ZOBEL, District Judge.
In this bankruptcy appeal, defendant-appellant PNC Mortgage ("PNC") contends that the bankruptcy court erroneously awarded plaintiff-appellee Warren E. Agin ("Trustee"), the Chapter 7 Trustee in bankruptcy for Kelley J. Spodris ("debtor"), $234,000 for the benefit of debtor's estate. Trustee moves to dismiss the appeal as untimely (Docket #8). For the reasons discussed below, I conclude that PNC's appeal is timely and the bankruptcy court erred in awarding the money judgment. The judgment is therefore VACATED and the case remanded.
Debtor and her mother, Donna M. Kelley, own by joint tenancy with a right of survivorship a property in Marstons Mills, Massachusetts. On February 4, 2011, PNC loaned debtor and Kelley $282,000 and took a mortgage on the property. Debtor filed for Chapter 7 bankruptcy on June 21, 2011. Because PNC had recorded the mortgage within the ninety-day period prior to the time debtor filed her bankruptcy petition, the Trustee filed an adversary proceeding seeking to avoid the transfer of the mortgage lien. See 11 U.S.C. § 547(b)(4)(A). On November 29, 2011, the Trustee filed an application for default and a motion for entry of default judgment against PNC. The motion listed the value of the property at $234,000; the Trustee got that number from the debtor's bankruptcy schedules. On December 14, 2011, the bankruptcy court entered an endorsed order on the Trustee's application for default. It read, "Granted. The Clerk shall enter a default against the defendant in favor of the plaintiff." Docket #8-1 at 3. Two weeks later, on December 28, 2011, the bankruptcy court entered an endorsed order granting the Trustee's motion for default judgment. It read, "Granted. The Court enters a default judgment in favor of the Plaintiff against the Defendant." Docket #8-2.
The Trustee attempted to enforce the judgment against PNC in the U.S. District Court for the Southern District of Ohio. That court initially granted the Trustee's motion to enforce judgment and issued a writ of execution. See Fed.R.Civ.P. 69(a). Upon PNC's motion, however, it vacated the writ because the bankruptcy court had not held a hearing on damages, and as such there was no money judgment to enforce. See Docket #13-1. The Trustee then filed in the bankruptcy court a "Motion
Docket #13-3 (emphases added). The bankruptcy court granted the motion and entered the proposed judgment verbatim on June 10, 2013. The Trustee then noticed that the judgment was incorrect because it used December 28, 2012, rather than December 28, 2011, the date on which the bankruptcy court entered the initial endorsed order granting the motion for a default judgment, as the start date for the interest calculation. On June 12, 2013, he filed a "Motion to Amend Judgment." Docket #13-4. PNC filed its notice of appeal on July 3, 2013. On August 9, 2013, the bankruptcy court allowed the motion to amend the judgment. It entered the new judgment on August 14, 2013.
I review the bankruptcy court's factual findings for clear error and its legal conclusions de novo. Parker v. Handy (In re Handy), 624 F.3d 19, 21 (1st Cir.2010). I review the bankruptcy court's entry of a default judgment for abuse of discretion. MacPherson v. Johnson (In re MacPherson), 254 B.R. 302, 305 (1st Cir. BAP 2000).
First, I must determine whether PNC timely filed its notice of appeal. Johnson v. Teamsters Local 559, 102 F.3d 21, 28 (1st Cir.1996) (timely filing of notice of appeal mandatory and jurisdictional) (quotation and citation omitted). In support of its motion to dismiss, the Trustee asserts that the bankruptcy court's endorsed order ripened into a final judgment for which the appeal window has closed. See Mot. to Dismiss Appeal, Docket #8, at 5-6. The bankruptcy court entered the endorsed order authorizing a default judgment on December 28, 2011, but did not set forth a judgment in a separate document. Generally, judgment requires entry on a separate document, but "under Fed.R.Civ.P. 58(c)(2)(B), judgment enters after 150 days have passed since a judgment order was placed on the civil docket, even if no separate document was filed." Bos. Prop. Exch. Transfer Co. v. Iantosca, 720 F.3d 1, 7 (1st Cir.2013).
