In re Charles L. Abrahams, No. 3:2012cv01560 - Document 54 (S.D. Cal. 2013)
Court Description: ORDER Granting 21 Trusteee's Motion to Dismiss and 20 Motion to Strike. Appeal is Dismissed Without Prejudice, and the hearing for Arguments on Appellant's Bankruptcy Appeal, set for June 21, 2013, is Vacated. Signed by Judge Gonzalo P. Curiel on 6/18/2013. (All non-registered users served via U.S. Mail Service)(srm)
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In re Charles L. Abrahams Doc. 54 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CHARLES L. ABRAHAMS, Debtor/Appellant 12 13 Case No. 12cv1560-GPC-BGS BAP No. SC-12-1319 vs. Bankruptcy No. 10-00968 ORDER GRANTING TRUSTEE’S MOTION TO DISMISS APPEAL AND MOTION TO STRIKE 14 15 MATHIAS HENTZ, 16 17 18 19 20 21 22 Before the Court is Trustee Leslie T. Gladstone's Motion to Dismiss Appellant Charles L. Abrahams Bankruptcy Appeal and Motion to Strike Appellant's Amended Appeal Notices, Designations, and Statements. (Dkt. Nos. 21, 22.) Having considered the parties' submissions and for the reasons set forth below, the Court hereby GRANTS Trustee's Motion to Dismiss and GRANTS Trustee's Motion to Strike. 23 24 25 26 27 28 [ECF Nos. 20, 21] Creditor/Appellee. BACKGROUND Bankruptcy Proceedings On January 22, 2010, Debtor/Appellant Charles Abrahams ("Appellant" or "Abrahams") filed his petition for relief under Chapter 11 of the United States Bankruptcy Court for the Southern District of California (the "Bankruptcy Court"). (Bk. Dkt. No. 1, Ch. 11 Voluntary Pet.) Appellant's case was subsequently -1- 12cv1560-GPC-BGS Dockets.Justia.com 1 converted to Chapter 7 at a hearing held on February 16, 2012, pursuant to which 2 Trustee Leslie T. Gladstone ("Trustee") was appointed by the Bankruptcy Court and 3 has, at all times relevant to the matters herein, served as the Chapter 7 Trustee in 4 Appellant's bankruptcy case. (See Bk. Dkt. No. 294, the "Conversion Order") 5 On August 4, 2010, Creditor/Appellee Mathias Hentz ("Appellee" or 6 "Hentz") filed his Proof of Claim in the Bankruptcy Court in the secured amount of 7 approximately $250,140.35. (Bk. Claim No. 7-1.) Mr. Hentz amended his claim on 8 February 16, 2012, in the secured amount of approximately $281,364.43. (Bk. 9 Claim No. 7-2, "Claim No. 7.") Mr. Abrahams filed objections to Claim No. 7 on 10 February 16, 2012 and April 17, 2012. (See Bk. Dkt. Nos. 289-90, 338-39.) Mr. 11 Hentz filed Responses to Appellant's Objections on March 16, 2012 and May 4, 12 2012. (See Bk. Dkt. Nos. 314, 346). On May 8, 2012, the Trustee filed a Statement 13 of Position in Response to Debtor's Objection to Claim of Creditor Mathias Hentz, 14 asserting that Mr. Abrahams' objections were without merit and should be 15 overruled. (Bk. Dkt. No. 349.) 16 On May 17, 2012, the Bankruptcy Court convened a fully noticed hearing on 17 Appellant's objections to Claim No. 7, and issued an order overruling Mr. 18 Abrahams' objections. (See Bk. Dkt. No. 365, "Claim Objection Hearing," Bk. Dkt. 19 Nos. 359, 365, 368.) Mr. Abrahams did not object to the Bankruptcy Court order 20 and on June 21, 2012, the Bankruptcy Court entered its final Order Overruling 21 Debtor's Objections to Claim No. 7 of Creditor Mathias Hentz. (Bk. Dkt. No. 372, 22 "Claim No. 7 Order.") 23 On June 14, 2012, Appellant filed a Notice of Appeal of the Claim No. 7 24 Order to the Ninth Circuit Bankruptcy Appellate Panel ("BAP"). (Bk. Dkt. No. 25 385.) Per Mr. Hentz' timely election, the appeal was transferred to this Court on 26 June 25, 2012. (See Dkt. No. 1.) On June 11, 2012, after commencing the present 27 appeal, Appellant filed additional pleadings in Bankruptcy Court seeking 28 reconsideration of the Claim No. 7 Order. (See Bk. Dkt. No. 380, "Reconsideration -2- 12cv1560-GPC-BGS 1 Motion.") After further extensive briefing by interested parties, the Bankruptcy 2 Court denied Appellant's Reconsideration Motion on August 23, 2012. (See Bk. 3 Dkt. No. 445, Minute Order re: Debtor's Mot. to Amend and Alter Hentz Judgment.) 4 The Bankruptcy Court entered the final order denying Mr. Abrahams' 5 Reconsideration Motion on September 5, 2012. (Bk. Dkt. No. 467.) 