In Re: Morreale Hotels, LLC
Filing
25
ORDER denying 16 United States Trustee's Motion to Dismiss Appeal for Lack of Jurisdiction. The Opening Brief of Appellant Morreale Hotels LLC (ECF No. 12 ) is STRICKEN, but the parties may continue to cite the appendices attached to that opening brief (ECF Nos. 12-1 to 12-22). Morreale SHALL FILE a new opening brief that complies with all requirements as to form and content no later than 5/4/2015. By Judge William J. Martinez on 4/13/2015. (alowe)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 14-cv-1537-WJM
Bankruptcy Case No. 12-35230-ABC
IN RE:
MORREALE HOTELS, LLC,
Debtor,
MORREALE HOTELS, LLC,
Appellant,
v.
2011-SIP-CRE/CADC VENTURE, LLC, and
UNITED STATES TRUSTEE,
Appellees.
ORDER DENYING TRUSTEE’S MOTION TO DISMISS, STRIKING MORREALE’S
OPENING BRIEF, AND SETTING NEW BRIEFING SCHEDULE
Morreale Hotels, LLC (“Morreale”) has appealed various bankruptcy court orders,
including an order lifting the automatic stay and an order rejecting Morreale’s Chapter
11 reorganization plan. The United States Trustee (“Trustee”) has filed a Motion to
Dismiss the Appeal for Lack of Jurisdiction (“Motion”). (ECF No. 16.) Despite the
Motion’s title, the Trustee does not seek to dismiss the entire appeal. Rather, the
Trustee seeks to dismiss only the appeal from the Bankruptcy Court’s order rejecting
Morreale’s Chapter 11 reorganization plan. (Id. at 2 n.2.) The other appellee,
2011-SIP-CRE/CADC Venture, LLC (“CRE”), has not weighed in on the Trustee’s
motion.
For the reasons stated below, the Court will deny the Motion. Furthermore,
having reviewed portions of Morreale’s opening appeal brief, the Court finds numerous
deficiencies in form and content. The Court will therefore strike the brief, require
Morreale to file a conforming brief, and reset the parties’ briefing schedule.
I. BACKGROUND
Because the Court has so far only received Morreale’s brief on the merits (the
Court stayed further briefing until this Motion could be resolved, see ECF No. 17), the
Court has not received a full description of the facts and proceedings below from both
sides. However, the following appears uncontroverted, or at least uncontroversial.
Morreale purchased two commercial properties in Denver through loans currently
held by CRE. (ECF No. 12 at 3.) Morreale later filed for Chapter 11 bankruptcy
protection and CRE filed proofs of claim related to its loans. (Id. at 12.) CRE moved to
lift the automatic bankruptcy stay, apparently with the intent to foreclose on the
properties. (Id. at 9.) The Bankruptcy Court denied CRE’s motion to lift the stay
because the court found “a reasonable prospect for this debtor to effectively reorganize
in the near future.” (ECF No. 12-12 at 73.) “But,” said the court, “the continuation of
the stay . . . is conditioned on the debtor conf irming the reorganiz[ation] plan pending
before the Court . . . .” (Id. at 74.)
As it turns out, once the Bankruptcy Court had fully considered Morreale’s
reorganization plan, the court refused to confirm it. (ECF No. 12-19 at 1.) The court
therefore lifted the automatic stay. (Id.) Morreale then filed this appeal. (ECF No. 12
at 6–7.)
2
II. ANALYSIS
A.
Appellate Jurisdiction Over Reorganization Plan Rejections
With respect to Bankruptcy Court decisions, this Court has jurisdiction to hear
appeals
(1) from final judgments, orders, and decrees;
(2) from interlocutory orders and decrees issued under [a
portion of the Bankruptcy Code not relevant here]; and
(3) with leave of the court, from other interlocutory orders
and decrees . . . .
28 U.S.C. § 158(a). The Trustee argues that the Bankruptcy Court’s refusal to confirm
Morreale’s Chapter 11 reorganization plan is not a final judgment, order, or decree, nor
should this Court grant permission for an interlocutory appeal. (ECF No. 16 at 4–8.)
