Law Offices of Mark Kotlarsky, Esq. Pension Plan v. Nesse et al
Filing
7
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 9/8/14. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
LAW OFFICES OF MARK KOTLARSKY,
ESQ. PENSION PLAN
:
v.
:
Civil Action No. DKC 14-1033
:
JANET M. NEESE, et al.
:
MEMORANDUM OPINION
Pending before the court is an appeal filed by The Law
Offices of Mark Kotlarsky Pension Plan (“Appellant”) from an
oral ruling made by United States Bankruptcy Judge Thomas J.
Catliota on August 19, 2013.
unnecessary.
A hearing on the appeal is deemed
See Fed.R.Bankr.P. 8012; Local Rule 105.6.
For
the reasons that follow, the appeal will be dismissed.
I.
Background
This case involves an appeal from an oral ruling by Judge
Catliota.
Judge Catliota sustained a trustee’s objection to the
approval of a Final Report and Account and held that certain
funds
be
held
in
escrow
by
the
trustee
pending
further
investigation into ownership of said funds.
On November 18, 2010, Silver Spring Family Medical Center,
LLC (“the Debtor”) filed a voluntary petition under Chapter 7 of
the United States Bankruptcy Code, which commenced case number
10-36319-TJC before Judge Thomas J. Catliota.
(ECF No. 1-13).
On November 23, 2010, Mark Kotlarsky entered his appearance in
that case as counsel for Law Offices of Mark Kotlarsky, Esq.
Pension Plan, an unsecured creditor of the Debtor.
36319-TJC, ECF No. 14 (D.Bankr. Nov. 23, 2010).
Case No. 10Gary A. Rosen
was appointed trustee over the Debtor’s estate.
Appellant filed
a claim against the Debtor’s estate.1
On February 6, 2013, Mark Kotlarsky filed for his personal
bankruptcy under Chapter 7 of the United States Bankruptcy Court,
which commenced case number 13-12002 before Judge Wendelin I.
Lipp.
Janet M. Nesse (“Appellee” or “Ms. Nesse”) was appointed
the Chapter 7 Trustee of the personal bankruptcy estate of Mark
Kotlarsky.
Case No. 13-12002, ECF No. 8-2 (D.Bankr. Feb. 6,
2013).
On May 9, 2013, Gary A. Rosen, trustee for the estate of
Silver Spring Family Medical Center, LLC, filed a Final Report
and
Account
in
the
bankruptcy
case
of
In
re:
Family Medical Center, LLC, Case No. 10-36319.
Silver
Spring
(ECF No. 1-11).
On June 14, 2013, Ms. Nesse - as an interested party - filed an
objection to this report.
(ECF No. 1-10).
In her brief, Ms.
Nesse stated that:
it appears that Kotlarsky may have a claim
through the Law Offices of Mark Kotlarksy,
Esq. Pension Plan.
This claim is an asset
1
The amount of the claim was initially $286,372.70, which
was later amended to $91,411.35 to reflect receipt of partial
payments. (ECF Nos. 3-3 to 3-5).
2
Kotlarsky failed to disclose in his personal
bankruptcy case which is currently pending.
Although he listed a pension plan, it
included only three accounts, no claims.
Ms. Nesse has not yet received information
on
the
pension
plan
as
Kotlarsky’s
bankruptcy counsel is out of the country.
The Law Offices of Mark Kotlarsy, Esq. Pension Plan opposed the
objection on July 22, 2013.
(ECF No. 1-6).
On August 19, 2013, Judge Catliota held a hearing related
to the Debtor’s bankruptcy case.
bankruptcy
case
reflects
that
A review of the docket in the
the
hearing
addressed
objections, primarily regarding fees and discovery.
multiple
During the
hearing, Judge Catliota also addressed Trustee Nesse’s objection
to the Final Report and Account prepared by Trustee Rosen in
connection with the Debtor’s bankruptcy case.
In re: Silver
Spring Family Medical Center, LLC, Case No. 10-36319, ECF No.
100.
(See ECF No. 1-17, at 4).
Appellant does not provide a
transcript of the hearing – a deficiency which will be discussed
below - but both parties agree that Judge Catliota held that Mr.
Rosen shall distribute the funds due to the Pension Plan to
Trustee Janet M. Nesse to be held until ownership of said funds
is determined.
