KATHERINE POLK FAILLA, United States District Judge.
Over the course of his Chapter 7 bankruptcy proceeding, Appellant Everton Aloysius Sterling has appealed several decisions of the presiding United States Bankruptcy Judge, Sean H. Lane, to the United States District Court for the Southern District of New York. See, e.g., In re Everton Aloysius Sterling, No. 16 Civ. 351 (KPF); In re Everton Aloysius Sterling, No. 16 Civ. 1446 (PKC); In re Everton Aloysius Sterling, No. 16 Civ. 6639 (AJN); In re Everton Aloysius Sterling, No. 17 Civ. 248 (ALC). In a prior Order, this Court dismissed one of his appeals — from a December 22, 2015 order of the Bankruptcy Court (the "December 22 Order") — for lack of subject matter jurisdiction because of its untimeliness. See In re Everton Aloysius Sterling, No. 16 Civ. 351 (KPF), Dkt. #9 (S.D.N.Y. Mar. 30, 2016). The instant appeal is a second challenge to the proceedings that resulted in the December 22 Order, and it also fails. To the extent that this Court may consider Appellant's current claims on appeal, they fall in the face of the Bankruptcy Court's proper exercise of its considerable discretion.
The relevant timeline is detailed in the Bankruptcy Court's December 22 Order, from which this summary is excerpted. (See Bankr. Dkt. #65 at 2-4). Appellant does not seriously dispute this sequence of events, though he vigorously disputes whether certain entities had rights in (and, by extension, had the legal ability to assign or transfer their rights in) the properties in question.
At issue here are three real properties, located at 551 Knickerbocker Avenue, Brooklyn, New York (the "Brooklyn Property"); 1320 East 222 Street, Bronx, New York (the "Bronx Property"), and Block and Lot 4730/7 on East 222 Street, also in the Bronx (the "Bronx Lot," and together with the Brooklyn Property and the Bronx Property, the "Three Properties"). On December 23, 2011, Appellant executed a note in favor of Columbia Capital Co. in the amount of $190,000.00 (the "Brooklyn Note"). The Note was secured by the Brooklyn Property, pursuant to a mortgage executed by Appellant on December 23, 2011 (the "Brooklyn Mortgage"). On August 20, 2012, the Brooklyn Mortgage was assigned by Columbia Capital Co. to 222 Funding Associates. Subsequently, an "allonge" — a sheet of paper on which additional endorsements can be made — was attached to the Brooklyn Note and signed by Columbia Capital Co., paying the Note to the order of 222 Funding Associates.
On August 23, 2012, Appellant, in his role as President of Latou Realty Corp. ("Latou"), executed a note in favor of 222 Funding Associates in the amount of $275,000.00 (the "Second Note"). The Second Note was, in turn, secured by each of
On August 23, 2012, the Brooklyn Note and the Second Note were consolidated into the principal sum of $465,000.00 (the "Consolidated Note"). On the same date, Appellant, as President of Latou, consolidated the Brooklyn Mortgage and the Second Mortgage in favor of 222 Funding Associates by executing a consolidation modification spreader agreement on all of the Properties (the "Consolidated Mortgage"). To facilitate the execution of the Consolidated Note and the Consolidated Mortgage, on August 23, 2012, Appellant deeded the Three Properties to Latou.
A few months later, however, in November 2012, Latou defaulted on the Consolidated Mortgage. 222 Funding Associates subsequently filed a foreclosure action against the Bronx Property and the Bronx Lot in Bronx Supreme Court. See 222 Funding v. Latou Realty, Index No. 380272/2013 (the "Foreclosure Action").
