Fetman et al v. Aish Hatorah of N.Y. Inc. et al

Filing 3

MEMORANDUM AND ORDER, The Court now dismisses the appeal on accountof appellants' inexcusable failure to file a brief, pursuant to Rule 8018 of the Federal Rules of Bankruptcy Procedure, and their neglect otherwise to prosecute this appeal. For the foregoing reasons, the appeal is dismissed with prejudice.The Clerk of Court is directed to enter judgment accordingly and to close this case. (Ordered by Judge Eric N. Vitaliano on 9/7/2018) c/m Fwd. for Judgment. (Galeano, Sonia)

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OFFICE

- I ^OJFTED.N.Y.
U;rrE.i

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

"7 2013

MOSHE FETMAN & YAFFA FETMAN,

Bi v^OKLYN off/ce

Appellants,
MEMORANDUM & ORDER

-againstl:17-cv-01247(ENV)
AISH HATORAH OF N.Y. INC. & ROBERT

MUSSO as Chapter 7 Trustee,

Appellees.

VITALIANO,D.J.

This is an appeal from an order of Bankruptcy Judge Nancy Hershey Lord entered in the

involuntary Chapter 7 bankruptcy case of Jacob Fetman (the "debtor"), brought in the United

States Bankruptcy Court for the Eastern District of New York. Appellants appeal from an order,'
dated February 14, 2017, which denied their request for the imposition ofa constructive trust and

approved the sale oftwo properties to which the debtor had title. Decision Denying Constructive
Trust & Authorizing Sale at 2(ECF No. 1, at 6). The Court now dismisses the appeal on account

of appellants' inexcusable failure to file a brief, pursuant to Rule 8018 ofthe Federal Rules of
Bankruptcy Procedure, and their neglect otherwise to prosecute this appeal.
Background

On August 11, 2015, appellants filed an involimtary bankruptcy petition against their son.
Id. at 3(ECF No. 1, at 7). Robert Musso was appointed as interim trustee on October 26, 2015
and was named trustee in the case after an Order for Relief was entered on November 21, 2015.

Id. The trustee subsequently moved, pursuant to section 363 ofthe Bankruptcy Code and

Bankruptcy Rules 2002 and 6004,for an order approving bidding procedures for the sale oftwo
ofthe debtor's properties and authorizing the sale free and clear of all liens. Id. Appellants

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objected to the trustee's motion, claiming that they were the true owners of the two properties
and that the debtor was holding them for his parents in a constructive trust. Id. Judge Lord
overruled the objection and granted the trustee's motion. Id.

Appellants filed a notice of appeal from the bankruptcy court's order, which was
docketed in this Court on March 6,2017. Notice of Appeal(ECF No. 1). The bankruptcy court

record was received on April 17,2017, and notice was promptly given to the parties that,

pursuant to Bankruptcy Rule 8018, appellants were required to file a brief within 30 days, and
appellee was required to file an answering brief within 30 days of service of appellants' brief,
with reply by appellants permitted within 14 days ofservice ofthe answering brief. Docket

Entry(ECF No. 2). When appellants failed to file their brief on this schedule, the Court, after

waiting more than a reasonable time, issued an order, on September 8,2017, directing the parties
to file, no later than September 12, 2017, a joint status report, including either a proposed

briefing schedule or agreement on a signed voluntary dismissal, pursuant to Bankruptcy Rule
8023.

Apparently, there being no agreement, there was no compliance with this second order.
That resulted in the issuance of another status report order on October 10, 2017. With still no

response, and patience waning,the Court again issued a request for a status report, on April 4,
2018. Finally, in the face of continued inaction, the Court issued an order to show cause,

directing appellants to file, by August 21,2018, a letter explaining why this appeal should not be
dismissed for failure to prosecute, pursuant to Fed. R. Civ. P. 41(b). Appellants have made no
effort to comply with the order to show cause.
Discussion

A district court has the power to dismiss a bankruptcy appeal for failure to prosecute sua

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sponte. See Chambers v. NASCO,Inc.^ 501 U.S. 32,49, 111 S. Ct. 2123,115 L. Ed. 2d 27
(1991)(recognizing a district court's authority to dismiss sua sponte for failure to prosecute);

