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In re Roadhouse Holding Inc.

United States District Court, D. Delaware

March 22, 2018

IN RE ROADHOUSE HOLDING INC., Reorganized Debtor.
v.
ROADHOUSE HOLDING INC., Appellee. WAYNE ENGLISH, Appellant,

          MEMORANDUM

         Pending before this Court is the Motion to Dismiss Appeal for Lack of Jurisdiction (D.I. 16) filed by Roadhouse Holding Inc. ("Reorganized Debtor") with respect to a pro se appeal filed by Wayne English ("Appellant"). The Motion to Dismiss argues that the Court lacks appellate jurisdiction to consider this appeal because Appellant failed to file a notice of appeal within the 14-day period prescribed by Rule 8002(a) of the Federal Rules of Bankruptcy Procedure ("Bankruptcy Rules") and failed to request an extension of the deadline for excusable neglect within the time frame set forth in Bankruptcy Rule 8002(d)(1). For the reasons set forth below, the Motion to Dismiss is granted, and the appeal is dismissed for lack of appellate jurisdiction.

         1. Background.

         This appeal arises out of the chapter 11 cases of the now Reorganized Debtor and certain affiliates, which were filed on August 8, 2016 (the "Petition Date"). As of the Petition Date, Appellant held claims on account of the Debtors' publicly issued 10.75% Senior Secured Notes due October 2017 (the "Notes"). He timely filed a proof of claim on account of his Notes in the chapter 11 cases (Claim No. 6099) (the "Claim"). The Debtors objected to Appellant's claim (B.D.I. 625) ("Objection")[1] on the basis that the Indenture Trustee for the Notes had filed proofs of claim on behalf of all individual noteholders, including Appellant, and that Appellant's claim was therefore duplicative of the Indenture Trustee's proofs of claim. (See Id. at 4-5). On March 22, 2017, the Bankruptcy Court held a hearing on the Objection as it related to Appellant's claim specifically and heard argument from Appellant. (See B.D.I. 799). The same day, the Bankruptcy Court entered an order sustaining the Objection with respect to Appellant's Claim. (B.D.I. 790).

         2. On April 4, 2017, Appellant filed the Motion for New Trial, Motion for Rehearing, and Motion to Modify, Correct or Reform the Judgment Granting Debtors' Fourth Omnibus (Substantive) Objection to Claims Pursuant to Section 502(b) of the Bankruptcy Code, Bankruptcy Rules 3003 and 3007, and Local Rule 3007-1 as to Proof of Claim 6099 Filed by Wayne English (B.D.I. 806) (the "Reconsideration Motion"), which was opposed by the Reorganized Debtor (B.D.I. 815).

         3. On May 25, 2017, the Bankruptcy Court entered a Memorandum Order denying the Reconsideration Motion ("Final Order"). (B.D.I. 825).

         4. Appellant's Notice of Appeal of the Final Order was filed on June 12, 2017, eighteen days after entry of the Final Order. (B.D.I. 840).

         5. The Motion to Dismiss is fully briefed. (D.I. 16, 18, 19). Appellant filed a motion to strike (D.I. 20) ("Motion to Strike") the Reorganized Debtor's reply in support of the Motion to Dismiss (D.I. 19) ("Reply"), on the basis that the Reply was untimely, and the Reorganized Debtor filed a response thereto (D.I. 21).

         6. Jurisdiction and Standard of Review.

         The Court has appellate jurisdiction over all final orders and judgments from the Bankruptcy Court. See 28 U.S.C. § 158(a)(1). Bankruptcy Rule 8002 provides: "Except as provided in subdivisions (b) and (c), a notice of appeal must be filed with the bankruptcy clerk within 14 days after entry of the judgment, order, or decree being appealed." Fed.R.Bankr.P. 8002(a)(1). Where a party makes a timely motion in the bankruptcy court (i) to amend or make additional findings under Bankruptcy Rule 7052, (ii) to alter or amend the judgment pursuant to Bankruptcy Rule 9023, (iii) for a new trial under Bankruptcy Rule 9023, or (iv) for relief under Bankruptcy Rule 9024, "the time to file an appeal runs for all parties from the entry of the order disposing of the last such remaining motion." Fed.R.Bankr.P. 8002(b). The Reconsideration Motion was disposed of by entry of the Final Order on May 25, 2017. Therefore, the time for appeal runs from May 25, 2017. Fed R. Bankr. P. 8002(b). The Third Circuit has held that the failure to appeal a bankruptcy court's ruling to the district court within the time period established by Bankruptcy Rule 8002 deprives the district court of jurisdiction to hear an appeal. See In re Caterbone, 640 F.3d 108, 113 (3d Cir. 2011).

         7. Discussion.

         The Final Order denying the Reconsideration Motion was entered on May 25, 2017. The deadline to file an appeal expired 14 days later, on June 8, 2017. See Fed. R. Bankr. P. 8002. The appeal was not filed until June 12, 2017, four days after the 14-day period under Bankruptcy Rule 8002 had expired. Although the Bankruptcy Rules alone cannot create or withdraw jurisdiction, Congress has limited the jurisdiction of this Court to hear an appeal from a final order of a Bankruptcy Court by specifically incorporating the time limits of Rule 8002 in the jurisdictional grant to the district courts to hear appeals from bankruptcy courts. Section 158(c)(2) of title 28 provides that "an appeal under subsections (a) and (b) of this section shall be taken in the same manner as appeals in civil proceedings generally are taken to the courts of appeals from the district courts and in the time provided by Rule 8002 of the Bankruptcy Rules."

         8. "[T]he taking of an appeal within the prescribed time is 'mandatory and jurisdictional.'" Bowles v. Russell, 551 U.S. 205, 209 (2007) (quoting Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 61 (1982)). The Third Circuit has joined other circuits in holding that the time limits of Bankruptcy Rule 8002 are jurisdictional, and the failure to file a timely notice of appeal creates a jurisdictional defect barring appellate review. See Caterbone, 640 F.3d at 112-13 & n.5 (citing S'holders v. Sound Radio, Inc., 109 F.3d 873, 879 (3d Cir. 1997)); see also, In re Sobczak-Slomczewski, 826 F.3d 429, 432 (7th Cir. 2016); In re Berman- Smith, 777 F.3d 997, 1003 (5th Cir. 2013); In re Latture, 605 F.3d 830, 836-37 (10th Cir. 2010). As the Third Circuit has explained:

[b]ecause Section 158 ... specifies the time within which an appeal must be taken - i.e., "in the time provided by Rule 8002" - that requirement is jurisdictional ... Here, even though it is a bankruptcy rule that specifies the time within which an appeal must be filed, the statutory incorporation of that rule renders ...

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