Yormak v. Yormak
Filing
14
OPINION AND ORDER denying 2 Motion for Leave to Appeal; denying as moot 3 Motion to Strike Reply. The Clerk shall enter judgment dismissing the appeal, transmit a copy of this Opinion and Order to the Clerk of the Bankruptcy Court, terminate all deadlines, and close the file. Signed by Judge John E. Steele on 6/8/2018. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
IN RE:
BENJAMIN H. YORMAK
STEVEN R YORMAK,
Appellant,
v.
Case No:
2:18-cv-309-FtM-29
BENJAMIN H. YORMAK,
Appellee.
OPINION AND ORDER
This matter comes before the Court on appellant/creditor
Steven Yormak’s Motion for Leave, and Appeal of Bankruptcy Court
Interlocutory Order Granting Debtor's Motion to Amend Objection to
Claim No. 4-1 of Steven R. Yormak; Denying Motion to Strike;
Setting Status Conference; and, Prohibiting Communications with
Debtor's Clients (Doc. #2) filed on May 9, 2018.
Appellee/debtor
Benjamin H. Yormak filed a Response (Doc. #5) and appellant filed
a Reply (Doc. #6), which includes a motion to stay pending appeal.
Also before the Court is appellee’s Motion to Strike the Reply of
Creditor Steven R. Yormak and to Deny Motion for Stay Pending
Appeal (Doc. #3).
I.
As background, on January 22, 2014, Benjamin Yormak removed
Steven Yormak’s Complaint from Collier County Circuit Court to
federal district court.
On May 28, 2015, Steven Yormak filed a
Second Amended Complaint (Doc. #190) against Benjamin H. Yormak
and Yormak Employment & Disability Law, otherwise known as BHY
Consulting, LLC, for damages stemming from the breach of the
written consulting agreement dated August 18, 2012, the same
subject of Claim 4-1 in the bankruptcy case at issue.
Steven
Yormak alleged that he provided hundreds of hours of consulting
services, and that Benjamin Yormak agreed to pay an hourly rate
for those hours.
See Case No. 2:14-cv-33-FTM-29CM.
On April 27,
2015, the district court case was stayed as to Benjamin Yormak
based on his filing of a Suggestion of Bankruptcy.
(Doc. #181.)
On May 19, 2015, the case was stayed in its entirety and the case
was administratively closed pending further order.
(Doc. #189.)
That case remains stayed.
Benjamin Yormak filed the voluntary petition under Chapter 13
of the Bankruptcy Code on April 24, 2015.
On
June
1,
2015,
Steven
Yormak
See 9:15-bk-04241-FMD. 1
filed
an
objection
to
the
confirmation of the proposed Chapter 13 Plan, and on September 17,
2015, Benjamin Yormak filed an objection to Claim No. 4-1 filed by
Steven Yormak.
for
summary
On November 10, 2015, Steven Yormak filed a motion
judgment
in
the
Bankruptcy
1
Court
regarding
the
The following facts were discerned from review of the docket
sheet filed in Case No. 2:17-cv-73-FTM-38.
No updated docket
sheet was transmitted with the request to appeal.
- 2 -
objection to his Claim No. 4-1.
On April 22, 2016, the Bankruptcy
Court entered an Order Denying Motion for Summary Judgment Filed
by Steven Yormak, and scheduled trial on the objection filed by
Benjamin Yormak, which asserted that the Consulting Agreement was
void as a matter of law.
On May 4, 2016, Benjamin Yormak filed a
motion for leave to amend his objection.
In response, on May 20,
2016, Steven Yormak filed a motion for summary judgment on the
amended objection, and on May 24, 2016, Steven Yormak filed an
objection to the request for leave to amend the objection.
On
June 6, 2016, an Order was entered denying the motion for leave to
amend the objection.
On July 27, 2016, Benjamin Yormak filed a notice of voluntary
conversion
to
a
Chapter
7
case.
On
January
19,
2017,
the
Bankruptcy Court entered an Order Denying Motion for Summary
Judgment on an amended objection to Claim No. 4-1, and Steven
Yormak sought leave to appeal.
The Bankruptcy Court held the
motion in abeyance.
On February 1, 2017, Steven Yormak filed an interlocutory
Notice of Appeal in the district court from the Order Denying
Motion for Summary Judgment Filed by Steven Yormak.
