In Re Kimberly P. Budd ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_______________________________
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IN RE: KIMBERLY BUDD, )
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DEBTOR. )
-------------------------------)
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AIHUA PALMOUR, )
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Appellant, )
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v. ) Civil Action No. 18-270 (EGS)
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KIMBERLY BUDD, )
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Appellee. )
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MEMORANDUM OPINION AND ORDER
In November 2016, Appellant Aihua Palmour initiated an
adversary proceeding against Debtor-Appellee Kimberly Budd in
the United States Bankruptcy Court for the District of Columbia
(“Bankruptcy Court”). After a trial, the Bankruptcy Court
dismissed Ms. Palmour’s complaint. Months later, the Bankruptcy
Court also denied Ms. Palmour’s motion for reconsideration. On
February 5, 2018, Ms. Palmour, proceeding pro se, appealed the
Bankruptcy Court’s dismissal to this Court. Pending before the
Court is Ms. Budd’s motion to dismiss Ms. Palmour’s appeal.
After considering the motion, the response and reply thereto,
the record, and the applicable law, the Court hereby GRANTS the
motion to dismiss.
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I. Background
In May 2012, Ms. Palmour sued Ms. Budd in the Superior
Court of the District of Columbia for breach of contract arising
out of a purportedly fraudulent real estate transaction. A.R.,
ECF No. 2-1 at 79-80. 1 In May 2013, Superior Court Judge Michael
Rankin entered a $63,788 judgment against Ms. Budd. Id. at 78.
Before Ms. Palmour could collect, Ms. Budd filed for bankruptcy
and listed Ms. Palmour’s judgment as a dischargeable, consumer
debt. See In re Budd, Bankruptcy Case No. 16-429-SMT. In
response, Ms. Palmour initiated an adversary proceeding in
Bankruptcy Court on November 25, 2016. See Palmour v. Budd,
Adversary Proceeding No. 16-10039-SMT. In her complaint, Ms.
Palmour argued that her $63,788 judgment against Ms. Budd was
not discharged by Ms. Budd’s bankruptcy because Ms. Budd had
willfully and maliciously injured her property via a fraudulent
real estate investment scheme. See A.R., ECF No. 2-1 at 1-5
(citing 11 U.S.C. § 523(a)(2),(6)).
After a trial, the Bankruptcy Court dismissed Ms. Palmour’s
complaint on August 3, 2017. See id. at 203. On August 16, 2017,
Ms. Palmour filed a motion for reconsideration, then proceeding
pro se. See id. at 207-15. On December 29, 2017, the Bankruptcy
1 When citing electronic filings throughout this Opinion, the
Court cites to the ECF page number, not the page number of the
filed document.
2
Court denied Ms. Palmour’s motion for reconsideration, id. at
239-64, but its order was not entered on the docket until
January 3, 2018, see Docket No. 25, Adversary Proceeding No. 16-
10039. On February 2, 2018, Ms. Palmour filed a notice of
appeal. See ECF No. 1; A.R., ECF No. 2-1 at 265-66; Docket No.
27, Adversary Proceeding, 16-10039.
In response, Ms. Budd filed a motion to dismiss Ms.
Palmour’s appeal. See Appellee’s Mot., ECF No. 4. The motion is
now ripe for review.
II. Analysis
Ms. Budd argues that the appeal must be dismissed because
Ms. Palmour failed to file a notice of appeal within fourteen
days of the Bankruptcy Court’s order denying her motion for
reconsideration, as required by Federal Rule of Bankruptcy
Procedure 8002. See Appellee’s Mot., ECF No. 4. Accordingly, Ms.
Budd argues that this Court lacks jurisdiction over Ms.
Palmour’s appeal because failure to file a notice of appeal
within the fourteen days is a “jurisdictional barrier.” Id. at
4. In her response, Ms. Palmour argues that she never received
notice of the Bankruptcy Court’s order denying her motion for
reconsideration. See Appellant’s Opp’n, ECF No. 5. She contends
that she filed a notice of appeal only two days after she called
the clerk’s office and learned that the Bankruptcy Court had
denied her motion. See id. at 1. Because her failure to timely
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appeal “was due to the court’s error,” she argues that this
Court should consider her appeal. Id.
28 U.S.C. § 158(a) confers jurisdiction on federal district
courts to hear appeals from final judgments, orders, and decrees
“entered in cases and proceedings referred to the bankruptcy
judges.” Section 158(c)(2) provides that appeals “shall be taken
. . . in the time provided by Rule 8002 of the Bankruptcy
Rules.” Federal Rule of Bankruptcy Procedure 8002(a) mandates
that “a notice of appeal must be filed with the bankruptcy clerk
within 14 days after the entry of the judgment, order, or decree
being appealed.”
