Weary v. Poteat (TV2)

Filing 8

ORDER denying 3 Motion for Damages and Costs Frivolous Appeal Pursuant to Fed. R. Bankr. P. 8020; granting 5 Motion for Extension of Time to File. Signed by Chief District Judge Thomas A Varlan on 5/28/2014. (KMK, ) Modified on 5/28/2014 (KMK): copy mailed

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
IN RE: STEPHANIE RENEE POTEAT,
Debtor,

JOHN F. WEARY, JR.,
Appellant,
v.
STEPHANIE RENEE POTEAT,
Appellee.

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No.:

3:14-CV-46-TAV-HBG

MEMORANDUM OPINION AND ORDER
This civil action is before the Court on Appellee’s Motion for Damages and Costs
for Frivolous Appeal Pursuant to Fed. R. Bankr. P. 8020 [Doc. 3]. Appellee moves the
Court pursuant to Federal Rule of Bankruptcy Procedure 8020 to find that appellant’s
appeal is frivolous and accordingly award just damages and single or double costs.
Appellant responded in opposition to this request [Doc. 4]. Also before the Court is
Appellant’s Motion for Enlargement of Time to File Briefs [Doc. 5], in which appellant
moves the Court pursuant to Federal Rule of Bankruptcy Procedure 9006(b)(1) for an
enlargement of the time in which to file briefs related to his appeal. Appellee filed an
untimely response in opposition to appellant’s motion. See E.D. Tenn. L.R. 7.1(a).

I.

Background
On April 30, 2013, appellee filed a voluntary petition for Chapter 7 bankruptcy in

the United States Bankruptcy Court for the Eastern District of Tennessee [Doc. 1-1].
Subsequently, appellant, who is one of appellee’s bankruptcy creditors, sent letters to
appellee’s counsel and mother regarding appellee’s debt and his intent to pursue criminal
charges against appellee [Doc. 1-36 pp. 5–8]. Because these letters were sent after
appellee had filed her bankruptcy petition—which triggered the automatic stay imposed
by 11 U.S.C. § 362—appellee moved the bankruptcy court to hold appellant in contempt
of court for violating the automatic stay [Id. at 10–11]. The bankruptcy court granted this
motion, awarding actual damages of $28.25 and punitive damages of $7,500.00, as well
as $5,784.39 in attorneys’ fees and expenses incurred by appellee’s counsel in
prosecuting the motion [Id. at 16].
On December 21, 2013, appellant filed a notice of appeal of the bankruptcy
court’s decision [Doc. 1-29]. On February 4, 2014, the appeal was docketed in this Court
[Doc. 1], and on February 5, 2014, a notice was sent to the parties that stated, in part:
“Unless otherwise ordered by the district court, the briefing schedule set forth in
Bankruptcy Rule 8009(a) (copy attached) will apply.”

Federal Rule of Bankruptcy

Procedure 8009(a) states:
Unless the district court or the bankruptcy appellate panel by local
rule or by order excuses the filing of briefs or specifies different time
limits:
(1) The appellant shall serve and file a brief within 14 days after
entry of the appeal on the docket pursuant to Rule 8007.
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(2) The appellee shall serve and file a brief within 14 days after
service of the brief of appellant. If the appellee has filed a cross
appeal, the brief of the appellee shall contain the issues and
argument pertinent to the cross appeal, denominated as such, and the
response to the brief of the appellant.
(3) The appellant may serve and file a reply brief within 14 days
after service of the brief of the appellee, and if the appellee has
cross-appealed, the appellee may file and serve a reply brief to the
response of the appellant to the issues presented in the cross appeal
within 14 days after service of the reply brief of the appellant. No
further briefs may be filed except with leave of the district court or
the bankruptcy appellate panel.
Appellant failed to comply with Rule 8009(a)(1), as nothing was filed in the
record until appellee’s March 31, 2014 motion asking the Court to find appellant’s appeal
frivolous and award damages and costs [Doc. 3]. In this motion, appellee cites Federal
Rule of Bankruptcy Procedure 8020, which states:
If a district court or bankruptcy appellate panel determines that an
appeal from an order, judgment, or decree of a bankruptcy judge is
frivolous, it may, after a separately filed motion or notice from the
district court or bankruptcy appellate panel and reasonable
opportunity to respond, award just damages and single or double
costs to the appellee.
Appellee submits that appellant’s appeal is frivolous because: (1) it is very doubtful that
appellant has a reasonable expectation of success on appeal given the forceful opinion
issued by the bankruptcy court; (2) appellant has yet to request a transcript of the trial
proceedings in the bankruptcy court; and (3) appellant failed to file a brief in support of
his appeal within the requisite time for doing so [Doc. 3 p. 2].
In a timely response in opposition to appellee’s motion, appellant contends that
appellee’s motion is baseless and conclusory in its assertion that the appeal is frivolous
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[Doc. 4 p. 1]. Appellant submits that his counsel overlooked the Court’s February 5
notice and therefore did not calendar the deadlines set forth therein [Id.]. Instead, counsel
for appellant relates that he believed in good faith that the Court would issue a briefing
schedule [Id. at 1–2]. Counsel for appellant states that he regrets the error and did not
intend to neglect this appeal [Id. at 1]. In light of this explanation, appellant submits that
appellee has provided no evidence, outside of conclusory allegations, that appellant’s
appeal is frivolous [Id. at 2].
Simultaneously, appellant filed a motion seeking an enlargement of the time in
which to file a brief in support of his appeal [Doc. 5].

