Thompson v. North Mississippi Spine Center, Inc. et al

Filing 7

MEMORANDUM OPINION re 6 Order on Motion for Leave to Appeal. Signed by Senior Judge Neal B. Biggers on 3/30/2017. (llw)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
OXFORD DIVISION
CLAUDE STEVEN THOMPSON
V.

APPELLANT
CASE NO. 3:16-CV-00063-NBB

NORTH MISSISSIPPI SPINE CENTER, INC.;
MID-SOUTH BUSINESS ASSOCIATES, LLC;
TLW PROPERTIES, LLC; R. TAYLOR WINDHAM;
AND THOMAS L. WINDHAM, SR., M.D.

APPELLEES

MEMORANDUM OPINION
This cause comes before the court upon the appellant’s motion for leave to appeal an
interlocutory order of the United States Bankruptcy Court for the Northern District of
Mississippi. Upon due consideration of the motion, response, and applicable authority, the court
finds that the motion is not well taken and should be denied.
The appellant, Claude Steven Thompson, seeks leave to file an interlocutory appeal from
the bankruptcy court’s March 2, 2016 order granting the appellees’ motion to amend their
complaint and join TLW Properties and Thompson in the adversary proceeding originally filed
in this court as cause number 3:14-cv-00098-SA-SAA but transferred to the bankruptcy court on
the motion of Thomas L. Windham, Jr. This adversary proceeding was consolidated in
bankruptcy court with the previously transferred action filed by Thomas Windham, Sr., against
Thompson and Thomas Windham, Jr., District Court cause number 3:14cv00099-NBB-SAA.
The appellant asserts that the bankruptcy court erred in failing to apply the doctrine of
futility and Rule 7015(c) of the Federal Rules of Bankruptcy Procedure regarding relation back
of amendments to the date the original pleading was filed. Specifically, the appellant argues that
the amendment is futile because the allegations in the amended complaint do not relate back to

the original complaint and is therefore barred by the statute of limitations. He further asserts that
consolidation of the two adversary proceedings was improper in light of the fact that the claims
set forth in the amended complaint are time barred.
Title 28 U.S.C. § 158(a)(3) authorizes a district court to grant leave to appeal an
interlocutory order of the bankruptcy court. In the Fifth Circuit, a district court should look to
the factors listed under 28 U.S.C. § 1292(b) to determine whether to grant such a motion. In re
Royce Homes LP, 466 B.R. 81, 94 (S.D. Tex. 2012). The factors are: (1) that a controlling issue
of law must be involved; (2) that the question must be one where there is substantial ground for
difference of opinion; and (3) that an immediate appeal must materially advance the ultimate
termination of the litigation. Ichinose v. Homer Nat’l Bank, 946 F.2d 1169, 1177 (5th Cir.
1991). An order is said to involve a controlling issue of law, “if, on appeal, a determination that
the decision contained error would lead to reversal.” Patrick v. Dell Financial Services, Inc.,
366 B.R. 378, 385 (M.D. Pa. 2007). “In the interlocutory-appeal context, ‘[t]he question of law
must refer to a pure question of law that the reviewing court could decide quickly and cleanly
without having to study the record.’” Royce Homes, 466 B.R. at 94 (quoting In re Fairfield
Sentry, Ltd., 458 B.R. 665, 673 (S.D.N.Y. 2011)). In Royce Homes, the court noted that
determining whether the attorney-client privilege applied to certain documents and, if so,
whether the defendant waived the privilege, were fact-intensive questions and, therefore, not a
question of pure law. Id.
Rule 7015 provides that Rule 15 of the Federal Rules of Civil Procedure applies in
adversary proceedings. Fed. R. Bankr. P. 7015. Rule 15(c)(1) states that an amended pleading
relates back to the date of the original pleading if the following requirements are satisfied:

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(A) the law that provides the applicable statute of limitations allows relation
back;
(B) the amendment asserts a claim or defense that arose out of the conduct,
transaction, or occurrence set out – or attempted to be set out – in the original
pleading; or
(C) the amendment changes the party or the naming of the party against whom a
claim is asserted. . . .
Fed. R. Civ. P. 15(c)(1). Where, as here, a plaintiff is ignorant of claims he can make against a
defendant but discovers those claims during the process of litigation – in the instant case,
through subpoenaing and analyzing bank records – the amendment of the complaint relates back
to the date of the original pleading. Womble v. Singing River Hospital, 618 So. 2d 1252, 1268
(Miss. 1993), overruled on other grounds by Sparks v. Kim, 701 So. 2d 1113 (Miss. 1997)
(“[S]tatutory period of limitations should be tolled for a reasonable period of time to allow
plaintiffs to acquire and peruse the medical records that would provide a basis for any alleged
negligence.”). “[T]he statute of limitations commences upon discovery of an injury, and
discovery is an issue of fact to be decided by a jury when there is a genuine dispute.” Donald v.
AMOCO Production Co., 735 So. 2d 161, 167 (Miss. 1999). The tolling of the statute of
limitations is, therefore, not a question of pure law and not a proper issue for interlocutory
appeal. This finding is dispositive as to an interlocutory appeal of the amendment issue as
“[e]very ground in § 1292(b) must be met in order for the interlocutory appeal to be considered;
these are not factors to be weighed and balanced.” In re Central Louisiana Grain Co-op, Inc.,
489 B.R. 403, 411 (W.D. La. 2013) (quoting Panda Energy Int’l, Inc. v. Factory Mut. Ins., 3:10CV-003-K, 2011 WL 610016, at *4 (N.D. Tex. Feb. 14, 2011)). It is, therefore, unnecessary for
the court to examine the remaining grounds of § 1292(b) as to the amendment issue.

