Diamond v. Dambro

Filing 5

ORDER: Richard K. Diamond's Motion for Leave to Appeal Interlocutory Order Pursuant to 28 U.S.C. 158(a) 1 is DENIED. The appeal is therefore DISMISSED as leave was not granted and the Court otherwise lacks jurisdiction to hear the appeal. The Clerk shall enter Judgment accordingly and CLOSE THIS CASE. The Clerk shall transmit a certified copy of this Order to the United States Bankruptcy Court Clerks Office. Signed by Judge Virginia M. Hernandez Covington on 9/2/2011. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
IN RE:
DAVID J. DAMBRO
Debtor.
__________________________________/
RICHARD K. DIAMOND, Chapter 7
Trustee of the Bankruptcy Estate of
IVDS
Interactive
Acquisitions
Partners,
Plaintiff,
vs.

Case No. 8:11-cv-1000-T-33
Bankr. No. 8:09-bk-3240-CED
Adversary No. 8:09-ap-338-CED

DAVID J. DAMBRO,
Defendant.
__________________________________/
ORDER
This matter comes before the Court pursuant to Richard K.
Diamond’s Motion for Leave to Appeal Interlocutory Order Pursuant
to 28 U.S.C. 158(a) (Doc. # 1) and David J. Dambro’s Response in
Opposition (Doc. # 1-6).

Both of these documents were initially

filed in the Bankruptcy Court and were transmitted to this Court on
May 18, 2011.

For the reasons set forth below, the Court denies

the Motion.
I.

Background
The adversary proceeding before the Bankruptcy Court, which is

the

subject

of

the

present

Motion,

has

its

origins

in

a

$5,600,000.00 fraudulent conveyance judgment entered against Dambro
by the United States District Court for the Central District of

California and affirmed by the Ninth Circuit Court of Appeals. The
judgment was entered after ten years of hard-fought litigation.
On February 24, 2009, Dambro filed a voluntary petition for
relief under Chapter 7 of the United States Bankruptcy Code.

On

May 22, 2009, Diamond filed a complaint in Dambro’s bankruptcy case
seeking

a

determination

that

the

$5,600,000.00

fraudulent

conveyance judgment entered against Dambro is nondischargeable
under 11 U.S.C. §§ 523(a)(2)(A), (a)(4) and (a)(6).1

Thereafter,

on June 22, 2010, Diamond filed a motion for summary judgment, to
which Dambro replied. On September 15, 2010, the Bankruptcy Court
held oral argument on the motion for summary judgment.

On March

22, 2011, the Bankruptcy Court convened the parties to inform them
of its ruling, and on that same day, the Court issued an order
denying the motion for summary judgment “for the reasons stated in
open court.”

(Doc. # 1-4 at 4).

During the March 22, 2011, hearing, the Bankruptcy Court
identified the issues presented as: (1) “whether Mr. Dambro is
barred from contesting the nondischargeability of Plaintiff’s
California

judgment against him under Sections 523(a)(2)(A),

523(a)(4), [and] 523(a)(6) of the Bankruptcy Code” and (2) “whether

1

Section 523(a)(2) excepts from discharge debts incurred by
false pretense, a false representation, or actual fraud; Section
523(a)(4) excepts from discharge a debt for fraud while acting as
a fiduciary, embezzlement, or larceny; and Section 523(a)(6)
excepts from discharge a debt incurred for willful and malicious
injury by the debtor to another entity or to the property of
another entity.
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the [California] jury’s findings collaterally estopped Mr. Dambro
from

denying

that

the

Plaintiff’s

judgment

is

excepted

from

discharge under Sections 523(a)(2), (a)(4), and (a)(6).” (Doc. # 17 at 4, 8).
After describing the complex procedural history and setting
forth the controlling law, the Bankruptcy Court determined “the
moving party, the Plaintiff, has not established those requirements
[the four requirements of collateral estoppel].” Id. at 12, 13.
The Bankruptcy Court further noted that, even if the elements for
collateral

estoppel

were

present,

the

Court

would

use

its

discretion to decline to apply the doctrine of collateral estoppel
pursuant to Bush v. Balfour Beatty Bahammas, 62 F. 3d 1319, 1325
n.8

(11th

Cir.

