NANETTE K. LAUGHREY, District Judge.
This appeal arises out of an adversary proceeding under title 11 of the United States Code.
Bruce Cole was the president and CEO of Mamtek U.S., Inc., and Nanette Cole is his wife. On December 15, 2011, several creditors filed an involuntary petition for relief under Chapter 7 of the Bankruptcy Code against Mamtek. Bruce Strauss was appointed Trustee of the Debtor's bankruptcy estate.
In May 2012, the Trustee filed an adversary proceeding against the Coles in which he sought, among other things, avoidance of fraudulent and preferential transfers. The Trustee also moved for a temporary restraining order and preliminary injunctive relief, to prevent the Coles from disposing of the proceeds of the sale of their residence in Beverly Hills, California. Based upon Bruce Cole's representation that the property would not be sold before June 27, 2012, the Bankruptcy Court denied the Trustee's request for a TRO and set a hearing on the request for a preliminary injunction for June 22, 2012.
On June 12, 2012, the Trustee filed a renewed motion for TRO because he had been informed by the broker's counsel that the sale of the real property could close as early as June 15.
Bankr. Doc. 55.
On June 18, 2012, the Bankruptcy Court entered another order, stipulated to by the Trustee and the Coles. It provided, in relevant part, that: (1) the June 15, 2012 order would "remain in force and effect until final judgment is entered in this adversary proceeding;" and (2) Escrow of the West would retain the net proceeds of the sale of the real property "until final judgment is entered in this adversary proceeding, at which time the Court shall enter an order directing the disposition of such proceeds." Bankr. Doc. 61. After entry of the June 2012 orders, Escrow of the West continued to hold the proceeds of the sale.
In December 2012, the Bankruptcy Court granted a motion to withdraw filed by the Coles' attorneys, Neal Sader and Bradley McCormack, and the Coles subsequently proceeded pro se in the adversary proceeding
On August 29, 2013, the Bankruptcy Court granted the Trustee summary judgment on Counts I and III of the adversary complaint, concerning fraudulent and preferential transfers.
At some point, the Coles hired Gary Mobley, a California attorney, to assist them in having capital gains taxes paid to the IRS and the California Franchise Tax Board out of the proceeds of the sale of the real property. Mobley did not enter an appearance on behalf of the Coles in the adversary proceeding. But he sent a letter on November 13, 2013 to Escrow of the West, stating that he "represent[ed]" the Coles with respect to the sale proceeds and demanding that payment be made from the proceeds to the IRS and the California Franchise Tax Board, based on the Bankruptcy Court's June 2012 orders. Bankr. Doc. 267, Exhibit A. Through December 17, 2013, Mobley and Escrow of the West's attorney, Daniel Krishel, exchanged numerous letters and emails regarding the Coles' demand for the payment and Escrow of the West's position that such a transfer was unauthorized. Bankr. Doc. 267, Exhibits B-E. The Coles also filed a supplemental brief in the Bankruptcy Court in opposition to the Trustee's motion to modify, but did not disclose the exchanges Mobley was having with Escrow of the West's attorney. Bankr. Doc. 231.
On December 20, 2013, the Bankruptcy Court denied the Trustee's motion to transfer the proceeds, holding that transfer was premature in view of the other pending claims in the adversary proceeding. Bankr. Doc. 239. The Bankruptcy Court added that if circumstances changed, it would consider a motion to modify its orders regarding the proceeds. The Bankruptcy Court also expressly acknowledged the argument the Coles had made in response to the Trustee's motion, i.e., "that taxes related to the sale of the Property are due and owing, and are to be disbursed by the Escrow Agent from the Funds," and ordered:
Bankr. Doc. 239, p. 4 (emphasis added).
Krishel sent an email to Mobley on January 6, 2014 about the Bankruptcy Court's order, and stating that the Coles would "need to make a motion to have specific funds released and to whom they are to be released." Bankr. Doc. 267, Ex. F. Mobley responded on January 7, 2014:
Id., Ex. G. Mobley also said Escrow of the West had "been stalling" him pending the Bankruptcy Court's decision regarding the disbursement motion and that the Bankruptcy Court had ordered Escrow of the West to pay the capital gains taxes. Id. Mobley threatened to sue Escrow of the West if it did not pay the taxes.
