McCallan v. Wilkins
MEMORANDUM OPINION AND ORDER: it is ORDERED as follows: 1) Appellant Timothy McCallan's 2:18-CV-604 motion (Doc. # 1 -1) for leave to file an interlocutory appeal, is DENIED; 2) Appellee Carly B. Wilkins's motions (Docs. # 2 of both 2 :18-CV-604, and 2:18-CV-608) to dismiss for lack of jurisdiction are GRANTED; 3) Appellee's motions (Docs. # 10 of 2:18-CV-604, and # 12 of 2:18-CV-608) to strike McCallan's brief in support of his appeals are DENIED as moot; 4) While the court will, at this time, give McCallan and his attorneys the benefit of the doubt regarding the frivolousness of these actions, McCallan and his attorneys are urged to think carefully about the merits of their filings with this court going forward; 5) The appeals in 2:18-CV-604 and 2:18-CV-608 are DISMISSED. Signed by Chief Judge William Keith Watkins on 9/17/2018. (wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
CARLY B. WILKINS,
as Trustee for Debtors Allegro Law,
LLC and Allegro Financial Services,
) CASE NO. 2:18-CV-604-WKW
) CASE NO. 2:18-CV-608-WKW
MEMORANDUM OPINION AND ORDER
Before the court are two cases, 2:18-CV-604, and 2:18-CV-608, both
concerning Defendant/Appellant Timothy McCallan, and Plaintiff/Appellee Carly
B. Wilkins. They were filed by McCallan on June 25, 2018, were consolidated on
September 4, 2018, and were heard for oral argument on September 6, 2018.
2:18-CV-604 is a motion for leave to appeal the bankruptcy court’s 35-page
Memorandum Decision dated May 23, 2018. In that decision, the bankruptcy judge
meticulously spells out the history of McCallan’s games and deceit before
For all of the length, breadth, and weight of these proceedings, the
bottom line remains simple. McCallan owes more than $100,000,000.
The evidence shows and the Court finds that McCallan has secreted
millions of dollars’ worth of money and property in locations presently
unknown to the Trustee. Until he discloses all of his property and turns
over all of his ill-gotten gains, he remains in contempt.
(Doc. # 1-1 at 44–45.)
Now pending are: (1) Appellant McCallan’s motion (Doc. # 1-1) for leave to
file an interlocutory appeal; (2) Appellee Carly B. Wilkins’s motion (Doc. # 2) to
dismiss for lack of jurisdiction; and (3) Appellee’s motion (Doc. # 10) to strike
McCallan’s brief on the grounds that this court lacks jurisdiction over McCallan’s
appeal. Moreover, the court must decide whether this action is frivolous and/or
interposed for delay and, if so, whether McCallan and/or his attorneys should be
subject to sanctions (including costs and the opposing party’s attorneys’ fees) for
filing a frivolous appeal and/or for filing this appeal for the purpose of delay.
2:18-CV-608 contains a notice of appeal of the bankruptcy judge’s 3-page
order dated May 29, 2018. (Doc. # 1-1.) The 3-page May 29th order incorporates
the 35-page May 23rd order, adds that McCallan remains in contempt, urges the
parties to meet and work matters out, and expresses the bankruptcy court’s desire
for closure on this case that has been ongoing since 2010.
Now pending are: (1) McCallan’s notice of appeal (Doc. # 1-1); (2) Appellee’s
motion to dismiss (Doc. # 2) for lack of jurisdiction; and (3) Appellee’s motion (Doc.
