SWJ MANAGEMENT, LLC v. LIBERTY HARBOR HOLDING, LLC
OPINION. Signed by Judge Claire C. Cecchi on 1/30/17. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SWJ MANAGEMENT LLC,
Civil Action No.: 14-3311 (CCC)
LIBERTY HARBOR HOLDING LLC,
CECCHI, District Judge.
This matter comes before the Court upon Appellant SWJ Management, LLC’s
(“Appellant”) appeal of the Bankruptcy Court’s April 1, 2014 order dismissing Appellant’s
adversary proceeding with prejudice, (ECF No. 1), as well as Appellee and Debtor Liberty Harbor
Holding, LLC’s (“Appellee”) motion to dismiss the appeal and to impose sanctions on Appellant’s
counsel. (ECF No. 25). The Court has considered Appellant’s most recent brief in support of the
appeal (ECF No. 22), as well as the materials submitted in support of and in opposition to the
motion to dismiss, (ECF Nos. 25, 27, 28). The Court decides this matter without oral argument
pursuant to Fed. R. Civ. P. 78(b).’
For the reasons set forth below, the motion to dismiss is GRANTED, the motion for
sanctions is DENIED without prejudice, and the appeal is DISMISSED without prejudice.
The Court considers any new arguments not presented by the parties to be waived. See
Brennerv. Local 514, United Bhd. of Carpenters & Joiners of Am., 927 F.2d 1283, 1298 (3d Cir.
1991) (“It is well established that failure to raise an issue in the district court constitutes a waiver
of the argument.”).
The Court has jurisdiction pursuant to 28 U.S.C.
Appellant filed an adversary proceeding in Appellee’s Chapter 11 proceeding on February
3, 2014. (Bankr. Dkt. No.
Briefly, the adversary complaint appears generally to concern the
rightful ownership of certain real estate subject to prior litigation in the bankruptcy courts of other
districts, as well as in New Jersey state court.
(). Appellee moved to dismiss for lack of standing
and failure to state a claim. (Bankr. Dkt. No. 4, 4-1). In an order dated April 1, 2014, the
Bankruptcy Court dismissed the adversary proceeding with prejudice, but did not explain the
grounds for dismissal. (Bankr. Dkt. No. 10). Apparently, the Bankruptcy Court gave its reasoning
for dismissal in a bench ruling on March 31, 2014 (the “Bench Ruling”). (See ECF No. 17 at 45). The transcript of the Bench Ruling has not been posted on the bankruptcy docket.
Appellant filed this appeal on May 21, 2014. (ECF No. 1). On June 4, 2014, Appellant
moved for an extension of time to file its brief in support of the appeal, (ECF No. 6), which the
Court granted on June 6. (ECF No. 9). On June 25, 2014, Appellant moved for a further extension
of time, (ECF No. 10), which Appellee opposed. (ECF No. 11). On September 3, 2014, Appellee
moved to dismiss the appeal as having been filed in bad faith, as well as for failure to prosecute.
(ECF No. 12-1). Appellee’s motion noted that Appellant had failed to order a transcript of the
Bench Ruling. (RI. at 4-5). On November 21, 2014, the Court “grant[ed] Appellant one final
opportunity to file his brief and to arrange for a complete record.
. including requesting the
transcript” of the Bench Ruling, and ordered Appellant to file its brief within ten days. (ECF No.
15). When Appellant missed this deadline, the Court dismissed the appeal “without prejudice to
Citations to “Bankr. Dkt.” are to the underlying adversary proceeding, SWJ
Management, LLC v. Liberty Harbor Holding, LLC, No. 14-1204 (Bankr. D.N.J.).
Appellant requesting to reinstate the appeal” so long as “any such request
shall include an
explanation of Appellant’s delay and good cause for reinstating the appeal.” (ECf No. 17 at 4-5).
Nearly a year later, on October 27, 2015, Appellant moved to reinstate the appeal,
explaining that Appellant had been a debtor in its own Chapter 7 banlcruptcy case in the District
of Connecticut, and thus Appellant’s counsel had not been able to act on Appellant’s behalf in the
instant appeal. (ECF No. 18). The motion did not explain why Appellant had not yet provided
the transcript of the Bench Ruling. Over Appellee’s objection, the Court reinstated the appeal on
May 4, 2016. (ECF No. 21). On May 18, 2016, nearly two years after filing this appeal, Appellant
filed its brief. (ECF No. 22). On June 20, 2016, Appellee moved to dismiss this appeal with
prejudice and to impose sanctions on Appellant’s counsel pursuant to 28 U.S.C.
To this day, Appellant has not provided the Court with a transcript of the Bench Ruling.
Federal Rule of Bankruptcy Procedure 8001(a) empowers the Court “to dismiss an appeal
for failure to.
follow the procedures set out in the Bankruptcy Rules[.]” In re Richardson Indus.