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The appellant’s objection to the bankruptcy court’s consolidation of the two adversary
proceedings is primarily an extension of his argument regarding amendment – that is, because
the amendment is futile, according to the appellant, the cases should not have been consolidated.
The appellant argues that “[w]ithout the amended complaint there exists no basis for
consolidation. . . .” [Doc. No. 2, p.4]. This argument presupposes that the bankruptcy court was
in error by allowing the complaint to be amended – an issue which this court finds is improper
for interlocutory review, as outlined above. This court’s finding on that issue renders the
appellant’s consolidation argument moot.
In the event the appellant may have intended to argue the consolidation issue as separate
and distinct from the amendment issue, the court finds that, like the amendment issue, the
consolidation issue does not survive review under § 1292(b). Specifically, the question is not
one where there is substantial ground for difference of opinion. Courts find a substantial ground
for difference of opinion: (1) when a trial court rules in a manner contrary to the rulings of all
Courts of Appeals which have addressed the issue; (2) when the circuits are in dispute on the
questions and the Court of Appeals of the circuit has not addressed the issue; (3) when
complicated questions arise under foreign law; (4) when novel and difficult questions of first
impression are presented. In re Central Grain Co-Op, Inc., 489 B.R. at 412. A substantial
ground for difference of opinion does not exist merely because a party claims the bankruptcy
court ruled incorrectly. Id.
Rule 42(a) of the Federal Rules of Civil Procedure provides: “If actions before the court
involve a common question of law or fact, the court may: (1) join for hearing or trial any or all
matters at issue in the actions; (2) consolidate the actions; or (3) issue any other orders to avoid

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unnecessary cost or delay.” Fed. R. Civ. P. 42(a) (made applicable to adversary proceedings by
Fed. R. Bankr. P. 7042).
In the instant case, the alleged plot through which the appellant and Thomas Windham,
Jr., secured loans, forged the appellees’ signatures, converted corporate assets, and utilized those
assets to inflate their value to facilitate a check kiting scheme is at the center of the claims raised
in the amended complaint as well as the action with which that case was consolidated. These
actions therefore contain common questions of law and fact, and their consolidation would cause
no prejudice and would avoid multiplicity of suits, conserving judicial resources. Given these
common questions of law and fact, there is no substantial ground for difference of opinion as to
their consolidation, and the court finds that the issue is not proper for interlocutory review.
Finally, the appellant also argues that the bankruptcy court’s order granting the appellees’
motion to amend and join and motion to consolidate is subject to the parameters of the collateral
order doctrine. To be reviewable under the collateral order doctrine, an order must (1) be
independent and easily separable from the substance of the other claims in the action; (2) present
a need to secure prompt review to protect important interests of the parties; and (3) be examined
in the light of practical as opposed to narrowly technical considerations. Matter of Covington
Grain Co., Inc., 638 F.2d 1357, 1360 (5th Cir. 1981). “The collateral order doctrine is a narrow
exception, whose reach is limited to trial court orders affecting rights that will be irretrievably
lost in the absence of an immediate appeal.” Richardson – Merrell v. Koller, 472 U.S. 424, 43031 (1985) (internal citation omitted). Thus, if an order is reviewable on appeal following final
judgment, it does not fall within the small class of orders subject to the collateral order doctrine.
Id. at 431. In the present case, whether the appellees’ claims are barred by the statute of

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limitations is a question which may be addressed on appeal after the entry of final judgment.
The collateral order doctrine is not applicable here, and the appellant’s argument is without
merit.
In accordance with the foregoing analysis, the court finds that the appellant’s motion for
leave to appeal should be denied. A separate order in accord with this opinion shall issue this
day.
This, the 30th day of March, 2017.

/s/ Neal Biggers
NEAL B. BIGGERS, JR.
UNITED STATES DISTRICT JUDGE

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