Neurology & Neurophysiology Associates, P.A. v. Tarbox (In Re Neurology & Neurophysiology Associates, P.A.)

Case: 15-50105 Document: 00513233121 Page: 1 Date Filed: 10/15/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 15-50105 October 15, 2015
Summary Calendar Lyle W. Cayce
Clerk
In the Matter of: NEUROLOGY AND NEUROPHYSIOLOGY ASSOCIATES,
P.A.,
Debtor.
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NEUROLOGY AND NEUROPHYSIOLOGY ASSOCIATES, P.A.,
Appellant,
v.
PETER A. TARBOX, MD,
Appellee.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:14-CV-903
Before JOLLY, DENNIS, and PRADO, Circuit Judges.
PER CURIAM:*
Debtor–Appellant Neurology and Neurophysiology Associates, P.A.
(“NNPA”) appeals a district court judgment affirming the dismissal of its
*Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 15-50105 Document: 00513233121 Page: 2 Date Filed: 10/15/2015
No. 15-50105
petition for relief under Chapter 7 of the U.S. Bankruptcy Code. NNPA also
appeals the bankruptcy court’s denial of its motion to extend the automatic
stay pending appeal. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
On July 24, 2009, the Texas Secretary of State forfeited NNPA’s
corporate charter. 1 Under Texas law, NNPA remained a legal entity for three
years after its termination in order to carry out specific, limited purposes, such
as defending against legal claims and liquidating assets. See Tex. Bus. Orgs.
Code § 11.356(a). In December 2010, Creditor–Appellee Peter Tarbox, MD filed
suit against NNPA in state court, alleging multiple causes of action, including
shareholder oppression and breach of contract. 2 On June 19, 2014, nearly five
years after the forfeiture of its charter, NNPA sought protection under the
Bankruptcy Code by filing a Chapter 7 petition for relief. 3 In response, Tarbox
filed a motion to dismiss the bankruptcy proceeding, arguing that NNPA, as a
terminated entity, does not qualify as a “person” under 11 U.S.C. § 109(b) and
§ 101(41) and therefore has no standing to proceed with its petition. 4 The
bankruptcy court granted the motion, concluding that NNPA “is not a ‘person’
under the Bankruptcy Code and, as such, the [bankruptcy court] has no
jurisdiction to grant relief.” 5
A. Motion to Dismiss
NNPA filed a notice of appeal to the district court on August 21, 2014,
appealing the bankruptcy court’s dismissal of its petition for relief. 6 NNPA
1 ROA.143.
2 Red. Br. 2; ROA.102, 111–18. At the time briefs were filed in this appeal, the pending
state court case was set for trial on August 10, 2015. Blue Br. 11.
3 ROA.23.
4 ROA.62–64.
5 ROA.10.
6 ROA.6–8.
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later filed its record on appeal, and on October 21, 2014, the district court clerk
sent a “Notice of Docketing Record on Appeal” to the parties. 7
As the district court noted in its dismissal order, under Federal Rule of
Bankruptcy Procedure 8009(a)(1), 8 NNPA’s brief was due on November 4,
2014. 9 Based on NNPA’s failure to file its brief, on December 4, 2014, Tarbox
filed a motion to dismiss the appeal. 10 On December 8, 2014, over a month after
NNPA’s brief was due, it simultaneously filed 1) a motion to extend the
deadline to file its brief and 2) the brief itself. 11 In its motion, NNPA
maintained that its counsel never received the Notice of Docketing Record and
that the e-mail address on file for lead counsel was outdated and had not been
used in two years. 12
The district court denied NNPA’s motion to extend time to file its brief
and granted Tarbox’s motion to dismiss, “find[ing] that Appellant’s neglect was
not excusable.” 13 NNPA now appeals the district court’s dismissal. 14
B. Motion to Extend the Automatic Stay Pending Appeal
After filing a notice of appeal to the district court, NNPA filed a motion
to extend the automatic stay pending appeal. 15 The bankruptcy court denied
the motion. 16 While NNPA challenged the bankruptcy court’s ruling in its
7 ROA.168–69.
8 On December 1, 2014, while the district court appeal was pending, the 2014
amendments to the Federal Rules of Bankruptcy Procedure took effect. As NNPA’s deadline
to file its brief was set prior to this date, the citations in this opinion reference the Rules as
they appeared before the 2014 amendments and as cited by the district court in its order
dismissing NNPA’s appeal.
