Jones et al v. 133 Chesapeake St., LLC

Filing 14

MEMORANDUM OPINION. Signed by Judge Peter J. Messitte on 3/2/2016. (c/m chambers)(hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

DELPHINE JONES, et al., pro se
Appellants,

v.
133 CHESAPEAKE ST., LLC,
Debtor-Appellee

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Civil No. PJM 15-1695

MEMORANDUM OPINION
This case is on appeal from an Order of the United States Bankruptcy Court for this
District. In re 133 Chesapeake St., LLC, Ch. 11 Case No. 14-20894 (Bankr. D. Md. July 9,
2014). Debtor-Appellee 133 Chesapeake St., LLC (133 Chesapeake St.) filed a Motion to Sell
Real Property Free and Clear in the Bankruptcy Court, seeking authority to sell certain property
free and clear of all liens, claims, encumbrances, and interests. 133 Chesapeake St., LLC, 1420894, ECF No. 73. Appellants Delphine Jones and Jacqueline King (collectively Appellants),
two purported tenants on the property, objected. 133 Chesapeake St., LLC, 14-20894, ECF No.
83. Despite this objection, on May 26, 2015, the Bankruptcy Court entered an Order Authorizing
Debtor to Sell Real Property Free and Clear of Liens (Sale Order). 133 Chesapeake St., LLC, 1420894, ECF No. 96. On June 10, 2015, fifteen days after entry of the Bankruptcy Court’s Sale
Order, Appellants filed a Notice of Appeal in this Court. ECF No. 1.
133 Chesapeake St. has filed a Motion to Dismiss Appeal, asserting that the Court lacks
jurisdiction over the Appeal due to Appellants’ failure to timely file their Notice of Appeal. ECF

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No. 2. The Court agrees, and for the reasons that follow, 133 Chesapeake St.’s Motion to
Dismiss Appeal is GRANTED, and this Appeal is hereby DISMISSED.
I.
133 Chesapeake St. is a limited liability company owned entirely by Vincent L. Abell, a
debtor in a related bankruptcy case. In re Abell, Ch. 11 Case No. 13-13847 (D. Md. March 5,
2013). 133 Chesapeake St. owned an improved parcel of real property at 6328 Eastern Avenue,
NE, Washington DC 20011 (the Property). 133 Chesapeake St., LLC, 14-20894, ECF No. 73.
The Property was 133 Chesapeake St.’s sole substantial asset. Id.
On July 9, 2014, 133 Chesapeake St. filed a Voluntary Petition for Bankruptcy under
Chapter 11 of the Bankruptcy Code. 133 Chesapeake St., LLC, 14-20894, ECF No. 1. As of the
Petition Date, there were two purported tenants on the Property, Appellants Jones and King, both
of whom were occupying the residence with expired leases. 133 Chesapeake St., LLC, 14-20894,
ECF No. 73. On January 27, 2015, the Bankruptcy Court entered an Order rejecting the leases.
133 Chesapeake St., LLC, 14-20894, ECF No. 58.
On March 26, 2015, 133 Chesapeake St. filed its Motion to Sell the Property Free and
Clear of Liens to JBN Realty Investment pursuant to 11 U.S.C. §§ 363(b), (f), and (m). 133
Chesapeake St., LLC, 14-20894, ECF No. 73. Appellants objected, asserting that the sale of the
Property could not go forward until a determination of their rights under the District of
Columbia’s Tenant Opportunity to Purchase Act (TOPA). 133 Chesapeake St., LLC, 14-20894,
ECF No. 83. On May 11 and May 12, 2015, the Bankruptcy Court held a hearing on 133
Chesapeake St.’s Motion to Sell (“Sale Hearing”), which Appellants attended and participated in.
133 Chesapeake St., LLC, 14-20894, ECF Nos. 86-87. During the hearing, the Bankruptcy Court
issued an oral ruling concerning Appellants’ objection, explaining that TOPA includes an