On February 10, 2014, Mobley filed a lawsuit on behalf of the Coles in the Superior Court of California, Orange County, against the Trustee, Escrow of the West, the State of California, and the United States of America concerning the proceeds of the sale of the real property. The first count sought a declaration that Escrow of the West should disburse $175,000 of the funds to the Coles as a homestead exemption, and remaining funds to the United States and the State of California to satisfy the taxes. The second count alleged Escrow of the West had breached a fiduciary duty when it did not comply with the Coles' demands to pay over the funds as the Coles had requested. Bankr. Doc. 267, Exhibit H.
The Trustee filed an emergency motion on February 25, 2014 in the adversary proceeding before the Bankruptcy Court, to halt the California litigation and asking for modification of the Bankruptcy Court's prior orders and an expedited hearing. The Coles filed a response in the Bankruptcy Court the following day, representing that there was "no emergency or imminent threat of funds being disbursed." Bankr. Doc. 248, p. 2. The Coles filed another response in the Bankruptcy Court on March 4, 2014, arguing that the Bankruptcy Court did not have jurisdiction over the funds held by Escrow of the West, and that they had merely brought the California lawsuit to force Escrow of the West to comply with the Bankruptcy Court's orders. Bankr. Doc. 259, pp. 2 and 10.
The Bankruptcy Court held a hearing by telephone on the emergency motion on March 5, 2014.
On March 11, 2014, Escrow of the West filed a motion to dismiss in the California lawsuit, attaching copies of the Bankruptcy Court's March 5, 2014 hearing transcript and order on the emergency motion. Bankr. Doc. 267, Exhibit I. The Coles filed suggestions in opposition in the California lawsuit, arguing that the Bankruptcy Court had ordered Escrow of the West to pay their taxes. Bankr. Doc. 267, Exhibit J. The Hon. Derek W. Hunt held a hearing on the motion on April 22, 2014. Judge Hunt denied Escrow of the West's motion to dismiss, but stayed the case. Although Mobley argued that the Bankruptcy Court's June 2012 orders' reference to the "taxes" should be read expansively and the Coles were therefore entitled to immediate payment of the capital gains taxes from the sale proceeds, Judge Hunt disagreed. He opined that the order was merely referring to property taxes, but that in any event, it was up to the Bankruptcy Court to interpret and enforce its own order. Judge Hunt found the Coles had "misinform[ed] [him] about the background [of the bankruptcy proceedings]." Bankr. Doc. 267, Exhibit M, p. 9. He concluded that the "money [was] within the bankruptcy court's jurisdiction" and it was not "sensible [of the Coles] to think [they] could go forward and adjudicate against Escrow of the West, which has transferred, or in some fashion put that money—by virtue of a bankruptcy court order—in the hands of" the Trustee. Id., pp. 11-12. Judge Hunt also noted that the Bankruptcy Court had invited the Coles to file a motion in the Bankruptcy Court if they felt the funds should be used to pay the capital gains taxes, but the Coles had not taken the Bankruptcy Court up on the invitation. Judge Hunt stated that he was "not going to step on Judge Dow's feet." Id., p. 13-15.
The Coles did not file a motion in the Bankruptcy Court concerning payment of taxes. They continued to litigate the California case and it was reassigned from Judge Hunt to the Hon. Randall Sherman on August 9, 2014. On December 5, 2014, Judge Sherman held a hearing, vacated the stay previously entered by Judge Hunt, and set a case management conference for January 23, 2015 with a trial to follow.