Appellant filed a voluntary petition under Chapter 7 of the Bankruptcy Code on September 14, 2014. (Bankr. Dkt. #1). The progress of the petition, according to the U.S. Trustee, was hindered by Appellant's conduct, including (i) his incomplete financial disclosures; (ii) his filing of an "Affidavit of Discharge," which included a "final counter offer" pursuant to which any effort to take Appellant's property would result in "damages of Five Million Dollars ($5,000,000.00) in lawful United [S]tates dollars"; (iii) his imposition on various court documents of the watermark "REFUSAL FOR CAUSE WITHOUT DISHONOR — DO NOT CONSENT — Return Without Prejudice," followed by his signature as "Authorized Representative All Rights Reserved UCC 1-308"; and (iv) his refusal to answer questions posed by the U.S. Trustee on the grounds that "pursuant 12 U.S.C. § 95a(2) [a statute specifying regulatory powers of the President in times of war] the matter has been discharged." (Bankr. Dkt. #29).
On September 25, 2015, Appellee moved to lift the stay in order to commence a foreclosure action against the Three Properties (the "Lift-Stay Motion"); it sought as well in rem relief with respect to the Properties themselves. Among other facts, Appellee related that: (i) Appellant had listed the Three Properties in his bankruptcy filings without listing any secured mortgages or claims against them; (ii) Appellant had failed to list Appellee (or its predecessor in interest, 222 Funding Associates) as a secured creditor; and (iii) Appellee believed that the timing of various assignments and the petition itself were designed to delay the foreclosure sale of the Bronx Property and the Bronx Lot. (Bankr. Dkt. #40). Among other exhibits to the motion, Appellee included copies of the underlying mortgages, notes, and allonges thereto. (Id.).
Appellant responded on October 15, 2015, by seeking an order to show cause why a temporary restraining order and/or a preliminary injunction should not be imposed to stay foreclosure proceedings (the "Motion for Injunctive Relief"). (Bankr. Dkt. #42). In his supporting affidavit, Appellant contended that (i) Appellee was barred under the doctrine of laches from raising a claim to the Three Properties because it had filed the Lift-Stay Motion more than one year after the petition was filed; (ii) Appellant had obtained a discharge with respect to the Three Properties by "pledging the Reversionary Interest and everything in the name of the infant EVERTON ALOYSIUS STERLING for the beneficial interest of the UNITED STATES who agreed to perform and indemnify Everton Aloysius and hold him harmless in accord with [12 U.S.C. § 95a(2)]"; and (iii) Appellee lacked standing to raise a claim to the Properties. (Id.). Appellant's motion papers also included a "Notice of Demand for Offer of Proof," in which he outlined various supporting documents and affidavits he sought from Appellee. (Id.).
By Order dated October 19, 2015, the Bankruptcy Court denied Appellant's request for a temporary restraining order and scheduled a hearing for both the Lift-Stay Motion and the Motion for Injunctive Relief to take place on October 27, 2015. (Bankr. Dkt. #43). That same day, Appellant filed a Motion to Strike Appellee's Lift-Stay Motion (the "Motion to Strike"), on the grounds that counsel for Appellee had failed to file an application to appear pro hac vice in the Bankruptcy Court. (Bankr. Dkt. #45). Appellee filed a joint opposition memorandum to the Motion for Injunctive Relief and the Motion to Strike on October 23, 2015. (Bankr. Dkt. #47).
A hearing on the Lift-Stay, Injunctive Relief, and Strike Motions was held before
The Bankruptcy Court then discussed with Appellant the bases on which the stay could be lifted. (Bankr. Dkt. #60 at 12-16). After numerous attempts to question him on this point, Appellant conceded that, to the best of his knowledge, no payments had been made on the underlying mortgages in the preceding three years. (Id. at 12-14). The Court then heard further argument from Appellant on his laches defense, his claim that counsel for the Appellee was improperly acting as a witness at the hearing by presenting evidence to the Court and answering the Court's questions, and his belief that "all matters in the name of `EVERTON ALOYSIUS STERLING' have been assigned to and on behalf of the United States of America. And pursuant to 12 U.S.C. [§ 95a(2)], issued a full discharge and acquittal." (Id. at 14-16).