9 ROA.220.
10 ROA.170–75.
11 ROA.176–79, 181–94.
12 ROA.176.
13 ROA.221–22.
14 Blue Br. 6–7.
15 ROA.176–79.
16 ROA.237.
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untimely filed district court brief, 17 it failed to comply with the requirements
of Federal Rule of Bankruptcy Procedure 8006 to properly challenge the ruling
on appeal to the district court. 18 As the appeal was dismissed for failure to
timely file, the district court never addressed this issue. 19 In its brief to this
Court, NNPA again challenges the bankruptcy court’s denial of the motion to
extend the automatic stay, arguing that the bankruptcy court abused its
discretion in denying the motion. 20
II. DISCUSSION
The bankruptcy court had jurisdiction over NNPA’s petition for relief
under 28 U.S.C. § 1334 and § 157. The district court had jurisdiction to hear
the appeal under 28 U.S.C. § 158(a). This Court has jurisdiction to review the
district court’s dismissal as a final judgment under 28 U.S.C. § 1291.
We review district court decisions to extend filing deadlines for abuse
of discretion. See, e.g., Salts v. Epps, 676 F.3d 468, 474 & n.13 (5th Cir. 2012).
“[D]eference . . . is the hallmark of abuse-of-discretion review.” Love v. Tyson
Foods, Inc., 677 F.3d 258, 262 (5th Cir. 2012) (quoting Gen. Elec. Co. v. Joiner,
522 U.S. 136, 137 (5th Cir. 1997)). An abuse of discretion occurs if a district
court “(1) relies on clearly erroneous factual findings; (2) relies on erroneous
17 ROA.190–92.
18 In order to appeal an issue to the district court, under Federal Rule of Bankruptcy
Procedure 8006, the appellant must file 1) a designation of items to be included in the record
on appeal and 2) a statement of issues to be addressed on appeal. A review of the bankruptcy
and district court records reveals that NNPA never filed a statement of issues and the
designation of the record on appeal does not include any filings relevant to the motion to
extend the automatic stay. “It is ‘clear under the law of this circuit that an issue that is not
designated in the statement of issues in the district court is waived on appeal when the
district court rules on the merits,’ ‘even if the issue was argued before the district court.’” In
re McClendon, 765 F.3d 501, 506 (5th Cir. 2014) (quoting In re McCombs, 659 F.3d 503, 510
(5th Cir. 2011)).
19 ROA.219–22, 227–29.
20 Blue Br. 11–12.
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conclusions of law; or (3) misapplies the law to the facts.” Id. (quoting McClure
v. Ashcroft, 335 F.3d 404, 408 (5th Cir. 2003)).
Under Federal Rule of Civil Procedure 6(b), district courts have
“broad discretion” to extend filing deadlines. Hetzel v. Bethlehem Steel Corp.,
50 F.3d 360, 367 (5th Cir. 1995). A district court may extend the time to file a
motion for “good cause” “if the party failed to act because of excusable neglect.”
Fed. R. Civ. P. 6(b)(1)(B). In determining whether a party’s neglect was
“excusable,” a district court considers the following factors: “(1) ‘the possibility
of prejudice to the other parties,’ (2) ‘the length of the applicant’s delay and its
impact on the proceeding,’ (3) ‘the reason for the delay and whether it was
within the control of the movant,’ and (4) ‘whether the movant has acted in
good faith.’” Salts, 676 F.3d at 474 (quoting Charles Alan Wright et al., Federal
Practice & Procedure § 1165). Federal Rule of Bankruptcy Procedure 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[s] only
for such action as the district court . . . deems appropriate, which may include
dismissal of the appeal.”
The district court’s order dismissing NNPA’s bankruptcy appeal
reasonably considers each of the Salts v. Epps factors. The district court’s
careful consideration of each factor places its decision squarely within the
court’s discretion. In the order granting Tarbox’s motion to dismiss, the district
court found: 1) “the delay of over one month has prejudiced Appellee” in its
state court suit against NNPA; 2) the “thirty-four day delay” “is substantial,
and could have been easily avoided through basic diligence”; 3) “Appellant’s
failure to exercise diligence in filing and pursuing its appeal was the sole
reason for the delay”; and 4) “Appellant has not shown good cause to excuse
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the late filing.” 21 Considering these factors, the district court’s dismissal of the
appeal and denial of the motion to extend the time to file was reasonable in
light of the relevant circumstances. Therefore, considering the governing
deferential standard, the district court’s dismissal of NNPA’s bankruptcy
appeal does not amount to an abuse of discretion.
NNPA also appeals the bankruptcy court’s denial of its motion to
extend the automatic stay pending appeal. Although raised in NNPA’s
untimely filed brief, the district court’s dismissal of the entire bankruptcy
appeal rendered this issue moot. Therefore, in light of our affirmance of the
district court’s motion to dismiss, this Court also need not address the motion
to extend the automatic stay.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district
court dismissing NNPA’s bankruptcy appeal.
21 ROA.221–22.
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