In re: CPDC Inc

REVISED - September 22, 2000
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 99-20576
_____________________
In The Matter Of: CPDC INC
Debtor
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JOSEPH ZER-ILAN; IDEAL SYSTEMS INC
Appellants
v.
GARY FRANKFORD; BEN B FLOYD
Appellees
_________________________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
_________________________________________________________________
August 3, 2000
Before KING, Chief Judge, and GARWOOD and DeMOSS, Circuit Judges.
KING, Chief Judge:
Appellants Joseph Zer-Ilan and Ideal Systems, Inc. appeal
from the district court’s dismissal of their bankruptcy appeal.
Because we find that the district court abused its discretion, we
reverse the district court’s judgment and reinstate the appeal.
I. FACTUAL AND PROCEDURAL BACKGROUND
CPDC, Inc. (“CPDC”) is a Texas corporation. In May 1995,
CPDC filed for Chapter 11 protection in the United States
Bankruptcy Court for the Southern District of Texas. On
September 11, 1995, Appellants Joseph Zer-Ilan and Ideal Systems,
Inc. (“Ideal Systems”) (collectively, “Appellants”) each filed a
proof of claim for an approximately $2.4 million secured claim.1
The claim was based on a series of transactions between Ronald
Sexton, CPDC’s director and president (who also owned one-third
of CPDC’s stock), and Zer-Ilan that occurred in August 1994.2
On August 23, 1996, Appellee Gary Frankford, as creditor and
representative of CPDC, instituted an adversary proceeding to
determine the allowability of Appellants’ claim pursuant to 11
U.S.C. § 502. Appellee Ben Floyd, the bankruptcy trustee for
CPDC (collectively with Frankford, “Appellees”), intervened in
the action. The first amended complaint asserted that the loan
1
On October 27, 1995, Zer-Ilan filed an amended proof of
claim restating the amount of the claim as “[u]ndetermined but
believed to be in excess of $1,275,000.00.” Ideal Systems did
not file another proof of claim.
2
These transactions were comprised, in part, of (1) a
$1,075,000 secured promissory note from Sexton to Zer-Ilan
executed on August 2, 1994 and modified to include CPDC as
successor borrower on August 23, 1994; (2) a deed of trust
executed by Sexton as grantor on behalf of Zer-Ilan on August 2,
1994 and modified to include CPDC as successor grantor on August
23, 1994; (3) a $200,000 secured promissory note executed August
2, 1994 between CPDC as pledgor and Zer-Ilan as secured party;
(4) a consulting agreement dated August 2, 1994 between CPDC and
Ideal Systems; and (5) a security agreement (stock pledge) dated
August 2, 1994 between Sexton, Don Seerfried and Shelton Smith as
pledgors and Zer-Ilan as secured party.
2
transactions between Zer-Ilan, Ideal Systems, CPDC, and Sexton
violated Texas usury laws, and therefore that Zer-Ilan’s claims
should be disallowed and three times the excess interest awarded
as damages. Appellees also sought to have Zer-Ilan’s claim
subordinated, to avoid a postpetition foreclosure sale by Zer-
Ilan of real property belonging to CPDC, and to recover 199
performing notes transferred prepetition from Sexton to Zer-Ilan.
Appellees also requested reasonable expenses and attorney’s fees.
The parties filed cross-motions for summary judgment, both
of which were denied by the bankruptcy court on November 22,
1996. The parties resubmitted their motions after discovery was
completed. On September 2, 1997, the bankruptcy court granted
Appellees’ motion for partial summary judgment on their usury
claim and denied Appellants’ cross-motion. The summary judgment
order disallowed Appellants’ claims against the estate in their
entirety and extinguished Appellants’ security interests in the
estate’s assets. The court also dismissed Appellees’ claim for
equitable subordination as moot.3 The only remaining fact
question, the issue of damages, was tried before a jury. The
jury determined that Appellants had provided $40,000 worth of
services pursuant to the consulting agreement.
3
Appellees had moved to sever and abate their equitable
subordination and fraudulent conveyance claims on July 11, 1997.
The court accepted the nonsuit at a status hearing held on July
24, 1997, but did not issue a separate order.
3
On February 3, 1999, the bankruptcy court entered a final
judgment against Appellants. In their motion for entry of final
judgment, Appellees submitted a calculation of actual damages in
the amount of $1,797,605.28.4 The court adopted Appellees’
calculation and awarded them $1,797,605.28 in actual damages,
$380,691.75 in attorney’s fees, costs of court, and post-judgment
interest to Floyd as trustee of the estate.