# 12) to strike McCallan’s brief on the grounds that this court lacks jurisdiction over
McCallan’s appeal. Additionally, as with 2:18-CV-604, this court must address
whether McCallan and/or his attorneys should be subject to sanctions. (Docs. # 5,
McCallan has been here before, and this court has previously described his
shenanigans at length.1 In a nutshell, on October 6, 2016, the bankruptcy court held
McCallan in civil contempt of court for willful failure to comply with its previous
order to account for the whereabouts of the more than $100,000,000.00 he stole from
30,000 victims. On October 23, 2017, the bankruptcy court ordered McCallan jailed
for contempt after finding that McCallan’s claims that he had complied with the
court’s orders were false. In ongoing efforts to purge himself of contempt, McCallan
has repeatedly lied to the bankruptcy court, and more than one attorney has been
suspended or disbarred from more than one state for their role in his fraud.2
On June 25, 2018, McCallan filed in this court a motion for leave to appeal
from the bankruptcy court’s May 23, 2018 Order (2:18-CV-608), and a notice of
appeal from its May 29, 2018 Order (2:18-CV-604).
See McCallan v. Wilkins for Debtors Allegro Law, LLC & Allegro Fin. Serv., LLC, No.
18cv117, 2018 U.S. Dist. LEXIS 44234 (M.D. Ala., Mar. 19, 2018).
See, e.g., 2:18-CV-608, Doc. # 1-2 at 2.
Timeliness of Appeal
As our sister court noted decades ago, “a threshold issue relevant to any
bankruptcy appeal [is] whether the notice of appeal was timely filed. This is a
significant issue because the courts have uniformly held that if the notice of appeal
was not timely filed, the district court does not have jurisdiction to hear the appeal.”
Hemmerle v. Bakst (In re Sun-Island Realty), 177 B.R. 391, 394–95 (S.D. Fla.
1994).3 Under Federal Rule of Bankruptcy Procedure 8002(a)(1), a “notice of appeal
must be filed with the bankruptcy clerk within 14 days after entry of the judgment,
order, or decree being appealed.” The 14 days to file a notice of appeal under Rule
8002(a)(1) is jurisdictional. Gowdy v. Mitchell (In re Ocean Warrior, Inc.), 835 F.3d
1310, 1318 (11th Cir. 2016) (citing In re Williams, 216 F.3d 1295, 1298 (11th Cir.
2000)); see also Advanced Estimating Sys. Inc. v. Riney, 77 F.3d 1322, 1323 (11th
Cir. 1996) (“The Supreme Court has emphasized that the timely filing of a notice of
appeal is mandatory and jurisdictional. If the notice is not timely filed, the appellate
court is without jurisdiction to hear the appeal.”).
Neither McCallan’s motion for leave to appeal the bankruptcy court’s May 23
order (2:18-CV-604) nor his notice of appeal of the bankruptcy court’s May 29 order
In re Sun relied on In re Topco, Inc., 894 F.2d 727 (5th Cir. 1990), and In re Abdallah,
778 F.2d 75 (1st Cir. 1985).
(2:18-CV-608) was filed within the required 14-day period. In fact, these June 25,
2018 filings were late by about double the 14-day time limit. This time limit is
jurisdictional and dispositive in both cases.
McCallan admits that his appeals were filed late, but he pleads “the safe-
harbor of ‘excusable neglect’ in Rule 8002(d)(1) and 9006(b)(1).” (2:18-CV-604
Doc. # 6 at 5, and 2:18-CV-608 Doc. # 8 at 6.) In support of this argument, McCallan
states that his counsel “contemplated their time to file the appeal through the Federal
Rules of Civil Procedure as opposed to the Federal Rules of Bankruptcy Procedure.”
(2:18-CV-604, Doc. # 6 at 11, and 2:18-CV-608, Doc. # 8 at 14.)4
The Supreme Court provided guidance on the boundaries of excusable neglect
as it relates to Bankruptcy Rule 9006(b) by weighing four factors: (1) the danger of
prejudice to the non-moving party; (2) the length of delay and potential impact on
judicial proceedings; (3) the reason for the delay; and (4) whether the movant acted
in good faith. Pioneer Inv. Servs. Co. v. Brunswick Assocs., 507 U.S. 380, 395
Evaluating the relative weight of the Pioneer factors, several federal courts of
As Appellee points out, McCallan was required to file a motion for an extension of time
within 21 days with the bankruptcy court, not the district court. Fed. R. Bank. P. 8002(d)(1).