Finality of judgment in the bankruptcy context is somewhat different than in the
traditional civil context, as aptly summarized by the Tenth Circuit:
Traditionally, a decision in a civil controversy is not
considered final unless it terminates the litigation on the
merits and leaves nothing for the court to do but execute the
judgment. In the bankruptcy realm, however, the concept of
finality has been given a less restrictive meaning. Unlike
most civil cases, bankruptcy proceedings often involve an
aggregation of controversies, many of which would
constitute individual lawsuits had a bankruptcy petition never
been filed. In such proceedings, therefore, we separately
consider the finality of each discrete dispute raised within
the larger bankruptcy case. In other words, we have
recognized that the appropriate judicial unit for purposes of
determining finality . . . is not the overall bankruptcy case; it
is instead the particular adversary proceeding or discrete
controversy pursued within the broader framework cast by
the petition.
In re Baines, 528 F.3d 806, 809–10 (10th Cir. 2008) (internal quotation marks and
3
citations omitted).
Despite this flexibility, the Tenth Circuit has held—in the Chapter 13 context—
that denial of a reorganization plan is not a final, appealable order: “so long as the
bankruptcy proceeding itself has not been terminated, the debtor, unsuccessful with
one reorganization plan, may always propose another plan for the bankruptcy court to
review for confirmation.” In re Simons, 908 F.2d 643, 645 (10th Cir. 1990). Thus, no
finality exists sufficient to satisfy 28 U.S.C. § 158(a). See id. The Tenth Circuit has
applied this reasoning in the Chapter 12 context as well, albeit in an unpublished
disposition. See In re Simon, 1996 WL 192977, at *2 (10th Cir. Apr. 22, 1996).
The Court could locate no decision applying this reasoning in the Chapter 11
context, but the Court sees no principled reason why it would not apply. Just like a
Chapter 13 debtor, a Chapter 11 debtor may propose a new plan after rejection of the
first plan. Compare 11 U.S.C. § 1127(a) (“The proponent of a plan may modify such
plan at any time before confirmation . . . .”) with id. § 1323(a) (“The debtor may modify
the plan at any time before confirmation . . . .”). The Court therefore concludes that
denial of a Chapter 11 reorganization plan is generally not appealable.
This case presents unique circumstances, however. Morreale also appeals from
the Bankruptcy Court’s order lifting the automatic stay. That order is appealable, and
no party argues otherwise. See Rajala v. Gardner, 709 F.3d 1031, 1034 (10th Cir.
2013) (“The grant or denial of relief from an automatic stay is generally an appealable
final order.”). Moreover, the Bankruptcy Court lifted the automatic stay specifically
because it refused to confirm Morreale’s reorganization plan. (See ECF No. 18 at 3.)
4
In other words, Morreale’s appeal of the Bankruptcy Court’s stay-lift order is inextricably
bound up with its appeal of the Bankruptcy Court’s refusal to confirm the plan. Even if
this Court limited Morreale to challenging the stay-lift order, Morreale would necessarily
be arguing the merits of its reorganization plan.
Moreover, in opposing the Motion, Morreale argues that, “with CRE’s Motion for
Relief From Stay having been granted, the filing of an amended [reorganization] plan
would have been futile with the essential and primary assets of the estate having been
immediately scheduled for a foreclosure sale.” (ECF No. 18 at 3–4.) The Trustee’s
reply brief (ECF No. 19) offers no rebuttal to this argument.
Accordingly, in these unique circumstances, the Court holds that it has
jurisdiction under 28 U.S.C. § 158(a)(1) to hear Morreale’s appeal f rom the Bankruptcy
Court’s denial of its reorganization plan.
B.
Deficiencies in Morreale’s Brief
In resolving the Motion, the Court briefly reviewed Morreale’s opening appeal
brief (ECF No. 12). The Court finds it deficient in the following respects and will require
Morreale to file a new brief that corrects these deficiencies.
First, this Court’s Local Rules require all bankruptcy appeal briefs to comply with
Federal Rules of Bankruptcy Procedure 8001–8020. See D.C.COLO.LAPR 10.2(b).