The Bankruptcy Court rendered a preliminary oral opinion on the Lift-Stay Motion, but then determined to adjourn the matter, in order to permit Appellee to "produce the physical consolidated note with the allonge, so that the Court can just determine that the allonge is properly attached to the consolidated note." (Bankr. Dkt. #60 at 26; see generally id. at 21-33). Assuming that to be the case, the Court opined that the facts warranted a lifting of the stay. (Id. at 26-29). Considering next the application for in rem relief, the Court found tentatively that Appellee had not met its burden of justifying such relief. (Id. at 30-32).
At the conclusion of the proceeding, the Bankruptcy Court discussed a schedule for further briefing; pursuant to those discussions, Appellant filed a Motion for Declaratory Relief with Request for Preliminary Injunction and for an Opportunity to Conduct Discovery on November 18, 2015 (the "Declaratory Relief Motion"). (Bankr. Dkt. #59). This motion was equal parts a reply brief to the Lift-Stay Motion and a request for additional discovery to substantiate Appellee's claims. Again, Appellant advanced claims of laches and lack of standing. (Id. at 3-6). To these he added new claims under (i) the Organic Act of 1871, which, according to Appellant, transformed the United States into a Municipal Corporation with no sovereign immunity (id. at 8)
The hearing resumed on November 24, 2015. (Bankr. Dkt. #64). The Bankruptcy Court began by examining the originals of several of the notes, including the Consolidated Note and the allonge attached thereto. (Id. at 4-8). Appellant was given an opportunity to inspect the documents as well, and reiterated his objection to the documents being presented by counsel for Appellee. (Id. at 9). Appellant again claimed that Appellee had validated neither a debt nor its claim in the Bankruptcy Court, and briefly restated his arguments for laches, lack of standing, the FDCPA, and due process violations. (Id. at 10-15).
At the end of the hearing, the Court sought to clarify for Appellant an apparent misconception concerning the Lift-Stay Motion:
(Bankr. Dkt. #64 at 20-21 (emphases added)).
In a Memorandum Opinion and Order issued on December 22, 2015, the Bankruptcy Court decided the Lift-Stay Motion and the Preliminary Injunction Motion, and resolved the Motion to Strike by deeming it an objection to the Lift-Stay Motion. (Bankr. Dkt. #65 at 2 & n.1).
The Bankruptcy Court then considered the merits of the Lift-Stay Motion. (Bankr. Dkt. #65 at 8-11). After reviewing the documentary and testimonial evidence supporting Appellee's claim that no one was making post-petition payments on the Three Properties (and thus that its interests in same were not adequately protected), the Court noted that "[Appellant] does not appear to contest that no payments have been made on the Properties, that taxes are not being paid, or that [Appellee] is, in fact, not adequately protected." (Id. at 9). The Court then reviewed the factors set forth in Sonnax Indus., Inc. v. Tri Component Prods. Corp. (In re Sonnax Indus., Inc.), 907 F.2d 1280, 1286 (2d Cir. 1990), and concluded that the majority of those factors applicable to the case supported lifting the stay. (Id. at 9-11).
However, while willing to lift the stay, the Bankruptcy Court was unwilling to grant Appellee's application for in rem relief pursuant to 11 U.S.C. § 362(d)(4). (Bankr. Dkt. #65 at 11-14). Even as it acknowledged that certain acts by Appellant — including the transfer of the deeds on the Three Properties from Latou to Appellant during the pendency of the Foreclosure Action — may have been part of a scheme to hinder, delay, or defraud, the Court found an "[in]sufficient evidentiary record to conclude at this time that the bankruptcy filing was intended to be part of such a scheme." (Id. at 13).