On March 10, 2014, Judge Catliota issued a final decree in
In re: Silver Spring Family Medical Center, LLC (Case No. 1036319-TJC),
closed.
and
the
underlying
(ECF No. 1-4).
Chapter
7
bankruptcy
case
was
Based on Trustee Rosen’s Final Account
3
and
Distribution
Report,
$41,148.55
was
distributed
to
Janet
Nesse, as trustee for Mr. Kotlarsky’s estate, on August 28, 2013,
in accordance with Judge Catliota’s ruling.
(ECF No. 1-5, at 9).
The Appellant filed a Notice of Appeal on March 18, 2014,
seven months after the August 19, 2013 hearing.
Trustee Nesse
filed
5),
an
opposition
on
May
2,
2014
(ECF
No.
to
which
Appellant replied on May 15, 2014 (ECF No. 6).
II.
Standard of Review
When
reviewing
a
bankruptcy
court’s
district court acts as an appellate court.
conclusions
are
reviewed
reviewed for clear error.
de
novo
and
final
order,
the
Accordingly, legal
findings
of
fact
are
In re Official Comm. of Unsecured for
Dornier Aviation (N. Am.), Inc., 453 F.3d 225, 231 (4th Cir.
2006).
A finding of fact is “clearly erroneous” when “although
there is evidence to support it, the reviewing court on the
entire evidence is left with the definite and firm conviction
that a mistake has been committed.”
United States v. United
States Gypsum Co., 333 U.S. 364, 395 (1948).
The district court
may affirm, modify, or reverse a bankruptcy order’s order, or
remand
with
instructions
for
further
proceedings.
See
Fed.R.Bankr.P. 8013.
III. Analysis
The crux of Appellant’s argument is that Judge Catliota
erred by sustaining Trustee Nesse’s objection to the approval of
4
the Final Report and Account and instructing Trustee Gary Rosen
to distribute the pension plan’s funds to Ms. Nesse, to be held
until ownership of said funds is determined.
that
Judge
Catliota
issued
this
ruling
Petitioner asserts
orally
and
without
discussing the merits of Ms. Nesse’s opposition to the Final
Report and Account.2
2
As an initial matter, Appellant’s failure to designate a
transcript of the August 19, 2013 hearing as part of the record
on appeal makes it virtually impossible to adjudicate this
appeal. Fed.R.Bankr.P. 8006 states:
The record on appeal shall include the items
so designated by the parties . . . and any
opinion, findings of fact, and conclusions
of law of the court. . . . If the record
designated
by
any
party
includes
a
transcript of any proceeding or a part
thereof, the party shall, immediately after
filing the designation, deliver to the
reporter and file with the clerk a written
request
for
the
transcript
and
make
satisfactory arrangements for payment of its
cost.
“Fed.R.Bankr.P.
8006
implies
that
the
designation
of
a
transcript is not required.” Coley v. Draper, Civ. No. WDQ-122020, 2012 WL 5267436, at *3 (D.Md. Oct. 23, 2012).
Here,
however, the record on appeal is incomplete, considering that
the ruling itself appears nowhere on the record.
It is
Appellant’s
responsibility
to
provide
all
the
necessary
materials from the record to be considered.
Here, Appellant
included in his designation of record Trustee Rosen’s Final and
Account, the objection filed by Janet Nesse, and Appellant’s
response.
(See ECF No. 1-2).
Appellant did not, however,
include a copy of the transcript of the oral ruling from which
he appeals.
This deficiency, in and of itself, provides
sufficient ground to dismiss the appeal. See Hornick v. I.R.S.,
252 B.R. 897, 899 (W.D.Pa. 2000) (dismissing the appeal because
the record was incomplete for purposes of reviewing the
bankruptcy court’s finding of fact as clearly erroneous).
5
There are several problems with this appeal.
Appellant
argues that the August 19, 2013 oral order was never docketed,3
thus it was not final or appealable until after the bankruptcy
case of In re: Silver Spring Family Medical Center, LLC (case
number 10-36319-TJC) was concluded in March 2014.
at 3).
appeals
(ECF No. 3,
The order memorializing the ruling from which Appellant
has
yet
to
appear
on
the
docket,
however.
