of appeal deprives
this court of jurisdiction.”
This Court cannot waive compliance
with the time limits set for the filing of appeals for a timely
appeal is a mandatory, jurisdictional prerequisite by which all
parties and this Court must abide.
See Ultimate Appliance CC v.
Kirby Co., 601 F.3d 414, 415 (6th Cir. 2010) (citing Budinich, 486
U.S. at 203; Feltner v. Lamar Adver. of Tenn., Inc., 200 Fed.Appx.
419, 422 (6th Cir.2006); In re Sulzer Orthopedics & Knee Prosthesis
Prods. Liab. Litig., 399 F.3d 816, 817 (6th Cir. 2005)).
Court is deprived of jurisdiction when a notice of appeal is not
timely filed, as in this case, and Appellant’s appeal shall be
See Bowles v. Russell, 551 U.S. 205, 215 (2007).
Accordingly, IT IS ORDERED:
that Appellee James D. Lyon’s Motion to Lift the Order
Holding Appeal in Abeyance and to Dismiss the Appeal [DE 7] is
that Appellant Neil Baker’s Motion for a Continuance of
the Abeyance and Suspension of Deadlines [DE 9] is DENIED;
that Appellant Neil Baker’s appeal is DISMISSED;
and that the Clerk shall STRIKE THIS MATTER FROM THE
This the 11th day of August, 2011.