Among those rules is the requirement that briefs be double-spaced. Fed. R. Bankr. P.
8015(a)(4). Morreale’s brief is, at best, 1.5-spaced. Morreale must correct this.
Second, Morreale is limited to 14,000 words. Id. 8015(a)(7)(B)(i). Although
Morreale’s brief may be under that limit, Morreale does not attach the required
5
certification. Id. 8015(a)(7)(C)(I). Morreale’s new brief must contain this certification.
Third, Morreale’s current brief includes a generic standard of review apparently
applicable to all twelve of its issues for review. (See ECF No. 12 at 3.) The Court is
skeptical that Morreale’s proffered standard of review applies indiscriminately to all
twelve issues. For example, Morreale appeals both the Bankruptcy Court’s refusal to
confirm its plan and the court’s stay-lift order. Morreale offers no standard of review
specific to those sorts of orders (e.g., abuse of discretion, de novo, etc.). See Fed. R.
Bankr. P. 8014(a)(5) (requiring “a statement of the issues presented and, for each one,
a concise statement of the applicable standard of appellate review” (emphasis added)).
Morreale’s new brief must correct this deficiency.
Fourth, Morreale must provide “appropriate references to the record.” Id.
8014(a)(6). Although Morreale’s current brief provides record citations, it generally
does so through descriptive cites such as “Confirmation Hr’g Tr.” (ECF No. 12 at 4.)
This requires the Court to identify where in the parties’ voluminous record this particular
transcript resides. In its new brief, Morreale should instead cite either the ECF docket
number or the consecutive Appellant Appendix pages. For example, the first page of
Morreale’s objection to CRE’s motion to lift the stay would be cited as “ECF No. 12-3 at
16” or “App. 116.” 1
1
The Court notes that the parties filed a 900-page Record on Appeal (ECF No. 9) but
that Morreale then attached a 2,800-page “Appendix” to its opening brief (ECF Nos. 12-1 to 1222). In the Court’s cursory review, the Appendix appears to contain only items from the record
below, but it nonetheless goes far beyond the Record on Appeal and likely duplicates it in many
respects. The Court will, however, permit both the Appendix and the Record on Appeal to
remain in their current state (absent specific objection from CRE or the Trustee in their
response brief) because the Court suspects that the time needed to sort out and re-file all
documents appropriately would not be worth the effort. Any citation to the document titled
6
Fifth, Morreale’s current brief is a scanned version of a printed document. That
is not permitted under this Court’s Electronic Case Filing Procedures (Civil Cases)
(Version 6.0), Part I, § 1.3(f): “Filers shall only scan documents unavailable in an
electronic format. Documents shall be converted to PDF directly from the software
application in which they were created (e.g., Word, WordPerfect, Excel).” Morreale
must comply with this directive.
Accordingly, the Court will strike Morreale’s opening brief (ECF No. 12) and
require re-filing.2 The parties may nonetheless continue citing to the appendices
attached to Morreale’s opening brief (ECF Nos. 12-1 to 12-22).
III. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.
The United States Trustee’s Motion to Dismiss Appeal for Lack of Jurisdiction
(ECF No. 16) is DENIED;
2.
The Opening Brief of Appellant Morreale Hotels, LLC (ECF No. 12) is
STRICKEN, but the parties may continue to cite the appendices attached to that
opening brief (ECF Nos. 12-1 to 12-22); and
3.
No later than May 4, 2015, Morreale SHALL FILE a new opening brief that
complies with all requirements as to form and content. The deadlines for
“Record on Appeal” (ECF No. 9) shall either be to its ECF docket number or the consecutive
pagination inserted at the bottom. Thus, for example, the first page of the Trustee’s objection
to confirmation would be cited as “ECF No. 9-2 at 12” or “R. 216.”
2
If, after receiving Morreale’s corrected brief, CRE or the Trustee still detect a
jurisdictional defect such as the one raised here, they are free to argue that defect in their
response brief (not in a separate motion).
7
response and reply briefs will then be governed by Fed. R. Bankr. P. 8018(a)(2)
& (3).
Dated this 13th day of April, 2015.
BY THE COURT:
William J. Martínez
United States District Judge
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?