Finally, the Bankruptcy Court addressed Appellant's Motion for Injunctive Relief. (Bankr. Dkt. #65 at 14-20). The Court noted Appellant's failure to address how he would be harmed by the lifting of the automatic stay, particularly since lifting the stay would only allow the Foreclosure Action to proceed, and would not immediately (if ever) result in foreclosure. It also found no likelihood of success on the merits. Considering first Appellant's laches argument, the Bankruptcy Court rejected it, finding no time limitation on Appellee's ability to vindicate any rights it might have by filing the Lift-Stay Motion — and, indeed, no missed deadlines by Appellee in the Chapter 7 proceeding. More broadly, the Court found laches, an equitable doctrine, to be inapplicable to a situation where Appellant had demonstrated neither inexcusable delay nor any prejudice to him resulting from the delay:
(Id. at 18-19 (citations omitted)). The Court also rejected Appellant's arguments for discharge under 12 U.S.C. § 95a(2), inasmuch as any conveyances purportedly made by Appellant were plainly not related to the President's powers to regulate transactions during wartime. (Id. at 20). And the Court rejected, in a footnote, certain arguments raised for the first time in Appellant's reply brief. (Id. at 20-21 n.9).
In sum, in the December 22 Order, the Bankruptcy Court granted Appellee's application to lift the automatic stay; denied its request for in rem relief; and denied Appellant's request for injunctive relief.
On December 31, 2015, Appellant mailed a copy of the December 22 Order back to the Bankruptcy Court. (Bankr. Dkt. #68). On each page, Appellant had superimposed a red watermark with the legend: "REFUSAL FOR CAUSE WITHOUT DISHONOR — DO NOT CONSENT — Return Without Prejudice," followed by his signature as "Authorized Representative All Rights Reserved UCC 1-308." (Id.).
On January 13, 2016, Appellant filed a notice of appeal with respect to the December 22 Order. (Bankr. Dkt. #69). The appeal was assigned to the undersigned. After an initial conference held on February 24, 2016, at which Appellant failed to appear, this Court issued an order to show cause why the case should not be dismissed (i) for failure to prosecute under Federal Rule of Civil Procedure 41(b), or (ii) as untimely pursuant to Federal Rule of Bankruptcy Procedure 8002(a). (16 Civ. 351 Dkt. #4). After receiving a written submission from Appellant that explained satisfactorily his absence from the conference (16 Civ. 351 Dkt. #8), but not the untimeliness of his notice of appeal (id.), this Court dismissed the matter for lack of jurisdiction (16 Civ. 351 Dkt. #9; see also id. at 3 (explaining that the time limit contained in Fed. R. Bankr. P. 8002 is jurisdictional)). That decision is now on appeal to the United States Court of Appeals for the Second Circuit. See In re Everton Aloysius Sterling, No. 16-1120.
After the notice of appeal had been filed, in February 2016, the Bankruptcy Court received a document that Appellant had dated January 7, 2016 (the "Motion for Additional Findings"). (Bankr. Dkt. #73 (entered February 2, 2016)). The document recited that it was a "Motion to Make Additional Findings of Fact Pursuant to Federal Rules of Bankruptcy Procedure §§ 7052, 9014 and 7062."
As best as this Court can discern, Appellant contends in the Motion for Additional Findings that the Bankruptcy Court should have had an evidentiary hearing with respect to Appellee's Lift-Stay Motion because (i) Appellee's claims were unsubstantiated and (ii) Appellant had filed various factual affidavits in the Bankruptcy Court that controverted facts in issue. (Bankr. Dkt. #73 at 2-4 (citing Fed. R. Bankr. P. 9014)). Appellant also listed docket entries that he believed to be relevant to the issue, several of which post-dated the December 22 Order and several of which pertained only to the adversary proceeding to which Appellee was not a party. (Id. at 4-8).