6 On August 9, 2012, Trustee filed a Motion to Approve a Compromise 7 pursuant to a negotiated settlement agreement with the bankruptcy estate's two 8 major secured judgment creditors-Appellee Hentz and the creditor group known as 9 the Tunnicliffe Creditors. (Bk. Dkt. Nos. 419-424, "Settlement Motion.") The 10 terms included two central agreements required to achieve the final settlement. 11 First, Trustee proposed to transfer the bankruptcy estate's 4% property interest in 12 230-248 N. Golden Mall Associates, LLC ("GMA") to Mr. Hentz-who already has a 13 96% property interest in GMA-in consideration of Mr. Hentz' compromise and 14 release of his remaining claims against the bankruptcy estate under Claim No. 7. 15 (Bk. Dkt. No. 421, Trustee's Memo. in Support of Trustee's Settlement Mot. at 4.) 16 The 4% interest in GMA is approximately equal to the amount claimed under Claim 17 No. 7. (Id.) Second, Trustee proposed to make a partial distribution to the 18 remaining secured creditor in the estate, the Tunnicliffe Creditors, in the amount of 19 $500,000.00. (Id at 3.) 20 On September 10, 2012, the Bankruptcy Court entered an order approving 21 Trustee's Settlement Motion. (Bk. Dkt. No. 475, "Settlement Order.") Mr. 22 Abrahams neither opposed Trustee's Settlement Motion nor the Settlement Order, 23 which is now a final order of the Bankruptcy Court. Pursuant to the Settlement 24 Order, Trustee has distributed $500,000 from the bankruptcy estate to the 25 Tunnicliffe Creditors.1 (Dkt. No. 422, Decl. of Trustee in Support of Mot. to 26 Approve Compromise at 6.) 27 28 1 As of June 3, 2013, Hentz has not yet received his 4% interest in GMA. (Dkt. No. 52, Hentz’s Appellee Brief/Response to Appellant’s Opening Brief at 9.) -3- 12cv1560-GPC-BGS 1 2 Appeals Proceedings On June 14, 2012, Appellant filed a Notice of Appeal of the Bankruptcy 3 Court's Claim No. 7 Order to the Ninth Circuit Bankruptcy Appellate Panel 4 ("BAP"). (Bk. Dkt. No. 385.) Per Mr. Hentz' timely election, the appeal was 5 transferred to this Court on June 25, 2012. (See Dkt. No. 1.) The only issue before 6 this Court on appeal relate to Mr. Abrahams' appeal of Claim No. 7 by Creditor 7 Hentz-this appeal does not include the Bankruptcy Court's orders authorizing the 8 sale of any properties nor does it include other creditors. (See Dkt. No. 33, Order 9 Denying Emergency Mot. and Am. Mot. to Stay Pending Appeal.) Pending before 10 the Court are Trustee's Motion to Dismiss Appeal and Motion to Strike. (Dkt. Nos. 11 21, 22.) 12 13 LEGAL STANDARD The district court reviews the bankruptcy court's findings of fact for clear 14 error and its conclusions of law de novo. Havelock v. Taxel (In re Pace), 67 F.3d 15 187, 191 (9th Cir. 1995); Fed. Rules Bankr. Proc. Rule 8013. A factual finding is 16 clearly erroneous if the appellate court, after reviewing the record, has a definite 17 conviction that a mistake has been made. Beauchamp v. Hoose (In re Beauchamp), 18 236 B.R. 727, 729 (B.A.P. 9th Cir. 1999). Findings of fact based on credibility are 19 given particular deference by reviewing courts. Id. at 730 (internal citation 20 omitted). In applying a "clearly erroneous" standard of review, an appellate court 21 views evidence in light most favorable to party who prevailed. Lozier v. Auto 22 Owners Ins. Co., 951 F.2d 251, 253 (9th Cir.1991). Mixed questions of fact and 23 law are reviewed de novo. Id. Mootness is a jurisdictional issue which the court 24 reviews de novo. See In re Baker & Drake, 35 F.3d 1348, 1351 (9th Cir. 1994). 25 26 DISCUSSION Trustee seeks dismissal of Mr. Abrahams' appeal of the Bankruptcy Court's 27 Claim No. 7 Order on three grounds: (1) The appeal is constitutionally and 28 equitably moot; (2) Appellant failed to comply with the procedural requirements of -4- 12cv1560-GPC-BGS 1 Fed. R. Bank. Proc. 8006 to perfect his appeal; and (3) Appellant failed to timely 2 file opposition pleadings to Trustee's Motion to Dismiss and Motion to Strike. (See 3 Dkt. Nos. 20-21, 38.) Alternatively, Trustee contends that Appellant's late-filed 4 amended Notices of Appeal, Designations of Record, and Statements of Issue 5 should be stricken from the record for noncompliance with Fed. R. Bank. Proc. 6 8006. (Dkt. No. 20.) 