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absolute bankruptcy sale exemption, making it inapplicable to the Motion to Sell.1 On May 26,
2015, the Bankruptcy Court entered a Sale Order authorizing 133 Chesapeake St.’s sale of the
Property to JBN Realty Investment. 133 Chesapeake St., LLC, 14-20894, ECF No. 96.
Fifteen days later, on June 10, 2015, Appellants filed their Notice of Appeal to this Court.
ECF No. 1. The case was electronically transmitted to this Court on the same day. Id. On June
29, 2015, 133 Chesapeake St. then filed its Motion to Dismiss Appeal. ECF No. 2.
II.
133 Chesapeake St. asserts that the Court should dismiss the Appeal because Appellants
failed to file their Notice of Appeal in timely fashion under the Federal Rules of Bankruptcy
Procedure. Appellants, says 133 Chesapeake St., filed their Notice of Appeal fifteen days after
the Sale Order was entered, not within fourteen days, and such failure deprives the Court of
jurisdiction over the Appeal. Appellees’ Mot. Dismiss Appeal 6-8, ECF No. 2. Appellants
respond that their Notice of Appeal was in fact timely: they say that, although not entered on the
docket until fifteen days after the Bankruptcy Court’s Sale Order, their Notice of Appeal was
“timely” because they in fact submitted it to the Bankruptcy Clerk’s night box on the fourteenth
day after the Sale Order, albeit at 5:54 p.m., after the Clerk’s office was closed. Appellants’
Resp. Opp. Mot. Dismiss (Appellants’ Resp.) 2-4; ECF No. 13.
The Court agrees with 133 Chesapeake St.
A party’s “[f]ailure to file a timely notice of appeal from a bankruptcy court order
deprives the district court of jurisdiction.” Ekweani v. Wells Fargo Home Mortgage, Inc., No.
CIV. CCB-13-2661, 2013 WL 5937977, at *1 (D. Md. Nov. 5, 2013) (citing Smith v. Dairymen,

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TOPA provides a residential tenant a right to notice of a sale and opportunity to purchase an
accommodation at a price and terms that represent a bona fide offer of sale before the owner sells the
accommodation. See generally D.C. Code Ann. § 42-3404. However, TOPA expressly provides that a
bankruptcy sale does not constitute a “sale” under TOPA. D.C. Code Ann. § 42-3404.02(c)(2)(E).
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Inc., 790 F.2d 1107, 1109 (4th Cir. 1986); Reig v. Wells Fargo Bank, N.A., No. PWG-12-3518,
2013 WL 3280035, at *1 (D. Md. June 26, 2013). As set forth in Federal Rule of Bankruptcy
Procedure 8002(a), “a notice of appeal must be filed with the bankruptcy clerk within 14 days
after entry of the judgment, order, or decree being appealed.” (emphasis added). The fourteenday deadline “has been strictly construed, requiring strict compliance with its terms.” Ekweani,
2013 WL 5937977, at *1 (quoting AgSouth Farm Credt, ACA v. Bishop, 333 B.R. 746, 748
(Bankr. D.S.C. 2005)). While this period may be extended in certain very limited circumstances
not applicable here,2 the deadline for filing a timely notice of appeal may not be extended in the
case of appeals from orders authorizing sales of property under § 363 of the Bankruptcy Code,
Fed. R. Bankr. P. 8002(d)(2)(B), as is the case here.
Appellants filed their Notice of Appeal on June 10, 2015, outside the fourteen-day
window permitted under the Bankruptcy Rules. Although they contend that their Notice of
Appeal was “timely” because they dropped the Notice in the Bankruptcy Clerk’s night box on
June 9, 2015, at 5:54 p.m., their argument is without merit. Federal Rule of Bankruptcy
Procedure 8002(a)(1) expressly stipulates that a notice of appeal “must be filed with the
bankruptcy clerk within 14 days” (emphasis added). Placing papers in a night box does not
constitute “fil[ing] with the bankruptcy clerk” within the meaning of the Bankruptcy Rules.
Federal Bankruptcy Rule 9006(a)(4) indicates that the “last day” for filing when filing by means
other than electronic filing (such as occurred here) ends “when the clerk’s office is scheduled to
close.” The Bankruptcy Clerk’s office in the District of Maryland, Greenbelt Division closes at
4:00 p.m. Local Bankr. R. 5001-2(a). Further, as stated clearly in Local Bankruptcy Rule 5001-

