Filed: Jun. 20, 2006
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2006 Decisions States Court of Appeals for the Third Circuit 6-20-2006 In Re Richardson Precedential or Non-Precedential: Non-Precedential Docket No. 05-5087 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006 Recommended Citation "In Re Richardson " (2006). 2006 Decisions. Paper 866. http://digitalcommons.law.villanova.edu/thirdcircuit_2006/866 This decision is brought to you for free and open access by the Opinions of the United
Summary: Opinions of the United 2006 Decisions States Court of Appeals for the Third Circuit 6-20-2006 In Re Richardson Precedential or Non-Precedential: Non-Precedential Docket No. 05-5087 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006 Recommended Citation "In Re Richardson " (2006). 2006 Decisions. Paper 866. http://digitalcommons.law.villanova.edu/thirdcircuit_2006/866 This decision is brought to you for free and open access by the Opinions of the United ..
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Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
6-20-2006
In Re Richardson
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-5087
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006
Recommended Citation
"In Re Richardson " (2006). 2006 Decisions. Paper 866.
http://digitalcommons.law.villanova.edu/thirdcircuit_2006/866
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2006 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-5087
IN RE: RICHARDSON INDUSTRIAL CONTRACTORS, INC.,
Debtor
HARRY A. RICHARDSON,
Appellant
v.
TREACY, SHAFFEL, MOORE & MUELLER; JOSEPH AMBROSIO;
THOMAS BUCK; DEANNE ARNONE; SALVATORE ARNONE; LARRY
BLUMENSTYK; EUGENE R. BOFFA, JR.; ROBERT KESSLER, Deceased;
STATE OF NEW JERSEY; UNITED STATES OF AMERICA, Internal
Revenue Service
_______________
Appeal From the United States District Court
For the District of New Jersey
(D.C. Civil No. 05-cv-02803)
District Judge: Honorable Garrett E. Brown, Jr.
______________
Submitted Under Third Circuit L.A.R. 34.1(a)
June 1, 2006
Before: RENDELL, AMBRO and ROTH, Circuit Judges.
(Filed: June 20, 2006)
_______________
OPINION OF THE COURT
_______________
PER CURIAM
This appeal represents one of several cases arising from disputes over a Federal
Bureau of Prisons construction contract on the New York Metropolitan Detention Center
(MDC). Appellant Harry Richardson appeals from the District Court’s order granting
Salvatore and Deanne Arnone’s cross-motion to dismiss the appeal from the Bankruptcy
Court for the District of New Jersey and the order denying Richardson’s motion to
reconsider. For the reasons that follow we will affirm.
I.
After more than a decade of litigation, the parties are now quite familiar with the
facts and, thus, we only briefly recite them here. In 2003, Richardson Industrial
Contractors, Inc. (RICI), commenced a bankruptcy action in which Richardson, as RICI’s
principal shareholder, joined as a creditor. See In re Richardson Indus. Contractors, Inc.,
No. 03-26318 (Bankr. D.N.J.). Several of RICI’s creditors also filed suit in the New
Jersey Superior Court seeking a determination as to the extent of the liens each held
against RICI. See Robert Kessler, et al. v. Richardson Indus. Contractors, Inc., No. L-
3759-02 (N.J. Super. Ct.). Due to this filing, the Bankruptcy Court issued an abstention
order permitting the parties to return to state court to adjudicate the extent of each party’s
interest. On October 27, 2003, the Bankruptcy Court amended its abstention order
retaining jurisdiction to determine the priority of any liens or interests held by the
creditors. See In re Richardson Indus. Contractors, Inc., No. 03-26318, Order (Bankr.
D.N.J. Oct. 27, 2003).
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On April 28, 2004, the Trustee filed an adversary action in the Bankruptcy Court
seeking “to determine the extent, validity and priority of liens and interest, to subordinate
liens and other related relief.” In re Richardson Indus. Contractors, Inc., No. 04-01677,
Trustee’s Compl. ¶ 1 (Bankr. N.J. Apr. 28, 2004). Richardson was not among the named
parties. On May 24, 2004, the proceedings were consolidated with another adversary
proceeding filed by Treacy, Shaffel, Moore and Mueller (TSMM), which also sought to
determine the extent and priority of its liens.
