Leslie Danner v. Ust- United States Trustee, Bo , 549 F. App'x 702 ( 2013 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
DEC 13 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
In re: LESLIE FRED DANNER and No. 12-60059
TERRIANN RENE DANNER,
BAP No. 11-1315
Debtors.
LESLIE FRED DANNER and MEMORANDUM*
TERRIANN RENE DANNER,
Appellants,
v.
UNITED STATES TRUSTEE, BOISE,
Appellee.
In re: KEVIN CLYDE WERRY and No. 12-60062
D’RESE GRETCHEN WERRY,
BAP No. 11-1525
Debtors.
KEVIN CLYDE WERRY and D’RESE
GRETCHEN WERRY,
Appellants,
v.
UNITED STATES TRUSTEE, BOISE,
Appellee.
*
This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.
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Appeals from the Bankruptcy Appellate Panel
for the Ninth Circuit
Eileen Hollowell, Meredith Jury, and Bruce Markell, Bankruptcy Judges
Submitted December 5, 2013**
Seattle, Washington
Before: McKEOWN and TALLMAN, Circuit Judges, and MURPHY, District
Judge.***
The debtors in separate bankruptcy proceedings appeal decisions of the
bankruptcy appellate panel affirming orders of the bankruptcy court, which denied
a law firm’s applications to serve as counsel to the debtors. Because the bankruptcy
court’s orders were interlocutory and one of the appeals is moot, we dismiss for
lack of jurisdiction.
I. Finality
This court’s jurisdiction over bankruptcy appeals is limited to appeals
involving “‘final decisions, judgments, orders, and decrees’” of the bankruptcy
court. In re AFI Holding, Inc., 530 F.3d 832, 836 (9th Cir. 2008) (quoting 28
U.S.C. § 158(d)). A bankruptcy court order is final if it “‘1) resolves and seriously
**
The panel unanimously concludes this case is suitable for decision without oral
argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Stephen Joseph Murphy, III, United States District Judge for the
Eastern District of Michigan, sitting by designation.
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affects substantive rights and 2) finally determines the discrete issue to which it is
addressed.’” Id. (quoting In re Lazar, 237 F.3d 967, 985 (9th Cir. 2001)).
It is well-settled that a bankruptcy court’s decision to appoint counsel is not
appealable. See In re S.S. Retail Corp., 162 F.2d 1230, 1231 (9th Cir. 1998) (per
curiam); In re Westwood Shake & Shingle, Inc., 971 F.2d 387, 388 (9th Cir. 1992).
Although this court has not squarely held that the same is true of an order that
denies an attorney’s application to serve as counsel, we have suggested that it is.
See In re Westwood Shake, 971 F.2d at 389 (“Where the underlying bankruptcy
court order involves the appointment or disqualification of counsel, courts have
uniformly found that such orders are interlocutory even in the more flexible
bankruptcy context.”).
In ordinary civil litigation, neither a court’s decision to disqualify counsel
nor a court’s refusal to do so is a final order. See Richardson-Merrell v. Koller, 472
U.S. 424, 430 (1984); Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374
(1980). An order that affects a party’s choice of counsel in bankruptcy proceedings
is no different. When a bankruptcy court accepts or rejects an attorney’s
application, we cannot say if the decision will seriously affect the substantive
rights of any party until the case is actually litigated. See In re Westwood Shake,
971 F.2d at 390 (citing Richardson-Merrell, 472 U.S. at 439).
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The only immediate effect of either acceptance or rejection is on the ability
of a particular attorney to earn fees for future services. An attorney need not submit
an application to retain fees for services performed before a bankruptcy petition is
filed. See 11 U.S.C. § 329(a) (requiring only disclosure). And an attorney cannot
obtain fees for post-petition services until his application is approved. See Lamie v.
U.S. Trustee, 540 U.S. 526, 529 (2004). Although the debtors argue that the order’s
effect on future earnings renders it final, an order approving of an application is
interlocutory even though it affects the payment of fees and, by extension, the
distribution of the estate. Our precedent thus requires us to treat the orders here as
interlocutory.1
II. Mootness
The Werrys — but not the Danners — also argue that the bankruptcy court’s
subsequent acceptance of their reorganization plan gives this court jurisdiction
over their appeal from the bankruptcy appellate panel. Although a final order may
cure a premature appeal of an interlocutory order, see In re Rains, 428 F.3d 893,
1
Two of our sister circuits agree that orders denying an attorney’s applications are
interlocutory. See In re M.T.G., Inc., 403 F.3d 410, 413–14 (6th Cir. 2005); In re Devlieg, Inc.,
56 F.3d 32, 33–34 (7th Cir. 1995) (per curiam). Only the Second Circuit has concluded
otherwise on materially similar facts. See In re Kurtzman, 194 F.3d 54, 57 (2d Cir. 1999) (per
curiam). That decision, however, rested on the assumption that orders appointing counsel are
also final, see id., at 57 & n.1 — a premise we have firmly rejected, see In re S.S. Retail, 162
F.3d at 1231; In re Westwood Shake, 971 F.2d at 388.
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900–01 (9th Cir. 2005), it is doubtful that this doctrine applies when the
interlocutory and final orders issue from different courts. But that question need
not be settled here because the Werrys’ appeal is moot.
Although none of the parties argue that either appeal is moot, we have an
independent duty to make that determination sua sponte. See In re Burrell, 415
F.3d 994, 997 (9th Cir. 2005). An appeal is moot if it is “‘impossible for the court
to grant any effectual relief whatever to a prevailing party.’” In re Pattullo, 271
F.3d 898, 901 (9th Cir. 2001) (quoting In re Cascade Roads, Inc., 34 F.3d 756, 759
(9th Cir. 1994)).
Here, the Werrys cannot obtain meaningful relief on appeal. They have
already obtained substitute counsel and litigated their case to conclusion.
Moreover, they do not argue that the bankruptcy court’s order has affected the
outcome of their case. The significance of the bankruptcy court’s order is thus
limited to its effect on the law firm they sought to retain. Because there is no
further legal work to perform and the order does not affect compensation for past
services, the appeal is moot. See In re Kurtzman, 194 F.3d at 58–59 (dismissing as
moot the appeal of a district court’s order affirming a bankruptcy court’s order
denying a trustee’s application to retain counsel, because the trustee had hired
substitute counsel).
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Therefore, we lack jurisdiction to hear both appeals.
DISMISSED.
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