On February 12, 1999, Appellants filed a notice of appeal of
the bankruptcy court’s judgment with the clerk of the bankruptcy
court. On February 22, Appellants filed their designation of
record excerpts in accordance with Federal Rule of Bankruptcy
Procedure 8006. However, Appellants failed to file a statement
of issues, also required by Rule 8006, at the same time. On
February 22, Appellee Frankford also filed a notice of cross-
appeal. On March 4, Appellees filed a designation of record
excerpts and statement of issues to be presented on cross-appeal.
On the same day, Appellants’ counsel contacted Appellees’ counsel
“to discuss the issues on appeal and to coordinate the
preparation of the record.” According to Appellants’ counsel,
Appellees’ attorney stated at that time that Appellees would not
4
The document attached to Appellees’ motion indicated that
they had arrived at this figure by adding the interest on the
$1,075,000 note, the difference between the $750,000 consulting
fee and the value of services rendered under that agreement, and
the difference between the fair market value of the performing
notes received by Zer-Ilan and the amount he paid for those
notes; subtracting the maximum allowed interest on the $1,075,000
notes from this sum; and trebling the resulting $599,201.76.
4
designate additional record excerpts other than those previously
designated for the purposes of their cross-appeal.
On March 15, Appellants’ designated record excerpts were
filed with the clerk of the bankruptcy court. Among the filings
were five documents, four of which were volumes of trial
transcripts, that had not been previously identified in the
record designation. Furthermore, three documents identified on
the original record designation were not included in the record
excerpts presented to the clerk. A letter to the clerk
accompanying the filings listed all of the record excerpts
submitted to the clerk, including the transcripts. The appeal
was placed on the docket of the United States District Court for
the Southern District of Texas.
On March 25, 1999, Appellees filed a motion to dismiss the
appeal. The motion was predicated on the fact that Appellants
had failed to file a statement of the issues on appeal. On April
6, Appellants filed their statement of issues on appeal,
accompanied by a motion for leave of court to file it. On the
same day, Appellants filed their response to Appellees’ motion to
dismiss. Appellants argued that, prior to dismissing the appeal,
the district court should (1) make a finding of bad faith or
negligence; (2) consider whether the delay prejudiced other
parties; or (3) indicate that it considered the impact of
sanctions and available alternative sanctions. Appellants
maintained that their counsel “innocently neglected” to file the
5
statement of issues. They further contended that there was
evidence of neither bad faith nor prejudice. They also pointed
to the fact that they had complied with the rule when notified of
their dereliction. In addition, they argued that under Fifth
Circuit precedent, dismissal is a penalty of last resort, and
inappropriate in their case.5
After receiving the statement of issues, Appellees contended
in their reply brief on the motion to dismiss the appeal that the
record was deficient and that they would require extra time to
designate additional record excerpts. They anticipated a delay
of approximately three months, which, they claimed, increased the
risk that Zer-Ilan, whose Texas assets were insufficient to
satisfy the judgment, would transfer his assets out of
California, where he resided.
Appellants timely filed their brief on appeal.6 On May 13,
1999, the district court dismissed the appeal without ruling on
Appellants’ motion for leave to file the statement of issues. In
5
Appellants also argued that dismissal was inappropriate
under either Federal Rule of Bankruptcy Procedure 8001(a) or
9006(b)(1).
6
Appellants had received an extension of time to file
their brief. The brief was mailed on the due date, May 6, 1999,
and thus was deemed timely filed pursuant to Rule 8008. See FED.
R. BANKR. P. 8008(a). Appellants also filed a supplemental
designation of materials for the record, which consisted of
Appellants’ brief in support of their second motion for summary
judgment and a transcript of a pretrial conference before the
bankruptcy court.
6
its entirety, the memorandum opinion (“Opinion on Dismissal”)
read as follows:
The Top Ten[] reasons the appeals of Joseph Zer-Ilan
and Ideal Systems, Inc., must be dismissed are that
they:
10. Failed to file their statement of the issues
for appeal on time;
9. Failed to move for an extension of time to
file their statement;
8. Delayed six weeks to move for leave to file
their statement late, and only after
notification from their opposing party;
7. Notified their opposing party six weeks late
of their issues for appeal;
6. Delivered five documents to the clerk that
they failed to designate on time;
5. Failed to move for an extension of time to
deliver their five non-designated documents
to the clerk;
4. Failed to notify their opposing party that
they had delivered five non-designated
documents to the clerk;
3. Delayed eleven weeks to move for leave to
supplement their record for appeal with the
five non-designated documents;
2. Failed to deliver three documents to the
clerk that they had designated on time; and
the number one reason their appeal will be dismissed,
1. Failed to file their appellate brief on time,
after being given a 30-day extension.
