Hood v. Frazier

Filing 15

MEMORANDUM AND ORDER that Court lacks jurisdiction to hear Hood's appeal. Clerk of Court to enter judgment accordingly. Signed by Judge J. Phil Gilbert on 11/16/2012. (dka, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
MARY ANN HOOD,
Appellant,
vs.

Case No. 11-cv-883-JPG

DANA S. FRAZIER, Trustee,
Appellee.

Consolidated with:

MARY ANN HOOD,
Appellant,
Case No. 11-cv-1139-JPG
vs.
DANA S. FRAZIER, Trustee,
Appellee.

Consolidated with:

MARY ANN HOOD,
Appellant,
Case No. 11-cv-1140-JPG
vs.
DANA S. FRAZIER, Trustee,
Appellee.
MEMORANDUM AND ORDER
This matter comes before the Court on appellee Dana S. Frazier’s (“Frazier”) amended
motion to dismiss (Doc. 8) to which appellant Mary Ann Hood (“Hood”) has responded (Doc.
10). For the following reasons, the Court grants Frazier’s motion to dismiss.

FACTS
Hood filed a voluntary Chapter 7 bankruptcy on June 30, 2009, to which Frazier was
appointed to serve as Chapter 7 Trustee. Following the discharge of Hood’s bankruptcy, Frazier
brought two adversary proceedings, case numbers 11-3268 and 11-3303, against Hood.
The first adversary proceeding, case number 11-3268, was filed on June 16, 2011. In that
complaint, Frazier alleges that Hood executed a quit claim deed transferring her interest in real
property located at 2003 Clawson Street, Alton, Illinois, to her son Daniel J. Wehrle. Frazier
maintains that the transfer was made “for less than reasonably equivalent value,” and Hood was
insolvent at the time of the transfer. As such, Frazier sought to avoid the transfer of the property,
alleging that Hood conveyed the property in order to hinder, delay, and defraud her creditors.
In adversary proceeding 11-3268, Hood filed a motion to dismiss for failure to state a
claim on July 18, 2011. At a hearing held on August 15, 2011, the bankruptcy court denied
Hood’s motion to dismiss. On September 28, 2011, Hood filed her notice of appeal in this Court
appealing “from the final judgments and orders denying the debtor’s right to a dismissal of the
lawsuits filed against her by Dana S. Frazier . . . .” (Doc. 1). Hood did not seek leave to file her
appeal.
The second adversary proceeding, case number 11-3303, filed on August 17, 2011,
alleges that Hood fraudulently transferred property. Specifically, Frazier alleges that Hood
executed a quit claim deed transferring her interest in property located at 2003 Clawson Street,
Alton, Illinois, to Hood’s son, Daniel J. Wehrle. That deed was recorded on June 25, 2007.
Thereafter Daniel J. Wehrle transferred the property to Hood and Daniel J. Wehrle as joint
tenants with the right of survivorship. While this second deed was dated June 25, 2007, it was
not recorded until March 1, 2010. A third deed was then executed on January 26, 2011, naming

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Hood as the grantee. Thereafter, Hood took a mortgage out on the home with Wells Fargo Bank,
N.A. and the United States Secretary of Housing and Urban Development. Frazier then initiated
an adversary proceeding, case number 11-3303, seeking to revoke Hood’s Chapter 7 discharge
and avoid the transfer of the property in the third deed executed in 2011. In the second adversary
proceeding, case number 11-3303, however, the bankruptcy court issued no orders prior to
Hood’s notice of appeal in the instant case. Accordingly, the court presumes Hood is appealing
the denial of her motion to dismiss in case number 11-3268.
In her motion to dismiss in this appeal, Frazier asserts that this Court lacks jurisdiction to
hear Hood’s appeal from the bankruptcy court’s order denying Hood’s motion to dismiss.
Specifically, Frazier contends that Hood is appealing from a non-final order of the bankruptcy
court, the denial of her motion to dismiss, and she has failed to ask for the appropriate leave to
appeal an interlocutory order.
ANALYSIS
Federal district courts have jurisdiction to hear appeals from bankruptcy courts “[f]rom
final judgments, orders, and decrees; and with leave of the court, from other interlocutory orders
and decrees.” 28 U.S.C. § 158(a); In re Rimsat, Ltd., 212 F.3d 1039, 1044 (7th Cir. 2000). With
respect to bankruptcy, “finality does not require a final order concluding the entire bankruptcy;
certain orders entered prior to the conclusion of the bankruptcy proceeding will be deemed
final.” Rimsat, Ltd., 212 F.3d at 1044. “Where an order terminates a discrete dispute that, but
for the bankruptcy, would be a stand-alone suit by or against the trustee, the order will be
considered final and appealable.” Id. (citing In re Szekely, 936 F.2d 897, 899-900 (7th Cir.
1991)); Zedan v. Habash, 529 F.3d 398, 402 (7th Cir. 2008).

