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In re Long Neck Properties, LLC

United States District Court, D. Delaware

September 22, 2017

IN RE LONG NECK PROPERTIES, LLC, Debtor.
v.
GEORGE L. MILLER, et al, Appellees. ERIC S. CAMPBELL, Appellant, No. 14-11707 (KJC)

          MEMORANDUM ORDER

          HON. LEONARD P. STARK UNITED STATES DISTRICT JUDGE.

         Pending before the Court is the untimely Letter Objection (D.I. 22) filed by pro s'e appellant Eric S. Campbell with respect to the Report and Recommendation issued by Chief Magistrate Judge Thynge on June 30, 2017 (D.I. 21). For the reasons set forth herein, the Court will overrule the Letter Objection, adopt the Report and Recommendation in part, and dismiss the appeal with prejudice.

         I. BACKGROUND

         On or about July 14, 2014, Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, and George L. Miller was appointed as the Chapter 7 Trustee ("Trustee"). On September 9, 2015, Trustee filed a motion seeking sanctions against appellant for his alleged willful violations of the automatic stay pursuant to section 362(k) of the Bankruptcy Code (B.D.I. 50)[1] ("Sanctions Motion"). In the Sanctions Motion, Trustee asserted that appellant had willfully obstructed Trustee in marketing and selling certain real property constituting the Debtor's primary asset, and had also refused to turn over estate assets, including money and a motor vehicle. (See id.) On September 22, 2015, the Bankruptcy Court held a hearing on the Sanctions Motion. During the hearing, Trustee and appellant reported a settlement of the dispute. The settlement resolved the Sanctions Motion and other issues between the parties. The settlement generally provided that appellant was obligated to the estate in the amount of $10, 000, but that this obligation would be deemed satisfied and released if appellant paid $4, 000 within 30 days of the date of an order approving the settlement. The terms of the parties' settlement were read into the record at the hearing, and the Bankruptcy Court asked appellant if he understood and agreed to the terms of the settlement and whether he could make the agreed-upon payment. Appellant answered in the affirmative. Following the hearing, the parties did not reach an agreement regarding a form of order. (See B.D.I. 68) On October 13, 2015, the Bankruptcy i i i Court entered a short order setting forth the settlement terms read into the record at the i September 22, 2015 hearing and attaching the relevant excerpt of the hearing transcript (B.D.I. 70) ("First Settlement Order") Appellant did not appeal the First Settlement Order and also did not make the $4, 000 payment.

         On December 15, 2015, Appellant filed a letter request with Bankruptcy Court seeking relief from the terms of the First Settlement Order. (B.D.I. 89) On February 5, 2016, Trustee filed a response opposing any such relief. (B.D.I. 90) Following a hearing, the Bankruptcy Court denied the relief sought in the letter request, issuing an order on March 15, 2016. (B.D.I. 93) On April 5, 2016, appellant filed a notice of appieal with respect to the March 15, 2016 order. (D.I. 1) .

         Since the filing of this appeal, Judge Thyngeiheld a number of teleconferences with the parties, scheduled a mediation (which was later cancelled), and had an in-person conference on December 12, 2016. During that conference, it was confirmed on the record that appellant was now willing to resolve his appeal by paying Trustee $ 1, 000.00 in weekly increments of $75.00, beginning December 16, 2016 and continuing until full payment of the $1, 000.00 settlement. As a result of the conference, on December 14, 2016, the Court issued an order memorializing the parties' settlement agreement (D.I. 16) ("Second Settlement Order"). In accordance with the Second Settlement Order, appellant's weekly payments were to be made directly to Trustee, whose mailing address was included in the Second Settlement Order, and the Trustee was further required to advise the Court when full payment had been made. (See Id. at 2)

