Gebhardt v. Hardigan

Filing 24

ORDER granting 6 Motion for Leave to Appeal; denying 9 Motion to Dismiss; granting 14 Motion to Consolidate Cases. The following actions CV413-125 and CV413-130 are consolidated for purposes of the Court's appellate review of the Consolidated Order. Signed by Judge J. Randal Hall on 03/31/2014. (thb)

IN THE UNITED
THE

STATES DISTRICT COURT

FOR

SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION

GUY G. GEBHARDT, Acting
United States Trustee,
Appellant,
CASE NO.

KENNETH R.

CV413-125

CASE NO.

v.

CV413-130

HARDIGAN,

Appellee.

SUNTRUST BANK,

Appellant,
v.

KENNETH R.

HARDIGAN,

Appellee.

ORDER

Before

Motion

for

Appellant

the

Court

Leave

to

Suntrust

(CV413-130,
that

the

Doc.

are

Appeal

Bank's

2).

Bankruptcy

Appellant

1,

March

order

(CV413-125,

5-43)

(the "Consolidated Order")

these

motions

are

for

Following the

Doc.

Attach.

GRANTED.

G.

(CV413-125,

Motion

Judge's

Guy

1;

Doc.

Leave

Court's
29,

Gebhardt's

6)

to

and

Appeal

determination

2012

consolidated

CV413-130,

Doc.

2

at

is an interlocutory order,

Appellants

have

also

filed

Joint Motions to Consolidate this action.

14;

CV413-13 0,

opposition
Doc.

16;

to

this

Appellee has

After careful consideration,

12.)

as

of

(CV413-125,

to Consolidate are GRANTED.
Appellee's

untimely

the

Consolidated Order.

Court's

Finally,

Motion

11)/

to

consideration

which
of

the

Motion

Appellant

is

and

9)

is

are hereby CONSOLIDATED

appellate

Appellee

Dismiss

Doc.

review

of

the

Suntrust Bank has

filed a Motion to Supplement Record On Appeal
Doc.

In light
to

(CV413-125,

above-styled actions

purposes

in

Doc.

appeal

The

filed responses

consolidation.

consolidation,

DENIED.

Doc.

requested

Motions

Gephardt's

for

8).

the

CV413-130,

Appellants'
of

Doc.

(CV413-125,

(CV413-130,

opposed.

Response,

Upon

the

due

Motion

is

GRANTED.

I.

MOTIONS

The

and

TO APPEAL

Court

has

appellate

interlocutory

U.S.C.

§§

appeals

U.S.C.

may

orders

158(a)(1),
only

be

§ 158(a)(3).

it must
Comm'r. ,

end the
92

bankruptcy

"completely

a

Bankruptcy

158(a)(3).
made

with

Judge.

However,
leave

In general,

of

1539,

context,

resolves

1547

however,

all

of

final

See

28

interlocutory

the

Court.

28

for an order to be final,

litigation on the merits.

F.3d

discrete claim,

of

jurisdiction over both

(11th

an

the

including issues as

Cir.

Jove

Eng'g v.

1996).

In

order

is

final

issues

pertaining

the

if

to

it

a

to the proper relief."

In re Atlas,

the

210 F.3d 1305,

Consolidated

Order

1308

(11th Cir.

denied

Dismiss for Abuse under 11 U.S.C.

Motions

to Convert

under 11 U.S.C.

2000).

Appellants'
§ 707(b)

Because

Motions

to

as well as their

the case to a Chapter 11 proceeding

§ 706(b),

the Court must determine whether

these decisions are interlocutory or final.
Whether

always

an

to

easy

context.

order

determine,

Other

motion

to

is

final

circuits

dismiss

interlocutory

especially
have

a

or

found

Chapter

7

in

the

that

a

case

is

bankruptcy

denial

is

not

of

a

generally

interlocutory because the resultant effect is that the case
merely proceeds in the bankruptcy court.

Jartran,

Inc.,

Phillips,

844

Bedford Drive

More

886
F.2d

F.2d
230

(5th

Corp. , 778

importantly,

the

859

(7th
Cir.

Cir.

1379

Circuit

e.g. , In re

1989);

1988);

F.2d 1374,

Eleventh

See,

In

re

In

re

405

N.

(9th Cir.