7 Appellant asserts a number of arguments in opposition to Trustee's motions 8 including, inter alia, the Bankruptcy Court's orders are void; the conversion to 9 Chapter 7 was void for lack of cause; and Trustee should have withdrawn her 10 representation of the estate because she breached her fiduciary duty to the estate and 11 represented the Creditors who admitted to embezzlement. (Dkt. No. 41, Mem. in 12 Opp'n to Trustee's Mot. to Dismiss Appeal at 2.) 13 The Court GRANTS Trustee's motions and finds the Appeal should be 14 DISMISSED for the following reasons: the appeal is equitably moot, Appellant 15 failed to perfect his appeal, and Appellant failed to comply with local civil rules and 16 Court orders to timely file his opening brief and opposition pleadings. 17 I. Appeal is Equitably Moot 18 Trustee contends the appeal should be dismissed because the Settlement 19 Order has rendered Mr. Abrahams' appeal constitutionally and equitably moot. 20 Trustee states that Appellant failed to obtain a stay with the Bankruptcy Court 21 pending this appeal, and failed to oppose Trustee's Settlement Motion and the 22 Bankruptcy Court's Settlement Order, thereby allowing Trustee to commence the 23 transfer of assets pursuant to the Settlement Order. (Dkt. No. 21, Motion to Dismiss 24 "MTD" at 7.) As a result, $500,000 has been transferred to the Tunnicliffe 25 Creditors and Trustee intends to transfer Appellant's 4% interest in GMA to Mr. 26 Hentz. (Id. at 9.) Trustee argues that this distribution of funds and agreement to 27 transfer the estate's 4% interest in GMA to Mr. Hentz renders this case moot 28 because it ended the controversy and prevents this Court from overturning the -5- 12cv1560-GPC-BGS 1 Bankruptcy Court's Claim No. 7 Order. (Id. at 7.) 2 A. Constitutional Mootness 3 For the following reasons, the Court concludes that Mr. Abrahams' appeal is 4 not constitutionally moot. The jurisdiction of federal courts is limited to actual 5 cases and controversies. U.S. CONST. art. III, § 2, cl. 1. Federal courts may not 6 entertain an appeal if the case is moot, but "the party moving for dismissal on 7 mootness grounds bears a heavy burden." Jacobus v. Alaska, 338 F.3d 1095, 1103 8 (9th Cir. 2003). In the case of constitutional mootness, the focus is on whether 9 there is an ability to alter the outcome in a manner that appellant can obtain relief. 10 Maxwell Tech., Inc. v. ISE Corp. (In re ISE Corp.), 2012 WL 4793068 at 2 (S.D. 11 Cal. 2012). "The test for mootness on appeal is whether the appellate court can give 12 appellant any effective relief on the merits in his favor. If the court can grant such 13 relief, the matter is not moot." Felser Publ'g v. Burrell (In re Burrell), 415 F.3d 994, 14 998 (9th Cir. 1986) (quotations omitted). An appeal is not constitutionally moot if a 15 court can reverse the plan confirmation or require modification of the plan to 16 provide relief to appellant. See Motor Vehicle Cas. Co. v. Thorpe Insulation Co. (In 17 re Thorpe Insulation Co.), 677 F.3d 869, 880 (2012). 18 Trustee contends that the Settlement Order has rendered this appeal 19 constitutionally moot because there is no longer a justiciable case or controversy. 20 (Dkt. No. 21, Mot. to Dismiss at 7.) Further, Trustee states that Appellant waived 21 any right to appeal the Settlement Order by failing to oppose Trustee's Settlement 22 Motion and the Bankruptcy Court's Settlement Order, resulting in a change in 23 circumstances that renders this case moot. (Id.) The Court concludes that the 24 present appeal is not constitutionally moot because it is possible to give relief to 25 Appellant on the merits by reversing or modifying the Settlement Agreement. See 26 27 28 -6- 12cv1560-GPC-BGS 1 e.g., In re ISE Corp., 2012 WL 4793068 at 2.2 2 B. Equitable Mootness 3 The Court concludes this appeal is equitably moot because Mr. Abrahams 4 failed to seek a stay of bankruptcy proceedings and the Settlement Agreement has 5 been carried out to a substantial culmination. The equitable mootness doctrine 6 derives from the policy that debtors, creditors, and third parties should be able to 7 rely on the finality of bankruptcy judgments. In re Thorpe, 677 F.3d at 880. In 8 determining whether an appeal is equitably moot, the Ninth Circuit adopts a test 9 similar to those developed by the Second, Third, and Fifth Circuits. Id. at 880-81. 10 Whether to dismiss a case on equitable mootness grounds requires asking, first, 11 "whether a stay was sought, for absent that a party has not fully pursued its rights." 