In Re: In the Matter of Sandler Michaud, L.L.C.
Filing
11
ORDER AND REASONS: IT IS ORDERED that 3 Motion to Dismiss Appeal is DENIED as set forth in document. Ordered deadlines are set herein. Signed by Judge Jay C. Zainey on 8/31/2022. (ajn)
Case 2:22-cv-01287-JCZ-DMD Document 11 Filed 08/31/22 Page 1 of 5
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN RE:
DENNIS MICHAEL SCACCIA
CIVIL ACTION
NO: 22-1287
Bankruptcy Case 19-13024
SECTION: "A"(3)
ORDER AND REASONS
Before the Court is the following motion: Motion to Dismiss Appeal (Rec. Doc. 3)
filed by Appellee Florida Moon, LLC (“Florida Moon”). Appellant Sandler Michaud, LLC
(“Sandler Michaud”) opposes the motion (Rec. Doc. 7) and Appellee Florida Moon replied
(Rec. Doc. 10). The motion, submitted for consideration on August 3, 2022, is before the
Court on the briefs without oral argument. For the following reasons, the motion is
DENIED.
I.
BACKGROUND
On April 25, 2022, United States Bankruptcy Judge Meredith S. Grabill issued a
Memorandum Opinion and Order granting in part and denying in part Florida Moon’s
Motion to Dismiss Chapter 13 Case with Prejudice and for Sanctions in Bankruptcy Case
No. 19-13024 (“the Order”). (Bankruptcy ECF Doc. 79; Rec. Doc. 1-1). Specifically, Judge
Grabill ordered that Debtor Michael Scaccia’s Chapter 13 case be dismissed without
prejudice and that monetary sanctions be assessed against the law firm of Sandler
Michaud, LLC and in favor of Florida Moon, LLC, in the amount of $18,844.85. (Id.). On
May 9, 2022, Sandler Michaud filed a Notice of Appeal of the Bankruptcy Court’s Order
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#79. (Rec. Doc. 1-2). The appeal was docketed with this Court on May 11, 2022. (Rec.
Doc. 1).
On July 11, 2022, Appellee Florida Moon filed the instant Motion to Dismiss (Rec.
Doc. 3), requesting the Court to dismiss the appeal on the grounds that Appellant has
failed to timely file its designation of items to be included in the record on appeal and a
statement of issues to be presented on appeal, as required by Federal Rule of Bankruptcy
Procedure 8009. (Id. at p. 1). According to Appellee, Appellant’s designation and
statement were due on or before May 23, 2022, 14 days after Appellant filed its Notice of
Appeal, yet no designation or statement has been filed. (Rec. Doc. 3-1 at pp. 4–5).
Appellant Sandler Michaud asks the Court to deny the motion, arguing that counsel
for Appellant believed that he complied with the procedural rules by filing the Notice of
Appeal and by designating the order being appealed in the statement of election within the
notice. (Rec. Doc. 7 at p. 2). Appellant further claims that refusing to allow the appeal to
proceed would cause a grave injustice to the appealing party. (Id.). Appellant requests the
Court for additional time to file its designation into the record. (Id. at p. 3).
In reply, Appellee Florida Moon asserts that, in addition to the designation of items
and statement of issues to be presented on appeal, Appellant has also failed to file and
serve its brief within the deadline set out by the Federal Rules of Bankruptcy Procedure.
(Rec. Doc. 10). Appellee claims that Appellant’s filing of the Notice of Appeal was a delay
tactic to avoid timely compliance with the Bankruptcy Court’s imposed sanctions and that
Appellee is prejudiced by the incurrence of additional attorney’s fees and expenses as a
result of such tactics. (Id. at pp. 6–8)
The Court considers the motion below.
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II.
LEGAL STANDARD
According to Rule 8009 of the Federal Rules of Bankruptcy Procedure,
The appellant must file with the bankruptcy clerk and serve on the appellee
a designation of the items to be included in the record on appeal and a
statement of the issues to be presented. The appellant must file and serve
the designation and statement within 14 days after: (i) the appellant’s notice
of appeal as of right becomes effective under Rule 8002 . . . .