By Order dated April 12, 2016 (the "April 12 Order"), the Bankruptcy Court denied Appellant's Motion for Additional Findings. (Bankr. Dkt. #88). The Court began by explaining its understanding that the motion sought both an evidentiary hearing and to amend or set aside the December 22 Order. Focusing on the former, the Bankruptcy Court found that Appellant had previously requested an evidentiary hearing in connection with the Lift-Stay Motion, and that the Court had denied this request, as it had the discretion to do. (Id. at 1-2). The Court found no "factual or legal basis to revisit the Court's conclusion that an evidentiary hearing was not necessary." (Id. at 2). Similarly, the Bankruptcy Court found no reason to revisit its prior holding that Appellee had standing to seek to lift the stay. (Id.). Finally, in a footnote, the Court rejected efforts to obtain relief under Federal Rules of Civil Procedure 59 or 60, to the extent such arguments could be located in Appellant's motion papers, after concluding that Appellant was merely seeking to relitigate issues that had already been decided. (Id.) (citing, inter alia, Associated Press v. U.S. Dep't of Def., 395 F.Supp.2d 17, 19 (S.D.N.Y. 2005) ("[A] motion for reconsideration [under Rule 59] is neither an occasion for repeating old arguments previously rejected nor an opportunity for making new arguments that could have been previously advanced.")).
Appellant filed his notice of appeal from the April 12 Order on April 26, 2016. (Dkt. #1). The matter was initially assigned to
By letter dated February 1, 2017, Appellee moved to dismiss for lack of jurisdiction, claiming that the instant appeal contravened the Court's prior dismissal of Appellant's first appeal. (Dkt. #14; see also Dkt. #7 (letter dated August 10, 2016, from counsel for Appellee, seeking leave to file motion to dismiss in lieu of appellate brief, and observing that Appellant's brief was not properly filed on ECF)).
A district court reviewing an appealable order from a bankruptcy court is instructed to review the bankruptcy court's findings of facts for clear error, its conclusions of law de novo, and its evidentiary rulings for an abuse of discretion. In re Residential Capital, LLC, 552 B.R. 50, 62 (S.D.N.Y. 2015) (citing In re Bayshore Wire Prods. Corp., 209 F.3d 100, 103 (2d Cir. 2000); Manley v. AmBase Corp., 337 F.3d 237, 247 (2d Cir. 2003)), appeal dismissed (Mar. 9, 2016). See generally Fed. R. Bankr. P. 8013. "[A] finding is `clearly erroneous' when" the reviewing court is "left with the definite and firm conviction that a mistake has been made." ASM Capital, LP v. Ames Dep't Stores, Inc. (In re Ames Dep't Stores), 582 F.3d 422, 426 (2d Cir. 2009) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 S.Ct. 746 (1948)).
A district court "may affirm [the bankruptcy court's decision] on any ground that finds support in the record, and need not limit its review to the bases relied upon in the decision[] below." Freeman v. Journal Register Co., 452 B.R. 367, 369 (Bankr. S.D.N.Y. 2010). That said, the district court may not consider evidence out-side the record below. See In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 389 B.R. 325, 339 (Bankr. S.D.N.Y. 2008). Further, any argument not raised in the bankruptcy court is considered waived and will not be considered by the district court, unless such a waiver would result in manifest injustice. See Klein v. Civale & Trovato, Inc. (In re Lionel Corp.), 29 F.3d 88, 92 (2d Cir. 1994); see also Best Payphones, Inc. v. Manhattan Telecomms. Corp. (In re Best Payphones, Inc.), 432 B.R. 46, 60 (Bankr. S.D.N.Y. 2010), aff'd, 450 Fed. Appx. 8 (2d Cir. 2011) (summary order).
