US Bank NA et al v. Pulsifer et al

Filing 58

ORDER signed by Judge Rudolph T. Randa on 4/23/2015 GRANTING 48 Defendants' Motion for Reconsideration. This Court's 3/5/2015 Order 46 and Amended Judgment 47 are VACATED; its 9/23/2014 Judgment 44 is REINSTATED. (cc: all counsel) (cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
Lee H. Pulsifer and Laura L. Pulsifer,
Debtors.

Bankruptcy Case No. 12-36562-svk

LEE H. PULSIFER and LAURA L. PULSIFER,
Plaintiffs,
-vs-

Adv. Proc. No. 13-02176-svk
Case Nos. 13-C-648, 13-C-835

U.S. BANK, NATIONAL ASSOCIATION,
as Trustee for Citigroup Mortgage Pass-Through
Certificates Series 2007-AR4, and
WELLS FARGO HOME MORTGAGE,
Defendants.
MARY B. GROSSMAN, Standing Chapter 13 Trustee,
Additional Party.
DECISION AND ORDER
The defendants move to reconsider the Court’s March 5 order
approving the bankruptcy court’s January 14 order. The defendants argue,
persuasively, that the Court had no authority to approve this order, which
addressed core claims that the bankruptcy court had authority to hear
under 28 U.S.C. § 157(b).

If an action before the bankruptcy court “contains both core and noncore issues, then the bankruptcy court must simply enter final orders and
judgments in those proceedings that are core and submit to the district
court proposed findings of fact and conclusions of law in those proceedings
that are non-core but related.” Beneficial Nat’l Bank v. Best Receptions
Sys., Inc., 220 B.R. 932, 950 (Bankr. E.D. Tenn. 1998). In this case, the
Court withdrew the reference from the bankruptcy court to address the
non-core claims in the first instance. ECF No. 43. Since the core claims are
referred to the bankruptcy court, the Court’s jurisdiction is appellate, not
original. §§ 157(a), 157(b)(1), 158(a). The procedure set forth in § 157(c)(1)
is inapplicable, and the plaintiffs’ attempt to invoke it was misguided. See
Fed. R. Bankr. P. 9033(a) (“In non-core proceedings heard pursuant to 28
U.S.C. 157(c)(1), the bankruptcy judge shall file proposed findings of fact
and conclusions of law. …”).
What the plaintiffs should have done to preserve their right to
review in the Seventh Circuit was file a direct appeal from the bankruptcy
court’s January 14 Order. Appellate proceedings here would have been
summary because the Court previously dismissed the non-core claims, and
the parties consented to the dismissal of the core claims before the
bankruptcy court. However, if prompted the Court could have entered a
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summary order denying the appeal, and the plaintiffs could have proceeded
to appeal to the Seventh Circuit. In re Bronk, 775 F.3d 871, 874 (7th Cir.
2015). To be fair, the plaintiffs did appeal, but they withdrew the appeal in
reliance on the Court’s March 5 order of approval. Case No. 15-C-224. That
was hasty, although the plaintiffs were faced with a motion to dismiss on
the grounds that the bankruptcy court abused its discretion by extending
the time for appeal, so perhaps the point is or would have been moot.
The foregoing may seem overly formalistic, but to hold otherwise
would provide litigants with an avenue to evade and extend the 14-day
appeal period in cases with a mix of core and non-core claims. Fed. R.
Bankr. P. 8002(a)(1). Here, the plaintiffs waited over a month before
asking this Court to “approve” the bankruptcy court’s January 14 order.
This was a backdoor attempt to extend the time to file an appeal. There are
procedures in place to extend the appeal period, committed to the
discretion of the bankruptcy court, Fed. R. Bankr. P. 8002(d), but the time
to appeal cannot be extended in the manner utilized by the plaintiffs.
Defendants’ motion for reconsideration [ECF No. 48] is GRANTED.
The March 5, 2015 Order [ECF No. 46] and Amended Judgment [ECF No.
47] are both VACATED. The September 23, 2014 Judgment [ECF No. 44]
is REINSTATED.
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Dated at Milwaukee, Wisconsin, this 23rd day of April, 2015.
SO ORDERED:
__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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