Fed. R. Bankr. P. 8009(a)(1)(A)–(B)(i). Rule 8002 provides the time limitations for filing an
appeal: “[e]xcept as provided in subdivisions (b) and (c), a notice of appeal must be filed
with the bankruptcy clerk within 14 days after entry of the judgment, order, or decree being
appealed.” Fed. R. Bankr. P. 8002(a)(1).
“An appellant’s failure to take any step other than the timely filing of a notice of
appeal does not affect the validity of the appeal, but is ground (sic) only for the district
court or BAP to act as it considers appropriate, including dismissing the appeal.” Fed. R.
Bankr. P. 8003(a)(2). As evidenced by this rule, it is only the failure to file a timely notice
of appeal that deprives the district court of jurisdiction and mandates dismissal. See Mehta
v. Shah (In re Shah), 96 F. App'x 943, 944 (5th Cir. 2004); Zer-Ilan v. Frankford (In re
CPDC, Inc.), 221 F.3d 693, 698 (5th Cir. 2000). In contrast, a dismissal for failure to follow
other procedural rules, including Rule 8009, has been characterized as “a harsh and
drastic sanction that is not appropriate in all cases, even though it lies within the district
court's discretion.” In re CPDC, Inc., 221 F.3d at 699; see Kollinger v. Hoyle (In re
Kollinger), 551 F. App'x 104, 106 (5th Cir. 2013); In re Acad. Drive Dev., LLC, No. CV 211710, 2021 WL 5881891, at *1 (E.D. La. Dec. 13, 2021). In considering dismissal as an
appropriate sanction, a court should take into account
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that some infractions of the rules of bankruptcy procedure are harmless and
do not merit dismissal; that dismissal unfairly punishes clients for the
mistakes of their counsel in some cases; and that the primary goal of courts
as enforcers of the bankruptcy rules should be to ensure the swift and
efficient resolution of disputes pertaining to the distribution of the bankruptcy
estate.
In re CPDC, Inc., 221 F.3d at 699–700.
III.
DISCUSSION
In the instant case, Appellant’s Notice of Appeal became effective on May 9, 2022,
when it was timely filed in accordance with Rule 8002, i.e., within 14 days of the entry of
the Bankruptcy Court’s Order. Accordingly, pursuant to Rule 8009, Appellant’s designation
of items for inclusion in the record on appeal and statement of issues to be presented were
due within 14 days thereafter, on or before May 23, 2022. Appellant’s failure to timely
comply with Rule 8009 is evident from the record. A July 8, 2022, letter from the Deputy
Clerk for the United States Bankruptcy Court confirms that a designation of items to be
included in the record on appeal was not filed by the May 23, 2022, deadline. (Rec. Doc.
4). And, to date, Appellant has still not filed its designation of items or statement of issues
to be presented.
These procedural violations, however, do not result in an automatic dismissal of the
appeal. As stated above, when an appellant fails to take any step under the Federal Rules
of Bankruptcy Procedure other than the timely filing of a notice of appeal, the Court has
the discretion to take whatever action it considers appropriate including dismissing the
appeal. Fed. R. Bankr. P. 8003(a)(2). Appellant argues that counsel for Appellant does
not as a matter of regular practice appeal these matters and that, therefore, counsel
believed the Notice of Appeal to be sufficient. (Rec. Doc. 7 at p. 2). Counsel for Appellant
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allegedly was unaware that additional filings were required and requests the Court for
additional time to file the required items into the record of this matter. (Id. at pp. 2–3).
Although ignorance of the law is not a valid excuse, the Court does not find dismissal to
be an appropriate remedy at this stage in the proceedings.
Accordingly;
IT IS ORDERED that the Motion to Dismiss Appeal (Rec. Doc. 3), filed by
Appellee Florida Moon, LLC is DENIED.
IT IS FURTHER ORDERED that Appellant Sandler Michaud, LLC shall file and
serve its designation of the items to be included in the record on appeal and its statement
of the issues to be presented on appeal no later than ten (10) days from the date of this
Order.
IT IS FURTHER ORDERED that Appellant Sandler Michaud, LLC shall comply with
any other applicable provisions of Federal Rule of Bankruptcy Procedure 8009 no later
than ten (10) days from the date of this Order.
Appellant is warned that its failure to comply with the deadlines set forth in this
Order is grounds for the Court to dismiss the appeal.
August 31, 2022
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE
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