Analysis of this appeal — Appellant's second appeal relating to the December 22 Order — is informed by the first. To begin, Appellee argues with some force that this appeal is wholly precluded in light of this Court's prior order dismissing the first appeal for lack of jurisdiction. (Dkt. #7, 14). After all, this Court's prior ruling is
The Court continues to extend solicitude to Appellant because of his pro se status. See Pabon v. Wright, 459 F.3d 241, 248 (2d Cir. 2006) (directing courts to read pro se filings "liberally and interpret them to raise the strongest arguments that they suggest"). As such, it considered in the first instance whether the Motion for Additional Findings should have been deemed by this Court or the Bankruptcy Court to be a motion for reconsideration of the December 22 Order that would have tolled the deadline for appeal. Ultimately, this Court concludes that it should not have been. The Motion for Additional Findings was received by the Bankruptcy Court several weeks after the notice of appeal of the December 22 Order had been filed; it was captioned for, and made extensive reference to, the adversary proceeding in which Appellee was not involved; and at no point did Appellant advise the Bankruptcy Court or this Court that the motion ought to be considered in connection with the first appeal. Perhaps more significantly, even accepting as true the January 7, 2016 date that is affixed to the motion, Appellant's motion was untimely as a reconsideration motion. See Fed. R. Bankr. P. 8002(a) (specifying a 14-day deadline for filing notices of appeals, absent certain exceptions), 8002(b)(1)(A) (permitting tolling of the deadline for filing a notice of appeal for a "timely file[d]" motion to amend or make additional findings under Fed. R. Bankr. P. 7052), 7052 (specifying a 14-day deadline for filing motions under this provision), 9024 (permitting reconsideration of orders and judgments in certain circumstances), 9023 (requiring motions pursuant to Rule 9024 to be filed within 14 days of entry of judgment); cf. Coe v. RJM, LLC, 372 Fed.Appx. 188, 189 n.* (2d Cir. 2010) (summary order) ("Rule 8002 was amended effective December 1, 2009, to provide that a motion for reconsideration filed pursuant to Bankruptcy Rule 9024 within 14 days after the entry of judgment ... tolls the time to appeal.").
This Court agrees with Appellee that, to the extent that Appellant is now challenging the Bankruptcy Court's refusal, in the April 12 Order, to set aside or amend the December 22 Order, those arguments are precluded by its prior decision. "Under the doctrine of res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 499 (2d Cir. 2014) (emphasis omitted) (quoting St. Pierre v. Dyer, 208 F.3d 394, 399 (2d Cir. 2000)). See generally Marcel Fashions Grp., Inc. v. Lucky Brand Dungarees, Inc., 779 F.3d 102,
Given that conclusion, the Court finds it difficult to address the propriety of the evidentiary rulings by the Bankruptcy Court, including its decision to have an evidentiary hearing that was smaller in scope than that sought by Appellant. That is because, were the Court to agree with Appellant on his claims of procedural infirmities, the remedy would be vacatur of the December 22 Order — a remedy foreclosed by this Court's prior decision. That said, it is significant to this Court that both Appellant and the Bankruptcy Court addressed the Motion for Additional Findings as a standalone motion, with the Bankruptcy Court focusing on Appellant's evidentiary challenges. For purposes of this appeal, this Court will consider the April 12 Order as the denial of a standalone evidentiary challenge, and not a second attempt at challenging the propriety of the December 22 Order.
With this construction in mind, the Court must determine whether any of the potential bases for appeal of a bankruptcy court order applies. It considers first whether the April 12 Order is a "final judgment[], order[], and decree[]" from which Appellant can appeal under 28 U.S.C. § 158(a)(1). The Supreme Court has observed in the bankruptcy context as follows:
Bullard v. Blue Hills Bank, ___ U.S. ___, 135 S.Ct. 1686, 1692-93, 191 L.Ed.2d 621 (2015) (concluding that orders denying confirmation of a plan with leave to amend are not "final" for purposes of appeal; defining relevant "proceedings" to include "the entire process culminating in confirmation or dismissal").