12 Id. at 880. If a stay was sought but not obtained, the Court considers (1) "whether 13 substantial consummation of the plan has occurred," (2) "the effect on third parties 14 not before the court," and (3) "whether the bankruptcy court can fashion effective 15 and equitable relief without completely knocking the props out from under the 16 plan." Id. i. Mr. Abrahams Failed to Seek a Stay 17 18 A bankruptcy appeal may become "equitably moot" when an appellant fails to 19 obtain a stay or neglects to pursue diligently available remedies to obtain a stay of 20 the objectionable orders of the bankruptcy court, thus permitting such a 21 "comprehensive change of circumstances" to occur as to render it inequitable for 22 [the] court to consider the merits of the appeal." In re ISE Corp., 2012 WL 4793068 23 at 2 (citing In re Thorpe, 677 F.3d at 880). A "party's failure to seek a stay may, by 24 itself, render that party's claims equitably moot." Stokes v. Gardner, 2012 WL 25 1944552 (9th Cir. 2012) (citing In re Roberts Farms, Inc., 652 F.2d at 798) ("If an 26 appellant fails to obtain a stay after exhausting all appropriate remedies, that well 27 2 28 The Court notes that Trustee has not yet transferred the bankruptcy estate’s 4% interest in GMA to Mr. Hentz pursuant to the Settlement Order. As such, the Bankruptcy Court may still modify the Order. -7- 12cv1560-GPC-BGS 1 may be the end of his appeal."). Failure to obtain a stay, however, does necessarily 2 require the conclusion of equitable mootness where parties use due diligence in 3 seeking a stay. See Fred Lowenschuss v. Beverly Selnick (In re Lowenschuss), 170 4 F.3d 923, 933; Focus Media, Inc. v. Nat'l Broad. Co. (In re Focus Media, Inc.), 379 5 F.3d 916, 924 (9th Cir. 2004) (declining to apply the equitable mootness doctrine 6 where the appellants requested stays from bankruptcy court but were denied). A 7 failure to obtain a stay is one factor to be considered in assessing equitable 8 mootness but it is not necessarily controlling. In re Thorpe, 677 F.3d at 880-81. 9 But where appellant makes no effort to obtain a stay of bankruptcy proceedings 10 while his appeals are pending, his appeals are likely equitably moot. In re ISE 11 Corp., 2012 WL 4793068 at 3. 12 Here, although Appellant filed a Motion for Reconsideration in Bankruptcy 13 Court and a Notice of Appeal opposing the Bankruptcy Court's Claim No. 7 Order, 14 Appellant never sought a stay of bankruptcy proceedings pending appeal to this 15 Court. In re Roberts Farms, Inc., 652 F.2d at 795 ("Appellants did not at any time 16 apply to the bankruptcy judge for a stay."). Following the Bankruptcy Court's June 17 1, 2012 Order Overruling Debtor's Objections to Claim No. 7, Appellant filed a 18 Reconsideration Motion with the Bankruptcy Court, which was ultimately denied, 19 and simultaneously filed a Notice of Appeal appealing Claim No. 7 Order to the 20 Ninth Circuit BAP. Despite filing these pleadings, the Bankruptcy Court docket 21 reflects that Appellant never filed any motions to stay the bankruptcy proceedings, 22 which allowed all the subsequent proceedings, including the Settlement Agreement, 23 to move forward. 24 On September 10, 2012, the Bankruptcy Court entered the Settlement Order 25 granting Trustee's Settlement Motion, finding that it was in the best interest of the 26 estate. (Bk. Dkt. No. 475.) Appellant did not object either to Trustee's Settlement 27 Motion or to the Settlement Order; neither did he pursue a stay of the bankruptcy 28 proceedings pending appeal after the Settlement Order was issued. The negotiated -8- 12cv1560-GPC-BGS 1 Settlement Agreement involves the Appellant and Mr. Hentz, as well as the 2 bankruptcy estate's other major secured creditor not before the Court-the Tunnicliffe 3 Creditors. Pursuant to the Bankruptcy Court's approval of the Settlement Motion, 4 Trustee transferred $500,000 to the Tunnicliffe Creditors. Trustee also seeks to 5 finalize the Settlement Agreement by transferring Appellant's 4% interest in GMA 6 to Mr. Hentz. Appellant's failure to pursue a stay allowed the Settlement Agreement 7 to go forward, thereby permitting a "comprehensive change of circumstances" to 8 occur. In re ISE Corp., 2012 WL 4793068 at 2. As such, it would be