Gharbi et al v. Century 21 Real Estate LLC

Filing 6

Memorandum Opinion and Order REVERSING Bankruptcy Court (District Court Cases 1:11-CV-832 and 1:11-CV-888) and judgment RENDERED that Appellants may proceed with their appeal (District Court Case 1:11-CV-759) without paying the filing f ee; DENYING 5 MOTION to Dismiss, MOTION for Default Judgment filed by Mohammad H. Gharbi. Having decided the merits of the only issues on appeal in cause numbers A-11-CV-832-LY and A-11-CV-888-LY, IT IS FINALLY ORDERED that those cases are hereby CLOSED. Signed by Judge Lee Yeakel. (jk, )

TATP flITRTflT PflTTRT
FOR THE WESTERN DISTRICT OF TEXA
AUSTIN DIVISION

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INRE:

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°1 3 05

§
§
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MOHAMMAD H. GHARBI AND
FATEMEH GHARBI,
DEBTORS.

CAUSENOS.A-iiCY-759-LY
A-i 1-CV-832-LY
A-11-CV-888-LY

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§

MOHAMMAD H. GHARBI AND
FATEMEH GHARBI,
APPELLANTS,

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§
§
§

V.

CHAPTER 7

ADV. NO. 08-01099-CAG

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§

CENTURY 21 REAL ESTATE LLC
APPELLEE.

§
§

OPINION AND ORDER
Before the Court are the above-styled and numbered related pro se appeals from orders of
the United States Bankruptcy Court for the Western District of Texas, Austin Division.

I.

Background
The record in cause number A-li -CV-75 9-LY (the '759 case) reflects that on July 29, 2011,

Appellants Mohammad H. Oharbi and Fatemeh Gharbi filed a Notice of Appeal of the bankruptcy

court's Order Awarding Plaintiff Counsel Fees in the Amount of $147,996 and Accepting Award
from Discharge, entered on July 28, 2011. At the same time and in connection with this appeal,

Appellants filed in the bankruptcy court an Application for Waiver of Filing Fee. The bankruptcy
court denied the application on August 18, 2011, and sent a letter to Appellants on August 22, 2011,

ordering them to remit a total filing fee for the Notice of Appeal of $255 or face dismissal of the
appeal. To date, Appellants have not paid the filing fee.
The record in cause number A-11-CV-832-LY (the '832 case) reflects that on August 30,

2011, Appellants filed a Notice of Appeal of the bankruptcy court's denial of their request for waiver

of the filling fee due in conjunction with the appeal in the

case. Appellants also filed in the

'759

bankruptcy court a second Application for Waiver of Filing Fee associated with this appeal, which
the bankruptcy court denied on August

31,

2011.

The record in cause number A-li -CV-88 8-LY (the '888 case) reflects that on September21,

2011, Appellants filed a third Notice of Appeal, appealing the bankruptcy court's August 31, 2011
denial order. Appellants filed in the bankruptcy court a third request entitled Application to Proceed
In Forma Pauperis in association with the original appeal. The bankruptcy court denied the

application on September 29,

2011.

By order dated September 3,2011, this court ordered the parties in the

'759

case to.brief the

issue of whether the bankruptcy court erred in awarding plaintiff counsel fees in the amount of
$147,966

the

'832

and set the cause for submission. By order dated October

and

'888

13, 2011,

the court combined

cases for purposes of appellate briefing on the issue of whether the bankruptcy

court erred in denying Appellants' applications for waiver of the appellate filing fee and to proceed

informa pauperis. In that same order, the court informed the parties that it would not hear oral
argument on the filing-fee issue but would rule on the pleadings.
Accordingly, before the court today are Appellants' Brief, filed November 4, 2011 (Clerk's
Doc. No. 4 in the

'832

case and Clerk's Doc. No.

3

in the

'888

case) and Century

21

Real Estate

LLC's Appellee's Brief, filed December 7, 2011 (Clerk's Doc. No. 4 in the '888 case). Century 21

Real Estate did not file a responsive brief in the

'832

case. Nor did Appellants file a reply brief in

either case. Instead, Appellants filed a pleading styled "Motion for Dismissal of the Appellee's
Claim and entering Default Judgment Against the Appellee" in each case (Clerk's Doc. No. Sin the
2

'832 case and Clerk's Doe. No.

5

in the '888 case). By these motions, Appellants argue that due to

Century 21 Real Estate's failure to timely file their responsive brief by November 23, 2011, as

ordered by this court, the court should dismiss Century 21 Real Estate's claims for attorney's fees
at issue in the appeal in the '759 case.