On January 20, 2015, Escrow of the West filed a motion in the Bankruptcy Court asking for findings that Escrow of the West had complied with the Bankruptcy Court's orders and that the Coles were in contempt. Bankr. Doc. 267. Mobley and the Coles filed separate suggestions in opposition. Docs. 274 and 274. The Bankruptcy Court held a hearing on Escrow of the West's motion on March 11, 2015. Mobley was present in person and Nanette Cole participated by telephone. After hearing argument, Judge Dow made oral findings of fact and conclusions of law under Bankruptcy Rules 7052 and 9014(c). Judge Dow found that Escrow of the West had complied in all material respects with the Bankruptcy Court's orders and that "as of February 6, 2014, the Coles and their counsel [Mobley] were in contempt of this Court's order of 12/20 by filing the proceeding in the State of California requesting precisely the determination that this Court told the Coles in my order of 12/20 they could only get here." Bankr. Doc. 283, p. 35. Judge Dow ordered the Coles to dismiss the California case and stated that they would be fined $100 per day until they had done so. Id., pp. 35-36. Judge Dow also ordered Escrow of the West's attorney to prepare a written order incorporating his oral ruling. Id., p. 46. Although Judge Dow had not in his oral ruling indicated whether the California lawsuit should be dismissed with or without prejudice, the written order he subsequently entered provided that it should be dismissed with prejudice. Bankr. Doc. 281.
The Coles filed a motion to dismiss with prejudice in the California case on March 13, 2015 and the case was dismissed with prejudice the same day.
Bankr. Doc. 304.
The Coles filed motions in the Bankruptcy Court under Bankruptcy Rule 9023 to alter or amend, and to clarify. Bankr. Docs. 306 and 307.
On May 4, 2016, the Bankruptcy Court denied the Coles' motions. Bankr. Doc. 312. The Bankruptcy Court held that the grounds for the Coles' motion were unclear. It noted that although the Coles asked for clarification about the process for determining the appropriate disposition of the proceeds held by the Trustee of the sale of their residence, and complained that the Bankruptcy Court had overlooked a similar request for clarification in their response to the motion to dismiss, the issue was irrelevant to the Trustee's motion to dismiss the remaining counts. The Bankruptcy Court further noted it had already made "abundantly clear" what the Coles must do if they wanted a determination regarding payment of taxes from the sale of the proceeds. Id., p. 2. Finally, the Bankruptcy Court noted that Rule 9023 is addressed to mistakes of law or fact, but the Coles had not suggested that anything in the order on the motion to dismiss reflected a mistake of law or fact. The Bankruptcy Court concluded:
Id., p. 3.
The Coles appealed to the District Court.
The Trustee and Escrow of the West argue that this Court lacks jurisdiction because the Coles filed their Rule 9023 motions to alter, amend, and clarify too late, and their notices of appeal were therefore filed too late. As discussed below, the Court agrees with respect to Nanette Cole's motion and notice of appeal, but concludes Bruce Cole's motion and notice of appeal were timely filed.
A Rule 9023 motion must be filed within 14 days of entry of the judgment or order being challenged, and that time limit cannot be extended. See Fed. R. Bankr. P. 9006(b)(2); In re Ellis, 72 F.3d 628, 631 (8
Here, the Bankruptcy Court granted the motion to dismiss on March 11, 2016. Nanette Cole delivered her Rule 9023 motion to the Bankruptcy Court clerk on March 28, 2016, or 17 days later, beyond the 14-day window for filing it. Accordingly, the late filing of her Rule 9023 motion did not toll the time to file a notice of appeal under Bankruptcy Rule 8002, and her notice of appeal—filed two months after the dismissal order—was filed too late to challenge the Bankruptcy Court's dismissal order and underlying rulings.
