American Asset Finance LLC v. Feldman ( 2017 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 16-1073
_____________
In re: LAWRENCE E. FELDMAN f/d/b/a Lawrence E. Feldman & Associates,
Attorney at Law; ROBYN FELDMAN,
Debtors
AMERICAN ASSET FINANCE LLC,
Appellant
v.
LAWRENCE E. FELDMAN
_____________
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2-14-cv-05267)
District Judge: Honorable C. Darnell Jones, II
______________
Submitted under Third Circuit L.A.R. 34.1(a)
March 28, 2017
Before: AMBRO, VANASKIE, and RESTREPO, Circuit Judges.
(Filed: April 14, 2017)
______________
OPINION*
______________
*
This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7,
does not constitute binding precedent.
RESTREPO, Circuit Judge.
This appeal concerns an individual adversary action by a creditor against a debtor
in a bankruptcy matter. The Bankruptcy Court granted summary judgment in favor of the
creditor in the adversary action. The District Court, on review, vacated the Bankruptcy
Court’s decision and remanded the case for further proceedings. Because the District
Court’s order was not a final, appealable order under 28 U.S.C. § 158, we must dismiss
this appeal for lack of appellate jurisdiction.
I
Appellee-Debtor Lawrence E. Feldman and his wife Robyn Feldman filed for
Chapter 7 bankruptcy in February 2013 in United States Bankruptcy Court for the
Eastern District of Pennsylvania. The Feldmans listed in their bankruptcy petition a debt
of $407,433.76 owed to Appellant-Creditor American Asset Finance, LLC (“AAF”).
This debt represented a judgment obtained by AAF against Mr. Feldman in 2012 in New
Jersey state court. In May 2013, AAF filed an adversary complaint with the Bankruptcy
Court, objecting to the discharge of the debt under 11 U.S.C. § 523. After the
Bankruptcy Court dismissed AAF’s original complaint without prejudice, AAF filed an
amended adversary complaint in November 2013, again objecting to the discharge of the
debt under 11 U.S.C. § 523. Mr. Feldman answered the complaint, and AAF filed a
motion for summary judgment.
The Bankruptcy Court granted summary judgment for AAF in July 2014, finding
that the New Jersey judgment collaterally estopped Mr. Feldman from arguing that his
debt to AAF was non-dischargeable under 11 U.S.C. § 523. Mr. Feldman appealed the
2
Bankruptcy Court’s decision to the United States District Court for the Eastern District of
Pennsylvania.
The District Court, in July 2015, found that collateral estoppel did not apply
to the New Jersey judgment, vacated the Bankruptcy Court’s summary judgment
opinion, and remanded the case to the Bankruptcy Court for further proceedings.
AAF appealed the District Court’s order to this Court in January 2016, contending
that the District Court incorrectly decided the collateral estoppel issue.
II
Before reaching the merits of the collateral estoppel issue presented on appeal, we
must decide whether, pursuant to 28 U.S.C. § 158(d), we have jurisdiction to hear this
appeal of the District Court’s order.1 “To determine whether we have appellate
jurisdiction over a district court’s order in a bankruptcy proceeding, our approach has
been to first examine whether the underlying bankruptcy court order is final. If it is, we
then examine whether the district court’s order is final or appealable.” In re Truong, 513
F.3d 91, 93 (3d Cir. 2008) (per curiam). There is no dispute in this case that the
Bankruptcy Court order awarding summary judgment was an appealable order. The
parties dispute instead whether the District Court’s order vacating the Bankruptcy Court’s
summary judgment decision was a final, appealable order under 28 U.S.C. § 158(d).
1
Section 158(d) grants jurisdiction in bankruptcy cases to courts of appeals in
order to review “final decisions, judgments, orders, and decrees” entered by the district
courts. 28 U.S.C. § 158(d). Section 158(a) grants the district courts jurisdiction to hear
appeals from final orders of the bankruptcy courts. 28 U.S.C. § 158(a).
3
Generally speaking, the concept of finality is more “relaxed” in the bankruptcy
context than in other types of civil litigation. Buncher Co. v. Official Comm. of
Unsecured Creditors of GenFarm Ltd. P’Ship IV, 229 F.3d 245, 249-50 (3d Cir. 2000).
This broader and more flexible interpretation of finality, our Court has explained, better
accommodates the pragmatic considerations that are unique to bankruptcy law, which
typically involves protracted litigation by multiple parties with different claims. Truong,
513 F.3d at 93-94. “But ‘[d]espite th[e] relaxed view of finality in the bankruptcy setting
as a whole, the general antipathy toward piecemeal appeals still prevails in individual
adversary actions.’” Id. (quoting In re Natale, 295 F.3d 375, 378-79 (3d Cir. 2002)).
Accordingly, “an order in an individual adversary proceeding” should be viewed like an
order in any other “routine” civil proceeding, in that it “is not final unless it ‘ends the
litigation on the merits and leaves nothing more for the court to do but execute the
judgment.’” Id. (quoting Bethel v. McAllister Bros., Inc., 81 F.3d 376, 381 (3d Cir. 1996)
(emphasis added)). In other words, “[o]rders that do not fully adjudicate [the] specific
adversary proceeding or that require further factual development are governed by the
ordinary finality precepts of routine civil litigation.” Id. (quoting United States v.
Nicolet, Inc., 857 F.2d 202, 206-07 (3d Cir. 1988)).
Here, the District Court’s order did not fully and finally resolve AAF’s adversary
proceeding against Mr. Feldman. As Mr. Feldman points out in his briefing, the District
Court’s remand to the Bankruptcy Court demands significantly more of the Bankruptcy
Court than executing a judgment or completing ministerial tasks. The Bankruptcy Court
must determine on the merits, through additional fact-finding, whether Mr. Feldman’s
4
failure to pay its full debt to AAF was “willful and malicious” and thus non-
dischargeable under 11 U.S.C. § 523(a)(6).2 Therefore, we hold that we do not have
appellate jurisdiction at this juncture.
III
Because the District Court’s order here was not a final order pursuant to 28 U.S.C.
§ 158(d), this appeal will be dismissed for lack of appellate jurisdiction.
2
AAF does not challenge Mr. Feldman’s assessment of the Bankruptcy Court’s
duties on remand.
5