2:17-cv-73-FTM-38.)
(Case No.
On June 19, 2017, Steven Yormak’s motion for
leave to appeal from the Order was denied by the Honorable Sheri
Polster Chappell.
The appeal from Judge Chappell’s Opinion and
Order was dismissed for lack of jurisdiction.
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On April 18, 2018, the Bankruptcy Court issued an Order
Granting Debtor’s Motion to Amend Objection to Claim No. 4-1 of
Steven R. Yormak, denying Steven Yormak’s motion to strike the
unlicensed practice of law objection, and directing Steven Yormak
to respond to the amended objection.
On May 9, 2018, Steven Yormak
filed another motion for leave to appeal in the district court
from this Order.
II.
The United States District Court functions as an appellate
court in reviewing decisions of the United States Bankruptcy Court.
28 U.S.C. § 158(a); In re JLJ, Inc., 988 F.2d 1112, 1116 (11th
Cir.
1993).
The
threshold
issue
jurisdiction to entertain the appeal.
1134, 1136 (11th Cir. 2008).
is
the
district
court’s
In re Donovan, 532 F.3d
The first inquiry is whether the
appealed Order was final and appealable, or whether it was an
interlocutory order.
If the Court determines that the Order was
interlocutory in nature, the second inquiry is whether leave to
file an interlocutory appeal should be granted.
In re Charter
Co., 778 F.2d 617, 620-621 (11th Cir. 1985).
An interlocutory order is one that “does not finally determine
a
cause
of
action
but
only
decides
some
intervening
matter
pertaining to the cause, and which requires further steps to be
taken in order to enable the court to adjudicate the cause on the
merits.”
In re Kutner, 656 F.2d 1107, 1111 (5th Cir. Unit A Sept.
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1981) 2 (citation omitted).
It is clear that the Order granting
the amendment was not a final order within the meaning of the cases
summarized above.
The Order did not “completely resolve all of
the issues pertaining to a discrete claim,” In re Celotex Corp.,
700 F.3d 1262, 1265 (11th Cir. 2012), and “[did] not finally
determine a cause of action,” In re Kutner, 656 F.2d at 1111.
Therefore, the order is not appealable as of right, and the Court
must consider whether leave to appeal should be granted.
A
federal
district
court
has
jurisdiction
to
consider
interlocutory appeals from the orders of a bankruptcy court if the
district court grants leave.
28 U.S.C. § 158(a)(3).
If a
district court, on its own motion or on the request of a party,
determines:
(i) the judgment, order, or decree involves a
question of law as to which there is no
controlling decision of the court of appeals
for the circuit or of the Supreme Court of the
United States, or involves a matter of public
importance;
(ii) the judgment, order, or decree involves
a question of law requiring resolution of
conflicting decisions; or
(iii) an immediate appeal from the judgment,
order, or decree may materially advance the
progress of the case or proceeding in which
the appeal is taken,
2
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th
Cir. 1981) (en banc) the Eleventh Circuit adopted as binding
precedent all the decisions of the former Fifth Circuit handed
down prior to the close of business on September 30, 1981.
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the
district
158(d)(2)(A).
court
shall
certify
the
appeal.
See also 28 U.S.C. § 1292(b).
28
U.S.C.
§
The Court finds that
none of these three basis have been established in this case.
A. Bankruptcy Court’s Findings
The proposed objection to Steven Yormak’s claim that is the
subject of this appeal is that the services provided by Steven
Yormak
under
unauthorized
specifically,
the
consulting
practice
Benjamin
of
agreements
law.
Yormak
(Doc.
alleges
#2,
that
constituted
p.
36.)
the
the
More
consulting
agreements were drafted by Steven Yormak as disguised agreements
to engage in a joint venture partnership for the practice of law
in Florida with Benjamin Yormak, and for Steven Yormak to be paid
a substantial portion of the legal fees earned as the senior
partner in the venture.
(Id., p. 38.)
Steven Yormak argued that
Benjamin Yormak must first obtain a determination from the Florida
Supreme Court that he engaged in the unauthorized practice of law,
and the objection should be stayed during the process.
(Id., p.
39.)