Appellants may toll the Rule 8002 appeal deadline by filing
one of four motions within fourteen days after the judgment is
entered: (1) a motion to amend pursuant to Bankruptcy Rule 7052;
(2) a motion to alter or amend the judgment under Bankruptcy
Rule 9023; (3) a motion for a new trial under Bankruptcy Rule
9023; or, as applicable here, (4) a motion for relief
under Bankruptcy Rule 9024—that is, Federal Rule of Civil
Procedure 60(b). Fed. R. Bankr. P. 8002(b). If the appellant
files one of these motions, as Ms. Palmour did when she filed
her motion for reconsideration, “the time to file an appeal runs
for all parties from the entry of the order disposing of the . .
. motion.” Id. Thus, Ms. Palmour had fourteen days to appeal the
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Bankruptcy Court’s judgment once it denied her motion for
reconsideration.
Finally, “the Bankruptcy Court may extend the time to file
a notice of appeal upon a party’s motion.” Fed. R. Bankr. P.
8002(d)(1). 2 The Bankruptcy Court may extend the fourteen-day
deadline if the appellant’s motion is filed “within the time
prescribed by this rule; or within 21 days after that time, if
the party shows excusable neglect.” Id.
It is undisputed that Ms. Palmour did not file her notice
of appeal within fourteen days of the Bankruptcy Court’s January
3, 2018 order denying her motion for reconsideration, as
required by Bankruptcy Rule 8002(a). See Appellant’s Opp’n, ECF
No. 5; see also Docket, Adversary Proceeding No. 16-10039
(notice of appeal filed on February 2, 2018). It is also
undisputed that Ms. Palmour did not file a motion for an
extension of time within fourteen days of the Bankruptcy Court’s
January 3, 2018 order, or within twenty-one days after that
time, as required by Bankruptcy Rule 8002(d). See id. At issue,
then, is whether this Court may consider Ms. Palmour’s appeal
notwithstanding her undisputed failure to adhere to Rule 8002.
2 A Bankruptcy Court may not extend the time to file a notice of
appeal for certain judgments or orders inapplicable here. See
Fed. R. Bankr. P. 8002(d)(2).
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Ms. Budd argues that the Court lacks jurisdiction over Ms.
Palmour’s appeal because Rule 8002 is “mandatory and
jurisdictional” and thus, the Court may not consider whether Ms.
Palmour received notice of the Bankruptcy Court’s order denying
her motion for reconsideration. Appellee’s Reply, ECF No. 6 at
2. Ms. Palmour does not respond to this argument, beyond
asserting her lack of notice. See Appellant’s Opp’n, ECF No. 5.
Failure to comply with a jurisdictional time prescription
“deprives a court of adjudicatory authority over the case,
necessitating dismissal.” Hamer v. Neighborhood Hous. Servs. of
Chicago, 138 S. Ct. 13, 17 (2017)(citations omitted). Because
Congress alone “may determine a lower federal court’s subject-
matter jurisdiction,” id., a “time prescription governing the
transfer of adjudicatory authority from one Article III court to
another” is jurisdictional only if it “appears in a statute,”
id. at 20 (quotations and citations omitted). On the other hand,
a “time limit not prescribed by Congress ranks as a mandatory
claim-processing rule.” Id. at 17. Of course, 28 U.S.C. § 158,
which references Bankruptcy Rule 8002, does not govern appeals
from Article III courts. Instead, it governs the transfer of
adjudicatory authority from an Article I court (the bankruptcy
court) to either an Article III court (the district court) or
another Article I court (the bankruptcy appellate panel). “In
cases not involving the time bound transfer of adjudicatory
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authority from one Article III court to another,” the Supreme
Court has applied the “clear-statement rule.” Hamer, 138 S. Ct.
at 20 n.9. The clear-statement rule provides that “‘[a] rule is
jurisdictional if the Legislature clearly states that a
threshold limitation on a statute's scope shall count as
jurisdictional.’” Id. (quoting Gonzalez v. Thaler, 565 U.S. 134,
141 (2012)(citations omitted)).
In the wake of Hamer, several courts have concluded that
the time limitation in Bankruptcy Rule 8002 is jurisdictional
because the deadline is imposed by 28 U.S.C. § 158(c)(2), which
contains a clear statement of congressional intent. See, e.g.,
In re Jackson, 585 B.R. 410, 416-19 (B.A.P. 6th Cir. 2018)
(“Every circuit court that has considered this question has come
to the conclusion that the time limit for appeals from
bankruptcy court decisions is statutory.”). However, the Court
need not determine at this time whether the time limit in Rule
8002 is jurisdictional. Assuming the appeal deadline is not
jurisdictional, it is instead a mandatory claim-processing rule.
See Hamer, 138 S. Ct. at 17-18. As such, the Court must still
enforce the time limit, as it was properly invoked. See id. (“if
properly invoked, mandatory claim-processing rules must be
enforced”). Indeed, “claim-processing rules thus assure relief
to a party properly raising them, but do not compel the same
result if the party forfeits them.” Eberhart v. United
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States, 546 U.S. 12, 19 (2005) (per curiam). Therefore, because
Ms. Budd properly invoked Rule 8002, the Court must enforce it
here. See Miller v. District of Columbia, 891 F. Supp. 2d 8, 11
n.4 (D.D.C. 2012)(“The Court need not reach the District's
contention that Rule 8002 is jurisdictional in nature. Even if
considered a claim-processing rule, the requirements of Rule
8002 are unalterable in light of the District's timely
objection.”)(citing cf. Youkelsone v. Fed. Deposit Ins.
