Leliever v. Ward

Filing 10

ORDER granting 2 Motion to Dismiss; granting 3 Motion for Damages and Costs for Frivolous Bankruptcy Appeal. Signed by Senior Judge Graham Mullen on 5/3/2013. (blf)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:13-cv-204-GCM

W. ANDREW LELIEVER,

)
)
Appellant,
)
)
vs.
)
)
JAMES T. WARD, TRUSTEE for
)
MATTHEW ALAN JENKINS, et al.,
)
)
Appellees.
)
____________________________________)

ORDER

THIS MATTER comes before the Court on Appellee’s Motion to Dismiss Bankruptcy
Appeal [Doc. No. 2], Appellant’s response [Doc. No. 4], and Appellee’s reply [Doc. No. 8].
Also before the Court is Appellee’s Motion for Damages and Costs for Frivolous Bankruptcy
Appeal [Doc. No. 3], Appellant’s response [Doc. No. 5], and Appellee’s reply [Doc. No. 9]. The
matters, fully briefed by the parties, are ripe for determination. For the reasons set forth below,
the Court will grant Appellee’s Motion to Dismiss Bankruptcy Appeal and Appellee’s Motion
for Damages and Costs for Frivolous Bankruptcy Appeal.
I. PROCEDURAL BACKGROUND
On April 11, 2012, the Debtor, Matthew Allen Jenkins, filed a voluntary petition for
relief pursuant to chapter 7 of the Bankruptcy Code. [Bankruptcy Docket 12-50413, Doc. No. 1]
On April 30, 2012, the Clerk of Court filed a Notice of Presumed Abuse Under § 11 U.S.C
707(b)(2) in the Debtor’s case.

[Id., Doc. No. 34].

On May 30, 3012, the Bankruptcy

Administrator filed a statement pursuant to 11 U.S.C. § 707(b)(2) indicating that a motion to
dismiss the Debtor’s case was not appropriate in this case, notwithstanding that a presumption of
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abuse had arisen. [Id., Doc. No. 61]. On June 5, 2012, W. Andrew LeLiever, Appellant in this
matter, filed the Motion requesting that the Court dismiss the Debtor’s bankruptcy case “as a
matter of law” based on the Debtor’s “failure of the means test.” [Id., Doc. No. 73]. The
LeLiever Motion was opposed by Appellee, Federated Financial Corporation of America, a
creditor in the Debtor’s case, and the United States Bankruptcy Administrator. [Id,. Doc. Nos.
88, 95 and 97]. On June 27, 2012, the Bankruptcy Court conducted a hearing on the LeLiever
Motion and on July 2, 2012, entered its Order Denying Motion to Dismiss Debtor’s Chapter 7
Bankruptcy Petition filed by W. Andrew LeLiever. [Id., Doc. No. 124]. On March 27, 2013,
Appellant filed a Notice of Appeal with respect to that Order. [Id., Doc. No. 182]. On April 2,
2013, the Appellee, filed the instant motions to dismiss the bankruptcy appeal and for damages
for filing a frivolous appeal. [Doc. Nos. 2 and 3].
II.

ANALYSIS

Appellee contends that Appellant LeLiever’s bankruptcy appeal must be dismissed because
the order he is appealing from is a final order pursuant to the Fourth Circuit’s holding in McDow
v. Dudley, 662 F.3d 284 (4th Cir. 2011) and must be appealed within fourteen days. Appellee’s
notice of appeal was filed beyond the fourteen day deadline for filing a notice of appeal pursuant
to Federal Rule of Bankruptcy Procedure Rule 8002. Compliance with this filing deadline is
jurisdiction, therefore, the instant appeal, filed more than eight months after entry of the Order
appealed from must be dismissed as untimely.
Appellant contends that the Appellee has overstated the holding of McDow and argues
that the McDow case only applies to cases in which the United States Trustee filed the motion to
dismiss. Appellant argues that in such instances, the bankruptcy court order on such motion to
dismiss is a final order that could be appealed immediately. However, in cases such as the

