In Re: Mac Truong

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
1-16-2008
In Re: Mac Truong
Precedential or Non-Precedential: Precedential
Docket No. 06-3980
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-3980
IN RE: MAC TRUONG;
MARYSE MAC-TRUONG,
Appellants
STEVEN P. KARTZMAN,
Trustee
On Appeal from the United States District Court
for the District of New Jersey
D.C. Civil Action No. 06-cv-3179
(Honorable Susan D. Wigenton)
Submitted Pursuant to Third Circuit LAR 34.1(a)
November 1, 2007
Before: SCIRICA, Chief Judge,
HARDIMAN and ALDISERT, Circuit Judges.
(Filed: January 16, 2008)
Mac Truong
Maryse Mac-Truong
Appellants, Pro Se
Bruce S. Etterman, Esquire
Hellring, Lindeman, Goldstein & Siegal
One Gateway Center, 8th Floor
Newark, New Jersey 07102
Attorney for Appellee,
Steven P. Kartzman, Trustee
OPINION OF THE COURT
PER CURIAM.
The threshold question in this bankruptcy appeal is
whether the bankruptcy court order appealed from was a final
order under 28 U.S.C. § 158. For the reasons set forth below,
we conclude that it was not and we will accordingly dismiss the
appeal for lack of appellate jurisdiction.
I.
We recount the facts only to the degree necessary to
resolve the question of our jurisdiction. Appellants, Mac
Troung and Maryse Mac-Troung, filed for Chapter 7 bankruptcy
2
in September 2003 in the United States Bankruptcy Court for
the District of New Jersey. Appellee, Steven P. Kartzman, was
designated as the Chapter 7 trustee charged with liquidating the
assets of the Troungs’ bankruptcy estate. On May 12, 2006, the
bankruptcy court issued an order denying appellants’ motion for
a hearing to determine whether there was cause for the removal
of Kartzman as trustee, under 11 U.S.C. § 324(a), due to a
conflict of interest between him and the assets of the bankruptcy
estate. The district court dismissed the appeal because
appellants had not filed a designation of items to be included in
the record and a statement of issues to be presented in the appeal
as required, under Federal Rule of Bankruptcy Procedure 8006,
within ten days of filing the notice of appeal.1 See Fed. R.
Bankr. P. 8001(a).2 Appellants filed a timely motion for
reconsideration, which was similarly denied by the district court
on August 11, 2006. Appellants subsequently filed a timely
notice of appeal to this court. The Clerk issued a briefing
schedule, instructing the parties to address, inter alia, whether
1
Under Bankruptcy Rule 8006, “[w]ithin 10 days after filing
the notice of appeal . . . the appellant shall file with the clerk and
serve on the appellee a designation of the items to be included
in the record on appeal and a statement of the issues to be
presented.”
2
Under Bankruptcy Rule 8001(a), the district court is
empowered to dismiss an appeal for failure to prosecute or
otherwise follow the procedures set out in the Bankruptcy Rules.
3
the bankruptcy court order constituted a final order so as to
confer jurisdiction on the district court and this court.
II.
Although the parties assert that we have jurisdiction over
this case, we have an obligation to satisfy ourselves of our own
jurisdiction. See Metro Transp. Co. v. N. Star Reinsurance Co.,
912 F.2d 672, 675-76 (3d Cir. 1990); see also In re Jeannette
Corp., 832 F.2d 43, 45 (3d Cir. 1987).
The appealability of orders issued by bankruptcy judges
is governed by 28 U.S.C. § 158. Section 158(a) authorizes
district courts to hear appeals from “final judgments, orders, and
decrees, and, with leave of the [district] court, from
interlocutory orders and decrees, of bankruptcy judges.”
Section 158(d)(1) provides that “[t]he courts of appeals shall
have jurisdiction of appeals from all final decisions, judgments,
orders, and decrees entered under subsection[] (a).” But “the
language of § 158(d) does not permit this court to review the
district court’s disposition of an appeal from a purely
interlocutory order of the bankruptcy judge. Unless the order
submitted to the district court is final, section 158(d) will not
allow an appeal to this court.” In re Jeannette Corp., 832 F.2d
at 45 (citing In re Comer, 716 F.2d 168, 172 (3d Cir. 1983)); see
also S’holders v. Sound Radio, Inc., 109 F.3d 873, 880 (3d Cir.
1997) (citing 28 U.S.C. § 158(a) & (d)).
4
III.
A.
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. See, e.g., In re Prof’l Ins.
Mgmt., 285 F.3d 268, 282 (3d Cir. 2002); In re White Beauty
View, Inc., 841 F.2d 524, 526 (3d Cir. 1988). Considerations
unique to bankruptcy appeals have led us to construe the factor
of finality broadly in the bankruptcy context. See, e.g., Buncher
Co. v. Official Comm. of Unsecured Creditors of Genfarm Ltd.