Contractors, Inc., 189 F. App’x 93, 96 (3d Cir. 2006). In determining whether to dismiss, the
Court must consider the following factors: “(1) the extent of the party’s personal responsibility;
(2) the prejudice to the adversary caused by the failure to [follow the rules]; (3) a history of
dilatoriness; (4) whether the conduct of the party or the attorney was willful or in bad faith; (5) the
effectiveness of sanctions other than dismissal, which entails an analysis of alternative sanctions;
and (6) the meritoriousness of the claim or defense.”
(quoting Poulis v. State Farm Fire & Cas.
Co., 747 F.2d $63, $68 (3d Cir. 1984)) (emphasis omitted).
Under 28 U.S.C.
§ 1927, the Court may impose on an attorney “excess costs, expenses,
and attorneys’ fees reasonably incurred” if the attorney “so multiplies the proceedings in any case
unreasonably and vexatiously.” In determining whether such an imposition is warranted, the Court
must “find an attorney has (1) multiplied proceedings; (2) in an unreasonable and vexatious
manner; (3) thereby increasing the cost of the proceedings; and (4) doing so in bad faith or by
intentional misconduct.” In re Prosser, 777 F.3d 154, 162 (3d Cir. 2015) (internal quotation
Dismissal of the Appeal
Appellant’s repeated failure to provide the Court with the Bench Ruling transcript renders
this appeal practically impossible to adjudicate. Without this transcript, the Court is unable to
evaluate whether the Bankruptcy Court acted correctly in dismissing the adversary proceeding
with prejudice. Nor is the Court able to discern the Bankruptcy Court’s reasons for doing so by
reading Appellant’s brief.
Under Fed. R. Bankr. P. 8009(b), it is Appellant’s duty to order “a transcript of such parts
of the proceedings not already on file as the appellant considers necessary for the appal[.]”
Clearly, the Bench Ruling is necessary for this appeal. Moreover, the Court has already ordered
Appellant to provide the Court with this transcript, (ECF No. 15), and Appellant has failed to do
so. It appears Appellant’s only argument that it need not provide the Court with this transcript is
that it is “part of the record[,] and the notion that [Appellee’s counsel] does not know what the
appeal is about is a total lie; it is about Judge Winfield’s arbitrary and capricious decision to
dismiss the appeal with prejudice.” (ECF No. 27 at 4). But this transcript is not “part of the
record” in any way that the Court is able to access, and whether or not Appellee knows “what the
appeal is about,” the Court cannot decide whether the Bankruptcy Court acted correctly without
knowing what it did below. Therefore, it appears Appellant has violated the federal Rules of
Bankruptcy Procedure, so the Court must consider whether dismissal is warranted.
The first factor, the party’s responsibility, does not weigh in favor of dismissal, because it
is not clear that Appellant, rather than Appellant’s attorney, is at fault for not providing the
transcript. The second factor, prejudice to Appellee, weighs in favor of dismissal, because this
appeal is over two years old and Appellant’s failure to take this basic step to begin review has
forced Appellee to litigate a motion to dismiss the appeal twice already. The third factor, a history
of dilatoriness, weighs in favor of dismissal, because, as described above, Appellant failed to
produce the transcript both at the outset of the appeal and after the Court ordered it to do so. In
addition, Appellant has missed several deadlines to file its brief, and sought several extensions of
time in this case. The fourth factor weighs in favor of dismissal because the Court has already told
Appellant it is obligated to provide the transcript, (ECF No. 15), yet Appellant has continued to
fail to provide it, which suggests this failure is willful. The fifth factor weighs in favor of dismissal
because this Court has already dismissed the appeal once witlout prejudice, and even that action
did not prompt Appellant to provide the transcript; thus, lesser sanctions have already proven
ineffective. Finally, the sixth factor is neutral, because without the transcript, the Court is not in a
position to opine as to whether the appeal is meritorious or not.
Because four of the six factors weigh in favor of dismissal, and the other two factors are
neutral, on balance, the Court finds that dismissal is appropriate. However, because dismissal with
prejudice is such an “extreme” sanction, Richardson, 189 F. App’x at 98, and because the Court
has not had occasion to address the merits of this appeal, the Court will dismiss the appeal without
Because the Court is not able to pass on the merits of the instant appeal without the Bench
Ruling transcript, the Court is not able at this time to decide whether Appellant’s counsel, in
bringing this appeal or the underlying adversary proceeding, has unreasonably or vexatiously
multiplied proceedings at an increased cost to Appellee. See In re Prosser, 777 F.3d at 162.
Therefore, the motion under 28 U.S.C.
§ 1927 is denied without prejudice.
For the foregoing reasons, Appellee’s motion to dismiss (ECF No. 25) is GRANTED; the
motion for sanctions is DENIED without prejudice; and the appeal is DISMISSED without
Appellant is granted sixty (60) days from the date of this Opinion to provide the Court with
a transcript of the Bench Ruling, and to file an amended brief specifically addressing why the
Bench Ruling was made in error. Failure to do so will result in the instant appeal being dismissed
An appropriate Order accompanies this Opinion.
CLAIRE C. CECCHI, U.S.D.J.
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