After holding a hearing, the Bankruptcy Court ruled that TSMM had no attorney’s
lien interest in RICI’s assets under New York Law. It also found that the Arnones had
two perfected secured interests in RICI’s assets which held priority to the other creditors
party to the suit. See id. Orders (Jan. 25, 2005). New Jersey and TSMM filed a motion to
reconsider, which was denied. Both TSMM and New Jersey claimed that they continued
to hold secured interests superior to those held by the Arnones and Larry Blumenstyk,
another creditor. On April 13, 2005, the Bankruptcy Court approved a consent order
requiring the Superior Court to proceed on the Arnones’ motion to turn over all funds
except $150,000, reserving the parties the right to file claims under 11 U.S.C. § 506(c)
within a specified time. Richardson filed a notice of appeal contesting the consent order.
The adversary proceeding is still pending in the Bankruptcy Court.
The District Court held that Richardson lacked standing to appeal the Bankruptcy
Court’s order. Richardson filed a motion for reconsideration, which the District Court
3
denied. We agree with the District Court’s determination.1
II.
Although the current Bankruptcy Code does not contain a provision for appellate
standing, we have recognized that standing continues to be a prerequisite to proceeding
on appeal. See In re Dykes, 10 F.3d 184, 187 (3d Cir. 1993). Standing to appeal is
limited to “persons aggrieved” by an order of the Bankruptcy Court. Individuals are
“‘persons aggrieved’ if the order diminishes their property, increases their burdens, or
impairs their rights.”
Id. This standard is more restrictive than typical Article III
standing requirements, and we require the appealing party to be “directly affected” by the
order, not merely “‘exposed to some potential harm incident to the bankruptcy court’s
order.’” In re Combustion Eng’g, Inc.,
391 F.3d 190, 215 (3d Cir. 2004). The finding of
whether a party is a person aggrieved is a factual issue to be determined by the District
Court. See In re
Dykes, 10 F.3d at 188. Thus we review the determination for clear
error.
We first note that Richardson was not even party to the adversary proceedings.
Second, and more importantly, it is uncontested that Blumenstyk retains a security
interest “in all rights, title, and interest in the proceeds of any claims by RICI arising
from” the MDC project. See Kessler v. Richardson Indus. Contractors, Inc., No. L-3759-
1
We have jurisdiction pursuant to 28 U.S.C. § 1291. Richardson appeals from
both the District Court’s order adopting the proposed consent order and his motion to
reconsider. Since both appeals relate to the same underlying issue, we address both in a
single analysis.
4
02, Judgment (N.J. Super. Ct. Oct. 6, 2003). The proceedings and consent order at issue
in this appeal reflect a dispute amongst creditors asserting that they possess secured
perfected interests that take priority over the Arnones’ notes and Blumenstyk’s liens.
Even if TSMM and the State of New Jersey succeed in their efforts, and even if the
Bankruptcy Court found that TSMM possesses an attorney’s lien under New York law,
Richardson would not be in any better position. He admits he possesses an unsecured
interest and, thus, no matter what priority the Bankruptcy Court assigns to the Arnones,
TSMM, and New Jersey, Blumenstyk and his assigns will be entitled to recover any
remaining proceeds before Richardson.
Richardson argues that the District Court failed to account for the fact that the New
Jersey Superior Court order in favor of the Arnones is currently under appellate review.
We fail to see how this alters the above determination. Richardson does not state that the
Blumenstyk ruling is also contested, or that he has some retained interest which receives
priority over Blumenstyk’s. Even if the Blumenstyk ruling is contested, we do not
believe that the potential alteration of the state court’s ruling on appeal, without more, is
sufficient to establish a direct injury for the purposes of appellate standing in this case.
See In re Combustion Eng’g, Inc., 391 F.3d at 214.
Accordingly, the District Court finding that Richardson is not a person aggrieved
is not clearly erroneous. We will affirm the District Court’s orders dismissing the appeal.
Richardson’s motion for oral argument is denied.
5
