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In re Dorsey

United States Court of Appeals, Fifth Circuit

September 1, 2017

In the Matter of: MICK DORSEY Debtor
v.
UNITED STATES DEPARTMENT OF EDUCATION; EDUCATIONAL CREDIT MANAGEMENT CORPORATION, Appellees MICK DORSEY, Appellant

         Appeal from the United States District Court for the Eastern District of Louisiana

          Before SMITH, OWEN, and HIGGINSON, Circuit Judges.

          STEPHEN A. HIGGINSON, Circuit Judge.

         Debtor-Appellant Mick Dorsey appeals the district court's determination that it lacked jurisdiction to consider Dorsey's appeal of the bankruptcy court's decision in Dorsey's adversary proceeding. Dorsey also appeals the bankruptcy court's decision to reopen his main bankruptcy proceeding to allow the United States Department of Education ("DOE") and Educational Credit Management Corporation ("ECMC") to file proofs of claim. We affirm.

         I

         In March 2013, Dorsey instituted a Chapter 7 bankruptcy proceeding (the "main bankruptcy") seeking to discharge more than $116, 000 of student loan debt. After determining that Dorsey had no assets to distribute, the bankruptcy court granted him a general discharge on July 10, 2013. The bankruptcy court closed the case in October 2013.

         Before being granted the general discharge in the main bankruptcy case, Dorsey filed an adversary proceeding against DOE and United Student Aid Funds, Inc. Dorsey asserted that his student loans were dischargeable as an undue hardship under 11 U.S.C. § 523(a)(8) because a mental health issue did not allow him to work consistently. ECMC appeared in the adversary proceeding, representing that it had an interest in the bankruptcy estate. From 2013 to 2015, the parties litigated the adversary proceeding. As part of that proceeding, Dorsey twice filed proper notices of appeal in the district court.

         Prior to trial in the adversary proceeding, both DOE and ECMC moved to reopen the main bankruptcy proceeding to file proofs of claim. The bankruptcy court granted the motions. In response, Dorsey filed a third notice of appeal. This final notice of appeal related to only the main bankruptcy case, not the adversary proceeding: the caption referred to only the main bankruptcy case's docket numbers and the body of the document referenced the orders reopening the case.

         After Dorsey filed his notice of appeal in the main bankruptcy case, the adversary trial was held, although Dorsey failed to appear. Ultimately, the bankruptcy court denied Dorsey a discharge from his student loan obligations. In response, Dorsey moved to amend his statement of issues and designation of record in the main bankruptcy appeal. Dorsey's proposed amendment added issues related to the adversary proceeding to the statement of issues and designated the entire adversary proceeding as part of the record. The district court granted the motion.

         On August 12, 2016, the district court issued its decision. The court found that it did not have jurisdiction to consider issues from the adversary proceeding because Dorsey failed to file a timely notice of appeal in that case. The district court then held that the bankruptcy judge did not err in the main bankruptcy proceeding when she reopened the case to allow the filing of proofs of claim. Dorsey timely appealed.

         II

         The failure to file a timely notice of appeal in a bankruptcy case deprives both the district court and this court of jurisdiction. See Smith v. Gartley (In re Berman-Smith), 737 F.3d 997, 1003 (5th Cir. 2013). Generally, a party has fourteen days to file a notice of appeal. Fed.R.Bankr.P. 8002. The order in the adversary proceeding was issued on December 16, 2015, and the time for filing an appeal has now lapsed. Accordingly, unless Dorsey has already filed a notice of appeal sufficient to confer jurisdiction over the adversary proceeding, no court has jurisdiction to review that proceeding. Dorsey could theoretically point to two documents that might constitute notices of appeal in the adversary case: the notice of appeal in the main bankruptcy proceeding and the amended statement of issues and designation of record that referenced issues and documents arising in the adversary case. We hold that neither document appealed the adversary proceeding.

         Dorsey filed a proper notice of appeal in the main bankruptcy proceeding. But that notice of appeal could not serve as a notice of appeal in the adversary proceeding. As the Sixth Circuit explained in refusing to consider an issue arising in the main bankruptcy proceeding in the appeal of the adversary proceeding: "[T]he main bankruptcy case and adversary proceeding must be treated as distinct for the purpose of appeal. They have separate docket numbers, separate issues, and separate parties." Dietrich v. Tiernan (In re Dietrich), 490 F.App'x 802, 804 (6th Cir. 2012) (unpublished); see also Dzikowski v. Boomer's Sports & Rec. Ctr. (In re Boca Arena, Inc.), 184 F.3d 1285, 1286 (11th Cir. 1999) ("In bankruptcy, adversary proceedings generally are viewed as 'stand-alone lawsuits, ' and final judgments issued in adversary proceedings are usually appealable as if the dispute had arisen outside of bankruptcy."). Refusing to treat a notice of appeal in the main case as a notice of appeal in the adversary case makes sense because adversary proceedings are discrete judicial units. See La. World Exposition, Inc. v. Fed. Ins. Co. (In re La. World Exposition, Inc.), 832 F.2d 1391, 1396 (5th Cir. 1987); Smith v. Seaside Lanes (In re Moody), 825 F.2d 81, 85 (5th Cir. 1987); see also United States v. Peel, 595 F.3d 763, 768-69 (7th Cir. 2010) ("An adversary proceeding is thus part of the bankruptcy but it is not the bankruptcy case itself, as illustrated by the fact that the dismissal of an adversary proceeding is an appealable final order even though the bankruptcy case continues."). Accordingly, the district court correctly refused to treat the notice of appeal in the main bankruptcy case as a notice of appeal in the adversary proceeding. See, e.g., In re Taylor, 98 CIV. 9205 (DC), 1999 WL 777955, at *4 (S.D.N.Y. Sept. 30, 1999) (holding that a notice of appeal filed in an adversary proceeding could not appeal the main proceeding).

         Likewise, the amended statement of issues and designation of record did not appeal the adversary proceeding. In a bankruptcy case, "[t]he notice of appeal must: (A) conform substantially to the appropriate Official Form; (B) be accompanied by the judgment, order, or decree, or the part of it, being appealed; and (C) be accompanied by the prescribed fee." Fed.R.Bankr.P. 8003(3). Because timely filing a notice of appeal is jurisdictional, failure to file a notice of appeal within the meaning of Rule 8003 during the proper time period defeats jurisdiction. See Alexander v. Alexander (In re Alexander), 472 B.R. 815, 824 (B.A.P. 9th Cir. 2012). Courts are divided over whether technical failures to follow the requirements of Rule 8003 must defeat jurisdiction. Compare Alexander, 472 B.R. at 824; Blinder, Robinson & Co v. Keller (In re Blinder, Robinson & Co.), 21 F.3d 1120 (10th Cir. 1994) (unpublished), with Fadayiro v. Ameriquest Mortg. Co., 371 F.3d 920, 922 (7th Cir. 2004). However, even courts that do not require strict compliance with Rule 8003(3) recognize that some documents are not notices of appeal. See Fadayiro, 371 F.3d at 922 ("We are doubtful that a notice of appeal that failed to indicate the order appealed from could nonetheless be thought to comply with the rule."). And that makes sense. Timely filing of a notice of appeal is a jurisdictional prerequisite to appellate review. Smith, 737 F.3d at 1003. For the prerequisite to maintain its jurisdictional teeth, not every document filed following the entry of a final judgment in bankruptcy court can be a notice of appeal. See, e.g., Colvin v. Amegy Mortg. Co., ...


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