Filed: Nov. 18, 2013
Latest Update: Nov. 18, 2013
Summary: Chapter 7 Case MEMORANDUM AND ORDER WITH RESPECT TO DECISION AFTER TRIAL Robert E. Gerber, United States Bankruptcy Judge Constitutional limits on the power of bankruptcy judges to enter final judgments in certain matters have resulted in confusion here as to "what happens next" after a bankruptcy judge, in lieu of entry of a judgment in an adversary proceeding, issues proposed findings of fact and conclusions of law, and a party wishes entry of a judgment implementing them, on the one hand,
Summary: Chapter 7 Case MEMORANDUM AND ORDER WITH RESPECT TO DECISION AFTER TRIAL Robert E. Gerber, United States Bankruptcy Judge Constitutional limits on the power of bankruptcy judges to enter final judgments in certain matters have resulted in confusion here as to "what happens next" after a bankruptcy judge, in lieu of entry of a judgment in an adversary proceeding, issues proposed findings of fact and conclusions of law, and a party wishes entry of a judgment implementing them, on the one hand, o..
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Chapter 7 Case
MEMORANDUM AND ORDER WITH RESPECT TO DECISION AFTER TRIAL
Robert E. Gerber, United States Bankruptcy Judge
Constitutional limits on the power of bankruptcy judges to enter final judgments in certain matters have resulted in confusion here as to "what happens next" after a bankruptcy judge, in lieu of entry of a judgment in an adversary proceeding, issues proposed findings of fact and conclusions of law, and a party wishes entry of a judgment implementing them, on the one hand, or is unhappy with them, on the other.
Here I issued a Decision after Trial,1 noting that by reason of constitutional constraints on my power as a bankruptcy judge to issue a final judgment on most of the claims, my decision should be deemed to be proposed findings of fact and conclusions of law ("Proposed Findings").2 I also issued a supplemental order providing for notice of the Proposed Findings, initiating the process under Fed.R.Bankr.P. 9033, discussed below, with which the bankruptcy clerk's office duly complied. Thereafter, defendants Mitch and Mehran Peykar filed notices of appeal from the Proposed Findings,3 although there was not yet a judgment from which to appeal, and where the appropriate procedure would have been to file objections to the Proposed Findings in accordance with Rule 9033. At the same time, my Chambers received an inquiry (to which it did not respond, and to which I respond only by this Memorandum and Order), from the plaintiff side, as to what it should do if it simply wanted judgment entered by the district court consistent with the Proposed Findings.
I find no fault with either side; the uncertainty is understandable. There are holes in the procedure, which the Court's Local Rules only partially plug. This Memorandum and Order addresses the remainder.
Fed.R.Bankr.P. 9033 provides, in relevant part:
(a) Service
In non-core proceedings heard pursuant to 28 U.S.C. § 157(c)(1), the bankruptcy judge shall file proposed findings of fact and conclusions of law. The clerk shall serve forthwith copies on all parties by mail and note the date of mailing on the docket.
(b) Objections: time for filing
Within 14 days after being served with a copy of the proposed findings of fact and conclusions of law a party may serve and file with the clerk written objections which identify the specific proposed findings or conclusions objected to and state the grounds for such objection. A party may respond to another party's objections within 14 days after being served with a copy thereof. A party objecting to the bankruptcy judge's proposed findings or conclusions shall arrange promptly for the transcription of the record, or such portions of it as all parties may agree upon or the bankruptcy judge deems sufficient, unless the district judge otherwise directs.
....
(d) Standard of review
The district judge shall make a de novo review upon the record or, after additional evidence, of any portion of the bankruptcy judge's findings of fact or conclusions of law to which specific written objection has been made in accordance with this rule. The district judge may accept, reject, or modify the proposed findings of fact or conclusions of law, receive further evidence, or recommit the matter to the bankruptcy judge with instructions.
Thus in non-core matters,4 under national Bankruptcy Rule 9033, district judges review the proposed findings; rule on any objections to the proposed findings that may have been filed; and enter judgment consistent with the proposed findings, decline to do so, or take any of the other actions enumerated in Rule 9033(d). They may also, if warranted, overrule the objections but nevertheless make any further adjustments to the findings they deem appropriate.5
In matters that are statutorily core but nevertheless beyond the constitutional power of a bankruptcy judge to enter a final judgment, district judges, at least in this district, do likewise—under caselaw,6 bankruptcy court local rule,7 and district court standing order.8
But national Bankruptcy Rule 9033, S.D.N.Y. Bankruptcy Rule 9033-1, and the District Court's Amended Standing Order of Reference do not address what parties should do if they have no objections, but still want entry of a judgment by the district court. And the applicable rules and orders do not address the mechanics of the docketing in the district court that is necessary for entry of a judgment and for the district court's consideration of any objections that might be filed.
To address those gaps, I believe that I may, and should, order on my own motion, since Rule 9033 objections were not lodged, (1) the opening of a matter in the district court for the consideration (and, if appropriate, implementation) of my Proposed Findings, and (2) the transmission of my Proposed Findings and the record on which they were based—all, of course, for further proceedings as a district judge may see fit. A party that wishes implementation of the Proposed Findings may then ask the district judge to issue a judgment on them, and a party who has objections may then be heard.9
The bankruptcy clerk is authorized and directed (1) to open up a "Civ" case in the district court, and (2) to electronically transmit to the district court, for filing in that case, (a) the Proposed Findings; (b) this Memorandum and Order; and (c) the remainder of the bankruptcy court ECF docket10 in this adversary proceeding.
This order is without prejudice to the rights of any party to address the significance, if any, of the early filing of an appeal by defendants Mitchell and Mehran Peykar; their failure to comply with Rule 9033; or any other matter with respect to whether judgment should be entered consistent with my Proposed Findings.
SO ORDERED.