However, the analysis is different with respect to Bruce Cole because he is incarcerated. The Bankruptcy Rules expressly incorporate the prison mailbox rule, an exception to filing by delivery to the clerk, with respect to notices of appeal. Under Bankruptcy Rule 8002(c), when an "inmate confined in an institution files a notice of appeal from judgment, order, or decree of a bankruptcy court, the notice is timely if it is deposited in the institution's internal mail system on or before the last day for filing." Bankruptcy Rule 8002 does not expressly state whether the prison mailbox rule also applies to the filing of motions that can toll the running of the time to file a notice of appeal, such as motions to alter or amend under Bankruptcy 9023, and the Eighth Circuit has not decided whether the prison mailbox rule applies to the filing of bankruptcy motions. In re. Bourgeois, 488 B.R. 622, 626 (8
But the Bankruptcy Rules are generally interpreted the same way as other, similar Federal Rules. See In re Lindley, 216 B.R. 811, 815 n.7 (Bankr. N.D. Ill. 1998), and In re Watson, 1977 WL 1327, at *2 (S.D. Ga. Dec. 8, 1977). Bankruptcy Rule 8002 is modeled after Fed. R. App. P. 4, which similarly includes the prison mailbox rule for notices of appeal, and a provision for motions tolling the time to file a notice of appeal such as motions to alter or amend under Fed. R. Civ. P. 59.
Accordingly, the Court will apply the prison mailbox rule to the filing of Bruce Cole's Bankruptcy Rule 9023 motion. He deposited his Rule 9023 motion in the prison mail on March 25, 2016—the 14
Cole raises nine issues on appeal:
Doc. 14.
Issues 1 through 8 are reviewed under a de novo standard. See In re Martin, 140 F.3d 806, 807 (8
Issue 9, the contempt finding, is reviewed for abuse of discretion. See Indep. Fed'n of Flight Attendants v. Cooper, 134 F.3d 917, 920 (8
Cole claims that the Bankruptcy Court erred in not advising him of his "right or opportunity to have the proceedings heard before an Article III judge[.]" Doc. 14, pp. 2-7 (citing Stern v. Marshall, 131 S.Ct. 2594 (2011), Executive Benefits Ins. Agency v. Arkison, 134 S.Ct. 2165 (2014), and Wellness Intern. Network, Ltd. v. Sharif, 135 S.Ct. 1932 (2015)). Emphasizing the Supreme Court's May 2015 decision in Wellness, he argues that the Bankruptcy Court did not have authority to adjudicate the claims against him in the adversary proceeding, absent notification to Cole of the right to refuse adjudication by the Bankruptcy Court. As discussed below, the Court concludes the issue lacks merit.
In Stern, the Supreme Court held that Article III prevents bankruptcy courts from entering final judgment on claims that seek only to "augment" the bankruptcy estate and would otherwise "exis[t] without regard to any bankruptcy proceeding." 131 S.Ct. at 2614, 2618. In Executive Benefits, the Supreme Court held that when the Constitution does not permit a bankruptcy court to enter final judgment on a bankruptcy-related claim, the bankruptcy court may nevertheless issue proposed findings of fact and conclusions of law to be reviewed de novo by a district court. 135 S.Ct. at 2170. Finally, in Wellness the Supreme Court held that Article III of the United States Constitution permits bankruptcy judges to adjudicate a claim that would otherwise fall under the Stern prohibition, with the parties' knowing and voluntary consent, and that such consent need not be expressly given. 135 S.Ct. at 1944-48.
In his previous appeal to this Court in case no. 2:13-cv-04200-NKL, Cole similarly argued that reversal was necessary because the Bankruptcy Court had not notified him of the right or opportunity to have the proceedings heard before an Article III judge. Noting he had cited no authority, this Court concluded the argument lacked merit. 2014 WL 4055787, at *4-5. At the time of this order, Stern and Executive Benefits had been decided, but Wellness had not been. The Coles appealed to the Eighth Circuit, case no. 14-3302, on September 26, 2014. Wellness was decided on May 26, 2015 and a supplemental brief addressing Wellness and consent was filed on June 16, 2015, before the Eighth Circuit took the case under submission. The Eighth Circuit summarily affirmed on July 7, 2015, stating it had "review[ed] the record and the parties' arguments" and "conclude[d] that there [was] no basis for reversal[.]" 608 Fed. Appx. 438 (8