P’ship IV, 229 F.3d 245, 250 (3d Cir. 2000) (noting that we
traditionally impose a “relaxed standard” of finality because of
unique considerations in bankruptcy cases). “We interpret
finality pragmatically in bankruptcy cases because these
proceedings often are protracted and involve numerous parties
with different claims.” In re Natale, 295 F.3d 375, 378 (3d Cir.
2002). 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. at 378-79. In this respect, an order in an individual adversary
proceeding is not final unless it “ends the litigation on the merits
and leaves nothing more for the court to do but execute the
judgment.” Bethel v. McAllister Bros., Inc., 81 F.3d 376, 381
(3d Cir. 1996) (internal quotation and citation omitted). Thus,
“even in bankruptcy appeals the concept of finality is not
5
open-ended. Orders that do not fully adjudicate a specific
adversary proceeding or that require further factual development
are governed by the ordinary finality precepts of routine civil
litigation.” United States v. Nicolet, Inc., 857 F.2d 202, 206-07
(3d Cir. 1988).
B.
The bankruptcy court’s order in this case was not final
for the purpose of conferring jurisdiction on this court.3 “[T]he
language of § 158(d) does not permit this court to review the
district court’s disposition of an appeal from a purely
interlocutory order of the bankruptcy judge.” In re Jeannette
Corp., 832 F.2d at 45. Here, the bankruptcy court’s order
merely denied appellants’ request for a hearing concerning an
3
In a previous case, we held that a district court order
affirming, in part, a bankruptcy court’s order granting a motion
to remove a trustee and his counsel was a final order. See In re
BH & P Inc., 949 F.2d 1300, 1307 (3d Cir. 1991). We note that
in In re BH & P Inc.,we focused our discussion on the district
court’s order and did not specifically address the underlying
issue of the finality of the bankruptcy court’s order. See id. at
1320 n.3 (Hutchinson, J., concurring) (“Although neither this
Court nor the district court examined the finality of the
bankruptcy court’s order removing the trustee and his counsel
. . . this area of our jurisprudence may also warrant re-
examination as to whether such orders are properly classified as
final or interlocutory.”).
6
alleged conflict of interest on the part of the trustee.4 This order
cannot plausibly be termed final as it was solely related to the
conduct or progress of litigation before the bankruptcy court and
did not dispose of any discrete claim or cause of action.
Compare Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368
(1981) (determining, in the context of general civil litigation,
that orders denying a motion for disqualification of an attorney
are not subject to appeal prior to resolution of the merits of the
dispute) and Matter of Devlieg, Inc., 56 F.3d 32, 33 (7th Cir.
1995) (deciding against the finality, and thus against the
appealability, of a bankruptcy court order denying
disqualification of a law firm based on lack of disinterestedness
under 11 U.S.C. § 327(e)) with In re Comer, 716 F.2d at 172
(holding that bankruptcy court’s order lifting automatic stay “is
final in the sense that it completes litigation on the question and
subjects the property to a foreclosure action in state court”).
IV.
Though flexibility is a hallmark of the concept of finality
in the bankruptcy context, appellants cannot be permitted to
appeal in a manner which results in numerous appeals of the
same issue and specifically runs the risk of engendering
4
In fact, more than a year later, on May 24, 2007, in response
to a subsequent motion put forth by appellants to schedule a
motion hearing to disqualify the trustee, the bankruptcy court
issued a more detailed letter opinion, but no order, on the issue
of removal of the trustee.
7
inconsistent decisions in this court.5 See Jeannette, 832 F.2d at
46 (noting that the inefficient use of judicial resources is as
objectionable in bankruptcy appeals as in other fields). Since
the bankruptcy court’s order was not final, this appeal will be
dismissed for lack of jurisdiction under § 158(d). Appellants’
motion for an order scheduling a hearing to remove appellee
from this appellate proceeding, and its numerous supplements,
is denied as moot.
5
With regard to the piecemeal appeal problem, appellants’
bankruptcy is still pending disposition and they currently have
at least two other appeals pending before this court. See C.A.
Nos. 07-3238, 3239. These appeals are the result of their further
appeals of bankruptcy court decisions which, in turn, have
resulted in separate district court proceedings from the one at
issue here. See D.N.J. Civ. No. 06-cv-05511. In fact, one of
these appeals concerns a memorandum opinion issued by Chief
Judge Garrett E. Brown explicitly denying appellants’ motion
for a hearing for the purpose of removing the trustee before the
district court. Noting the procedural infirmity of raising such a
motion in the district court, Chief Judge Brown declared that as
a matter of law “there is no basis . . . that allows [the district
court] to utilize a bankruptcy statute to facilitate a removal of a
trustee in an appeal.”
8