Steffen v. Menchise (In Re Steffen) ( 2016 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-15093
Non-Argument Calendar
________________________
D.C. Docket Nos. 8:14-cv-01250-SDM; 8:01-bk-09988-ALP
In Re: TERRI L. STEFFEN,
Debtor.
__________________________________________________
TERRI L. STEFFEN,
Plaintiff-Appellant,
versus
DOUGLAS N. MENCHISE,
Chapter 7 Trustee,
Defendant-Appellee.
________________________
No. 14-15094
Non-Argument Calendar
________________________
D.C. Docket Nos. 8:14-cv-01251-SDM; 8:01-bk-09988-MGW
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In Re: Terri L. Steffen,
Debtor.
__________________________________________________________________
TERRI L. STEFFEN,
Plaintiff-Appellant,
versus
DOUGLAS N. MENCHISE,
Chapter 7 Trustee,
Defendant-Appellee.
________________________
No. 15-12554
Non-Argument Calendar
________________________
D.C. Docket Nos. 8:14-cv-00416-SDM; 8:01-bk-09988-MGW
In re:
TERRI L. STEFFEN
Debtor.
______________________________________________________________
TERRI L. STEFFEN,
Plaintiff-Appellant,
versus
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UNITED STATES OF AMERICA,
Defendant-Appellee.
________________________
Appeals from the United States District Court
for the Middle District of Florida
________________________
(September 6, 2016)
Before HULL, MARCUS and BLACK, Circuit Judges.
PER CURIAM:
Terri Steffen, proceeding pro se in these three consolidated appeals, appeals
the district court’s order affirming the bankruptcy court’s entry of default judgment
in an adversary action by the Government and the district court’s dismissal of an
appeal from two related cases on procedural grounds. After review, we affirm the
entry of default judgment in the Government’s adversary action, case number 15-
12554, and dismiss as moot case numbers 14-15093 and 14-15094.
I. PROCEDURAL BACKGROUND
Steffen sought discharge of her debts through a bankruptcy proceeding filed
in 2001. 1 The Government and a trustee both filed separate adversary actions
objecting to the discharge of Steffen’s debts. See 11 U.S.C. § 727(a)(2)(B)
(prohibiting discharge when “the debtor, with intent to hinder, delay, or defraud a
1
As the parties are familiar with the facts of this case, we will not recount them in detail.
We include only those facts necessary to the discussion of each issue.
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creditor or an officer of the estate charged with custody of property under this title,
has transferred . . . property of the estate, after the date of the filing of the
petition”); id. § 727(c)(1) (permitting “[t]he trustee [or] the United States trustee”
to “object to the granting of a discharge under subsection (a)”). The adversary
actions were consolidated by the bankruptcy court. After Steffen failed to attend a
deposition in 2009, the bankruptcy court granted the Government’s sanctions
motion and ordered, among other things, that Steffen attend a deposition until
completed despite any objections to the questions asked. Steffen appealed the
2009 sanction order to this Court, but she subsequently moved to dismiss her
appeal with prejudice and this Court granted her motion. The Government
provided notice to Steffen of a deposition scheduled in April 2011 but Steffen
appeared without her attorney and refused to answer a question without asserting
any claim of privilege. The bankruptcy court subsequently granted motions by the
Government and the trustee for default judgment against Steffen in the adversary
cases as a sanction. As a result, the bankruptcy court entered a final judgment in
Steffen’s general bankruptcy case denying discharge of her debts. Steffen
appealed to the district court, which affirmed the grant of default judgment in the
Government’s adversary case. The district court dismissed Steffen’s appeals from
the trustee’s adversary case and the general bankruptcy case for failure to pay
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filing fees, file initial briefs, submit statements of the issues, and designate the
record.
II. DISCUSSION
A. The Government’s Adversary Action
We first consider Steffen’s appeal from the Government’s adversary action
(case no. 15-12554). Steffen argues that the district court erred in affirming the
bankruptcy court’s entry of default judgment because the bankruptcy court abused
its discretion in issuing the original 2009 sanction order as well as the sanction
order granting default judgment. See Buchanan v. Bowman, 820 F.2d 359, 361
(11th Cir. 1987) (explaining that the entry of a default judgment as a sanction for a
discovery violation is reviewed for an abuse of discretion).