By
Appellant’s own logic, there still is no docketed order from
which he can note an appeal.4
Bankruptcy Rule of Procedure 8002 provides that a “notice
of appeal shall be filed with the clerk within 14 days of the
date of the entry of the judgment, order, or decree appealed
3
A minute entry from August 19, 2013 in Case No. 10-36319TJC indicates that Judge Catliota requested Trustee Rosen to
prepare an order memorializing his rulings. Bankruptcy Case No.
10-36319-TJC, ECF No. 100.
Judge Catliota issued an order on
August 20, 2013 related to the other rulings made during the
August 19, 2013 hearing, but not the ruling from which Mr.
Kotlarsky appeals.
Bankruptcy Case No. 10-36319-TJC, ECF No.
101.
4
Appellee argues that the appeal is not timely because it
was noticed seven months after Judge Catliota issued an oral
ruling at the August 19, 2013 hearing. Appellant counters that
he timely noticed an appeal because an order sustaining Trustee
Nesse’s objection was never docketed, thus the time to appeal
did not begin to run until after the underlying bankruptcy case
closed. Appellant’s position that a party can wait indefinitely
to appeal a ruling that it believes is final because an order
was never docketed is suspect.
Because the appeal will be
dismissed
on
other
jurisdictional
grounds,
however,
the
timeliness argument need not be addressed.
6
from.”
Fed.R.Bankr.P. 8002(a).
28 U.S.C. § 158(a) provides
that:
The district courts of the United
have jurisdiction to hear appeals
(1)
from
decrees;
final
judgments,
States
orders,
and
(2)from interlocutory orders and decrees
issued under section 1121(d) of title 11
increasing or reducing the time periods
referred to in section 1121 of such title;5
(3) with leave of the court, from
interlocutory orders and decrees.
A.
In
other
Final Judgment, Order, or Decree
the
bankruptcy
context,
an
order
is
“final”
and
therefore appealable as a matter of right under 28 U.S.C. §
158(a) if it resolves a “discrete dispute[] within the larger
case.”
“[T]he
Sumy v. Schlossberg, 777 F.2d 921, 923 (4th Cir. 1985).
concept
traditionally
of
been
finality
applied
in
in
a
bankruptcy
more
cases
pragmatic
technical way . . . than in other situations.’”
and
‘has
less
In re Computer
Learning Ctrs., Inc., 407 F.3d 656, 660 (4th Cir. 2005) (quoting
A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1009 (4th Cir. 1986)).
Judge Hollander explained in Prologo v. Flagstar Bank, FSB, 471
B.R. 115, 127 (D.Md. 2012):
Despite
the
“more
pragmatic
and
less
technical”
conception
of
finality
that
applies with respect to a bankruptcy appeal,
5
Section 158(a)(2) does not apply here.
7
[] “an order must ‘conclusively determine[]
a separable dispute over a creditor’s claim
or priority,’” in order to be considered
final.
In re urban Broadcasting Corp., 401
F.3d 236, 247 (4th Cir. 2005) (quoting In re
Saco Local Dev. Corp., 711 F.2d 441, 44546(1st Cir. 1983)). In other words, a final,
appealable
order
is
one
that
“finally
dispose[s] of discrete disputes within the
larger case.”
In re Computer Learning
Ctrs., Inc., 407 F.3d at 660.
(emphasis added).
The oral ruling from which Appellant appeals does not meet
this standard.
The Law Offices of Mark Kotlarsky Pension Plan
is an unsecured creditor in the bankruptcy case of In Re: Silver
Spring Family Medical Center, Case No. 10-36319-TJC.
(See ECF
No. 1-11, at 8).
As stated earlier, in her objection to the
approval
final
of
the
report
and
account,
Trustee
Nesse
indicated that Mr. Kotlarsky did not disclose the funds from the
unsecured claim as an asset in his personal bankruptcy.
No. 1-10 ¶ 6).
(ECF
Ms. Nesse requested that “the Trustee’s Final
Report and Account not be approved until the ownership of said
asset
is
determined
or,
in
the
alternative,
that
all
funds
attributable to this claim be held by the Trustee until the
ownership
of
said
asset
is
determined.”
(Id.
¶
7).