As justification, appellant cites

Federal Rule of Bankruptcy Procedure 9006(b)(1), which provides:
Except as provided in paragraphs (2) and (3) of this subdivision,
when an act is required or allowed to be done at or within a specified
period by these rules or by a notice given thereunder or by order of
court, the court for cause shown may at any time in its discretion (1)
with or without motion or notice order the period enlarged if the
request therefor is made before the expiration of the period
originally prescribed or as extended by a previous order or (2) on
motion made after the expiration of the specified period permit the
act to be done where the failure to act was the result of excusable
neglect.
Counsel for appellant admits that upon review of his email system, he received the
February 5 notice from the Court, but apparently overlooked this notice and therefore
failed to calendar the deadline for filing a brief [Doc. 5 p. 1]. Counsel submits that he
greatly regrets this error and apologizes to the Court and opposing counsel [Id. at 1–2].
Yet, given the seriousness of the allegations and ruling against appellant and the fact that
this dispute proceeded to trial in the bankruptcy court, counsel for appellant emphasizes
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that neither appellant nor his counsel have taken this matter lightly [Id. at 2]. Counsel for
appellant represents that the foregoing amounts to excusable neglect and consequently
requests an enlargement of the time in which to file a brief in support of appellant’s
appeal [Id. at 2].
Appellee filed an untimely response on May 14, 2014, submitting that she opposes
any enlargement of time and stating in support: “Appellant filed a Motion for
Enlargement of Time to File Briefs on April 15, 2014. Today is May 14, 2014, almost a
month later, and no Brief has been filed” [Doc. 6 p. 1]. In response, appellant filed his
brief on May 20, 2014 [Doc. 7].
II.

Analysis
First, the Court must address appellee’s motion contending that appellant’s appeal

is frivolous. Bankruptcy Rule 8020 “is materially the same as Federal Rule of Appellate
Procedure 38,” and the Sixth Circuit has therefore construed it in light of the application
of Rule 38. In re Reese, 485 F. App’x 32, 35 (6th Cir. 2012). “[S]anctions are warranted
under Appellate Rule 38 only in the rare case when an appeal involves an improper
purpose, such as harassment or delay, or when . . . an appeal consists of baseless or
improperly raised arguments.” Id. (citation and internal quotation marks omitted). In
addition, “[f]rivolous appeals, such as those in which the result is obvious or the
appellant’s argument is wholly without merit, also may warrant sanctions[,]” and
“sanctions are appropriate where the appeal was prosecuted with no reasonable