The district court did not err in affirming the entry of default judgment in the
Government’s adversary action. First, because the district court previously
affirmed the 2009 sanction order and this Court dismissed Steffen’s appeal from
that order with prejudice, we may not review the merits of the 2009 sanctions
order. Second, as to the sanction order granting default judgment, the bankruptcy
court did not abuse its discretion in imposing default judgment as a sanction for
failing to comply with its discovery order.2 Under Rule 37, the court may impose
2
In the bankruptcy context, we sit as a second court of review, examining the legal
conclusions of the bankruptcy court and the district court de novo and the bankruptcy court’s
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sanctions for not obeying a discovery order, including rendering a default
judgment against the disobedient party. Fed. R. Civ. P. 37(b)(2)(A)(vi); see also
Bankruptcy R. 7037 (stating that Fed. R. Civ. P. 37 applies in adversary
proceedings). Throughout the proceedings, Steffen engaged in an effort to avoid
discovery and delay the proceedings. After being ordered to complete the
deposition, Steffen appeared at her deposition without counsel despite receiving
notice. Steffen then refused to answer a question without grounds to do so, despite
the bankruptcy court’s prior order that the deposition should continue despite
objections. Steffen’s efforts to interfere with and delay discovery show that
Steffen was not acting in a good faith attempt to complete her discovery
requirements, see Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1542 (11th
Cir. 1993) (“[A] default judgment sanction requires a willful or bad faith failure to
obey a discovery order.”), and that a lesser sanction would not suffice, see id.
(default judgment is appropriate as a “last resort, when less drastic sanctions would
not ensure compliance with the court’s orders”). Accordingly, we affirm case
number 15-12554.
B. The Trustee’s Adversary Action and the General Bankruptcy Case
factual findings for clear error. Finova Capital Corp. v. Larson Pharmacy Inc. (In re Optical
Techs., Inc.), 425 F.3d 1294, 1299-1300 (11th Cir. 2005).
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We next consider Steffen’s appeals from the trustee’s adversary action (case
no. 14-15094) and the general bankruptcy case (case no. 14-15093). The trustee
has moved this Court to dismiss these appeals because the bankruptcy court’s
appropriate grant of default judgment in the Government’s adversary case has
rendered them moot. We have held that:
If events that occur subsequent to the filing of a lawsuit or an appeal
deprive the court of the ability to give the plaintiff or appellant
meaningful relief, then the case is moot and must be dismissed.
Indeed, dismissal is required because mootness is jurisdictional. Any
decision on the merits of a moot case or issue would be an
impermissible advisory opinion.
Al Najjar v. Ashcroft, 273 F.3d 1330, 1336 (11th Cir. 2001) (citations and
quotation marks omitted); see also Adler v. Duval County Sch. Bd., 112 F.3d 1475,
1477 (11th Cir. 1997) (“A case is moot when the issues presented are no longer
live or the parties lack a legally cognizable interest in the outcome.” (quotation
marks omitted)). “The burden of establishing mootness rests with the party
seeking dismissal.” Beta Upsilon Chi Upsilon Chapter at the Univ. of Fla. v.
Machen, 586 F.3d 908, 916 (11th Cir. 2009).
Because we find that the district court did not err in affirming the bankruptcy
court’s grant of default judgment against Steffen in the Government adversary
action, the remaining appeals are moot. The trustee adversary action was
consolidated with the Government adversary action in the bankruptcy court.
Therefore, each of the decisions that Steffen appealed to the district court from the
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trustee adversary case were also appealed to, and affirmed by, the district court in
the Government adversary case. As to Steffen’s general bankruptcy action,
because the default judgment in the Government adversary proceedings prevents
Steffen from discharging her debt, see 11 U.S.C. § 727(a)(2)(B) (prohibiting
discharge when “the debtor, with intent to hinder, delay, or defraud a creditor or an
officer of the estate charged with custody of property under this title, has
transferred . . . property of the estate, after the date of the filing of the petition”),
granting relief from the district court’s dismissal in the general bankruptcy district
court appeal would not provide Steffen with the relief she seeks, and thus, would
simply be an impermissible advisory opinion, see Al Najjar, 273 F.3d at 1336.
Accordingly, we GRANT the trustee’s motion to dismiss as moot case nos. 15-
15093 and 14-15094.
AFFIRMED in case number 15-12554; appeals DISMISSED in case
numbers 14-15093 and 14-15094.
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