All posts in Appeals

Standing to appeal?

Another case I want to remember.  Seems to come up all the time.

Palmdale Hills Prop., LLC v. Lehman Commer. Paper, Inc., 654 F.3d 868, 874 (9th Cir. 2011) (“those persons who are directly and adversely affected pecuniarily by an order of the bankruptcy court . . . have standing to appeal that order”).

Judge Alex Kozinski argues before the 9th Circuit

Zindel v. Fox SearchlightWatch oral argument here.  December 9, 2019.  No result as of Feb 7, 2020.

Appeal divests the trial court of jurisdiction – mostly anyway

This blog is a great way to save stuff I might need at a later time.  I knew that an appeal divests the trial court of most jurisdiction but was not sure where it says that.  I happened to run into the law in a Judge Kaufman tentative I was reading today.

“The filing of a notice of appeal is an event of jurisdictional significance—it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal.” Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982). “The timely filing  of a notice of appeal to either a district court or bankruptcy appellate panel will typically divest a bankruptcy court of jurisdiction ‘over those aspects of the case involved in the appeal.’” In re Sherman, 491 F.3d 948, 967 (9th Cir. 2007) (quoting In re Padilla, 222 F.3d 1184, 1190 (9th Cir. 2000)). “The bankruptcy court retains jurisdiction over all other matters that it must undertake ‘to implement or enforce the judgment or order,’ although it ‘may not alter or expand upon the judgment.’” Id. (quoting Padilla, 222 F.3d at 1190).

 

Bankruptcy Appeals – BAP or District Court?

The Ninth Circuit 2018 Annual Report tells us that last year there were 277 appeals from bankruptcy courts in the Central District of California.  Total appeals in the 9th Cir were 623 so we are almost half.  Of the 277 in the Central District, 131 were to the BAP and 146 to the district courts.

Every appeals program I have been to since forever spends a healthy amount of time discussing which court is “better” for the appeal – the BAP or the district court.

Here is my take on how to decide which court to appeal in:

  • If the issue is truly a commercial bankruptcy issue, it is rarely better to appeal to the district court.  Plans and confirmation, the automatic stay and preferences befuddle most district court judges and their clerks.  One district court judge told me that he is mystified that anyone would want him to resolve a bankruptcy issue.
  • If there is BAP precedence against you, the BAP is bound by its prior rulings so you might as well go to the district court which is not bound by BAP rulings in other cases.
  • If you suspect that the matter is going to go  to the 9th Circuit irrespective of the result at the first level of appeal, go to the BAP.  It will recognize the issue and explain it to the 9th Circuit for you.
  • The BAP is ruling pretty quickly these days.  You can expect a resolution within 3-4-5 months.  The district court in my experience takes a lot longer.
  • The BAP will almost always allow oral argument.  The district court rarely does (in my experience).
  • If the matter is really heavy duty state court -non-bankruptcy court – litigation, the district court might be better.  For example, claims objections based on state law.  The district court is likely more familiar and comfortable with non-bankruptcy litigation issues.

The idea that one court or the other will “rubber stamp” the bankruptcy court is ridiculous and insulting to the judges.

9th Circuit en banc statistics

The 9th Circuit Annual Report for 2018 has some pretty interesting statistics.  One is that there were 955 petitions for rehearing en banc last year.  Of those, 17 were “called” for a vote.  Of those, 8 petitions were granted and 9 denied.  So 8 out of 955.

The way it works is that the petition for rehearing en banc is sent to all 27 “regular” or “active” 9th Circuit judges.  The “senior” status judges do not get to vote.  Any one of the 27 regular status judges can call for a vote.  If none makes the call, the petition is denied.  Once a judge makes the call, the 27 vote for rehearing and it takes a majority to grant the petition.  I’m not sure of the timing, i.e., how long it is before the petition is denied because there was no call.

The en banc panel is 11 judges consisting of the Chief Judge and 10 other judges chosen at random.  It hears oral argument and rules.  It affirms or reverses the three judge panel that it is reviewing.  A nice summary of the rules is here. 

Why en banc?  I think sometimes there is a sense that the three judge panel got it wrong.  But more often and usually, the three judge panel was bound by a prior 9th Circuit ruling that was wrong or needed to be better explained or modified.

Paying the mortgage in advance as prepetition exemption planning

I have asked bankruptcy attorneys many times over the years whether they think that it is okay to use non-exempt cash in the bank to prepay the mortgage before filing a petition.  It would only work of course if the mortgage payment created equity that was then exempt.  Every attorney I have ever asked has said something like, “Of course it’s okay.”  Some have looked at me strangely like “Why are you asking when the answer is obvious?” If you need to pay for debts quickly here you can learn What is a life settlement and how to work around it.

I don’t see it as obvious.  It is a transfer to delay, hinder or defraud creditors.  “But it is exchanging non-exempt assets for exempt assets which is okay,” is the usual response.  The answer to that is “sort of.”