Sydlar v. Swimelar, No. 6:10-cv-34(GLS),2010 WL 25222362(N.D.N.Y. June 14, 2010)
(dismissing a bankruptcy appeal sua sponte for failure to prosecute).; Bristol v. Ackerman {In re
Bristol), No. 09-cv-1683(JFB),2010 WL 1223053(E.D.N.Y. Mar. 24,2010)(same); Freidus v.
United States {In re Friedus), No. 94-cv-2687(NG), 1996 WL 622210(E.D.N.Y. Oct. 23,1996)
(same);In re Kleinman, No. 95 Civ. 2663(RO),No.95 Civ. 2665(RO), 1996 WL 157469
(S.D.N.Y. Apr. 4, 1996)(same).

Although the time limitations ofthe Bankruptcy Rules "are notjurisdictional" and "the
district court is not required automatically to dismiss the appeal of a party who has failed to meet
those deadlines," the Second Circuit instructs that "the [district] court should exercise its
discretion to determine whether dismissal is appropriate in the circumstances, and its decision to
dismiss will be affirmed unless it has abused its discretion." Balaber-Strauss v, Reichard {In re

Tampa Chain Co., Inc.), 835 F.2d 54,56(2d Cir. 1987)(per curiam)(citations omitted). In this
light, certainly, an appeal should be dismissed when failure to prosecute was "inexcusable."
Burton v. Schachter,99 F. App'x 333,335(2d Cir. 2004)(summary order)(citing Tampa Chain,
835 F.2d at 56).

Case law suggests particular facts for the district court to consider when weighing

dismissal. They include "bad faith, negligence, and indifference." Tampa Chain, 835 F.2d at 56.
Other factors include "1)the duration of[appellant's] failures or non-compliance; 2)whether

[appellant] had notice that such conduct would result in dismissal; 3)whether prejudice to the
[appellee] is likely to result"; 4)the balance ofthe court's "interest in managing its docket

against [appellant's] interest in receiving an opportunity to be heard;" and 5)"the efficacy of a

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sanction less draconian than dismissal." Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp.^ 222

F.3d 52,63(2d Cir. 2000)(citations omitted). These factors weigh strongly in favor of dismissal
here. Appellants have flatly ignored procedural rules and several orders of this Court for more

than a year. Plus, they have been given ample notice that continued disregard would result in

dismissal. These facts suggest abundant bad faith, negligence, and indifference to this appeal.
The case for dismissal is even clearer here than in Tampa Chain. In Tampa Chain^ the
Second Circuit held that dismissal for failure to prosecute was appropriate when a party had not
filed a brief even seven months after the due date, counsel had offered no explanation or excuse

for failure to file, and the district court had dismissed the appeal only after inquiring as to the

reason for failure to file and receiving no explanation. 835 F.2d at 56. In the present case, the

appellants have not filed a brieffor more than 15 months after the due date, have not responded
to three status report orders, and have not responded to an order to show cause that specifically
warned of dismissal for failure to prosecute. Having failed to communicate with the Court since

the filing ofthe bankruptcy record, in April 2017, appellants' conduct amounts to bad faith. See,

e.g.. In re Bristol, 2010 WL 1223053, at *2(identifying bad faith when a bankruptcy appellant
failed to file a brief and to communicate with the court in 11 months).

Appellants,furthermore, have not offered an excuse for what appears to be a bad faith
failure to prosecute, and the facts strongly suggest that none exists. On the totality ofthe
circumstances, it is quite evident that a lesser sanction would be meaningless and unwarranted.
Dismissal is the appropriate sanction. See Castaldo v. Bank ofN.Y. (In re Castaldo), No. 071840-bk,2009 WL 754793, at *1 (2d Cir. Mar. 24,2009)(summary order)("A dismissal is not
an abuse of discretion if it occurs after a party is asked to explain the failure to prosecute and

fails to respond to the court's order"(citing Tampa Chain,835 F.2d at 56)). Consequently, this

4

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appeal is dismissed for failure to prosecute.
Conclusion

For the foregoing reasons, the appeal is dismissed with prejudice.
The Clerk of Court is directed to enter judgment accordingly and to close this case.
So Ordered.

Dated: Brooklyn, New York
September 7, 2018
/s/ USDJ ERIC N. VITALIANO
ERICN. VITALIANO

United States District Judge