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expectation of altering the district court’s judgment . . . or out of sheer obstinacy.” Id.
(citations, alterations, and internal quotation marks omitted).
Here, the Court finds that appellee has not shown that appellant’s appeal is
frivolous. Though appellant has admitted to overlooking the notice highlighting the
briefing schedule, the Court finds that the record does not indicate that the appeal was
taken to harass or delay appellee, despite appellee’s allegations to this effect.
Further, in light of the fact that the issues involved in the appeal have not yet been
briefed, the Court cannot say that the appeal: (1) is wholly without merit, (2) was filed
with no reasonable expectation of altering the bankruptcy court’s judgment, or (3) was
filed out of sheer obstinacy. To this end, neither the fact that the bankruptcy court’s
opinion was strongly worded nor appellant’s failure to file a brief in support of his
appeal—admittedly as a result of counsel’s failure to timely ascertain and calendar the
deadline for doing so—renders the appeal frivolous. And to the extent that appellant has
yet to request a transcript that is not already in the record, that likewise does not lead to
the conclusion that the appeal is frivolous. Accordingly, the Court denies the appellee’s
motion.
Next, the Court must determine whether to grant appellant’s motion for an
enlargement of the time in which to file a brief in support of his appeal. As previously
noted, Federal Rule of Bankruptcy Procedure 9006(b)(1) provides:
Except as provided in paragraphs (2) and (3) of this subdivision,
when an act is required or allowed to be done at or within a specified
period by these rules or by a notice given thereunder or by order of
court, the court for cause shown may at any time in its discretion (1)
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with or without motion or notice order the period enlarged if the
request therefor is made before the expiration of the period
originally prescribed or as extended by a previous order or (2) on
motion made after the expiration of the specified period permit the
act to be done where the failure to act was the result of excusable
neglect.
Appellant did not file his motion before the expiration of the filing period, and thus he
requests that the Court find that his failure to file a brief within the requisite period was
the result of excusable neglect.
The Supreme Court has stated that the determination as to whether a party’s
neglect is excusable:
is at bottom an equitable one, taking account of all relevant
circumstances surrounding the party’s omission. These include . . .
the danger of prejudice to the debtor, the length of the delay and its
potential impact on judicial proceedings, the reason for the delay,
including whether it was within the reasonable control of the
movant, and whether the movant acted in good faith.
Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993)
(citation and footnote omitted).
With respect to the first factor, the Court finds there is little danger of prejudice to
the debtor in this case—appellee—if appellant’s motion for enlargement is granted
because appellee will have the opportunity to respond in opposition to any filing by
appellant in support of his appeal.
Regarding the second, third, fourth, and fifth factors, the Court finds the delay was
less than two months, a relatively insignificant amount of time. There does not appear to
be any bad faith on the part of appellant, whose attorney overlooked and failed to
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properly calendar the deadline for filing a brief and moved for an enlargement of time
simultaneously to filing his timely response to appellee’s motion, which presumably
alerted appellant to his neglect. Granting appellant’s request for an enlargement of time
also will have a slight impact on the judicial proceedings because the appeal was only
recently commenced and is in its early stages. As the Supreme Court stated in Pioneer
Investment Services Co., “the lack of any prejudice to the debtor or to the interests of
efficient judicial administration, combined with the good faith of [movants] and their
counsel, weigh strongly in favor of permitting the tardy claim.” 507 U.S. at 398. The
reason for the delay was within the reasonable control of appellant, given that it resulted
from his counsel overlooking and failing to calendar the deadline, but considering that the
other factors weigh in appellant’s favor, the Court finds that this factor is not controlling.
Moreover, the Court must be mindful of “the strong policy in favor of deciding cases on
their merits.” Krowtoh II LLC v. ExCelsius Int’l Ltd., 330 F. App’x 530, 537 (6th Cir.
2009) (citation and internal quotation marks omitted).
Finally, in response to appellee’s argument that an enlargement of time should not
be granted because, nearly one month after filing his motion requesting such relief,
appellant has failed to file a brief, the Court notes that it would be presumptive for
appellant to do so prior to the Court’s ruling on his motion. In any event, six days after
appellee’s response, appellant filed a brief in support of his appeal. Whether appellant
filed a brief prior to the Court’s ruling on his motion for enlargement of time has no
bearing on the ruling, however.

To this end, appellant failed to file a brief within the
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requisite period set forth in Federal Rule of Bankruptcy Procedure 8009(a), and therefore,
the issue is whether he should be permitted to belatedly file a brief, not whether he has
shown that he is presently prepared to do so.
Taking into account all of the circumstances in this case, the Court finds
appellant’s neglect excusable and grants his motion for an enlargement of the time in
which to file a brief in support of his appeal.
III.

Conclusion
For the reasons set forth herein, the Court hereby DENIES Appellee’s Motion for

Damages and Costs for Frivolous Appeal Pursuant to Fed. R. Bankr. P. 8020 [Doc. 3] and
GRANTS Appellant’s Motion for Enlargement of Time to File Briefs [Doc. 5].
Appellant has filed a brief in support of his appeal [Doc. 7]. Appellee shall have
fourteen (14) days from the entry of this order to file a response to appellant’s brief.
IT IS SO ORDERED.

s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE

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