         Despite the agreement between the parties, appellant failed to begin the weekly payments on December 16, 2016, and made only six payments between January 19, 2017 and June 1, 2017. Appellant should have completed and made full payment by early March 2017. Due to appellant's failure to comply with the payment schedule set forth in the Second Settlement Order, the Court scheduled additional teleconferences for February 15, 2017, March 29, 2017, and May 2, 2017. (See D.I. 17, 18, 19) The most recent teleconference was scheduled for June 26, 2017 (see D.I. 20), but appellant failed to participate, later claiming in an email that he forgot. (See D.I. 21 at 2) Based on appellant's email request for an accounting to finalize payment, however, Judge Thynge issued an email order to the parties on June 29, 2017, which required counsel for Trustee to confirm, on or before1 July 7, 2017, the total amount remaining and due and to advise the Court and appellant by email of same. (See D.I. 21 at 3) It also provided for appellant to make the final payment, as he indicated in prior emails that he intended and desired to do, by July 21, 2017. (See id.) The email order also required Trustee to confirm whether final payment was made, whether settlement is complete, and whether this appeal may be dismissed. (See id.) In response to this email order, appellant immediately advised that he did not intend to comply. (See id.)

         On June 30, 3017, the Report and Recommendation was issued. Judge Thynge recommends that, based on appellant's noncompliance with the Second Settlement Order, the Court enter an order (1) affirming the March 15, 2016 Bankruptcy Court order and dismissing the appeal with prejudice, and (2) ordering appellant to pay the fees and costs incurred by Trustee for the appeal. (See Id. at 4) On July 24, 2017, appellant filed a Letter Objection to the Report and Recommendations. (D.I. 22)[2]

         II. PARTIES' CONTENTIONS

         Appellant purports that he has no further obligations because "the Trustee, Mr. Miller, i has informed me that the settlement agreement, under which payments were to be made, has been quashed and rescinded." (D.I. 22 at 1) Appellant appears to rely on a letter dated May 23, 2017 to the Court, which included a letter dated May 17, 2017 from Trustee to appellant, advising that since appellant was in continued default of the settlement, the settlement was null and void. (See D.I. 21 at 3) Appellant takes the position that because Trustee has threatened further litigation, appellant has no further obligation under the Second Settlement Order. (See id.) Appellant further argues that the Trustee cannot proceed directly to litigation without first proving appellant has been "properly notified of a perceived breach" and has been "provided an opportunity to cure." (See D.I. 22 at 2) Trustee filed no response to the Letter Objection.

         III. LEGAL STANDARDS

         Rule 72 of the Federal Rules of Civil Procedure permits magistrate judges to conduct proceedings on dispositive pretrial matters without the consent of the parties. Fed.R.Civ.P. 72(b). Any portion of a report and recommendation on dispositive matters, to which a timely objection has been made, is reviewed de novo. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). The Court, however, is not required to review the factual findings or legal conclusions of the magistrate judge as to which no proper objections are interposed. See Gusler v. City of Long Beach, 823 F.Supp.2d 98, 109 (E.D.N.Y. 2011). To accept the report and recommendation of a magistrate judge to which no timely objection has been made, the district judge need only be satisfied that there is no clear error on the face of the record. See Fed. R. Civ. P. 72(b) (Advisory Committee Notes); Gusler, 823 F.Supp.2d at 109. Whether or not proper objections have been filed, the Court may accept, reject, or modify any of the magistrate judge's findings or recommendations. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). The Court may also receive further evidence or return the matter to the magistrate judge with instructions for proceeding. Id. Finally, "[appellant] proceeds pro se, and accordingly, we construe his pleadings liberally." Laughlin v. Peck, 552 Fed.App'x 188, 190 (3d Cir. 2014) (citing Haines v. Kemer, 404 U.S. 519, 520-21 (1972)).

         IV. DISCUSSION

         Appellant failed to timely object to the Report and Recommendation. Federal Rule of Civil Procedure 72(b)(2) provides that, "[w]ithin 14 days after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations." The Report and Recommendation was issued on June 30, 2017, and the docket entry indicated that appellant's objections, if any, were required to be filed no later than July 17, 2017. (See D.I. 21 (allowing three ...


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