On May 21, Appellants filed a motion for relief from the
dismissal order/motion for rehearing. In their motion,
Appellants argued, inter alia, that they had timely filed their
7
appellate brief, which negated the district court’s “number one”
reason for dismissing the appeal. Appellants also attached an
affidavit by their lead appellate counsel, in which she asserted
that the failure to file the statement of issues “was due to
counsel’s inadvertence,” but “was not intentional and was not for
purposes of delay.” They also noted that the filing of a
statement of issues is a requirement “peculiar to a bankruptcy
appeal,” which counsel had overlooked. Appellees conceded that
the Appellants’ brief was timely filed, but asserted that
dismissal was appropriate because the district court had found
nine instances of carelessness, consistently dilatory conduct,
lack of candor, negligence, and bad faith by Appellants.
On May 28, 1999, the district court issued an opinion and
order denying reinstatement of the appeal (“Opinion on
Reinstatement”). The district court found that even though
Appellants’ brief was timely filed, Appellants had “repeatedly
failed to follow the rules of procedure.” The district court
explained:
Litigants must follow the rules, meet the
deadlines, and, if necessary, ask for an extension
before the deadline. . . .
The court does not know why the appellants did and
did not do anything, and it is their responsibility to
meet the rules or to explain the extraordinary
circumstances that interfered with their ability to
meet them. Neither the court nor the appellees have
the burden of proving that the failures prejudiced
them. Only if there is an extraordinary circumstance,
8
then the significance of the prejudice is weighed to
determine whether equity should intervene.
The right to an appeal is conditioned on
appellants’ meeting the rules. Dismissal of an appeal
is not punishment; it is the natural consequence of the
appellants’ choices . . . .
(Emphasis in original). The district court also rejected the
argument that Appellants should not be penalized for their
counsel’s errors. It therefore declined to reinstate the appeal.
Appellants timely appeal to this court.7
II. DISCUSSION
Appellants argue on appeal that the district court abused
its discretion in dismissing the appeal because it failed to
consider (1) the egregiousness of the conduct and the explanation
offered by the offending party; (2) the equity of dismissing a
client’s appeal because of a lawyer’s conduct; (3) the efficacy
of lesser sanctions; and (4) prejudice to the appellee and bad
faith by the appellant. Further, Appellants maintain that the
uncontroverted record demonstrates that the late filing was
neither due to bad faith nor part of a pattern of dilatory
conduct, but rather the result of an inadvertent mistake of
counsel. Appellants also contend that dismissal is only proper
when the facts are much more egregious than those present here.
7
Appellants’ Notice of Appeal states that Appellants
appeal both the district court’s original order on dismissal, and
subsequent order denying reinstatement.
9
Finally, they assert that Appellees suffered no prejudice.
Appellees argue that the district court’s decision should be
affirmed because Appellants’ failure to plausibly explain their
breaches of procedure supports a finding of negligence,
indifference, or bad faith; and because they have suffered
prejudice. In the alternative, Appellees contend that Appellants
waived all of their issues on appeal by failing to file a
statement of issues.8
A. Standard of Review
We review actions taken by the district court in its
appellate role for an abuse of discretion. See In re Braniff
Airways, Inc., 774 F.2d 1303, 1305 (5th Cir. 1985) (citing
Pyramid Mobile Homes, Inc. v. Speake, 531 F.2d 743, 746 (5th Cir.
1976) (per curiam) (internal citations omitted)). A district
court abuses its discretion when its decision is based on an
erroneous view of the law. See In re Sealed Appellant, 194 F.3d
8
Appellees also argue that because Zer-Ilan was out of the
country and had a bench warrant for his arrest issued by the
bankruptcy court in connection with the enforcement of the
underlying bankruptcy judgment after the notice of appeal had
been filed with this court, this court should dismiss the appeal
based on the fugitive disentitlement doctrine. Appellees filed a
separate motion to dismiss the appeal advancing the same
argument. Appellants argue in their reply brief that the
fugitive disentitlement doctrine is inapplicable because Zer-Ilan
has since appeared before the bankruptcy court and purged the
contempt order. Appellees later withdrew their motion,
consistent with Appellants’ assertion. Consequently, we decline
to address the application of the fugitive disentitlement
doctrine to this appeal.