The Bankruptcy Court found that Benjamin Yormak was not
seeking to recover fees and damages but was using the argument as
a
“defensive
shield”.
(Id.,
p.
41.)
In
so
finding,
Bankruptcy Court noted:
The Eleventh Circuit's analysis makes it clear
that in order for a party to bring an
affirmative
claim
predicated
on
the
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the
unauthorized practice of law, the Florida
Supreme Court must have made the determination
that the conduct at issue is the unauthorized
practice of law and that no private cause of
action exists. But this rationale does not
apply to a party who defends a claim made
against him by an attorney based upon that
attorney's unauthorized practice of law.
Having reviewed the relevant case law, I
conclude that no case law requires a party,
defending a claim for compensation by an
attorney, to obtain a determination from the
Florida Supreme Court that the attorney had
engaged in the unauthorized practice of law
prior to raising that issue as a defense.
Therefore, I find the Debtor may object to
Steven Yormak's claim on the grounds that the
consulting agreements were void because they
called for the unlicensed practice of law
without first obtaining a determination from
the Florida Supreme Court.
(Id., p. 45.)
B. Motion for Leave to Appeal
Steven
established
Yormak
argues
precedent
that
under
the
Goldberg
Bankruptcy
v.
Merrill
Court
Lynch
ignored
Credit
Corp., 981 So. 2d 550 (Fla. 4th DCA 2008), approved, 35 So. 3d 905
(Fla. 2010), requiring that a party plead that the Florida Supreme
Court has made a finding of unauthorized practice of law before
proceeding on a claim.
In
Goldberg,
the
Fourth
District
Court
of
Appeals
specifically distinguished Vista Designs, Inc. v. Silverman, 774
So. 2d 884 (Fla. 4th DCA 2001) and Preferred Title Servs., Inc. v.
Seven Seas Resort Condo., Inc., 458 So. 2d 884 (Fla. 5th DCA 1984)
- 7 -
because “the issue was used as a shield and not as a sword”, unlike
in Goldberg.
Goldberg, 981 So. 2d at 552.
Vista Designs involved
a counterclaim that the verbal agreement was void because the
patent attorney was not licensed in the State of Florida.
The
appellate court determined that the trial court was correct in its
finding that attorney engaged in in the unauthorized practice of
law.
In Preferred Title, “[o]nce again, the case did not involve
an affirmative claim for fees as a result of the unauthorized
practice of law. The allegation of the unauthorized practice of
law was used as a defense to a claim by the title insurer to obtain
fees for document preparation.”
In
the
same
manner,
the
Id.
Bankruptcy
Court
distinguished
Benjamin Yormak’s defense from a claim of unauthorized practice of
law from pleading an actual claim of unauthorized practice of law.
The Bankruptcy Court also recognized the line of cases, including
the Eleventh Circuit, requiring a determination by the Florida
Supreme Court of an unauthorized practice of law, but noted that
none of the cases addressed the issue as a defense.
As a result,
the Bankruptcy Court found that the defense could be presented
without the finding.
The decision of the Bankruptcy Court is in line with current
case law and does not involve a matter of public importance.
Further, the order did not involve a question of law where there
is a split of authority because there are no conflicting decisions
- 8 -
or case law to the contrary.
Lastly, the Court does not find that
an immediate appeal would materially advance the progress of the
case.
For these reasons, the motion is denied.
Accordingly, it is hereby
ORDERED:
1. Appellant's Motion for Leave, and Appeal of Bankruptcy
Court Interlocutory Order Granting Debtor's Motion to Amend
Objection to Claim No. 4-1 of Steven R. Yormak; Denying
Motion
to
Strike;
Setting
Status
Conference;
and,
Prohibiting Communications with Debtor's Clients (Doc. #2)
is DENIED.
2. Appellee’s Motion to Strike the Reply of Creditor Steven
R. Yormak and to Deny Motion for Stay Pending Appeal (Doc.
#3) is DENIED as moot.
3. The Clerk shall enter judgment dismissing the
appeal,
transmit a copy of this Opinion and Order to the Clerk of
the Bankruptcy Court, terminate all deadlines, and close
the file.
DONE and ORDERED at Fort Myers, Florida, this
June, 2018.
Copies:
Clerk, Bankr. Ct.
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8th
day of
Counsel of Record
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