Cole argues that the Bankruptcy Court lacked jurisdiction over the sale proceeds. He raised the identical issue in his prior appeal before this Court, which concluded he had waived the issue by failing to brief it. 2014 WL 4055787, at *13. A party is not generally permitted to raise, on second appeal, an issue that the party could have raised in a first appeal. See Macheca Transp. Co. v. Philadelphia Indem. Ins. Co., 737 F.3d 1188, 1194 (8
Cole argues that this Court must consider the issue because it goes to the Bankruptcy Court's jurisdiction. The issue still lacks merit. This Court will assume for the sake of argument that the Bankruptcy Court's exercise of jurisdiction over the sale proceeds falls under the Stern prohibition, i.e., that it is a matter statutorily designated for final adjudication by a bankruptcy court but which the bankruptcy court is constitutionally prohibited from proceeding to finally adjudicate. But Cole knowingly and voluntarily consented to the Bankruptcy Court's exercise of jurisdiction, within the meaning of Wellness. 135 S.Ct. at 1944-48. The Supreme Court in Wellness explained that "the key inquiry" with respect to consent "is whether `the litigant or counsel was made aware of the need for consent and the right to refuse it and still voluntarily appeared to try the case' before the non-Article III adjudicator." 135 S.Ct. at 1948 (quoting Roell v. Withrow, 538 U.S. 580, 588 at n.5 (2003)). Consent may be express or implied. Id. The Supreme Court did not decide whether the defendant in Wellness consented to the bankruptcy court's exercise of jurisdiction in an adversary proceeding, because the determination would have been deeply fact bound and of little guidance to litigants or lower courts, given the unique procedural history of the case. Id. at 1948-49. But other courts post-Wellness have held that parties have impliedly consented when they appeared before a bankruptcy court without objection. See Mandel v. Jones, 2016 WL 4943366, at *5 (E.D. Tex. Sept. 16, 2016) (parties may impliedly consent when a bankruptcy judge hears evidence and testimony related to a claim without objection by the parties) (citing In re McCollom Interests, LLC, 551 B.R. 292, 300 (Bankr. S.D. Tex. 2016) ("[T]his Court held two hearings during which two of the Firm's attorneys appeared and gave testimony; and the Firm never objected to this Court's constitutional authority to enter a final order. . . . If these circumstances do not constitute implied consent, nothing does.")). See also In re Campbell, 553 B.R. 448, 452 (Bankr. M.D. Ala. 2016) (concluding that a defendant's failure to appear and defend against claims in an adversary proceeding, despite service of the summons, constituted knowing and voluntary consent to a non-Article III adjudicator within the meaning of Wellness) (and cases cited therein).
Here, the Coles consented in June 2012 to the Bankruptcy Court's entry of a temporary restraining order and preliminary injunction regarding transfer of the sale proceeds. Furthermore, notwithstanding their late 2013 appeal to this Court, case no. 2:13-cv-04200-NKL, in which the Coles themselves identified the issue of the Bankruptcy Court's jurisdiction over the sale proceeds, they continued to appear before the Bankruptcy Court to litigate how the sale proceeds would be handled. For example, after the Trustee filed a motion in the Bankruptcy Court in October 2013 asking that the sale proceeds be transferred to him and credited against his judgment, the Coles did not object to the Bankruptcy Court's exercise of jurisdiction. Rather, they argued that the proceeds should be used to pay their capital gains taxes. Similarly, in March 2016 when the Trustee moved to dismiss the remaining counts of the adversary complaint, the Coles again failed to object to the Bankruptcy Court's jurisdiction. They instead asked the Bankruptcy Court to require the Trustee to file a motion for authorization to disburse the sale proceeds. The circumstances of this case easily demonstrate implied consent to the Bankruptcy Court's exercise of jurisdiction.
Issue 2 therefore lacks merit.
Cole argues that according to the June 2012 orders, the capital gains taxes were supposed to be paid from the sale proceeds, and that he and Nanette Cole "attempted to raise and schedule these issues with the bankruptcy court prior to its dismissal of the remaining counts of the Amended Complaint," but the Bankruptcy Court simply would not resolve them. Doc. 14, p. 14.