inequitable to 9 allow his appeal to go forward. See id. 10 ii. Substantial Consummation of the Settlement Agreement Has 11 Occurred Making Relief Untenable 12 The Court also considers whether a substantial consummation of the plan has 13 occurred because failure to obtain a stay, standing alone, is "often fatal but not 14 necessarily so" and neither is the "substantial culmination" of a relatively simple 15 reorganization plan. Public Service Co. of New Hampshire, 963 F.2d 469, 473 and 16 n. 13 (1st Cir. 1992). The Bankruptcy Code defines substantial consummation as: 17 (a) transfer of all or substantially all of the property proposed by the plan to be 18 transferred; (b) assumption by the debtor or by the successor to the debtor under the 19 plan of the business or of the management of all or substantially all of the property 20 dealt with by the plan; and (c) commencement of distribution under the plan. 11 21 U.S.C. § 1101(2); see In re Thorpe, 677 F.3d at 882 (concluding that plan not 22 substantially consummated where only $135M of the $600M involved in the plan 23 had been transferred). Although "unscrambl[ing] the eggs" may be theoretically 24 possible, under these circumstances, the Court finds that allowing Appellant to 25 proceed with his appeal would be inequitable. See Baker & Drake, Inc. v. Public 26 Service Comm'n of Nevada (In re Baker & Drake, Inc.), 35 F.3d 1348, 1351 (1994). 27 Due to Appellant's failure to obtain a stay of the bankruptcy proceedings, 28 Trustee has commenced distribution of assets pursuant to the Settlement Order, -9- 12cv1560-GPC-BGS 1 including to the Tunnicliffe Creditors who are third parties not before the Court. 2 (Bk. Dkt. No. 421, Trustee's Memo. in Support of Trustee's Settlement Mot. at 4.) 3 The Settlement Agreement is a negotiated settlement between the bankruptcy estate 4 and two of the estate's major creditors. (Id.) Mr. Hentz' agreement to release the 5 bankruptcy estate from all remaining obligations under Claim No. 7 in exchange for 6 the estate's transfer of Appellant's 4% interest in GMA and early transfer of 7 $500,000 to the Tunnicliffe Creditors was determined to be in the best interests of 8 the estate by the Bankruptcy Court. (See Bk. Dkt. No. 475, Settlement Order.) 9 It is unlikely that the Bankruptcy Court would be able to grant Appellant 10 relief "without completely knocking the props out from under the [Settlement 11 Agreement]" because the Settlement Agreement is a result of a complex negotiated 12 agreement to resolve not only Hentz' claims, but also claims of the Tunnicliffe 13 Creditors. See In re Thorpe, 677 F.3d at 881. The Claim No. 7 Order, which Mr. 14 Abrahams has appealed to this Court, is a key component to the settlement 15 agreement that has commenced. Claim No. 7 identified the amount that Mr. Hentz 16 claims as a creditor. Mr. Hentz agreed to release Claim No. 7 as part of the 17 settlement agreement in exchange for Mr. Abrahams' 4% interest in GMA. With 18 full notice of the Settlement Order, Appellant did not oppose the Order or seek a 19 stay of the bankruptcy proceedings. Accordingly, in reliance on the Settlement 20 Order, Trustee has made a substantial distribution of estate funds and committed the 21 estate to transfer the estate's interest in GMA to Mr. Hentz.3 Overturning the Claim 22 No. 7 Order at this point in the bankruptcy proceedings would constitute 23 "unscrambling the eggs." See In re Baker & Drake, Inc., 35 F.3d at 1351. The 24 Court refuses to do so. 25 As an additional matter, Mr. Abrahams has had two opportunities to be heard 26 27 28 3 At the time Trustee filed the Settlement Motion, the bankruptcy estate’s assets included $1,200,000.00 and proceeds from three properties. (Bk. Dkt. No. 421, Trustee’s Memo. in Support of Settlement Motion at 2.) Pursuant to the Settlement Agreement, $500,000.00 has been transferred to the Tunnicliffe Creditors, the estate’s largest secured debt creditor. - 10 - 12cv1560-GPC-BGS 1 before the Bankruptcy Court on this matter. Accordingly, this Court finds that due 2 to Appellant's failure to seek a stay, substantial consummation of the plan pursuant 3 to the Settlement Order has occurred, thereby rendering Mr. Abrahams' appeal of 4 the Claim No. 7 Order equitably moot. 5 iii. Granting Relief to Appellant Would Bear Unduly on Third 6 Parties Last, the Court evaluates "whether modification of the plan . . . would bear 7 8 unduly on the innocent." In re Thorpe, 677 F.3d at 882 (quoting In re N. LaSalle St. 9 Pshp., 126 F.3d 955, 961 (7th Cir. 1997)). In determining whether an appeal is 10 equitably moot, "the question is not whether it is possible to alter a plan such that no 11 third party interests are affected, but whether it is possible to do so in a way that 12 does not affect third party interests to such an extent that the change is inequitable." 