(2:18-CV-608, Doc. # 11 at 4.) Considering McCallan’s claim that his attorneys were “fully
unaware of their neglect” until after they had filed with this court (2:18-CV-608, Doc. # 8 at 16),
this court will not consider whether McCallan’s failure to file for an extension with the bankruptcy
court is in itself fatal to his appeals.
appeals cautiously began to rally around the idea that the “reason for delay” factor
essentially trumps the other three. See City of Chanute v. Williams Nat. Gas Co., 31
F.3d 1041, 1046 (10th Cir. 1994) (“fault in the delay remains a very important factor
— perhaps the most important single factor — in determining whether neglect is
excusable.”); Lowry v. McDonnell Douglas Corp., 211 F.3d 457, 463 (8th Cir. 2000)
(“[T]he four Pioneer factors do not carry equal weight; the excuse given for the late
filing must have the greatest import.”); Graphic Commc’ns Int’l Union v. Quebecor
Printing Providence, Inc., 270 F.3d 1, 5 (1st Cir. 2001) (same). In Torres, the Tenth
Circuit ruled that, even though the “reason for delay” factor was the only one of the
four factors weighing against finding excusable neglect, the district court abused its
discretion in finding excusable neglect. United States v. Torres, 372 F.3d 1159 (10th
But as Justice O’Connor prophetically wrote for the dissent in Pioneer,5 its
balancing test “unduly complicates the task of courts called upon to apply it.”
Pioneer, 507 U.S. at 399. The Eleventh Circuit has historically struggled with “some
pain to define ‘excusable neglect’ in different fact situations.” Cheney v. Anchor
Glass Container Corp., 71 F.3d 848, 849 (11th Cir. 1996). Unlike the First, Eighth,
and Tenth Circuits’ emphasis on the “reason for delay” factor, the Eleventh Circuit’s
The lengthy Pioneer dissent is joined by Justices Scalia, Souter, and Thomas.
initial interpretation of the relative weight of the Pioneer factors has been that “the
Supreme Court accorded primary importance to the absence of prejudice to the
nonmoving party and to the interest of efficient judicial administration.” Id. at 850.
However, twenty-two years after Cheney, the Eleventh Circuit seems to be
narrowing the gap with its sister courts of appeals on the importance of the reason
for delay factor.
In Rosenberg v. DVI Receivables XIV, LLC (In re Rosenberg), the district
court mentioned the four Pioneer factors, but only explicitly evaluated the reason
for the delay factor,6 yet the Eleventh Circuit “disagree[d] with the Appellants’
argument that the district court erred when it failed to explicitly examine each of the
Pioneer factors.” 724 F. App’x 882, 884 (11th Cir. 2018).7 Furthermore, the reason
for delay in Rosenberg is very similar to the reason McCallan advances in these
appeals. In Rosenberg:
Appellants made a legal error when they determined that the filing
deadline for their Rule 50b motion8 was governed by the Federal Rules
of Civil Procedure and not the Bankruptcy Rules. Under Riney, that
The district court’s analysis is available at: Rosenberg v. DVI Receivables, XIV, LLC, No.
12cv22275, 2017 U.S. Dist. LEXIS 68984 (S.D. Fla. May 5, 2017).
Although Rosenberg is not published or binding, it was released this March, and is
During the September 6, 2018 hearing, Appellant claimed that an untimely filed Rule
50(b) motion is significantly different than an untimely filed appeal in an excusable neglect
context. This argument is not persuasive. See, e.g., Advanced Estimating Sys. v. Riney, 130 F.3d
996, 997 (11th Cir. 1997), which specifically dealt with excusable neglect in relation to “failure to
file a timely notice of appeal.”
error is insufficient to demonstrate excusable neglect. We disagree with
the Appellants’ argument that the district court erred when it failed to
explicitly examine each of the Pioneer factors. In Riney, we held that
“as a matter of law . . . an attorney’s misunderstanding of the plain
language of a rule cannot constitute excusable neglect,” and we
explicitly noted that Pioneer did not counsel against that rule. Id.