In a December 2013 order, the Bankruptcy Court explicitly acknowledged the Coles' argument, raised in their response to a motion filed by the Trustee, "that taxes related to the sale of the Property are due and owing, and are to be disbursed by the Escrow Agent from the Funds[,]" an argument the Trustee disputed. Bankr. Doc. 239, p. 4. The Bankruptcy Court ordered:
Bankr. Doc. 239, p. 4. The first California judge assigned to the Coles' case also urged the Coles to do what the Bankruptcy Court had ordered, i.e., file a motion. But they never did.
The Bankruptcy Court was authorized to require the Coles to file a motion. By rule, a request for an order from bankruptcy court must be made by motion. Fed. R. Bankr. P. 7(b). More fundamentally, the statutory grant Congress has provided the bankruptcy courts extends to exercising such authority as is necessary or appropriate to accomplish the purposes of the Bankruptcy Code:
11 U.S.C. § 105(a). See also Hale v. U.S. Tr., 509 F.3d 1139, 1148 (9
Cole argues that the Bankruptcy Court's June 2012 orders were already clear about payment of the capital gains taxes and therefore there was no reason for the Bankruptcy Court to have ordered the Coles to file a motion seeking to have the capital gains taxes paid. But a bankruptcy court has jurisdiction to interpret and enforce its own orders, Travelers Indemnity v. Bailey, 537 U.S. 137, 151 (2009), and the Bankruptcy Court here was in the best position to do so, especially given the procedural history it faced in the adversary proceeding, including motions for temporary restraining orders and the consent orders that led to entry of the June 2012 orders, and the litigation filed in the California case concerning its orders.
Cole also suggests that the Bankruptcy Court somehow erred in March 2014 when it granted the Trustee's emergency motion to transfer the funds out of California, to be held in the Tennessee bank account for the Mamtek Estate. Cole's argument is hard to follow. But a bankruptcy court has the power to "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of" the Bankruptcy Code. 11 U.S.C. § 105(a). The Bankruptcy Court's order here, transferring the funds, ensured they were preserved for purposes of satisfying a judgment rendered in the adversary proceeding and was consistent with the provisions of the Bankruptcy Code.
Issue 3 therefore lacks merit.
Cole argues the Bankruptcy Court had no authority to order him to dismiss the California lawsuit. The argument fails.
First, the Coles in fact followed the Bankruptcy Court's order and dismissed the California lawsuit with prejudice in March 2015. Although Cole asks for reversal of the order requiring him to dismiss the lawsuit, he does not identify any effect a reversal could have now. The appeal of the order requiring dismissal therefore appears moot. Minnesota Humane Society v. Clark, 184 F.3d 795, 797 (8
Even if it is not moot, however, it fails on the merits. The Bankruptcy Court ordered the dismissal of the California lawsuit in the course of finding the Coles were in contempt of its prior orders by filing and continuing to litigate the lawsuit. The first count of the California lawsuit sought payment of the taxes from the proceeds of the sale, even though the Bankruptcy Court had explicitly instructed the Coles to file a motion, citing facts and authority, if they wanted that type of relief. The second count, which was integrally related to and predicated upon the first, claimed breach of fiduciary duty against Escrow of the West for failing to pay over the proceeds as the Coles demanded.
"[B]ankruptcy courts have the inherent power to sanction vexatious conduct presented before the court." Hale v. U.S. Tr., 509 F.3d 1139, 1148 (9
Separate from its inherent power to punish for contempt, the Bankruptcy Court also has the power to "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of" the Bankruptcy Code. 11 U.S.C. § 105(a). This power includes "the authority to enjoin litigants from pursuing actions in other courts that threaten the integrity of the Debtor's estate." In re Emergency Room Mobile Services, LLC, 529 B.R. 676, 691 (N.D. Tex. 2015) (citing In re Apollo Molded Products, Inc., 83 B.R. 189, 191 (Bankr. D. Mass. 1988) (collecting cases)). Preserving the funds that could be used to satisfy a judgment rendered against the Coles in the adversary proceeding, by ordering that the California case be dismissed, is consistent with the provisions of the Bankruptcy Code and helps preserve the estate.