13 Id. An important consideration is whether all parties affected by the appeal are 14 before the court. Id.; see In re Arnold & Baker Farms, 85 F.3d 1415, 1420 (9th Cir. 15 1996). Trustee states that the granting Appellant relief would be inequitable because 16 17 Trustee has already transferred $500,000 from the estate to the Tunnicliffe Creditors 18 in reliance on the Settlement Agreement involving the estate, Mr. Hentz, and the 19 Tunnicliffe Creditors. The Court agrees with Trustee. As the Court has previously 20 reminded Mr. Abrahams, the only issue on appeal before this Court is the 21 Bankruptcy Court's Claim No. 7 Order-the Court will not consider Appellant's 22 objections to the Tunnicliffe Creditors' claim. On June 12, 2012, the Bankruptcy 23 Court entered an Order Allowing the Tunnicliffe Amended Claim, which overruled 24 Mr. Abrahams' objections to the Tunnicliffe Amended Claim and allowed the claim 25 in its entirety. (Bk. Dkt. No. 383, "Claim No. 6 Order.") The Bankruptcy Court's 26 Claim No. 6 Order was never appealed and is not subject to further review by this 27 Court. 28 The Court concludes that granting Appellant relief will likely unravel the - 11 - 12cv1560-GPC-BGS 1 Settlement Agreement, thereby unduly affecting the Tunnicliffe Creditors, innocent 2 third parties not before the Court. See In re Thorpe, 677 F.3d at 882. 3 For the above reasons, the Court finds Appellant's appeal is equitably moot. 4 II. Appellant Failed to Perfect Appeal 5 Trustee argues that Mr. Abrahams' appeal should be dismissed because he has 6 failed to prosecute and perfect his appeal. (Dkt. No. 21, Mot. to Dismiss at 6.) 7 Alternatively, Trustee contends that Appellant's late-filed amended Notices of 8 Appeal, Designations of Record, and Statements of Issue should be stricken from 9 the record for noncompliance with procedural rules governing bankruptcy appeals. 10 (Dkt. No. 20.) Mr. Abrahams does not address Trustee's arguments regarding his 11 failure to comply with procedural requirements to perfect his appeal. (See Dkt. No. 12 41.) The Trustee contends that Appellant failed to prosecute his appeal because he 13 failed to file a Designation of Record and Statement of Issues on Appeal according 14 to the guidelines set forth in Fed. R. Bank. Proc. 8006. (Id. at 6.) 15 In prosecuting appeals, Bankruptcy Rule 8006 requires an appellant to file 16 with the clerk and serve on the appellee a designation of items to be included in the 17 record and a statement of issues within 14 days after filing a notice of appeal. Fed. 18 R. Bank. Proc. 8006. Bankruptcy Rule 8001(a) provides in part: "Failure of an 19 appellant to take any step other than the timely filing of a notice of appeal does not 20 affect the validity of the appeal, but is grounds only for such action as the district 21 court or bankruptcy appellate panel deems appropriate, which may include dismissal 22 of the appeal." Fed. R. Bank. Proc. 8001(a). 23 A procedural violation of a bankruptcy rule alone is an insufficient basis for 24 granting a motion to dismiss an appeal. See Fitzsimmons v. Nolden, 920 F.2d 1468, 25 1472 (9th Cir. 1990). The general rule on a motion to dismiss for failure to perfect 26 appeals, as specified by Bankruptcy Rule 8006, is that the district court must 27 consider alternative sanctions before dismissing an appeal. Id. However, in 28 "egregious circumstances, a court may dismiss an appeal for noncompliance with - 12 - 12cv1560-GPC-BGS 1 procedural rules without explicit consideration of alternative sanctions." Id. at 1473 2 (citing In re Donovan, 871 F.2d 807, 808-09 (9th Cir. 1989). Bad faith conduct is 3 an "egregious circumstance" that justifies dismissal even without explicit 4 consideration of other sanctions because bad faith "poses such a serious threat to the 5 authority of the district court." Id. at 1473-1474. Dilatory conduct that constitutes 6 bad faith includes "extreme and unexcused delay in complying with the 7 requirements of Bankruptcy Rule 8006." In re Patin, 199 B.R. 728, 731-32 (N.D. 8 Cal. 1996) (dismissing appeal where appellant provided "no plausible explanation 9 for its failure timely to complete the record on appeal for appellant's eight month 10 delay in serving the designation of pleadings). 