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Rosbottom v. Schiff

United States District Court, W.D. Louisiana, Shreveport Division

June 12, 2018

HAROLD L. ROSBOTTOM, JR
v.
GERALD H. SCHIFF

          HORNSBY, MAGISTRATE JUDGE

          MEMORANDUM RULING

          S. MAURICE HICKS, JR., UNITED STATES DISTRICT COURT CHIEF JUDGE

         Before the Court is a bankruptcy appeal by Appellant, Harold L. Rosbottom, Jr. (“Rosbottom”) from the bankruptcy court's Order on Motion for Final Decree filed by Appellee, Gerald H. Schiff (“Schiff”), who served as the Trustee in the bankruptcy proceeding. Rosbottom requests that the Final Decree Order and the orders on which it relies be vacated and the opinion of the bankruptcy court be reversed. For the reasons contained in the instant Memorandum Ruling, the bankruptcy court's ruling is AFFIRMED.

         I. BACKGROUND

         On June 9, 2009, Rosbottom filed a Chapter 11 Voluntary Petition for bankruptcy. See Record Document 1, Bankruptcy Docket Sheet. On February 18, 2010, the U.S. Trustee appointed Schiff as the Chapter 11 Trustee in accordance with 11 U.S.C. § 1104. See Record Document 847, Bankruptcy Docket Sheet. The Chapter 11 Plan of Reorganization proposed by Schiff was confirmed on May 1, 2013. See Record Document 1745, Bankruptcy Docket Sheet. On October 31, 2016, Schiff filed a Motion for Final Decree. See Record Document 2079, Motion for Final Decree. After numerous continuances of the hearing on Schiff's Motion for Final Decree, the bankruptcy court held a hearing on March 23, 2017. However, Rosbottom was unable to attend the hearing due to a security emergency at the federal prison where he was incarcerated in relation to the bankruptcy proceeding. See Record Document 2-24 at pp. 35-36, Hearing Transcript.

         Accordingly, the bankruptcy court, at the outset of the hearing, addressed Rosbottom's non-appearance and how it would remedy his non-appearance by allowing him access to the hearing transcript and the ability to file a Post Hearing Memorandum.

         On May 1, 2017, the bankruptcy court determined that the case had been fully administered and entered a Final Decree Order closing the case. See Record Document 1-2 at p. 15, Order Granting Motion for Final Decree. The bankruptcy court came to its decision based on substantial evidence in the record as well as witness testimony at the hearing and Rosbottom's Post Hearing Memorandum. See id. at p. 18; Record Document 2079. As a result of the bankruptcy court granting Schiff's Motion for Final Decree Order, the court denied as moot each of Rosbottom's separate “substantive” motions by entering separate orders[1] on May 2, 2017. See Record Documents 2147-2159. On May 15, 2017, Rosbottom filed his Notice of Appeal that is the subject of the present Memorandum Ruling. See Record Document 2178, Notice of Appeal. Rosbottom raises three issues on appeal which the Court will address infra:

1. Whether the bankruptcy court violated the due process clause of the United States Constitution and Fed.R.Bankr.P. 9029 and Fed.R.Civ.P. 83(a)(2) by excluding all of Rosbottom's evidence in opposition to the Final Decree Order by operation of the bankruptcy court's standing order.
2. Whether the bankruptcy court erred in never ruling upon and deeming moot by its Final Decree Order pending “substantive” motions to modify the confirmed Chapter 11 Reorganization Plan.
3. Whether the bankruptcy court erred in its opinion that Rosbottom lacked cognizable legal interest in a contested matter initiated by a timely motion to modify the confirmed Chapter 11 Reorganization Plan and ruling that it was impossible for the court to grant Rosbottom any effectual relief whatsoever both before and after it entered its Final Decree Order that closed the Chapter 11 proceeding.

See Record Document 30 at p. 8, Appellant Brief.

         II. LAW AND ANALYSIS

         A. Jurisdiction and Standard of Review.

         This Court has jurisdiction over Rosbottom's appeal from the bankruptcy court's Final Decree Order pursuant to 28 U.S.C. § 158(a). In reviewing a decision of the bankruptcy court, this Court functions as an appellate court and applies the standards of review generally applied in a federal court of appeals. See Matter of Webb, 954 F.2d 1102, 1103-04 (5th Cir. 1992). Conclusions of law are reviewed de novo. See Matter of Herby's Foods, Inc., 2 F.3d 128, 131 (5th Cir. 1993). Findings of fact are not to be set aside unless clearly erroneous. See id. at 130-31. "A finding is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with a firm and definite conviction that a mistake has been committed." Matter of Missionary Baptist Foundation of America, 712 F.2d 206, 209 (5th Cir. 1983). Thus, appellate courts will sustain a bankruptcy court's factual findings "absent a firm and definite conviction that the bankruptcy court made a mistake." In re Ragos, 700 F.3d 220, 222 (5th Cir. 2012) (citation omitted).

         B. Rosbottom's Due Process Claim.

         Rosbottom contends that the bankruptcy court violated the due process clause of the United States Constitution and Fed.R.Bankr.P. 9029 and Fed.R.Civ.P. 83(a)(2) by excluding all of his evidence in opposition to Schiff's Motion for Final Decree Order by operation of the bankruptcy court's standing order. Schiff advances two arguments: (1) Rosbottom has waived any due process claim by raising such for the first time on appeal, and (2) Rosbottom has no due process claim.

         i. Whether Rosbottom waived ...


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