II.

Discussion
"[Amy court of the United States may authorize the prosecution.

.

.

of any.. appeal.
.

without prepayment of fees or security" if the litigant submits an affidavit demonstrating that the
litigant "is unable to pay such fees or give security therefor." 28 U.S.C.

§

1915(a)(1). A court's

denial of informapauperis status is reviewed for abuse of discretion. See Collier v. Tatum, 722 F.2d
653, 656 (11th Cir. 1983). The threshold requirement which must be met in order to proceed in

formapauperis is that the party appealing show, by affidavit, that it is unable to pay court fees and
costs. 28 U.S.C.

§

1915(a).

In its first denial order, dated August 18, 2011, the bankruptcy court summarily denied

Appellant's application to proceed without paying the appellate filing fee, without further comment.
In the second and third denial orders, dated August 31, 2011, and September 29, 2011, the court the

court merely stated that "[t]here is nothing in the Bankruptcy Code or Federal Rules of Bankruptcy
Procedure which allow an appeal to proceed in forma pauperis" and that Mr. Gharbi "has over time
and in this proceeding specifically shown himself to be a vexatious litigant who pursues litigation

contrary to the facts and law." The bankruptcy court misstates the law when it asserts that there is
no basis for waiver

of the appellate filing fee. See id.; see also

Wynn

v.

Reiber, 173 F.3d 848 (2d

Cir. 1999); In re Fromal, 52 F.3d 321 (4th Cir. 1995); In re Bush, 39 F.3d 1191(10th Cir. 1994);
In re Carson, 983 F.2d 1065 (6th Cir. 1993) (reviewing district court's affirmance of bankruptcy

3

court's denial of debtor's request to pursue appeal without prepayment of costs or fees under section
1915). Furthermore, in none of its orders does the bankruptcy court address Appellants' ability to

pay a filing fee or reference the applications detailing Appellants' income, debts, and assets.

Additionally, nowhere in Century 21 Real Estate's responsive brief does it address

Appellants' request for waiver of the appellate filing fee.' The only filings relating to the ultimate
question before the

courtwhether Appellants should be entitled to proceed informapauperis on

their appeal in the '759

caseare

the three separate applications originally submitted to the

bankruptcy court, supported by declarations of Appellant Mohammad H. Gharbi, made under penalty

of perjury, detailing Appellants' financial hardship, as well as Appellants' brief reiterating that they
are unable to pay the costs of appeal. Neither the bankruptcy court nor any party challenges the

statements made in the declarations. On this record, the court concludes that the bankruptcy court

abused its discretion in denying Appellants' request to proceed without paying the appellate filing
fee. See Adkins

v.

El. DuPont de Nemours &

Co., 335 U.S. 331, 339 (1948).

IT IS THEREFORE ORDERED THAT the bankruptcy court's orders of August 18, 2011,
August 31, 2011, and September 29, 2011, denying the waiver of the appellate filing fee are

REVERSED and judgment RENDERED that Appellants may proceed with their appeal in the '759
case without paying the filing fee of $255 required by the bankruptcy court.

IT IS FURTHER ORDERED THAT Appellants' Motions for Dismissal of the Appellee's
Claim and entering Default Judgment Against the Appellee, filed December 7, 2011, (Clerk's Doc.
No.

5

in the '832 case and Clerk's Doc. No.

5

in the '888 case) are DENIED. The court will

The Appellee's Brief filed in the '832 case addresses the merits of the appeal in the '759
case. Because Century 21 Real Estate did not file a responsive brief in that appeal, it is likely that
Century 21 Real Estate intended to file its Appellee's Brief in the '759 case.
4

consider the responsive brief filed by Appellee Century 21 Real Estate in the '888 case, in addition
with the argument presented before the court on January 13, 2011, in ruling on the merits of the
appeal in the

'759

case.

This Opinion and Order is limited to Appellants' applications for waiver of the appellate

filing fee in the

'759

case before this court at this time. It extends no further. The parties and the

bankruptcy court shall not construe the rulings made herein as a grant of future waivers of any
appellate filing fee.
Having decided the merits of the only issues on appeal in cause numbers A-il-C V-832-LY
and A-i i-CV-888-LY, IT IS FINALLY ORDERED that those cases are hereby CLOSED. The
'759

case remains set for argument before this court on January 13, 2012.
SIGNED this

day of January, 2012.

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LEE'EAKEL
UIfTED STATS DISTRICT JUDGE