While offering a comparatively stringent standard for final orders, however, the Supreme Court in Bullard noted that interlocutory appeals were available under 28 U.S.C. § 158(a)(3), and expressed its "expectation that lower courts will certify and accept interlocutory appeals from plan denials in appropriate cases." 135 S.Ct. at 1696; see also Fed. R. Bankr. P. 8004(d) ("If an appellant timely files a notice of appeal under this rule but does not include a motion for leave, the district court ... may ... treat the notice of appeal as a motion for leave and either grant or deny it."). Even then, however, courts must consider whether the matter involves (i) a controlling question of law (ii) as to which there is a substantial ground for difference of opinion, (iii) where immediate appeal may materially advance the termination of the litigation. See 28 U.S.C. § 1292(b). See generally Kassover v. Kassover (In re Kassover), 343 F.3d 91, 94 (2d Cir. 2003). "[A]ll three requirements set forth in section 1292(b) must be met for a Court to grant leave to appeal." Thaler v. Estate of Arbore (In re Poseidon Pool & Spa Recreational, Inc.), 443 B.R. 271, 275 (E.D.N.Y. 2010). "In addition, a party seeking leave to appeal a non-final order must demonstrate exceptional circumstances to overcome the general aversion to piecemeal litigation and to justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment." In re Coudert Bros. LLP Law Firm Adversary Proceedings, 447 B.R. 706, 711 (S.D.N.Y. 2011) (internal quotation marks and citation omitted).
A final basis of appellate jurisdiction stems from the collateral order doctrine, "a judicially created exception to the final decision principle; it allows immediate appeal from orders that are collateral to the merits of the litigation and cannot be adequately reviewed after final judgment." Germain v. Conn. Nat'l Bank, 930 F.2d 1038, 1039-40 (2d Cir. 1991); see also In re Adelphia Commc'ns Corp., 333 B.R. 649, 657-58 (S.D.N.Y. 2005) (explaining that a bankruptcy decision may be appealed under this doctrine only if all three of the following requirements are met: "the decision would [i] conclusively determine the disputed question, [ii] resolve an important issue completely separate from the merits of the action[ ], and [iii] be effectively unreviewable on appeal from a final judgment" (citations omitted)). The Supreme Court has characterized the collateral order doctrine as a "narrow exception... whose reach is limited to trial court orders affecting rights that will be irretrievably lost in the absence of an immediate appeal." Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 430-31, 105 S.Ct. 2757, 86 L.Ed.2d 340 (1985) (internal quotation marks and citations omitted). In consequence, "the conditions for collateral order appeal [are] stringent," Dig. Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994), lest the exception swallow the rule against piecemeal appeals.
Appellant's appeal of the April 12 Order does not fit neatly into any of these three categories. To the extent that it is construed as an appeal from the Bankruptcy Court's evidentiary ruling, it does not appear to qualify as an appeal of a "final decision on the discrete issue at bar," and thus would not constitute a final order under § 158(a)(1). See LTV Corp. v. Farragher
Nor is the April 12 Order a proper subject for an interlocutory appeal. The Bankruptcy Court's decision not to have a more extensive evidentiary proceeding was plainly a matter committed to its discretion, and thus did not implicate a controlling question of law "to which there is a substantial ground for difference of opinion[.]" 28 U.S.C. § 1292(b). Nor can this Court discern how an immediate appeal of the order will "materially advance the termination of the litigation," id. given the resolution of the first appeal.
Finally, the Court does not believe this is the rare case where resort to the collateral order doctrine is warranted. As discussed throughout this Opinion, Appellant's dissatisfaction with the resolution of the Lift-Stay Motion has been resolved by the first appeal, which is now before the Second Circuit. The corollary issue of the scope of the evidentiary hearing is hardly an "important issue completely separate from the merits of the action." Richardson-Merrell, Inc., 472 U.S. at 431, 105 S.Ct. at 2761 (internal citation omitted).
For all of these reasons, the Court does not believe that the April 12 Order, properly construed, is appealable. However, again according deference to Appellant's pro se status and to the manner in which the Bankruptcy Court and Appellant construed the Motion for Additional Findings, the Court will consider whether Judge Lane erred in declining Appellant's request for an additional hearing.