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The Bankruptcy Rules allow for two exceptions to the ordinarily strict 14-day window: (1) if a party
requests an extension by written motion to the bankruptcy court within the 14-day period, or, (2) upon a
showing of excusable neglect, within 21 days after the initial period has expired. Fed. R. Bankr. P.
8002(d).
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2(d): “Deadlines Are Not Extended. The availability of the night box and after hours filing
do NOT extend the ‘Last Day’ as defined by Federal Bankruptcy Rule 9006(a)(4), which
Last Day ends for filing, other than electronic filing, at 4:00 p.m. when the Clerk’s Offices
close.” (emphasis in original).
Thus, Appellants’ submission to the night box at 5:54 p.m. on June 9, 2015 fails to
comply with the deadlines under the Federal and Local Bankruptcy Rules. See Ekweani, 2013
WL 5937977, at *1 n.3 (“[T]o the extent [appellants] argue they actually filed [notice of appeal] .
. . by dropping it in the bankruptcy court clerks’ night box for after-hours drop-off, their
argument is without merit.”). Accordingly, this Court lacks jurisdiction and will dismiss the
Appeal.
III.
Just to be sure, however:
Even if Appellants’ Notice of Appeal were deemed timely filed, it would fail because it is
statutorily moot.
Eleven U.S.C. § 363(m) provides that, even if grounds exist to reverse or modify the sale
of estate property during bankruptcy, such reversal or modification “does not affect the validity
of the sale . . . to an entity that purchased . . . such property in good faith . . . whether or not such
entity knew of the pendency of the appeal, unless such authorization . . . were stayed pending
appeal.” As the Fourth Circuit has held, “[t]his subsection creates a rule of statutory mootness,”
and “[w]here a sale of a bankrupt’s assets has not been stayed, an appeal challenging the sale’s
validity is moot because the court has no remedy that it can fashion even if it would have
determined the issues differently.” In re Rare Earth Minerals, 445 F.3d 359, 363 (4th Cir. 2006)

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(internal citations and quotations omitted). In such circumstances, “even if the bankruptcy court
erred in authorizing the sale, the appeal must be dismissed.” Id. (emphasis added).
As authorized by the Bankruptcy Court’s Sale Order, 133 Chesapeake St. sold the
Property to JBN Realty Investment on June 19, 2015. See Appellees’ Mot. Dismiss Appeal, Ex.
D, ECF No. 2-4. The Appellants did not seek a stay of the sale pending appeal prior to the sale’s
consummation,3 nor did the Bankruptcy Court independently order any stay prior to the sale. The
Appeal of the Sale Order is therefore statutorily moot under 11 U.S.C. § 363(m) and would be
dismissible on those grounds as well. See Rare Earth Minerals, 445 F.3d at 363.
IV.
For the above reasons, 133 Chesapeake St.’s Motion to Dismiss Appeal (ECF No. 2) is
GRANTED, and the Appeal is DISMISSED. This case is therefore CLOSED.
A separate Order will ISSUE.

/s/
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PETER J. MESSITTE
UNITED STATES DISTRICT JUDGE
March 2, 2016

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Appellants filed a Motion for Reconsideration and/or Stay of Order Granting Debtor’s Motion to Sell
Real Property Free and Clear Pending Appeal, but did so on June 19, 2015, the same day that the sale was
consummated. See 133 Chesapeake St., LLC, 14-20894, ECF No. 105.
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