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instant case, where the motion to dismiss pursuant to § 707(b) is brought by a party other than
the United States Trustee, such order is not final.
The Court has considered the McDow case and is not persuaded by Appellant’s argument.
In the McDow case, the Fourth Circuit considered “whether a bankruptcy judge’s order denying
a § 707(b) motion to dismiss a Chapter 7 bankruptcy case as abusive is a final order within the
meaning of 28 U.S.C. § 1581(a)(1).” 662 F.3d at 287. In considering this question, the Fourth
Circuit found it “beneficial to consider the precise nature and effect of the order at issue – an
order denying a § 707(b) motion.” Id. at 288. Upon review of the relevant statutory provisions,
case law, and policy considerations, the McDow court set forth its holding as follows: “We agree
with the circuits that have specifically addressed both the current and prior versions of § 707(b)
and hold that a bankruptcy court’s order denying a § 707(b) motion to dismiss a Chapter 7 case
as abusive is a final order within the meaning of 28 U.S.C. § 158(a).” Id. at 289. The McDow
court did not, as Appellant contends, define the issue before it as one of unique applicability to
United States Trustee motion under § 707(b) and its holding does not reflect an intention to set
forth a separate rule as to finality that only applies when the § 707(b) movant was the United
States Trustee.1 If the Circuit Court had intended to limit its holding to § 707(b) motions brought
by United States Trustees, it would have so stated that limitation. Therefore, based on the Fourth
Circuit precedent articulated in the case of McDow v. Dudley, 62 F.3d 284, 289 (4th Cir. 2011),
the order from which Appellant appeals from is a final order.
Rule 8002(a) of the Federal Rules of Bankruptcy Procedure provides that a notice of
appeal is timely if filed within fourteen (14) days of the entry of judgment, order, or decree being

1

The Court is aware that the McDow case involved the denial of a United States Trustee’s motion to
dismiss, however, the Fourth Circuit did not limit its holding to cases wherein a United States Trustee is the movant
under § 707(b). Instead, the Fourth Circuit held that a bankruptcy court’s order denying a motion to dismiss a
Chapter 7 cases as abusive is a final order. McDow, 662 F.3d at 289.

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appealed. Because the bankruptcy court’s order was immediately appealable, pursuant to Rule
8002(a), the deadline for any appeal of that order ran on July 16, 2012. The instant notice of
appeal was filed on March 28, 2013, more than eight months after entry of the order. Therefore,
this Court lacks jurisdiction2 to consider Appellant’s Appeal and the appeal must be dismissed as
untimely and Appellee’s Motion to Dismiss is GRANTED.
Next, the Court considers Appellee’s motion for damages and costs for bringing a
frivolous appeal. Rule 8020 of the Federal Rules of Bankruptcy Procedure states “[i]f a district
court . . . determines that an appeal from an order, judgment, or decree of a bankruptcy court is
frivolous, it may, after a separately filed motion . . . and reasonable opportunity to respond,
award just damages and single or double costs to appellee.”

In considering a motion for

sanctions for a frivolous bankruptcy appeal, courts are to “first determine that the appeal is
frivolous, and then determine that [it] is an appropriate case for the imposition of sanctions.” In
re Property Movers, L.L.C., 31 Fed App’x 81, 84 (4th Cir. 2002) (quoting Williams v. United
States Postal Service, 873 F.3d 1069, 1075 (7th Cir. 1989)). A frivolous appeal is one in which
the result is obvious or the appellant’s argument lacks any merit. Id. Sanctions for bringing a
frivolous appeal provide compensation to the prevailing party for the expense of defending a
wholly meritless appeal. Id. The decision whether to grant sanctions for a frivolous appeal is
discretionary. National Energy & Gas Transmission, Inc., 2009 WL 2229784 at * 4 (D. Md.
July 22, 2009).
The appeal in this case was so obviously untimely that the time and effort necessary to
obtain a dismissal seems sufficiently minimal, especially for attorneys as experienced as those
involved in this case.

Therefore, the Court will GRANT Appellee’s Motion, and direct

Appellant to pay Appellee for a half of his costs in filing this motion in the amount of $1,966.30.
2

See In re Anderson News, LLC, 2012 WL 5928316 (D. Del. Nov. 26, 2012).

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III. CONCLUSION
Based upon the foregoing, IT IS HEREBY ORDERED that Appellee’s Motion to
Dismiss Bankruptcy Appeal [Doc. No. 2] is GRANTED and Appellee’s Motion for Damages
and Costs for Frivolous Bankruptcy Appeal [Doc. No. 3] is GRANTED. Appellant SHALL pay
Appellee half of the costs associated with filing this motion in the amount of $1,966.30.
Appellant’s Bankruptcy Appeal is hereby DISMISSED

IT IS SO ORDERED.
Signed: May 3, 2013

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