Both
parties agree that by oral ruling during the August 19, 2013
hearing, Judge Catliota instructed Trustee Rosen to distribute
the funds to Trustee Nesse to be held in escrow, pending further
investigation
by
Trustee
Nesse
8
into
ownership
of
the
claim
(i.e., whether the claim belongs to the pension plan or Mr.
Kotlarsky personally).
The ruling did not finally determine the
substantive rights of the Appellant in either bankruptcy case
(Case No. 10-36319-TJC or his own personal bankruptcy case), nor
did it finally dispose of discrete disputes within the larger
bankruptcy case.
At best, it was a temporary ruling, pending
the results of further investigation by Ms. Nesse – the trustee
over
Mr.
Kotlarsky’s
personal
bankruptcy
estate
–
regarding
whether the claim is an asset that belongs to Mr. Kotlarsky
personally
or
conclusively
to
the
determine
pension
a
fund.
separable
The
dispute
claim or priority in either bankruptcy case.
ruling
over
did
not
Appellant’s
Thus, the ruling
did not constitute a final order from which an appeal can be
noticed.
B.
Interlocutory Orders and Decrees
28 U.S.C. § 158(a)(3) also grants district courts appellate
jurisdiction
over
interlocutory,
non-final
orders
of
the
Bankruptcy Court, provided the court grants leave to appeal.
Leave to appeal is governed by Fed.R.Bankr.P. 8003.
for
leave
to
appeal
generally
Fed.R.Bankr.P. 8003(a)-(b).
must
be
made
A request
by
motion.
Here, Appellant filed a notice of
appeal; he did not move for leave to appeal.
provides, in part:
9
Rule 8003(c)
If a required motion for leave to appeal is
not filed, but a notice of appeal is timely
filed, the district court . . . may grant
leave to appeal or direct that a motion for
leave to appeal be filed.
The district
court . . . may also deny leave to appeal
but in so doing shall consider the notice of
appeal as a motion for leave to appeal.
The notice of appeal will be treated as a motion for leave to
appeal pursuant to Fed.R.Bankr.P. 8003(c).
seeks
leave
to
appeal
from
an
“When a litigant
interlocutory
order
of
a
bankruptcy court, [] district courts in this circuit have found
guidance
in
the
standard
for
certification
of
orders
for
interlocutory review by the circuit court of appeal under 28
U.S.C. § 1292(b).”
See Prologo, 471 B.R. at 129; In re Rood,
426 B.R. 538, 548 (D.Md. 2010).
An interlocutory appeal can be
certified when: (1) the “order involves a controlling question
of
law”;
(2)
“as
to
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.”
28
U.S.C.
§
1292(b).
If
any
of
these
three
elements is unsatisfied, leave to appeal cannot be granted.
Even assuming the appeal was timely noticed here, the oral
ruling that is at the center of this appeal does not involve a
controlling question of law.
“An order involves a controlling
question
(1)
of
law
when
either
reversal
of
the
bankruptcy
court’s order would terminate the action, or (2) determination
10
of the issue on appeal would materially affect the outcome of
the litigation.”
2000);
Fannin
In re Travelstead, 250 B.R. 862, 865-66 (D.Md.
v.
CSX
42583, at *5 (4th
Transp.,
Inc.,
873
F.2d
1438,
1989
WL
Cir. 1989) (Table opinion) (noting that a
controlling question of law is “a narrow question of pure law
whose
resolution
will
be
completely
dispositive
of
the
litigation, either as a legal or practical matter, whichever way
it goes”).
that
the
Here, Judge Catliota exercised discretion in holding
funds
be
held
in
escrow
by
Trustee
Nesse
pending
completion of the investigation to determine whether the claim
at issue in the bankruptcy case of In re: Silver Spring Family
Medical Center, LLC, Case Number 10-36319-TJC, belonged to Mr.
Kotlarsky or the pension plan.
See Prologo, 471 B.R. at 130
(“As to the Adversary Order, it merely held that the Chapter 13
Trustee, and not Prologo, was entitled to seek avoidance of
Flagstar’s lien.
The controlling issue of law . . . (i.e.,
whether the lien should be avoided, not who was entitled to seek
avoidance) was not resolved. . . . Accordingly, [the] Order is
[not] appropriate for interlocutory review.”).
Accordingly, the appeal will be dismissed.
11
IV.
Conclusion
For the foregoing reasons, the appeal will be dismissed.
separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
12
A
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