Rinaldi et al v. HSBC Bank USA NA et al
ORDER signed by Judge J P Stadtmueller on 3/6/13 DISMISSING Appellants' appeal from the U.S. Bankruptcy Court's Order entered on 10/2/12 by Bankruptcy Judge Susan V. Kelley. (cc: all counsel)(nm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
ROGER PETER RINALDI and
DESA LILLY RINALDI,
Case No. 12-CV-1065-JPS
HSBC BANK USA NA, et al.,
On October 16, 2012, Appellants Roger Peter Rinaldi and Desa Lilly
Rinaldi (“Appellants”) filed a notice of appeal in the United States
Bankruptcy Court for the Eastern District of Wisconsin, notifying the court
and parties of their intent to appeal an Order entered on October 2, 2012, by
Bankruptcy Judge Susan V. Kelley (“the October 2 Order”). The October 2
Order denied Appellants’ second motion for reconsideration of their motion
for leave to file an amended complaint. Appellees Gray & Associates,
William N. Foshag, Duncan C. Delhey, Jay Pitner, and Brian D. Perhach
(“Appellees”) filed a motion to strike Appellants’ notice of appeal, arguing
that the October 2 Order was not a final judgment, and that Appellants did
not demonstrate that review of a non-final order was warranted. Appellants
filed a response to the motion to strike, in which they claim, without citing
any case law for support, that the October 2 Order constitutes a final order.
Appellees filed no reply. Following review, the court concludes that the
October 2 Order was not a final order. As the appeal is taken from a non-final
order, the court must dismiss this case.
The court’s analysis begins with the question of whether the October
2 Order is a final order. If it is, the court has jurisdiction to consider
Appellants’ appeal pursuant to 28 U.S.C. § 158(a)(1). An Order from a
bankruptcy court is a final order for purposes of appeal if it “ends the
litigation on the merits and leaves nothing for the court to do but execute the
judgment.” Herbstein v. Bruetman, 241 F.3d 586, 588 (7th Cir. 2001) (citations).
By this standard, the October 2 Order is plainly not a final order; it denied
appellants’ second motion for reconsideration of the amendment motion, but
it notes that the amendment motion was granted as to another group of
defendants, and it left intact the other claims Appellants raised against
Appellees. (Docket #3). Which is to say, the bankruptcy court had much more
to do but execute the judgment, as several claims (including claims against
Appellees) remained pending. It is the standard rule in this circuit that a
denial of a motion to amend a complaint is not immediately appealable. As
the Seventh Circuit explained:
An order denying a motion to amend a pleading is not
immediately appealable. 6 Charles A. Wright, et al., Federal
Practice and Procedure § 1484 (1990). It is not considered a final
judgment within the meaning of section 1291, title 28 of the
United States Code. Richardson Greenshields Sec., Inc. v. Lau, 825
F.2d 647, 650 (2nd Cir. 1987). […]A party must wait until a final
judgment in the case to appeal the order.
Agretti v. ANR Freight Sys., Inc., 982 F.2d 242, 248 (7th Cir. 1992). In sum, the
bankruptcy court’s denial of Appellants’ motion to amend, and, therefore, its
motion for reconsideration of that denial, is not a final order for purposes of
appeal to this court.
Yet, further analysis is warranted as the procedural landscape is
slightly more variable in bankruptcy appeals, which are often characterized
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as enjoying a “somewhat relaxed sense of finality.” In re J. Catton Farms, Inc.,
779 F.2d 1242, 1250 (7th Cir. 1985). This flexibility is justified due to the
“aggregation of controversies and suits” common to bankruptcy cases. In re
Donovan, 532 F.3d 1134, 1136 (11th Cir. 2008) (citing Jove Engineering v. IRS,
92 F.3d 1539, 1548 (11th Cir. 1996)). In such cases, courts have permitted
review of bankruptcy orders that “finally dispose of discrete disputes within
the larger case.” In re Computer Learning Centers, Inc., 407 F.3d 656, 660 (4th
Cir. 2005) (quoting In re Saco Local Dev. Corp., 711 F.2d 441, 444 (1st Cir. 1983)).
Because of the protracted nature of some bankruptcy cases, particularly those
that create and oversee a plan, “[t]o avoid the waste of time and resources
that might result from reviewing discrete portions of the action only after a
plan of reorganization is approved, courts have permitted appellate review
of orders that in other contexts might be considered interlocutory.” In re
Dalkon Shield Claimants, 828 F.2d 239, 241 (4th Cir. 1987) (quoting In re Amatex
Corp., 755 F.2d 1034, 1039 (3rd Cir. 1985)). The progress of this case in the
bankruptcy court makes this court’s decision not to review the appeal
unusually simple because, in the few months while this appeal was pending
before the court, the bankruptcy court has proceeded with the case, its work
culminating in a recommendation resolving the remainder of Appellants’
claims on the merits. In re Rinaldi, Bankruptcy No. 11-35689-SVK, Adversary
No. 12-2412 (Bankr. E.D. Wis. February 22, 2013). Because the remainder of
the case is now resolved, granting interlocutory review of the October 2
Order would not prevent any waste of time and resources of the bankruptcy
court, and there is no justification for assessing the bankruptcy court’s Order
with a “relaxed sense of finality.”
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Finally, the court notes that, pursuant to Federal Rule of Bankruptcy
Procedure 8003(c), it has discretion to consider Appellants’ notice of appeal
as a motion for leave to appeal an interlocutory order. Fed. R. Bankr. P.
8003(c) (“If a required motion for leave to appeal is not filed, but a notice of
appeal is timely filed, the district court or bankruptcy appellate panel may
grant leave to appeal or direct that a motion for leave to appeal be filed.”).
Again, considering the progress Judge Kelley has achieved with this case in
the bankruptcy court, it would be illogical to invoke this rule of procedure
to permit an interlocutory appeal of the October 2 Order.
Having concluded that the October 2 Order is not a final order for
purposes of review under 28 U.S.C. § 158(a)(1), and having concluded that
the notice of appeal will not be considered a motion for leave to appeal in this
case, the court must dismiss Appellants’ appeal of the October 2 Order.
IT IS ORDERED that Appellants’ appeal from the U.S. Bankruptcy
Court’s Order entered on October 2, 2012, by Bankruptcy Judge Susan V.
Kelley be and the same is hereby DISMISSED.
The clerk is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 6th day of March, 2013.
BY THE COURT:
U.S. District Judge
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