Court: United States Bankruptcy Court, M.D. Florida; June 19, 2006; Us Bankruptcy; United States Bankruptcy Court
The United States District Court for the Middle District of Florida remanded the matter to the Bankruptcy Court to assess whether the Trustee's failure to timely file a Notice of Appeal constituted "excusable neglect." Steve A. Clapper Associates of Florida filed for Chapter 11 bankruptcy on August 11, 1999, which later converted to a Chapter 7 liquidation. Thomas S. Heidkamp initially served as the Chapter 7 Trustee but was succeeded by Angela Stathopoulos. Capitol Indemnity Corporation initiated an adversary proceeding on July 17, 2000, with three claims regarding funds held by the Trustee from two construction projects. The Bankruptcy Court denied both parties' motions for summary judgment on February 20, 2001, but later granted the Trustee’s motion concerning Counts I and II on June 19, 2001, leading to a Final Judgment. Capitol appealed this decision to the District Court, which reversed the Bankruptcy Court's ruling on May 5, 2003, granting summary judgment to Capitol. The Trustee’s subsequent appeal to the Eleventh Circuit was dismissed due to lack of jurisdiction, as the Bankruptcy Court had not addressed Count III. To resolve the jurisdictional issue, the parties agreed to an entry of a Final Judgment on May 4, 2004, which preserved appellate rights and dismissed Count III.
On June 2, 2004, the Trustee filed a Notice of Appeal, twenty-nine days after the Court's Final Judgment favoring Capitol. The Court dismissed this appeal on June 9, 2004, due to its untimeliness. Following this, the Trustee sought reconsideration and an extension to file the appeal. The Court denied these motions on July 30, 2004. The Trustee subsequently filed a new Notice of Appeal on August 9, 2004, which was docketed by the District Court on August 17, 2004. The District Court affirmed the dismissal of the appeal and the denial of the motion for reconsideration on July 21, 2005, and entered judgment in favor of Capitol on June 22, 2005.
The Trustee then appealed to the Eleventh Circuit, which remanded the case back to the District Court on November 25, 2005. On March 19, 2006, the District Court vacated its previous order and remanded the issue of whether the Trustee's late appeal constituted "excusable neglect." During the hearings, the Trustee's counsel admitted to misunderstanding the applicable rules, mistakenly believing a thirty-day appeal period applied. The Court determined that the delay was a deliberate choice rather than due to unavoidable circumstances. Under Fed. R. Bankr. P. 8002(a), an appeal must be filed within ten days, and extensions require requests made before this period expires or within twenty days with a demonstration of excusable neglect. The Court referenced the Supreme Court's ruling in Pioneer Investment Serv. Co. v. Brunswick Assoc. to assess "excusable neglect," noting its relevance to the provisions of Rule 8002(c)(2) as recognized by the Eleventh Circuit.
Counsel for the Trustee acknowledged a belief that the thirty-day rule applied, which led to the failure to file the Trustee’s Notice of Appeal due to a misunderstanding of Fed. R. Bankr. P. 8002(a). The court clarified that such a misunderstanding does not meet the standard of "excusable neglect," referencing In re Dayton Circuit Courts and Maryland Casualty Co. v. Conner. It was emphasized that the filing of the notice was within the reasonable control of the Trustee’s counsel, and thus the consequences of any neglect fall on the client. Accordingly, the court determined that the Trustee’s Notice of Appeal was untimely filed without excusable neglect. Consequently, the court affirmed the Order Denying the Trustee’s Motion for Reconsideration and/or Review regarding the dismissal of the appeal for untimeliness and the motion for an extension to file the notice of appeal. The order was formally affirmed.