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The denial of a motion to dismiss does not terminate a discrete dispute and thus is not a
final order. See Marlin v. U.S. Trustee, 333 B.R. 14, 20 (WDNY 2005); In re Aquatic
Development Group, Inc., 196 B.R. 666, 669 (NDNY 1996) (“It is well-settled that denial of a
motion to dismiss a complaint in an adversary proceeding is an interlocutory order.”); Americare
Health Group, Inc. v. Melillo, 223 B.R. 70, 74 (EDNY 1998). Accordingly, Hood’s appeal is not
of right, and the Court has discretion as to whether it will grant her interlocutory appeal. 1
With respect to interlocutory appeals, section 158(a) does not provide guidance to the
district court in exercising its discretion to accept such an appeal. Courts, however, look to 28
U.S.C. § 1292(b), the statute outlining when an appellate court may take up an interlocutory
appeal from a district court, for guidance in determining whether to hear an interlocutory appeal
from a bankruptcy court. In re Dental Profile, Inc., 2010 WL 431590, at *4 (N.D. Ill. Feb. 1,
2010); In re Automotive Prf’ls, Inc., 379 B.R. 746, 751 (N.D. Ill. 2007). Under § 1292(b) an
interlocutory appeal is appropriate when it “(1) involves a controlling question of law; (2) over
which there is substantial ground for difference of opinion; and (3) an immediate appeal from the
order may materially advance the ultimate termination of the litigation.” In re Dental Profile,
Inc., 2010 WL 431590, at *4 (N.D. Ill. Feb. 1, 2010) (quoting 28 U.S.C. § 1292(b)); In re Capen
Wholesale, Inc., 184 B.R. 547, 549 (N.D. Ill. 1995). The party seeking an interlocutory appeal
bears the burden of demonstrating “exceptional circumstances justify a departure from the basic
policy of postponing appellate review until after the entry of a final judgment.” Coopers &
Lybrand v. Livesay, 437 U.S. 463, 475 (1978).
With regard to these factors, Hood fails to provide an appeal in which the Court should
exercise its discretion in granting an interlocutory appeal. Hood disputes the facts of the case

1

Hood failed to ask this Court for leave to appeal. However, pursuant Federal Rule of Bankruptcy Procedure
8003(c), the Court will treat her notice of appeal as a motion for leave to appeal.

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rather than presenting any question of law. For instance, in her brief, Hood describes in depth
her medical ailments that caused her to take certain actions relating the fraudulent transfer.
(Doc. 11, pp. 9-11). Hood further argues that Frazier made false statements to the bankruptcy
court and generally complains about the propriety of Frazier’s and attorney Steven Wallace’s
actions. (Doc. 11, p. 13-33). Hood further argues that Frazier filed an adversary proceeding
beyond the statute of limitations, but that argument, again, is based on factual discrepancies.
Because Hood fails to present any legal questions with which there is substantial ground for
difference of opinion, the Court declines to exercise its discretion in granting her motion for
leave to appeal the decision of the bankruptcy court.
CONCLUSION
Accordingly, for these reasons, the Court lacks jurisdiction to hear Hood’s appeal and
GRANTS Frazier’s motion to dismiss (Doc. 8). The Court DIRECTS the Clerk of Court to
enter judgment accordingly.
IT IS SO ORDERED.
DATED: November 16, 2012
s/ J. Phil Gilbert
J. PHIL GILBERT
DISTRICT JUDGE

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