1995)(“We

note

that

whether

to

allow

issue

preclusion is within the sound discretion of the trial court.”).
(Doc. # 1-7 at 13).

Thus, the Bankruptcy Court denied Diamond’s

motion for summary judgment.

Diamond seeks an order from this

Court allowing an interlocutory appeal of the Bankruptcy Court’s
order.
II.

Legal Standard
A 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). Because the statute does not
provide criteria for determining whether a district court should
exercise its discretionary authority to grant leave, courts look to

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28 U.S.C. § 1292(b), which governs discretionary interlocutory
appeals from the district courts to the courts of appeals.

In re

The Charter Co., 778 F.2d 617, 620 n. 5 (11th Cir. 1985).
The pertinent factors under 28 U.S.C. § 1292(b) are whether
the order involves a controlling question of law as to which there
is substantial ground for difference of opinion and whether an
immediate appeal from the order may materially advance the ultimate
termination of the litigation. McFarlin v. Conseco Servs., 381 F.
3d 1251, 1264 (11th Cir. 2004). However, even when these factors
are present, whether to grant or deny leave to appeal is within the
sound discretion of the district court, and leave should be granted
only in exceptional circumstances. Id.
III. Analysis
In McFarlin, the Eleventh Circuit clarified that the “question
of law used in § 1292(b) has reference to a question of the meaning
of a statutory or constitutional provision, regulation, or common
law doctrine rather than to whether the party opposing summary
judgment had raised a genuine issue of material fact.” 381 F.3d at
1258.

Further,

a

§

1292(b)

“question

of

law”

is

not

“the

application of settled law to fact” or “any question the decision
of which requires rooting through the record in search of the
facts.” 381 F.3d at 1258.

Instead, the McFarlin court clarified,

“what the framers of § 1292(b) had in mind is more of an abstract
legal issue or what might be called one of pure law, matters the

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court of appeals can decide quickly and cleanly without having to
study the record.” 381 F.3d at 1258 (internal citations and
quotation marks omitted).
The

fact-intensive

nature

of

the

issue

presented–-the

application of estoppel principles steeped in fourteen years of
procedural

history--precludes

any

conclusion

that

there

is

a

“controlling question of law” as to which there is a substantial
ground for difference of opinion.

This Court cannot evaluate the

arguments asserted “quickly and cleanly” without delving into the
record (not only the record in the pending bankruptcy case and
adversary proceeding, but also the California proceedings–including
the two week trial in the California district court leading to the
judgment in question).
In

addition,

the

Court

does

not

find

that

allowing

an

interlocutory appeal will advance the ultimate resolution of the
litigation.

To the contrary, such an appeal would hinder the

proceedings because the Bankruptcy Court litigation would be “put
on hold” during the appellate process in this Court. (Doc. # 1-6
at 9).

As stated in Figueroa v. Wells Fargo Bank, N.A., 382 B.R.

814, 823 (S.D. Fla. 2007), “Interlocutory review is generally
disfavored for its piecemeal effect on cases.”

The Court declines

to further protract these proceedings by allowing an interlocutory
appeal.

Thus, the request for leave to appeal is denied.

Accordingly, it is

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ORDERED, ADJUDGED, and DECREED:
1.

Richard

K.

Diamond’s

Motion

for

Leave

to

Appeal

Interlocutory Order Pursuant to 28 U.S.C. 158(a) (Doc. # 1) is
DENIED.
2. The appeal is therefore DISMISSED as leave was not granted
and the Court otherwise lacks jurisdiction to hear the appeal. The
Clerk shall enter Judgment accordingly and CLOSE THIS CASE.
3. The Clerk shall transmit a certified copy of this Order to
the United States Bankruptcy Court Clerk’s Office.
DONE and ORDERED in Chambers, in Tampa, Florida, this 2nd day
of September, 2011.

Copies to:
Caryl E. Delano, United States Bankruptcy Judge
Clerk, U.S. Bankruptcy Court
Counsel of Record

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