Corp., 660 F.3d 473, 476 (D.C. Cir. 2011)).
Ms. Palmour contends that the Court should forgive her late
appeal because the Bankruptcy Court erred in not notifying her
that it had denied her motion for reconsideration, which
commenced the running of the Rule 8002 clock. Appellant’s Opp’n,
ECF No. 5 at 1. Unfortunately, it does indeed appear undisputed
that Ms. Palmour did not receive notice of the Bankruptcy
Court’s order. The “certificate of notice” entered by the clerk
states that notice by mail was sent only to Ms. Budd and the
U.S. Trustee and notice by email was sent only to Ms. Budd’s
attorney. Docket No. 26, Adversary Proceeding 16-10039. Thus,
due to court error, Ms. Palmour did not receive notice that the
Bankruptcy Court had denied her motion for reconsideration.
However, this Court may not excuse her untimely appeal.
In cases where an appellant can demonstrate excusable
neglect, as Ms. Palmour probably could have, Rule 8002(d)(1)
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requires the appellant to file a motion for an extension of time
within thirty-five days of the Bankruptcy Court’s order. See
Fed. R. Bankr. P. 8002(d)(1) (comprised of the 14 days for
filing an appeal pursuant to Rule 8002(a)(1) plus the 21 days
thereafter for filing a motion to enlarge time based on
excusable neglect). Ms. Palmour learned about the Bankruptcy
Court’s order denying her motion for reconsideration within this
thirty-five day window. See Appellant’s Opp’n, ECF No. 5 at 1
(stating that Ms. Palmour learned about the Bankruptcy Court’s
January 3, 2018 denial on January 31, 2018). However, Ms.
Palmour did not file a motion for an extension of time to file a
notice of appeal. See Docket, Adversary Proceeding 16-10039.
Rule 8002 “‘does not allow a party to claim excusable neglect
after the time period has expired.’” In re Allen, Case No. 16-
23, 2018 WL 1940142 at *3 (Bankr. D.D.C. April 20, 2018)
(alterations omitted)(quoting In re Caterbone, 640 F.3d 108, 114
(3d Cir. 2011))(citing In re Herwit, 970 F.2d 709, 710 (10th
Cir. 1992) (finding that the district court lacked jurisdiction
to consider the merits of an appellant's untimely appeal where
the appellant had failed to file a motion for extension of
time); In re LBL Sports Ctr., Inc., 684 F.2d 410, 412–13 (6th
Cir. 1982) (ruling that the district court erred in considering
the issue of excusable neglect when no motion for an extension
of time on that basis was filed in the bankruptcy court)).
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Therefore, the Court may not consider whether Ms. Palmour’s
failure to timely appeal may be excused. 3
Although Bankruptcy Rule 9022 states that “immediately on
the entry of a judgment or order the clerk shall serve a notice
of entry . . . on the contesting parties,” it also mandates that
“lack of notice of the entry does not affect the time to appeal
or relieve or authorize the court to relieve a party for failure
to appeal within the time allowed, except as permitted in Rule
8002.” Fed. R. Bankr. P. 9022(a)(emphasis added). Thus,
“[n]otification by the clerk is merely for the convenience of
litigants. And lack of such notification in itself has no effect
upon the time for appeal.” In re Hilliard, 36 B.R. 80, 83
(S.D.N.Y. 1984) (quotations omitted). “Litigants have only to
check the court's electronic docket once a month in order to
protect their interests; this step will ensure that, even if
notice miscarries, a request for additional time can be made
within the 35 days allowed by Rule 8002(d)(1).” Netzer v. Office
of Lawyer Regulation, 851 F.3d 647,649 (7th Cir. 2017)(finding
that “courts lack an ‘equitable’ power to contradict the
3Moreover, the Court may not treat Ms. Palmour’s untimely appeal
as a motion to extend the time to appeal because Rule 8002(d)
provides that only the Bankruptcy Court may extend the time to
appeal. Fed. R. Bankr. P. 8002(d); see also Netzer v. Office of
Lawyer Regulation, 851 F.3d 647,649 (7th Cir. 2017)(“even if he
had [filed a motion for extension] in time, still the power to
decide [the motion] would have belonged to the bankruptcy judge,
not to the district judge or the court of appeals”).
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bankruptcy statutes and rules”)(citing Law v. Siegel, 571 U.S.
415, 421 (2014)).
Notwithstanding the clerk’s regrettable error in not
sending notice to Ms. Palmour, the Court must grant Ms. Budd’s
motion to dismiss Ms. Palmour’s appeal.
III. Conclusion and Order
Accordingly, for the reasons set forth in this Memorandum
Opinion and Order, Ms. Budd’s motion to dismiss Ms. Palmour’s
appeal is GRANTED. Ms. Palmour’s case is closed. This is a
final, appealable Order.
SO ORDERED.
Signed: Emmet G. Sullivan
United States District Judge
September 4, 2018
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