10
666, 670 (5th Cir. 1999) (citations omitted). Furthermore, this
court has held that, in reviewing a district court’s dismissal of
a bankruptcy appeal for non-jurisdictional defects under Federal
Rule of Bankruptcy Procedure 8001(a), we should “review the
district court’s action with attention to ‘the prejudicial effect
of delay on the appellees and the bona fides of the appellant.’”
Braniff, 774 F.2d at 1304 (citing Pyramid, 531 F.2d at 746)
B. Discretion to Dismiss a Bankruptcy Appeal Under Rule 8001(a)
Federal Rule of Bankruptcy Procedure 8006 requires
appellants to “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” within 10 days of
filing a notice of appeal. FED. R. BANKR. P. 8006. Rule 8006
further requires appellants to “provide to the clerk a copy of
the items designated” and arrange for any transcripts to be
delivered to the clerk. See id. The rule also instructs all
parties to “take any other action necessary to enable the clerk
to assemble and transmit the record.” Id.
Commentators have explained that the purpose of the record
designation requirement is to provide the reviewing court with an
adequate basis for evaluating the appellant’s claims on appeal.
See 10 COLLIER ON BANKRUPTCY ¶ 8006.03[1] (15th ed. 2000). The
burden of creating an adequate record rests with the appellant,
who may not urge an issue on appeal if he has failed to provide
11
the appellate court with the requisite record excerpts. See id.;
Pyramid, 531 F.2d at 745 (citations omitted). Likewise, the
purpose of the statement of issues is “principally to identify
the portions of the testimony below that should be included in
the record on appeal.” Editors’ Comment, NORTON BANKRUPTCY RULES
PAMPHLET 1999-2000 EDITION 559 (2d ed. 1999); In re Bishop, Baldwin,
Rewald, Dillingham & Wong, Inc., 104 F.3d 1147, 1148 (9th Cir.
1997) (citing NORTON BANKRUPTCY RULES PAMPHLET 1996-97 EDITION 594
(1996); 9 COLLIER ON BANKRUPTCY ¶ 8006-10 (1996)).
Rule 8001(a) states that “[a]n appellant’s failure to take
any step other than timely filing a notice of appeal does not
affect the validity of the appeal, but is ground only for such
action as the district court . . . deems appropriate, which may
include dismissal of the appeal.” As the language of the rule
makes clear, only the failure to file a notice of appeal, which
deprives the reviewing court of jurisdiction, mandates dismissal.
In contrast, the district court does not invariably dismiss for
breaches of other procedural rules, including Rule 8006. See In
re Tampa Chain Co., Inc., 835 F.2d 54, 55 (2d Cir. 1987) (per
curiam) (citations omitted). Rather, the court must exercise
discretion and consider what sanctions are appropriate.
Dismissal is a harsh and drastic sanction that is not appropriate
in all cases, even though it lies within the district court’s
discretion. In addition, when, as here, an appeal is dismissed
because of an attorney’s error, the client is unduly punished for
12
his attorney’s mistakes. See Editors’ Comment, NORTON BANKRUPTCY
RULES at 523 (“While counsel for the appellant may be sanctioned,
a dismissal of the appeal would unfairly penalize the client.”);
In re Hill, 775 F.2d 1385, 1387 (9th Cir. 1985) (per curiam)
(finding an abuse of discretion when “the default was the fault
of the attorneys and not the litigant[, y]et the impact of the
sanction imposed is primarily against the client”).
Here, the district court erred by failing to properly
exercise the discretion granted by Rule 8001(a). The district
court’s Opinion on Reinstatement states that the dismissal of the
appeal was “the natural consequence” of Appellants’ failure to
follow the rules of bankruptcy procedure. Further, the district
court stated that “[o]nly if there is an extraordinary
circumstance, then the significance of the prejudice is weighed
to determine whether equity should intervene.” (Emphasis added).
This indicates that the district court incorrectly interpreted
the rule to mean that a district court has discretion to decide
not to dismiss an appeal when procedural rules have been
breached, rather than discretion to decide whether dismissal is
appropriate. The district court’s interpretation presupposes,
contrary to the plain language of Rule 8001(a), that dismissal is
the norm rather than a possible sanction warranted only in
extreme cases. Moreover, the opinion states that this negative
discretion may only be exercised upon a threshold showing of
extraordinary circumstances by the appellant. This construction
13
of the rule is unsupported by the text of Rule 8001(a), its
commentary, or the caselaw interpreting and applying the rule.
