Jones v. Jones et al

Filing 7

ORDER DISMISSING APPEALS CASE for failure to comply with applicable rules of procedure. Signed by District Judge Martin Reidinger on 12/6/10. (siw)

L i s a P. Jones v. Daniel Ray Jones et al

Doc. 7

IN THE DISTRICT COURT OF THE UNITED STATES F O R THE WESTERN DISTRICT OF NORTH CAROLINA AS H E V IL L E DIVISION

L IS A P. JONES, D e b t o r /A p p e l l a n t . vs . D A N IE L RAY JONES and W IL M A O. JONES, A p p e lle e s . )

) ) ) ) ) ) ) ) ) )

C IV IL CASE NO. 1:10cv242

O R D E R DISMISSING APPEALS L IS A P. JONES, D e b t o r /A p p e l l a n t . vs . S AR A JONES and J O N E S FAMILY TRUST, A p p e lle e s . ) ) ) ) ) ) ) ) ) ) )

C IV IL CASE NO. 1:10cv243

TH E S E MATTERS are before the Court upon a Memorandum from th e Bankruptcy Clerk filed November 3, 2010 [Doc. 2],1 Appellees' Motion to Dismiss [Doc. 3], and Appellant's Answer to Motion to Dismiss [Doc. 5]. T h e Court notes that Debtor/Appellant filed both of these appeals on
The Document numbers correspond to both 1:10cv242 and 1:10cv243, as the filings in these two cases are essentially identical.
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th e same date, both appealing the denial of Objections to Claims. In both a p p e a ls she has failed to file her designation of record and statement of is s u e s within the requisite time. In both appeals, Plaintiff is represented by th e same counsel. The issues before this Court in both appeals are i d e n t ic a l . O n October 18, 2010, the Debtor/Appellant filed Notices of Appeal in th e s e matters with the Bankruptcy Court. Pursuant to Rule 8006 the A p p e lla n t's designations of items to be included in the record and issues fo r appeal were to be filed with the Bankruptcy Court no later than N o ve m b e r 2, 2010. Appellant failed to comply with that filing deadline. On N o ve m b e r 3, 2010, the Bankruptcy Clerk filed and served a Memorandum n o tifyin g Appellant of the missed deadline [Doc. 2]. That failure is the basis o f the Appellee's Motion to Dismiss. [Doc. 3]. Bankruptcy Rule 8006 states in pertinent part that "[w]ithin 14 days a fte r filing the notice of appeal . . . the appellant shall file with the clerk and s e rve on the appellee a designation of the items to be included in the re c o rd on appeal and a statement of the issues to be presented." Fed.R.Bkr.P. 8006 (emphasis added). Bankruptcy Rule 8001(a) provides in pertinent part: F a ilu re of an appellant to take any step other than the timely filing o f a notice of appeal does not affect the validity of the appeal, but
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is ground only for such action as the district court ... deems a p p ro p ria te , which may include dismissal of the appeal. R u le 8001(a). [ B ]e fo r e a district court may dismiss an appeal pursuant to Rule 8 0 0 1 (a ), it must take at least one of the following steps: (1) make a finding of bad faith or negligence; (2) give the appellant notice a n d an opportunity to explain the delay; (3) consider whether the d e la y had any possible prejudicial effect on the other parties; or (4 ) indicate that it considered the impact of the sanction and a va ila b le alternatives. ... "[A] proper application of [this] test will n o rm a lly require a district court to consider and balance all r e le v a n t factors." In re Weiss, 111 F.3d 1159, 1173 (4 th Cir. 1997) (emphasis in original). In assessing these factors, the Court takes notice of the fact that b e fo re the bankruptcy court Plaintiff has been the subject of an Order [C a s e 08-10897 Doc. 134] enjoining her from obstruction and interference with the Trustee's activities. This was entered upon the Trustee's Motion fo r Contempt Order, which stemmed from the Debtor having taken certain s te p s and sought conversions that have tended to delay the conduct and c o n c lu s io n of the underlying bankruptcy case. B a d faith is "inferable from the overall behavior of the [debtor] th ro u g h o u t the procedure." Id. The Court finds that this appeal was not ta k e n in good faith and the failure to prosecute it in accord with the law is th e product of Appellant's intentionally obstructionist and dilatory efforts. Such filings prejudice the bankruptcy estate and its creditors because it
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p ro lo n g s the bankruptcy proceedings. In re Weiss , 111 F.3d at 1173; H a n n ig a n v. Countrywide Home Loans, Inc., 2006 WL 3065583 (W.D.N.C. 2 0 0 6 ) The use of a less drastic sanction than dismissal will not provide the r e lie f needed, that is, the ability of the bankruptcy proceeding to go forward with o u t further delay. Nor does the Court find that notice and opportunity to re s p o n d would result in a reasonable, credible explanation. Having c o n s id e re d and balanced each of the Weiss factors, the Court concludes th a t despite the harsh nature of the sanction of dismissal, dismissal is wa rra n te d in this case. N o t only is the course of conduct of the Appellant herself s a n c tio n a b le in this instance, but that of her counsel is as well. Responding to Appellee's Motion to Dismiss [Doc. 3], Appellant's counsel K e lly Calloway, Jr. has filed a document styled as "Answer to Motion to D is m is s Appeal."2 The document addresses Appellant's failure to file his d e s ig n a tio n of the items to be included in the record on appeal and s ta te m e n t of the issues to be presented. C o u n s e l argues that he missed the deadline because he received a fo rm from the Bankruptcy Court and "in good faith interpreted the wording