Most financial experts say the most effective way to lower your mortgage payment is by refinancing. However, you typically need good credit to qualify, and you have to have some equity in the home unless you’re prepared to put money down. For those reasons, refinancing isn’t an option for everyone. If you can qualify, do the math to find out how much you can save both monthly, and over the life of the loan. Avoid refinance loans that extend the term, since you’ll often pay more in interest although you’re saving monthly. Living away from home and paying for your own housing, food and other necessities can be a tough adjustment. But being on your own for the first time is a new and exciting experience and it offers a perfect opportunity to set yourself up for success. If you need financing help, then consider hiring these mortgage brokers for assistance.  If you still aren´t sure on how to handle your mortgage, then consider hiring a mortgage agency for professional assistance. More so, if you have unsecured debt that you need relief from, there are professionals that can help you with a personalized debt settlement program.

The BAP has recently affirmed Judge Robert Kwan in an unpublished opinion, In re Ellison, who denied this guy’s discharge based on a bunch of prepetition transfers, (“But it’s allowed exemption planning says the debtor’s atty.”)  The debtor paid six months worth of his first and second mortgages and he will be looking for more details about debt consolidation to decrease his total debt.  Why you ask?  The debtor’s words, “to assure that my wife and my daughter and myself had a home to live in through the end of the year . . . I did prepay [the mortgage in the past] but not to that degree, not six months, or four months, five months, whatever it was in advance, normally.”  According to Judge Kwan, “This out of the ordinary course transaction and Defendant’s admissions are additional evidence of his intent to hinder or delay his creditors by putting these funds out of their reach for his personal benefit.”   See In re Ellison, 2:15-ap-01001-RK.  Docket No. 30.

There were other transfers to be sure which had the effect of protecting about $250,000 of equity in the debtor’s home (after the homestead exemption).  Judge Kwan concluded that the debtor “crossed over the line’ of what is permissible behavior.  See In re Beverly, 374 B.R. at 244-246 (discussing the difficulty in drawing the line between legitimate bankruptcy planning and intent to hinder, delay or defraud creditors).”

SFVBA Program This Friday October 12, 2018

Email from Steve Fox:

Dear All:

The bankruptcy section is back for its 2018-2019 season.  The first program up is a really unique program.  It will exercise our brains and give us some good food for thought, and good stuff to use in our law practices.  Daniel J. Bussell of Klee, Tuchin (and a law professor at UCLA), Whitman Holt (a partner at Klee Tuchin) and Judge Barash will speak on a small number of selected appellate cases. Read more…

Nice Program with Judge Alex Kozinski – October 19, 2017

Judging the Judge: A Candid Conversation Between Judge Kozinski and Professors Ronald Collins and David Skover on Appellate Judging and the Politics of Law. Judge Kozinski will engage the authors in a spirited dialogue about partisan politics and the art of appellate judging, primarily at the Supreme Court level.
In their latest book, The Judge: 26 Machiavellian Lessons (Oxford University Press, 2017), Professors Collins and Skover raise a provocative question: What flows from the proposition that law is politics, or that Supreme Court decision-making in controversial cases is greatly influenced by partisan beliefs? That is, ever more people believe that judicial power is a form of political power. If so, what then? The answer: the maximization of judicial power, which is where Machiavelli comes in by way of the 26 power-maxims urged by the authors. It is against this conceptual backdrop that Judge Kozinski will engage the authors in a spirited dialogue about partisan politics and the art of appellate judging, primarily at the Supreme Court level.

Panelists:
Honorable Alex Kozinski, Ninth Circuit Court of Appeal
Professor Ronald Collins, University of Washington School of Law
Professor David Skover , Seattle University School of Law Read more…

Big Win in the Ninth Circuit for Public Law Center

Hello All,

I wanted to share with you that just yesterday, the Ninth Circuit Court of Appeals overturned the Bankruptcy Appellate Panel and held that a debt owed by a parent to the Orange County Probation Department as the result of the involuntary incarceration of the parent’s minor child is not in the nature of support, and therefore is a dischargeable debt.

The BAP had previously held that the debt was “in the nature of support” and therefore was a Domestic Support Obligation that was nondischargeable under 101(14A) and 523(a)(5). The Ninth Circuit reversed, saying, amont other things, that BAPCPA changed who could be creditors, not what type of debts were covered by 523(a)(5), and this debt does not fit within the state’s family support infrastructure. This is an incredible win for our client, but also a win for other debtors in Orange County who were being pursued by Probation for similar debts.

Read more…

Kozinski “fed up with verbose lawyers and their bloated briefs”

Nice article about Judge Alex Kozinski.  9th Circuit Appellate opening briefs are limited to 14,000 words.  I can’t imagine preparing a brief that is longer than that, and filing it the day it’s due along with a motion for permission to exceed the limits.  Apparently it happens a lot.  This is a nice little article in the LA Times today.  Kozinski says he won’t read the additional 14 pages.