Thus, the district court’s decision was based on an erroneous
view of the law and must be vacated as an abuse of discretion.
Several of our sister circuits have established lists of
factors that a district court must consider in deciding whether
infractions of procedural rules (other than the failure to file a
notice of appeal) warrant dismissal under Rule 8001(a). See,
e.g., In re SPR Corp., 45 F.3d 70, 72, 74 (4th Cir. 1995)
(district court should (1) make a finding of bad faith or
negligence; (2) give appellant notice or opportunity to explain
the delay; (3) consider possible prejudicial effect of delay on
other parties; and (4) consider the impact of the sanctions and
available alternatives); In re Fitzsimmons, 920 F.2d 1468, 1474
(9th Cir. 1989) (district court must consider (1) alternative
sanctions and relative fault of the client and attorney unless
egregious circumstances exist; (2) the existence of bad faith,
which can constitute egregious conduct). This court has thus far
declined to create a definitive test for the district courts in
our circuit. Cf. In re M.A. Baheth Constr. Co., Inc., 118 F.3d
1082, 1084 (5th Cir. 1997), cert. denied by M.A. Baheth & Co. v.
Schott, 522 U.S. 1092 (1998) (in determining whether to dismiss
appeal for failure to file statement of issues in accordance with
FED. R. APP. P. 6(b)(2)(ii), court considered “mitigating factors”
but did not establish list thereof). However, we have upheld a
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district court’s decision to dismiss a bankruptcy appeal under
Rule 8001(a) when the appellee has shown prejudice from the delay
and when the appellant has exhibited “obstinately dilatory
conduct.” See Braniff, 774 F.2d at 1304 (citations omitted);
Pyramid, 531 F.2d at 746.
Although we do not here establish a definitive list of
factors, we think that, in determining whether dismissal is an
appropriate sanction, a district court should keep in mind that
some infractions of the rules of bankruptcy procedure are
harmless and do not merit dismissal; that dismissal unfairly
punishes clients for the mistakes of their counsel in some cases;
and that the primary goal of courts as enforcers of the
bankruptcy rules should be to ensure the swift and efficient
resolution of disputes pertaining to the distribution of the
bankruptcy estate. With these considerations in mind, we turn to
the record.
As an initial matter, we note that several of the nine
remaining reasons justifying dismissal in the district court’s
original Opinion on Dismissal cannot withstand even a cursory
analysis. First, Appellants contend, and Appellees do not
dispute, that the three designated record excerpts not filed with
the clerk consisted of (1) a notice of appeal mistakenly
designated as having been filed on November 5, 1998, actually
filed on November 5, 1996; (2) a motion for leave to file a
notice of appeal mistakenly designated as having been filed on
15
November 5, 1998, actually filed on November 5, 1996; and (3) a
second copy of a supplement to Appellants’ re-urged motion for
summary judgment that had been designated under two different
headings. Thus, two of the designated documents that were not
filed do not exist as designated, and the third was a duplicate.
Second, Appellants’ letter to the bankruptcy clerk, which
accompanied the filings and listed the four volumes of
transcripts not previously designated, was copied to Appellees.
Appellees nowhere contend that they did not receive this letter
contemporaneously with the filings. Third, it appears that the
motion for leave to supplement the record asserted by the
district court to have been filed eleven weeks late actually
pertained to a summary judgment brief and the transcript of a
pre-trial conference before the bankruptcy court, not to the five
nondesignated record excerpts filed with the clerk. We fail to
see how these actions can reasonably be characterized as breaches
of procedure.
Appellees, though they observe that the district court found
nine instances in which Appellants failed to follow bankruptcy
procedure, cite specifically to Appellants’ failure to (1) timely
file the statement of issues, (2) designate five filings, (3)
notify Appellees of the five nondesignated documents, and (4)
file three designated documents as a failure to follow the
bankruptcy rules. Appellees assert that these actions
individually justify dismissal under Fifth Circuit caselaw and
16
evince negligence, indifference, or bad faith. For the reasons
discussed above, we are unpersuaded that the latter two reasons
merit further consideration. Thus, we conclude for the purposes
of the discussion to follow that, in deciding to dismiss the
appeal, the district court relied on Appellants’ defective
performance of two procedural requirements: filing the statement
of issues and delivering previously designated documents.