Cole adds that he was surprised by the inclusion of the "with prejudice" language in the Bankruptcy Court's written order, i.e., that the Coles must dismiss their California lawsuit "with prejudice," because the issue of prejudice was never discussed during the oral argument on the contempt motion. However, at the end of the oral argument, the Bankruptcy Court ordered Escrow of the West's attorney to draft a written order for the Bankruptcy Court's entry, and that Mobley, the Coles' California counsel, should be allowed to look at it before it was provided to the Bankruptcy Court. Bankr. Doc. 283, p. 46 of 48. There were no objections to this process and the Coles in fact proceeded to dismiss the California lawsuit with prejudice. Finally, Cole did not complain about the "with prejudice" language after receiving the Bankruptcy Court's order. The "with prejudice" issue is therefore moot.
Cole argues that Escrow of the West was essentially seeking declaratory relief by way of its motion for substantial compliance, so it should have been required to file its own adversary proceeding under Fed. R. Bankr. P. 7001(9). He argues that the rules associated with adversary proceedings, such as the requirement of a pleading including indispensable parties, were not followed. This argument was not raised until oral argument on Escrow of the West's motion. The Bankruptcy Court held it was waived, and that the Bankruptcy Rules probably did not require a new adversary proceeding in any event. Doc. 265, pp. 45-46. The issue lacks merit.
Rule 7001 lists types of proceedings that are considered adversary proceedings, such as proceedings to recover money or property, or obtain an injunction or other equitable relief, see subsections (1)-(8), as well as "a proceeding to determine a claim for declaratory judgment relating to any of" the adversary proceedings listed, subsection (9). Cole does not cite any authority supporting his argument that Escrow of the West's motion for determination that it had complied with the Bankruptcy Court's orders constitutes a declaratory judgment for purposes of Rule 7001.
Even if it was, Rule 7001 is not jurisdictional. Parties may waive their right to an adversary proceeding with respect to a request for declaratory judgment that otherwise fell under Rule 7001. Cogliano v. Anderson (In re Cogliano), 355 B.R. 792, 806 (9
Issue 7 therefore lacks merit.
Cole challenges the Bankruptcy Court's finding that he was in contempt for filing the California lawsuit.
A finding of contempt requires a showing of a specific and definite order, of which the party was aware, and that the party disobeyed the order. Koehler v. Grant, 213 B.R. 567, 570 (B.A.P. 8
Bankr. Doc. 265, pp. 43-44.
Cole argues that the verbiage the Bankruptcy Court used at the time of entry of the TRO and the preliminary injunction order later changed. As noted, the December 2013 order expressly stated what the Coles must do, but they proceeded to file the California lawsuit two months later. An order that a party must follow a particular course of action necessarily precludes all other courses of action; the Bankruptcy Court did not need to detail every course of action Cole was precluded from taking in order for the December 2013 order to be clear. Whether the TRO and preliminary injunction verbiage changed in any substantive way, Cole knowingly violated the specific and definite language of the December 2013 order.
Having performed a searching review, Indep. Fed'n of Flight Attendants, 134 F.3d at 920, this Court discerns no abuse of discretion in the Bankruptcy Court's entry of the contempt order. Indeed, the Bankruptcy Court was measured under the circumstances.
Cole concludes by stating he was denied due process "and the Bankruptcy Court failed to resolve the evidence in [his] favor." Doc. 14, p. 22 of 23. Cole had notice and the opportunity to be heard, which is all that due process requires. Due process does not require that he succeed on his argument.
Issue 9 therefore lacks merit.
Cole suggests a stay of this appeal may be appropriate, pending further proceedings in the Bankruptcy Court. But the only issue he identifies as subject to further proceedings relates to the Coles' request for an order directing the payment of his taxes from the sale proceeds. The Bankruptcy Court ordered the Coles to file a motion if they wanted the taxes paid from the sale proceeds, and they appealed that order to this Court. Cole has not identified any pending proceedings that would merit a stay.
Appellant Bruce Cole's motion for leave to adopt Appellant Nanette Cole's brief, Doc. 15, is granted. The Bankruptcy Court's orders are affirmed.
Bankr. Doc. 239, p. 4 (emphasis added).