11 On June 2, 2012, the Clerk of the District Court issued a Notice of Appeal 12 from the Bankruptcy Court. (Dkt. No. 1.) Pursuant to Fed. R. Bank. Proc. 8006, 13 Appellant's Designation of Record should have been filed on or before June 28, 14 2012-14 days after filing his Notice of Appeal. See Fed. R. Bank. Proc. 8006. On 15 August 3, 2012, the Clerk of the District Court docketed a Notice of Unperfected 16 Appeal issued by the Bankruptcy Court. (See Dkt. No. 2; Bk. Dkt. No. 418.) On 17 September 20, 2012, Appellant filed his [Original] Designation of Items to be 18 Included in Record on Appeal ("Designation of Record"), [Original] Statement of 19 Issues on Appeal, [Additional] Designation of Record, and [Additional] Statement 20 of Issues on Appeal in the Bankruptcy Court. (Bk. Dkt. Nos. 498-500; see Dkt. 21 Nos. 3-6, Records Parts 1-36.) Appellant also filed a [First] Amended Notice of 22 Appeal in the Bankruptcy Court on September 20, 2012, wherein Appellant 23 attempts to expand the scope of his Original Notice beyond the Bankruptcy Court's 24 June 1, 2012 Claim No. 7. Order (Bk. Dkt. No. 496.) The only issue before this 25 Court, however, relates to the Hentz Claim-Claim No. 7-and does not include other 26 creditors or judgments. (See Dkt. No. 33, Order Denying Emergency Mot. to Stay 27 Pending Appeal.) 28 On September 28, 2012, Appellant filed his [First] Amended Designation of - 13 - 12cv1560-GPC-BGS 1 Record. (Bk. Dkt. No. 507.) On December 19, 2012, this Court issued an order 2 instructing the parties to file any additional Records of Appeal no later than January 3 15, 2013. (Dkt. No. 8, Order Setting Filing Briefs and Hearing on Mot. at 1.) Since 4 then, Appellant has filed the following items: 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Date of Filing Jan. 15, 2013 Jan. 15, 2013 Feb. 5, 2013 Mar. 22, 2013 Mar. 26, 2013 May 13, 2013 May 13, 2013 May 13, 2013 Description [Second Amended] Designation of Record Bk. Dkt. No Dkt. No. 585 9-10 [Second] Statement of Additional Issues 586 ----- Second Amended Notice of Appeal 616 13 Second Statement of Additional Issues 642 35 Second Amended Designation of Record 646 36 Third Amended Notice of Appeal 666 46 Third Amended Designation of Record 667 Third Statement of Additional Issues 668 42, 48 50 Appellant has not made any efforts to provide an explanation for his dilatory 19 conduct in filing his initial Designation of Record and Statement of Issues over 20 three months after his filing of a Notice to Appeal. This Court extended to 21 Appellant an opportunity to complete his Record of Appeal by January 15, 2013, 22 which Appellant has disregarded as he has continued to file amended Notices of 23 Appeal, Designations of Record, and Statements of Additional Issues after that 24 deadline. The record plainly reflects that Appellant has failed to comply with 25 Bankruptcy Rule 8006 and this Court's scheduling orders. Therefore, the Court 26 finds that in light of Appellant's disregard for procedural rules governing 27 bankruptcy appeals, and due to the lack of any explanation for his untimely 28 - 14 - 12cv1560-GPC-BGS 1 attempts to enlarge the scope and record of his appeal, the Court deems to be 2 stricken from the record the following: 3 Second Amended Notice of Appeal (Bk. Dkt. No. 616.) 4 Second Statement of Additional Issues (Bk. Dkt. No. 642.) 5 Second Amended Designation of Record (Bk. Dkt. No. 646.) 6 Second Designation of Record (Bk. Dkt. No. 656.) 7 Third Amended Notice of Appeal (Bk. Dkt. No. 666.) 8 Third Amended Designation of Record (Bk. Dkt. No. 667.) 9 Third Statement of Additional Issues (Bk. Dkt. No. 668.) 10 11 III. Appellant Failed to Timely File Pleadings The Court finds Appellant has also failed to timely file opposition pleadings. 