1985).

found

In

in

re

Donovan that it did not have appellate jurisdiction because
a

bankruptcy

dismiss

for

court's
abuse

final order.1
Here,

denial

under

11

of

U.S.C.

a

creditor's
§

707(b)(3)

motion
was

not

Appellants have both filed Motions

that

a

532 F.3d 1134 (11th Cir. 2008).
for Leave

Appeal
because
of
the
Eleventh
Circuit's
holding
J
Donovan.
Admittedly,
the Eleventh Circuit
stated
Donovan

to

"the

finality

requirement

is

met

to

in
in

where

1 Appellate courts have jurisdiction to hear only appeals on
final
orders,
whereas
interlocutory appeals.
(11th Cir.

2008) .

district
courts
In re Walker, 515

may
also
F.3d 1204,

hear
1210

practical
n.l.

considerations

However,

require

it."

532

F.3d

at

1137

while the creditor in Donovan felt that the

denial of her motion to dismiss would effectively eliminate
any chance to recover,

she

could

after

the

not
case

reasoned that
the

result

conclusively
did

at

[it]

meaningful

dismissed.

Id.

appellate

The

Eleventh

creditor's unlikelihood of

the

Id.

found

obtained

was

the

of

procedure.
Circuit

have

the Eleventh Circuit found no reason

facts

at

that

of

1137

the

n.2.

case
In

the

denial

the

bankruptcy

resolve

of

and

review
Circuit

recovery was

not

short,

bankruptcy

the

the

motion

case

as

Eleventh
not

whole,

a

"did

nor

resolve any adversary proceeding or claim."

1137.

Motions

Accordingly,
to

Dismiss

interlocutory

the

denial

should

because

it

of

the

likewise

does

not

be

Id.

Appellants'
treated

eliminate

either

as

of

Appellants' claims.
The

determination

of

whether

a

denial

of

a

motion

convert a case to Chapter 11 pursuant to 11 U.S.C.

is interlocutory or final is a matter of
in

this

that,

circuit.

At

least

one

other

circuit

has

§ 706(b)

impression
concluded

given the difficulty in appealing a decision after a

debtor's assets have been liquidated,
to

first

to

convert

Copper,

is

a

final,

426 F.3d 810

appealable

(6th Cir.

465 F.3d 767,

774

found

interlocutory

to

be

(7th Cir.

decision.

2005).

2006)

in

a denial of a motion
See

In

re

But see In re Salem,

(order denying conversion

light

of

a

venue

issue) .

However,

the

Eleventh

Circuit

reasoning unpersuasive

found

in Donovan.

that

"[b]y

denying

same

line

In finding the

of a motion to dismiss interlocutory,
reasoned

this

her

of

denial

the Eleventh Circuit

motion

to

dismiss,

the

bankruptcy court permitted the Chapter 7 case to continue."

Id.

at

1137.

denial of

Here,

the

Appellants'

effect of

Motions

to

the

Bankruptcy Judge's

Convert

is

the same:

case will continue to proceed under Chapter 7.

re Kutner,

656 F.2d 1107, 1110-11

(5th Cir.

the

See also In

1981)2 (denial

of a motion to convert from chapter 11 to 13 was procedural

and

thus

Court

considered

finds

it

interlocutory).

appropriate

to

Consequently,

treat

the

the

denial

of

Appellants' Motions to Convert as interlocutory as well.
Because

the

Court

finds

both

decisions

the Consolidated Order to be interlocutory,
to

whether

standards

leave

for

to appeal

whether

a

is

merited

district

contained

the Court turns

in this

court

in

case.

should

The

grant

an

interlocutory appeal from a bankruptcy court pursuant to 28
U.S.C.

§

158(a) (3)

are

the

same

as

those

applicable

to

interlocutory appeals made from the district courts to the
courts of appeal under 28
Co. ,

778

1292(b).

F.2d

617,

Under

28

620

U.S.C.

n.5

U.S.C.

(11th

§

§ 1292(b).
Cir.

1292(b),

In re Charter

1985);

leave

28

to

U.S.C.

appeal

§

an

interlocutory order should be granted if the order involves

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 decisions of the former Fifth Circuit
handed down prior to October 1, 1981.

a

controlling

ground
would

for

difference

materially

litigation.
P.C. ,

question

549

OFS
F.3d

of

of

advance

Fitel,
1344,

law,

there

opinion,
the

an

ultimate

LLC v.

1359

or

a

substantial

immediate

termination

Epstein,

(11th

is

Cir.

appeal
of

the

Becker and Green,
2008).

Here,

all

parties appear to agree that a discharge of the debtor and

liquidation of the assets is the next logical step in this
Chapter 7 proceeding.
of

the

Bankruptcy

Thus,
Judge's

an immediate appellate review
denial

of

both

Appellants'

Motions to Dismiss and Motions

to Convert is appropriate.

