United States District Court, W.D. Louisiana, Lake Charles Division
T. TRIMBLE, JR. UNITED STATES DISTRICT JUDGE
the court is a Motion to Dismiss Untimely Bankruptcy Appeal,
for Frivolous Appeal Damages and to Recover Costs, Expenses,
and Attorney Fees (Rec. Doc. 5) filed by the appellees,
Robert Kite and Kite Bros. LLC. For the following reasons,
the Motion (Rec. Doc. 5) will be GRANTED.
FACTS & PROCEDURAL HISTORY
March 1, 2013, R. Alan Kite ("the debtor") filed
for bankruptcy in the Western District of Louisiana. In
re: R. Alan Kite, 13-bk-20270 (W.D. La.) (Rec. Doc. 1).
The bankruptcy filing stayed a state court proceeding in
which Kenneth Wright was representing the debtor against the
appellees. On June 19, 2013, the bankruptcy court
modified the stay in regard to the state court proceeding,
allowing the state court trial to proceed, while keeping
jurisdiction over the enforcement of any judgment. In re:
R. Alan Kite, 13-bk-20270 (W.D. La.), (Rec. Docs.
60-62). Mr. Wright was appointed special litigation counsel
for the debtor by the bankruptcy court, to defend against the
appellees' counterclaims in the state action. In re:
R. Alan Kite, 13-bk-20270 (W.D. La.), (Rec. Doc. 67).
After the stay was lifted, the state court scheduled the case
for trial on August 1, 2013.
30, 2013, Mr. Wright, on behalf of his client, removed the
state court action to federal district court based on 28
U.S.C. §§ 1334 and 1452 and Rule 9027 of the
Federal Rules of Bankruptcy Procedure. Kite v. Kite
Brothers LLC, 2:13-cv-02381-PM-KK, (W.D. La.) (Rec. Doc.
1). The district court held an emergency telephone conference
regarding the removal on August 1, 2013. During the telephone
conference, the court determined that removal was untimely
and remanded the case. The court specifically instructed the
parties to proceed with state court proceedings that were
scheduled that same day. See Kite v. Kite Brothers
LLC, 2:13-cv-02381-PM-KK, (W.D. La.) (Rec. Doc. 3). The
state court delayed the scheduled trial until 1:00 P.M. on
August 1, 2013, so that Mr. Wright could be present. (Rec.
Doc. 5-12). Shortly after the announced delay, Mr. Wright
notified the court that he would not attend the trial,
arguing that the state court would not have jurisdiction over
the case until the state court received a certified copy of
the order of remand. See (Rec. Doc. 5-12).
afternoon of August 1, 2013, the trial court proceeded
without the debtor or Mr. Wright and entered a judgment
against the debtor. Mr. Wright appealed the judgment to the
state circuit court, Kite v. Kite Bros., 2014-807
(La.App. 3 Cir. 7/15/15), 170 So.3d 1184, and moved for the
federal district court to reconsider its remand, Kite v.
Kite Brothers LLC, 2:13-cv-02381-PM-KK, (W.D. La.) (Rec.
Doc. 5). Both the state appeal and the federal motion for
reconsideration failed. See Kite v. Kite Bros.,
2014-807 (La.App. 3 Cir. 7/15/15), 170 So.3d 1184; Kite
v. Kite Brothers LLC, 2:13-cv-02381-PM-KK, (W.D. La.)
(Rec. Doc. 13).
the state appellate court affirmed the appellees'
judgment, the appellees sought to enforce the judgment in
bankruptcy court, and Mr. Wright objected to the
appellees' claim, again arguing that the state court did
not have jurisdiction over the suit when it entered a
judgment against the debtor. In re: R. Alan Kite,
2:13-bk-20270 (W.D. La.), (Rec. Doc. 404). On November 17,
2016, the bankruptcy court overruled the objection. The order
overruling the objection was entered on November 28, 2016.
Id. (Rec. Doc. 419). Mr. Wright filed a Notice of
Appeal on December 13, 2016, fifteen days after the order was
entered. Id. (Rec. Doc. 420). The appellees move for
dismissal of the appeal because it was filed untimely. The
appellees also request double costs, expenses, and fees under
the Federal Rules of Bankruptcy Procedure 8020(a) and 9011,
or in the alternative, under the court's inherent power
or as a contempt order for failing to comply with the federal
district court's order in 2013.
Jurisdiction Over the Appeal
the appellees argue that the appeal must be dismissed because
it was untimely filed, and the court lacks jurisdiction over
untimely filed bankruptcy appeals. Under Federal Rule of
Bankruptcy Procedure 8002, an appeal must be filed within 14
days after the entry of an order. The 14-day time limit to
file an appeal is jurisdictional because 28 U.S.C. § 158
"expressly requires that the notice of appeal be filed
under the time limit provided in Rule 8002." In re
Berman-Smith, 131 F.3d 997, 1003 (5th Cir. 2013).
Therefore, if an appeal from a bankruptcy order is untimely,
the district court does not have jurisdiction to hear the
appeal, and the court has "no authority to create
equitable exceptions to jurisdictional requirements."
Bowles v. Russell, 551 U.S. 205, 214 (2007).
Wright filed a notice of appeal one day late,  which means that
the court does not have jurisdiction to hear the appeal. Mr.
Wright argues that the Fifth Circuit's ruling in In
re Berman-Smith is contrary to Supreme Court precedent.
(Rec. Doc. 8-1, pp. 1-3 (citing Bowles, 551 U.S.
205; Kontrickv. Ryan, 540 U.S. 443 (2004)). He
argues that the 14-day deadline in Rule 8002 is not
jurisdictional because it comes from the Federal Rules of
Bankruptcy Procedure and not a statute, but the Fifth Circuit
specifically addressed this argument in In re
Berman-Smith. 737 F.3d atl003. The Fifth Circuit, and
every other circuit court that has addressed whether Rule
8002's deadline is jurisdictional,  determined that
the deadline is jurisdictional and based on a statute because
28 U.S.C. § 158, "expressly requires that the
notice of appeal be filed under the time limit provided in
Rule 8002." Id. Mr. Wright's argument
fails, and the court does not have jurisdiction to hear the
appeal. See, e.g., In re Sobczak-Slomczewski, 826
F.3d 429, 432 (7th Cir. 2016) (finding that the court did not
have jurisdiction to hear a bankruptcy appeal that was filed
one day past the deadline).
Jurisdiction to Impose Sanctions
the appellees move for the court to sanction Mr. Wright for
filing this frivolous appeal under Federal Rules of
Bankruptcy Procedure 8020 and 9011, or in the alternative,
under the court's inherent power or as a contempt order
for not complying with the federal district court's 2013
order to proceed with the state court trial. Mr. Wright
argues that if the court does not have jurisdiction over the
appeal, the court does not have jurisdiction to sanction him.
(Rec. Doc. 8-1, p. 3). However, a court may sanction lawyers
for abusing the judicial process even when the court does not
have subject matter jurisdiction over the underlying dispute.
Ratliff v. Stewart,508 F.3d 225, 229 (5th Cir.
2007). The court can award sanctions without subject matter
jurisdiction over the underlying matter when the basis for
the sanctions are collateral to the merits, such as sanctions
for filing ...