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Leonard v. Shrock

United States District Court, S.D. Indiana, Indianapolis Division

February 10, 2017

JORDAN LEONARD, Appellant,
v.
RODNEY SHROCK, Appellee.

          ORDER ON MOTION TO DISMISS BANKRUPTCY APPEAL

          TANYA WALTON PARTT JUDGE UNITED STATES DISTRICT COURT.

         This matter is before the Court on Appellee Rodney Shrock's (“Shrock”) Motion to Dismiss (Filing No. 8) Appellant Jordan Leonard's (“Leonard”) appeal of a bankruptcy court adversary ruling filed pursuant to 28 U.S.C. § 158(a)(1) and Federal Rules of Bankruptcy Procedure 8001, 8002, and 8003. Following cross-motions for summary judgment regarding the dischargeability of Leonard's attorney fees debt to Shrock, the United States Bankruptcy Court for the Southern District of Indiana entered judgment in favor of Shrock. Leonard appealed that decision to this Court. Shrock filed his Motion to Dismiss, asserting that the district court does not have jurisdiction to consider the appeal because Leonard's Notice of Appeal was not timely filed. For the following reasons, the Court GRANTS Shrock's Motion to Dismiss.

         I. BACKGROUND

         In 2013, Allysha Conwell (“Conwell”) initiated a paternity action in state court against Leonard to establish the paternity of Conwell's son. Shrock served as Conwell's counsel in the paternity action. Leonard and Conwell initially could not agree on the terms of the son's custody and support, but following mediation, they were able to resolve their disagreements, and their resolution was memorialized in a mediation agreement. The mediation agreement was filed in the paternity court and entered as an order of the court on September 24, 2014. The mediation-agreement-turned-court-order addressed child support, medical insurance, parenting time, mediator's fees, guardian ad litem fees, and attorney fees. Leonard had agreed to pay $1, 000.00 of Conwell's attorney fees for Shrock's legal services. The court order directed Leonard to pay Shrock's attorney fees within ninety days of the mediation-by October 8, 2014.

         Leonard failed to pay Shrock's attorney fees, so Shrock took steps to enforce the order in the paternity court in late October 2014. However, before the paternity court could hold additional proceedings on the matter, Leonard filed a Chapter 7 bankruptcy case on February 14, 2015. Leonard listed Shrock as a creditor, and Shrock received notice of the bankruptcy filing. Shrock took no steps to collect the attorney fees debt during the pendency of the Chapter 7 bankruptcy case. Leonard received a discharge on May 19, 2015.

         Soon after Leonard's discharge, Shrock filed a show cause motion in the paternity court to enforce the paternity court's order and collect the attorney fees debt from Leonard. Believing that Shrock's actions were an improper attempt to collect a discharged debt, Leonard initiated an adversary proceeding by filing a complaint in the bankruptcy court (Case No. 15-842-RLM-7, Adversary Proceeding No. 15-50225). Leonard alleged in his complaint that the attorney fees debt was discharged by the bankruptcy court's earlier order, and Shrock's efforts violated the discharge injunction.

         Leonard and Shrock each filed a motion for summary judgment in the bankruptcy court, and the parties argued whether the attorney fees debt, as ordered by the paternity court, was discharged in Leonard's Chapter 7 bankruptcy proceeding or whether the debt fell within an exception to the discharge. The bankruptcy court held a hearing on the motions for summary judgment, and on March 30, 2016, the bankruptcy court issued Findings of Fact and Conclusions of Law and Final Judgment. The bankruptcy court ruled in favor of Shrock, determining that the attorney fees debt, as ordered by the paternity court, was not discharged in Leonard's Chapter 7 bankruptcy proceeding because it fell within an exception to discharge under 11 U.S.C. § 523(a)(5).

         One day after entry of the bankruptcy court's Final Judgment, Leonard filed a Notice of Appeal with the bankruptcy clerk on March 31, 2016 (Filing No. 1). However, the filing was deficient. On the same day (March 31, 2016), the bankruptcy clerk issued a Notice of Deficient Filing, notifying Leonard that the appeal was deficient because it did not include the orders or judgments that Leonard was appealing (Filing No. 1 at 3), and the appeal did not use “Official Form B17A or substantially comply with that form.” (Filing No. 2.) Leonard was given until April 14, 2016, to cure the deficiencies. Id.

         Leonard failed to correct the deficiencies by filing an adequate Amended Notice of Appeal by April 14, 2016. On April 18, 2016, the bankruptcy clerk sent notice to this Court that the parties failed to file the “Designation of Record” with the bankruptcy court. Later that same day, Leonard filed an Amended Notice of Appeal in the bankruptcy court, but this notice, like the first, was deficient because it did not include the appealed orders or judgments (Filing No. 5). The bankruptcy clerk again issued a Notice of Deficient Filing, which noted that deficiencies must be cured by May 2, 2016 (Filing No. 5-1). Later that day (April 18, 2016), Leonard filed a Second Amended Notice of Appeal, which included the bankruptcy court's Final Judgment but not the court's Findings of Fact and Conclusions of Law (Filing No. 6).

         One week later, on April 25, 2016, Shrock filed a Motion to Dismiss the bankruptcy appeal (Filing No. 8). Relying on Bankruptcy Rule 8002, Shrock contends that this Court lacks jurisdiction over the appeal on the basis that Leonard's Notice of Appeal was filed beyond the mandated fourteen-day appeal period; more specifically, Leonard missed the April 14, 2016 deadline to file a sufficient Amended Notice of Appeal and failed to request and receive an extension of time to file.

         II. LEGAL STANDARD

         “The district courts of the United States shall have jurisdiction to hear appeals from final judgments, orders, and decrees” of the bankruptcy courts. 28 U.S.C. § 158(a)(1). “An appeal under subsections (a) and (b) of this section shall be taken . . . in the time provided by Rule 8002 of the Bankruptcy Rules.” 28 U.S.C. § 158(c)(2). Bankruptcy Rule 8002 establishes that “a notice of appeal must be filed with the bankruptcy clerk within 14 days after entry of the judgment, order, or decree being appealed.” “The notice of appeal must: (A) conform substantially to the appropriate Official Form; (B) be accompanied by the judgment, order, or decree, or the part of it, being appealed; and (C) be accompanied by the prescribed fee.” Fed.R.Bankr.P. 8003(a)(3).

         “When a party appeals a bankruptcy court's decision under 28 U.S.C. § 158(a), district courts review a bankruptcy court's factual findings for clear error, and legal conclusions and the legal significance accorded to facts de novo.” In re Brown, 444 B.R. 173, 175 (S.D. Ind. 2011) (citing Ojeda v. Goldberg, 599 F.3d 712, 716 (7th Cir. 2010)). The clearly erroneous standard is a highly deferential one. Peoples State Bank v. Port Royal Aggregates, Inc., 193 B.R. 1020, 1022 (S.D. Ind. 1996). “Under this standard, if the trial court's account of the evidence is plausible in light of the record viewed in its entirety, a reviewing court may not reverse even if convinced that it would have weighed the evidence differently as trier of fact.” Id. (citation omitted). Indeed, a factual finding is only clearly erroneous when the district court is “left with the definite and firm conviction that a mistake has been committed.” In re Sheridan, 57 F.3d 627, 633 (7th Cir. 1995); In re Brown, 444 B.R. at 175. In contrast, de novo review requires an independent examination of the applicable law without deference to the bankruptcy court's conclusions. In re Brown, 444 B.R. at 175.

         III. ...


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