Accordingly,

also

because

the

Court

finds

the

Appellants

appeals to be timely filed,3 Appellants' Motions for Leave
to Appeal should be granted.

II.

MOTIONS

TO CONSOLIDATE AND MOTION TO DISMISS

Appellants

Consolidate

this

have

also

action,

arguing

questions of law and fact.

Doc.

8.)

Doc.
which

consolidation,

separate

that

it

(CV413-125,

12.)
come

However,
from

arguing

issues.

Motions

contains

Doc.

to

common

14; CV413-130,

that

(CV413-125,

the

Doc.

two
16;

the Court finds that the

the

evidentiary hearing,

See

Joint

Appellee has filed responses in objection to the

requested
involve

filed

same

order

and

after

appeals

CV413-130,

two appeals,
a

combined

are similar enough for consolidation.

infra Section II.

Pursuant

Court

may

common

to

Federal

consolidate

questions

42(a)(2).

of

Rule

of

multiple
law

or

Civil

Procedure

actions

fact.

if

Fed.

42,

they
R.

the

involve

Civ.

Pro.

The Court notes at the outset that consolidation

at this point comes too late to save any effort on behalf

of the parties, as all the appellate briefs have been filed

in

both

Judge

cases.

Nevertheless,

consolidated

the

parties'

evidentiary hearing and the
sees

no

reason

to

given

treat

that

the

motions

Bankruptcy

for

both

Consolidated Order,

them

separately

at

the

this

its
Court

point.

Both parties appeal from the same order and seek the same
outcome.

Accordingly,

the

Court

will

review

all

the

parties' appellate documents before rendering its decision.
In addition,
Gebhardt's

this

Appellee

appeal

motion,

as

has

untimely.

Gephardt

within

judgment,

fourteen

order

or

Gephardt responds

days

a

Motion

(CV413-125,

argues

Bankruptcy Procedure 8002(a)

appeal

filed

that

to

Doc.

Dismiss
9.)

Rule

Federal

In

of

requires that a party file an

of

decree.

the

date

(CV413-125,

that Bankruptcy Rule

of

entry

Doc.

8002(a)

9

of

at

a

2.)

also allows

a party an extra fourteen days after another party to the

same order has filed an appeal.
Here,

be

because

the

consolidated,

same order,
parties

to

it
the

Court

and

has

because

(CV413-125, Doc.

determined

both

the

appeals

10 at 3.)

actions

come

should

from

the

follows that Gephardt and Suntrust are both
Consolidated Order.

While

not

binding

on

the

Court,

the

principles

outlined

in

Health Servs. , Inc. , 959 F.2d 1277,
are helpful here.
La.

Health,

untimely

E.E.O.C.

1281

v.

W.

(5th Cir.

La.

1992)1

After consolidation was granted in W.

the court found that the appellant's otherwise

appeal

was

saved because

it

was

days of another appellant's appeal.5

within

Id.

fourteen

at 1280.

The

Court can discern no reason why the same principles should
not apply here.

Accordingly,

Appellee's Motion to Dismiss

should be denied.

CONCLUSION

Because
decisions

Attach.

the

in

Court

his

finds

1; CV413-13 0,

Doc.

Bankruptcy

Order

Consolidated

the

(CV413-125,

2 at 5-43)

Doc.

consideration,
(CV413-125,

light of

DENIED.
for

14;

purposes

Consolidated

as

Joint

the

Order.

After

Motions

Doc.

8)

Appellee's

untimely

to

1,

are

are

6;

careful

Consolidate
GRANTED.

In

Motion to Dismiss

(CV413-125,

above-styled actions
of

(CV413-125, Doc.

GRANTED.

CV413-130,

consolidation,

appeal

The

are

Appellant's

Doc.

this

Gephardt's

2)

Doc.

to be interlocutory,

Appellant's Motions for Leave to Appeal
CV413-13 0,

Judge's

Doc.

9)

is

hereby CONSOLIDATED

Court's

appellate

review

Finally,

Appellant

of

Suntrust

the

Bank's

4 The Court cannot find, and Appellee does not provide, any
Eleventh Circuit case addressing the same issue.

5 This decision is an application of the Federal Rules of
Civil

Procedure's

8002(a),

Fed.

R.

Civ.

parallel

rules

P. 4(a)(3).

to

Bankruptcy

Rule

Motion to Supplement Record On Appeal

(CV413-130,

Doc.

is GRANTED.

SO ORDERED this ggV day of March 2014.

HONORSpLE J. RANDAL HALL
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

11)