We find nothing in the record that supports dismissal on the
basis of Appellants’ designation and filing of record excerpts
and late filing of the statement of issues. Although the
statement of issues was not timely filed, Appellants did file
their appellate brief timely and prior to the district court’s
dismissal of the appeal. Evidence relating to all four issues
raised on appeal was contained in the designated record.9
9
The issues on appeal were (1) whether the bankruptcy
court erred in granting summary judgment on Appellees’ usury
claim; (2) whether Frankford had standing to assert usury or
equitable subordination claim; (3) whether Appellees had proved
that equitable subordination was appropriate; and (4) whether the
bankruptcy court erred in calculating the amount of usurious
interest and in awarding attorney’s fees. The first three issues
had previously been argued at summary judgment, and the record
designations filed with the court contain the briefing and
evidence for those motions. The record also contains Appellees’
calculation of damages, which the bankruptcy court adopted in its
Final Judgment, the summary judgment evidence that formed the
basis of that calculation, and the trial transcript showing that
the bankruptcy court excluded controverting evidence on the fair
market value of the 199 performing notes. As far as the
attorney’s fees issue is concerned, we note that Appellants only
argued that the award of attorney’s fees to Frankford was
inappropriate because Frankford allegedly lacked standing. Thus,
that issue would not appear to require evidentiary support
independent of the evidence pertaining to Frankford’s standing.
17
Consequently, the district court has an adequate record upon
which to decide the merits of the appeal, and the purpose of Rule
8006 has therefore been satisfied despite Appellants’ failure to
strictly adhere to its technical requirements. Furthermore, the
record does not indicate that Appellees’ ability to respond to
the appeal has been impaired in any way. Appellees do not here
contend that they were prejudiced by the incomplete designation
of record excerpts. Moreover, because Appellants filed their
brief and sufficient record excerpts in support thereof,
Appellees were placed on notice as to what issues they would be
required to defend, and have an adequate record on which to
defend them. Furthermore, Appellees have not alleged that either
the bankruptcy estate or its creditors have suffered any injury
from the delayed filing of the statement of issues; and our
review of the record reveals none.10 See Braniff, 774 F.2d at
1304 (citing Pyramid, 531 F.2d at 746). Thus, we conclude that
Appellees suffered no prejudice under these circumstances.
10
Appellees assert that they have been prejudiced because
Zer-Ilan’s conduct in the enforcement proceedings before the
bankruptcy court has created delays, increased costs, and
“threatened Floyd’s and Frankford’s legitimate efforts to enforce
the Bankruptcy Final Judgment.” Although we recognize that “time
is of the essence” in bankruptcy proceedings, the delay Appellees
refer to here did not result from Appellants’ prosecution of the
appeal, and in fact could have occurred whether or not Appellants
had filed an appeal at all. Therefore, this prejudice, if any in
fact occurred, does not justify a dismissal of the appeal. The
prejudice to Appellees’ interest in enforcing the judgment is
likewise outside the scope of the 8001(a) analysis.
18
In addition, there is no evidence of either an intent to
delay or obstinately dilatory conduct on the part of Appellants
that could otherwise justify dismissal. See Fitzsimmons, 920
F.2d at 1474 (finding that a district court was not required to
consider other factors when appellants had exhibited “bad faith
behavior”). Rather, the record establishes that Appellants
timely filed their notice of appeal, record designation, and
appellate brief and complied with the rules of bankruptcy
procedure with regard to all other aspects of prosecuting their
appeal. Cf. In re Champion, 895 F.2d 490, 492 (8th Cir. 1990)
(per curiam) (no abuse of discretion for dismissing appeal when
appellant had not filed a designation of record excerpts or
statement of issues nine months after filing of notice of
appeal); Greco v. Stubenberg, 859 F.2d 1401, 1403-04 (9th Cir.
1988) (no abuse of discretion for dismissing appeal when
appellant’s counsel repeatedly failed to order transcripts,
misrepresented to court that transcripts had been ordered, and
did not notify court of inability to do so for nine months);
Pyramid, 531 F.2d at 746 (“[F]or over four months after filing
its appeal appellant had made no effort to comply with the
Rules.”).
In the absence of evidence of prejudice or obstinately
dilatory conduct, and given that the purpose of Rule 8006 has
been satisfied, we conclude that dismissal was not justified in
this case. See In re Winner Corp., 632 F.2d 658, 661 (6th Cir.
19
1980) (reinstating appeal when there was no evidence of bad
faith).
III. CONCLUSION
For the foregoing reasons, the district court’s judgment
dismissing Appellants’ appeal of the bankruptcy court’s judgment
is REVERSED and the appeal REINSTATED. Costs shall be borne by
Appellees.
20