12 The Trustee's motions were filed and served on Appellant on February 28, 2013, 13 each accompanied by written notice of the hearing thereon scheduled for May 3, 14 2013. (Dkt. Nos. 21, 22.) Civil Local Rule 7.1.e.2. applies here and plainly 15 requires a party opposing a motion to file an opposition or statement of 16 non-opposition within fourteen (14) calendar days of the noticed hearing. Failure 17 to comply with these rules "may constitute a consent to the granting of a motion." 18 Civ. Local R. 7.1.f.3.c. The fourteen (14) calendar days deadline is "increased for 19 purposes of mail service upon opposing parties of counsel by three (3) days." Civ. 20 Local R. 7.1.e.4.1. Civil Local Rule 7.1.f.3. further provides that "of an opposing 21 party fails to file the papers in the manner required by Civil Local Rule 7.1.e.2, that 22 failure may constitute a consent to the granting of a motion or other request for 23 ruling by the court." Civ. Local R. 7.1.f.3. 24 District courts have broad discretion to enact and apply local rules, including 25 dismissal of a case for failure to comply with the local rules. Ghazali v. Moran, 46 26 F.3d 52, 53 (9th Cir. 1995) (affirming grant of an unopposed motion to dismiss 27 under local rule by deeming a pro se litigant's failure to oppose as consent to 28 granting the motion); United States v. Warren, 601 F.2d 471, 474 (9th Cir. 1979). - 15 - 12cv1560-GPC-BGS 1 Even though the court has an obligation to liberally construe their pleadings, "pro 2 se litigants are bound by the rules of procedure." Ghazali, 46 F.3d at 54. Before 3 dismissing an action for failure to comply with local rules, the district court 4 "weigh[s] several factors: '(1) the public's interest in expeditious resolution of 5 litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the 6 defendants; (4) the public policy favoring disposition of cases of their merits; and 7 (5) the availability of less drastic sanctions.'" Ghazali, 46 F.3d at 53 (quoting 8 Henderson v. Duncan, 779 F.2d 1421, 1423 (9th Cir.1986)). 9 Here, the Court concludes that "the public's interest in expeditious 10 resolution of litigation," "the court's need to manage its docket," and "the risk of 11 prejudice to the [Creditor Hentz]" weigh in favor of granting the Motion to Dismiss 12 and Motion to Strike based on Appellant's failure to file a timely opposition. See 13 Ghazali, 46 F.3d at 53. The majority of these factors weigh in favor of dismissal. 14 The docket reflects a history of Appellant's continuous and repetitive failure to 15 comply with this Court's rules. Previously, in addition to his failure to comply with 16 Bankruptcy Rules governing appeals and local rules regarding timely opposition 17 pleadings, Appellant has failed to follow court-issued briefing schedules. On 18 December 19, 2012, this Court issued a scheduling order instructing Appellant to 19 file his opening brief by February 4, 2013. Appellant did not file an opening brief 20 by this deadline. On February 12, 2013, without providing any explanation for the 21 delay, Appellant filed a request to extend the opening brief deadline. (Dkt. No. 22 15.) The Court then ordered Appellant to file his opening brief by March 4, 2013. 23 (Dkt. No. 16.) Once again, Appellant failed to file any opening brief by the 24 extended deadline. On March 6, 2013, Appellant filed yet another request for an 25 extension of time, which the Court granted and set for May 15, 2013. (Dkt. Nos. 26 28, 39.) Appellant filed his Brief on May 15, 2013, in which he once again 27 attempts to assert claims that are not present in the pending litigation. 28 - 16 - 12cv1560-GPC-BGS 1 2 Due to Appellant's failure to comply with the Local Civil Rules and Court Orders, the Court finds good cause to dismiss the appeal. CONCLUSION 3 4 For the reasons set forth above, IT IS HEREBY ORDERED that Trustee's 5 Motion to Dismiss Appeal and Trustee's Motion to Strike are GRANTED. (Dkt. 6 Nos. 20, 21.) Mr. Abrahams' appeal is DISMISSED WITHOUT PREJUDICE, 7 and the hearing for Arguments on Appellant's Bankruptcy Appeal, currently set for 8 June 21, 2013, is VACATED. 9 10 IT IS SO ORDERED. DATED: June 18, 2013 11 12 HON. GONZALO P. CURIEL United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 17 - 12cv1560-GPC-BGS
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