Noting that our rules recognize no such procedure as an "answer" to a Motion to Dismiss, the Court accepts this document as Appellant's Response to Appellee's Motion to Dismiss. 4

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`th e filing of designated items with the court is no longer required' as a c h a n g e d [sic] that did not require the filing of the Rule 1008 [sic] d o c u m e n t." [Doc. 5 ¶ 5]. The form is Exhibit B to Appellant's "Answer." [D o c . 5]. Counsel argues that he first learned that his interpretation of the fo rm was incorrect when he received the Bankruptcy Court's Memorandum d a te d November 3, 2010, that the deadline had been missed. [Doc. 5 ¶ 7]. T h e form that counsel offered as Exhibit B is one forwarded by the B a n k ru p tc y Court to all parties when an appeal from that Court is taken to th e District Court. The entire substance of that form reads as follows: N O T IC E IS HEREBY GIVEN that the United States B a n k ru p tc y Court requires that all pleadings be filed e le c tro n ic a lly. Therefore; the filing of designated ite m s with the court is no longer required. P L E AS E BE FURTHER advised that each item in the d e s ig n a tio n must be numbered complying with the c o u rt's official docket report. Each item designated m u s t contain the file date along with a description of e a c h item. T h is document obviously informs the parties that they need not re-file th e designated items, as they have previously been filed with the B a n k ru p tc y Court. It does not instruct that the designation need not be file d . In fact, it clearly implies (as Rule 8006 unambiguously requires) that th e designation be filed. After all, if the designation is not filed, how are the ite m s to be included in the record to be designated? How is the Court to
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k n o w what constitutes the record? Appellant does not answer these q u e s tio n s . Plaintiff's claim that he reasonably interpreted the second sentence of th e form to obviate the need for filing the designations,[Doc. 5 ¶ 7], is u n s u p p o rta b le . The document neither says nor implies such a thing. Counsel's argument is not credible for several reasons. F irs t, a mere form cannot pre-empt the effectiveness of a Federal R u le of Bankruptcy Procedure. Rule 8006 is not in conflict with the q u e s tio n e d wording, and continues to enjoy full force and effect in b a n k ru p tc y appeals. Similarly, the form does not pre-empt the e ffe c tive n e s s and applicability of Local Bankruptcy Rule 8006-1, but rather a tte m p ts to implement it. What counsel describes is not excusable neglect, b u t rather an inexplicable error in judgment. The error is worse given that h e could have inquired with the Clerk's office as to how they squared a ffirm a tive obligations under law with the apparent obviation of them by th e ir form, but did not. Next, the context of the paragraph within which that sentence falls d o e s not support an interpretation that designations are unnecessary. That p a ra g ra p h addresses the conversion of the court's bankruptcy appeals m a n a g e m e n t in or around the year 2005, from a paper-based filing system
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to an electronic filing system. It admonishes litigants to cease making p a p e r filings of the items designated to be part of the record on appeal. T h e context of the next paragraph of that form removes any doubt th a t designations must continue to be filed and served. It gives specific d e ta il on how to electronically file a designation under Rule 8006, d iffe re n tia tin g that method from the pre-2005 paper method. The records of this Court disprove counsel's assertion that he b e lie ve d his interpretation that the filing of designations was unnecessary. On October 9, 2008, counsel received personal3 notice that designations o n appeal are required to be filed. On that date the Bankruptcy Clerk is s u e d to counsel a notice - identical to the November 3 Notice herein - that h e had missed his deadline for filing designations in the matter of McCollum et al v. Vea, 1:08cv430. [1:08cv430, Doc. 2]. Counsel made no s u c h claim of confusion when he received the form then. Instead, he s o u g h t to excuse his failure to file designations by arguing that he could not g ive priority to learning the rules governing appellate procedure and