The Trustee's reasoning is incorrect because the default judgment, even if entered via endorsement, still required the Trustee to prove damages. See Torres-Rivera v. O'Neill-Cancel, 524 F.3d 331, 339 n. 3 (1st Cir.2008) (citing Fed.R.Civ.P. 55(b)(2)); KPS & Assocs., Inc. v. Designs by FMC, Inc., 318 F.3d 1, 19 (1st Cir.2003) ("`While a default judgment constitutes an
The appeal clock began to run when the district court entered its June 10, 2013 judgment, which contained the $234,000 damages figure. PNC, however, did not file its notice of appeal until July 3, 2013, after the two-week appeal period elapsed. But PNC correctly points out that its motion to amend the judgment stayed the appeal clock:
Fed. R. Bankr.P. 8002(b). PNC made a timely motion under the Rule, and thus, the clock ran from the date the bankruptcy court entered the order disposing of the motion: August 9, 2013.
Yet this conclusion raises another wrinkle. PNC filed its notice of appeal on July 3, 2013, more than a month before the bankruptcy court disposed of the motion and entered the amended final judgment. The Trustee contends PNC's notice of appeal was premature and thus invalid. Mot. to Dismiss at 10. PNC relies on Federal Rule of Bankruptcy Procedure 8002(a), which, it claims, relates forward the notice of appeal to August 14, 2013, the date the bankruptcy court entered the amended judgment.
Caselaw from the analogous context of Federal Rule of Appellate Procedure 4(a)(2)
Satisfied that I have jurisdiction over this appeal, I now turn to its merits.
PNC asserts that the bankruptcy court erred by awarding the Trustee a monetary judgment for the value of the transferred property pursuant to 11 U.S.C. § 550(a), instead of allowing the Trustee to avoid the transfer of the mortgage lien. Avoidance of the mortgage lien, PNC argues, will make the estate whole. Appellant's Br., Docket #16, at 9 (citing Agin v. Chambers (In re Ruel), 457 B.R. 164, 171-72 (Bankr.D.Mass.2011) (holding that where Trustee avoided a transfer under 11 U.S.C. § 547, the remedy was limited to avoidance of the mortgage lien)). PNC further contends that even if the Trustee were entitled to the value of the property, the bankruptcy court could not simply lift the damages award directly from the debtor's bankruptcy schedules. Id. at 11-13.
The bankruptcy court apparently never considered any of these arguments. Even assuming the endorsed order represents implied consideration, the court still erred. As explained above, the court could only have awarded the $234,000 without hearing additional evidence if the damages request was for a "sum certain." But because there was doubt as to the value of the property, the sum was not certain. See KPS & Assocs., Inc., 318 F.3d at 19. This is especially so given that the figure came straight from the debtor's bankruptcy schedules. See Hull v. Burr, 206 F. 1, 2 (1st Cir.1913) ("[T]he schedules bind no one but the bankrupt, and do not purport to set forth any estimates of values except the bankrupt's."); In re A & A Transport, Inc., 10 B.R. 867, 868-69 (Bankr.D.Mass. 1981) ("[A]lthough the Debtor signs the schedules under oath, the values listed therein are only reasonable estimates, and very often the person charged with preparing the schedules has little or no knowledge about the value of certain types of property listed therein. As a result, it is possible that the `scheduled value' and the actual `market value' may differ substantially."). Accordingly, it is proper to remand the case to allow the bankruptcy court to (1) consider the proper remedy; and (2) if it decides to award the Trustee the value of the property, hear additional evidence regarding its value. I note, however, that given that PNC had lent debtor the sum of $282,000, it is unclear why it should pay an additional amount simply because the loan transaction occurred during the preference period.
The Trustee's motion to dismiss the appeal as untimely (Docket #8) is DENIED. The Trustee's motion to strike issues on appeal (Docket #9) is DENIED. The judgment of the bankruptcy court is VACATED and the case is REMANDED for further proceedings consistent with this opinion.