A bankruptcy court has the discretion to decide an issue without holding an evidentiary hearing, and a district court can reverse such a decision only if it amounts to an abuse of discretion. See Key Mech. Inc. v. BDC 56 LLC (In re BDC 56 LLC), 330 F.3d 111, 119 n.5 (2d Cir. 2003), abrogated on other grounds, In re Zarnel, 619 F.3d 156 (2d Cir. 2010); see also D.A. Elia Constr. Corp. v. Damon & Morey, LLP (In re D.A. Elia Constr. Corp.), No. 04 Civ. 975A, 2006 WL 1720361, at *7 W.D.N.Y. June 19, 2006 ("The bankruptcy court's decision to deny a full evidentiary hearing was not an abuse of discretion. The nature of the hearing lies within the sound discretion of the bankruptcy judge, and does not necessarily require the presentation of oral testimony." (citation omitted)), aff'd sub nom. Bernheim v. Damon & Morey, LLP, Lead Dkt. No. 06-3386-bk, 2007 WL 1858292 (2d Cir. June 28, 2007).
A bankruptcy court judge does not abuse his discretion in reaching a decision without holding an evidentiary hearing where "the record provided ample evidence on which the court could make such a decision." C-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave. P'ship), 113 F.3d 1304, 1313 (2d Cir. 1997). What is more, "[a] ruling is an abuse of discretion only if the bankruptcy court `bases its ruling on a mistaken application of the law or a clearly erroneous finding of fact.'" Stasko v. Motors Liquidation Co. (In re Motors Liquidation Co.), No. 10 Civ. 4322 (JGK), 2011 WL 2462773, at *2 (S.D.N.Y. June 20, 2011) (quoting Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 411 F.3d 384, 388 (2d Cir. 2005)); see also Peskin v. Picard, 440 B.R. 579, 584 (S.D.N.Y. 2010).
Judge Lane did not abuse his broad discretion in denying Appellant's
Second, Judge Lane needed proof of a basis to lift the stay. In this case, the proffered basis was Appellant's failure to make post-petition payments on the Three Properties. See 11 U.S.C. § 362(d)(1) ("On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay ... (1) for cause, including the lack of adequate protection of an interest in property of such party in interest[.]"). Judge Lane obtained this proof by reviewing the documentation of arrearages that had been submitted by Appellee with the Lift-Stay Motion (see Bankr. Dkt. #40 at ¶¶ 8, 31), and then confirming with Appellant at the October 27 hearing that, indeed, no such payments had been made (see Bankr. Dkt. #60 at 14). With this information, the Bankruptcy Court could make an informed evaluation of the Sonnax factors; it did, and did not err in concluding that they favored lifting the stay.
Much of the evidence that Appellant sought then and seeks now was irrelevant to the issues before the Bankruptcy Court. In large part, that is because Appellant continues to confuse the standards for lifting the stay with the standards for foreclosing on the Three Properties. (See Bankr. Dkt. #60 at 20-21). As Judge Lane explained, once the stay was lifted, Appellant retained the ability to make his arguments in the Foreclosure Action. (See id. ("If I grant it, then you'll proceed in that other court with whatever arguments and merit arguments on the merits that you're entitled to make. And nothing that's happened here in connection with this motion changes that fact.")). Appellant remains free to make them in that forum.
In sum, a strong argument can be made that the entirety of this appeal is precluded by Appellant's appeal from the December 22 Order last year. However, giving Appellant the strongest argument this record can support, he has a challenge to Judge Lane's evidentiary issues, which challenge (assuming a permissible basis for appeal exists) fails because Judge Lane properly exercised his discretion in taking evidence on the Lift-Stay Motion. There is no basis to challenge the Bankruptcy Court's evidentiary rulings, and no basis to disturb the April 12 (or, for that matter, the December 22) Orders.
SO ORDERED.
Federal Rule of Bankruptcy Procedure 9014 pertains to the resolution of contested matters, and includes provisions regarding service, the application of certain of the Part VII rules (i.e., the rules that govern adversary proceedings) to contested matters, the taking of testimony from witnesses, and the attendance of witnesses.
Federal Rule of Bankruptcy Procedure 7062 applies Federal Rule of Civil Procedure 62, which concerns stays of proceedings in order to enforce a judgment, to adversary proceedings brought under the Bankruptcy Code.