Id. (citing Advanced Estimating Sys. v. Riney, 130 F.3d 996, 998 (11th Cir. 1997)).
McCallan’s claim that his attorneys “contemplated their time to file the appeal
through the Federal Rules of Civil Procedure as opposed to the Federal Rules of
Bankruptcy Procedure” (2:18-CV-608 Doc. # 8 at 14), does not rise to excusable
neglect. True, this court is bound by the Pioneer factors. But the fact that “the fourpart Pioneer standard for determining excusable neglect applies does not change
existing law that a lawyer’s misunderstanding of clear law cannot constitute
excusable neglect. If it could, almost every appellant’s lawyer would plead his own
inability to understand the law when he fails to comply with a deadline. We do not
believe that the Court intended a practice that would require courts to be that lenient
about disobedience to plain law.” Riney, 130 F.3d at 998. Here, McCallan’s
attorneys did not only ignore or mistakenly construe the plain language of a rule.
These same attorneys represented McCallan earlier this year on a previous appeal
before this court (18-cv-117), and upon dismissing that appeal, this court explicitly
spelled out the 14-day time limit to file appeals from bankruptcy court orders.9
McCallan v. Wilkins, No. 18cv117, 2018 U.S. Dist. LEXIS 44234, *22 (M.D. Ala. March
19, 2018) (dismissing an earlier appeal by McCallan and stating that, “[w]ith some exceptions not
Therefore, the “reason for delay” factor strongly weighs against a finding of
It is acknowledged that whether neglect is excusable is an equitable
determination, “taking account of all relevant circumstances surrounding the party’s
omission.” Pioneer, 507 U.S. at 395. This court has also considered the additional
three Pioneer factors. There is risk of prejudice to the Appellee, as well as an
adverse impact on the proceedings, because an appeal to this court would materially
disrupt the bankruptcy court’s ongoing efforts to secure compliance, waste judicial
resources, and cause judicial inefficiency and unnecessary piecemeal litigation.
While this court does not find that McCallan’s attorneys acted in bad faith in these
particular filings, the court is not inspired by the overwhelming evidence of blatant
disrespect and deceit by McCallan and some of his attorneys in their ongoing
interactions with the bankruptcy court. In sum, three of the four Pioneer factors
weigh against a finding of excusable neglect in this case. The 14-day time limit is
jurisdictional and dispositive, and McCallan’s failure to abide by this time limit is
not excusable neglect.
McCallan holds the keys to his jail cell. “Until he discloses all of his property
applicable in this case, appeals from final bankruptcy court orders and motions for leave to appeal
interlocutory bankruptcy court orders must be filed ‘within 14 days after entry of the judgment,
order, or decree being appealed.’ Fed. R. Bankr. P. 8002(a)(1); Fed. R. Bankr. P. 8003(a)(1); Fed.
R. Bankr. P. 8004(a)(1).”).
and turns over all of his ill-gotten gains, he remains in contempt.” (Doc. # 1-1 at
45.) The court system is not a game. McCallan’s latest attempt to circumvent the
bankruptcy court’s rulings confirms not only his duplicitousness and lack of candor
with courts generally but also the appropriateness of his current address.
Accordingly, it is ORDERED as follows:
Appellant Timothy McCallan’s 2:18-CV-604 motion (Doc. # 1-1) for leave to
file an interlocutory appeal, is DENIED.
Appellee Carly B. Wilkins’s motions (Docs. # 2 of both 2:18-CV-604, and
2:18-CV-608) to dismiss for lack of jurisdiction are GRANTED.
Appellee’s motions (Docs. # 10 of 2:18-CV-604, and # 12 of 2:18-CV-608)
to strike McCallan’s brief in support of his appeals are DENIED as moot.
While the court will, at this time, give McCallan and his attorneys the benefit
of the doubt regarding the frivolousness of these actions, McCallan and his attorneys
are urged to think carefully about the merits of their filings with this court going
The appeals in 2:18-CV-604 and 2:18-CV-608 are DISMISSED.
Final judgment will be entered separately.
DONE this 17th day of September, 2018.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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