Counsel's excuse intimates that it is the Court's responsibility to clarify for him the confusion that he has concocted from the form. He is wrong. He is not due a specific notice directed to him, but rather is charged with the notice provided to all litigants on this issue by Federal Rule of Bankruptcy Procedure 8006 and Local Bankruptcy Rule 8006-1. The Notices of October 9, 2008 and November 3, 2010 were sent as courtesies from the Bankruptcy Court to the District Court. Their content should have been an unneeded reminder, not an initial education to the law on the subject. [Doc. 5 ¶ 7]. 7

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e le c tro n ic filing, notwithstanding the fact that he had himself filed the a p p e a l in question. [1:08cv430, Doc. 4]. Counsel digs himself even deeper into this hole by claiming that he d id not receive the November 3, 2010, Clerk's Memorandum until N o ve m b e r 8. This assertion is also devoid of credibility. The M e m o ra n d u m was filed electronically as were with all other documents in th is case. Counsel has an ECF account which provides for automatic, in s ta n t notification of such filings. He does not claim delayed receipt of any o th e r item. The gist of counsel's argument appears to be that he should be e xc u s e d for not checking his e-mail for five days. Moreover, counsel gives n o explanation whatsoever for his delay in response from November 8 (the d a y he claimed to have received the Memorandum) and November 24 (the d a y that he filed his excuses). The same allegedly confusing form [Doc. 5-2] has been in use since we ll before the McCollum case, as have the Local Bankruptcy Rules and th e Federal Rules of Bankruptcy Procedure. Counsel's current excuse a b o u t misinterpretation of a form, therefore, being nothing more than a d iffe re n t but equally unfortunate amplification of the 2008 excuse, cannot b e credited. C o u n s e l is not a stranger to the federal courts of this district. He has
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h a d six cases in the District Court and numerous cases in the Bankruptcy C o u rt during the five years that the form and procedure he complains of h a ve been in use. He has maintained a North Carolina law license since 1 9 9 3 . In spite of this ample opportunity to cultivate an appropriate habit a n d attitude toward compliance with the procedural and substantive rules o f these courts, this is not his first unreasonable failure to adhere to im p o r ta n t time limitations. Key examples, but not the only examples, are th e Order on Show Cause issued by Judge George R. Hodges in 2009 and th e 1998 reprimands of the North Carolina State Bar. [Case 08-40691, D o c . 43; North Carolina State Bar 98G0703(IV) and 98G0788(IV)]. Both d e m o n s tra te not only the active indifference of counsel to reasonable d e a d lin e s and communications by adverse parties in ongoing litigation, but wo rs e , his repeated recalcitrance against the authority of the Court and S ta te Bar, respectively.4

Judge Hodges specifically cited a previous court order that was occasioned in part by counsel's failing to appear at two scheduled hearings. [Case 08-40691, Doc. 34]. In his Order on Show Cause, Judge Hodges noted that counsel defied the earlier order by paying a sanctions check "to the Trustee rather than to his counsel, as ordered by the Court, and [in the amount of] only half of the amount of the sanctions entered," and making a courthouse-steps records submission that "remain[s] materially incomplete." The State Bar specifically cited his having to be subpoenaed to their offices after no response to letters seeking his answers to two grievances, and only "finally" complying with commands. 9

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F o r all of the above reasons the Court finds and concludes that the A p p e lla n t failed to file the designation of items to be included in the record o n appeal and the issues for appeal within the requisite time, and when c o n fro n te d with this fact Appellant's counsel did not attempt to cure such fa ilu re promptly, but rather chose to delay this matter further by proffering a n explanation that is demonstrably false; and that all of this was u n d e rta k e n by Appellant and her counsel to further the pattern of o b s tru c tio n is m and delay that had permeated their actions in this B a n k ru p tc y. The Court finds the actions of Appellant and her counsel in th e s e actions were undertaken in bad faith and for the purpose of p re ju d ic in g the creditors in the Bankruptcy proceeding and the a d m in is tra tio n of this Bankruptcy estate. In weighing the conduct at issue, d is m is s a l of the appeal is an appropriate sanction. The appeal was taken a n d the delay was undertaken in bad faith. Dismissal simply allows the c re d ito rs and the Trustee to proceed in this matter as though the bad faith a c tio n s had not been undertaken. C o u n s e l for Appellant is admonished to give stronger consideration to h is ethical duties in this Court. If the actions present in this case persist c o u n s e l could be subject to strong sanctions, including monetary fines or s u s p e n s io n from practice in this Court.
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IT IS THEREFORE ORDERED that the Appellant's appeal is hereby D IS M IS S E D for failure to comply with applicable rules of procedure in both 1 :1 0 cv 242 and 1:10 cv 243.
Signed: December 6, 2010

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