United States District Court, E.D. Michigan, Southern Division
IN RE PATRICK GEORGE, Debtor.
v.
PATRICK GEORGE, Appellee. SELWAN KESTO, Appellant, Bankr. No. 11-54164
OPINION AND ORDER GRANTING MOTION TO DISMISS
APPEAL
DAVID
M. LAWSON United States District Judge.
Appellant
Selwan Kesto, a creditor of bankruptcy debtor Patrick George,
has appealed an unfavorable judgment entered against him by a
bankruptcy judge in an adversary proceeding in which Kesto
challenged the dischargeability of debts George allegedly
owed to him. The appeal, however, has been suffering from
neglect. Despite a scheduling order that required Kesto to
file his appellate brief by January 13, 2017, and bankruptcy
rules that reinforced that date, no appellate brief has been
filed. Appellee and debtor Patrick George filed a motion to
dismiss the appeal on February 13, 2017, to which Kesto
responded, and the Court held a hearing on the motion on
March 8, 2017. Kesto's attorney's argument at the
motion consisted essentially of an acknowledgment that his
brief was overdue and that he had no excuse for its
tardiness. But despite counsel's candid contrition and
the passage of even more time, still there has been no filing
of either a motion seeking to enlarge the deadline or -
better yet - the appellate brief itself. The Court,
therefore, sees no good reason not to grant the motion to
dismiss the appeal for want of prosecution and failure to
comply with the Bankruptcy Rules.
I.
Bankruptcy
Judge Walter Shapero filed a trial opinion on September 23,
2016, followed by an order that same day, denying Kesto's
claims. Relying on 11 U.S.C. §§ 523(a)(2)(A) and
523(a)(4), Kesto had alleged in the adversary proceeding that
certain debts George owed him, which arose from their
misbegotten joint business ventures, were nondischargeable
due to “false pretenses, a false representation, or
actual fraud, ” or because of “fraud or
defalcation while acting in a fiduciary capacity,
embezzlement, or larceny.” Judge Shapero never reached
the question of George's alleged fraud or defalcation,
because he found that Kesto failed to carry his burden of
proving that any enforceable debt existed between him and
George. Judge Shapero concluded that Kesto's
dischargeability challenge failed for that reason. Kesto
filed motions for reconsideration and to amend the judgment,
but Judge Shapero's successor (by then, he had retired)
denied those motions on November 1, 2016.
Kesto
filed his notice of appeal on November 14, 2016. That
triggered a 14-day period in which he was obliged to (a)
designate the items to include in the appellate record and
the issues on appeal, and (b) order the transcripts of the
proceedings. Fed. R. Bankr. P 8009(a)(1)(A), (4), (b)(1)(A).
Kesto failed to order the transcript on time. George asserts
in his motion to dismiss that he warned Kesto of that
procedural misstep - there were three days of trial that had
to be transcribed - but Kesto did not place a transcript
order until after the record was docketed in this Court.
The
Clerk docketed the record on December 12, 2016. The record
included a transcript excerpt of one of the trial days -
January 27, 2015 - consisting mostly of the testimony of
Patrick George, but no other witnesses. There also was a
transcript of an evidentiary hearing on July 21, 2014. The
complete trial transcript was not included however.
Under
Bankruptcy Rule 8018(a)(1), Kesto was required to file his
appellant's brief within 30 days after the record was
docketed. This Court entered a scheduling order that
confirmed that Kesto's filing deadline was January 13,
2017. When a month went by and no brief was filed, George
filed his motion to dismiss the appeal.
II.
If an
appellant in a bankruptcy appeal fails to file a brief within
the time allowed, “the district court . . . may dismiss
the appeal.” Fed.R.Bankr.P. 8018(a)(4); see
also Fed. R. Bankr. P. 8003(a)(2) (“An
appellant's failure to take any step other than the
timely filing of a notice of appeal does not affect the
validity of the appeal, but is ground only for the district
court or BAP to act as it considers appropriate, including
dismissing the appeal.”). Rule 8018(a)(4) was not
intended to encourage routine dismissals for only trivial
lapses of timely filings. But dismissal is appropriate
“when bad faith, negligence or indifference has been
shown.” In re Tucker, 665 F. App'x 841,
844 (11th Cir. 2016) (quoting Brake v. Tavormina (In re
Beverly Mfg. Corp.), 778 F.2d 666, 667 (11th Cir.
1985)).
Kesto
responded to the motion to dismiss the appeal by arguing that
the transcripts necessary to draft his appellate brief had
not been received, one of his attorneys (Steven Cohen) was
incapacitated with a medical issue between December 20, 2016
and January 10, 2017, another of his lawyers (Samuel Herman)
was not aware of the notice that the record was docketed, Mr.
Herman eventually retired, office staff did not calendar the
deadline even though they received the notice on PACER, and,
inexplicably, Judge Shapero's retirement “further
complicated this situation itself.” This litany of
unfortunate events, argues Kesto, coalesced into a perfect
storm that prevented the timely filing of his brief on
appeal.
When an
attorney's medical difficulties prevent attention to a
case, this Court is the first to grant sensible relief from
deadlines and provide reasonable accommodation. None of those
problems, however, were ever brought to the Court's
attention, and apparently George's attorneys were left in
the dark as well. Kesto was represented by a third attorney,
Aaron Silvenis, who appeared at oral argument on the motion
to dismiss the appeal, and said all of the procedural
defaults in this case were his fault. But Mr. Silvenis never
sought a stipulation from George's attorneys for more
time to file his brief, and to this day has not filed a
motion asking the Court for that relief.
Kesto's
attorneys state that they could not draft an appellate brief
because they did not have all the transcripts. However, on
December 12, 2016, George's attorney notified Mr. Cohen
and Mr. Silvenis about their failure to order the complete
trial transcripts. There is no evidence that Mr. Silvenis or
anyone else on Kesto's behalf ever attempted to fix that
fault, which amounts to a violation of Bankruptcy Rule
8009(b)(1). George's attorney points out that the
transcripts of the trial are now available and have been
since at least before March 3, 2017. Still, however, no
appellant's brief has been filed.
There
is no coherent explanation why Kesto cannot file a brief. The
response to the motion to dismiss references an incomplete
record and the inability to obtain a transcript of a
“hotly-contested” motion hearing. But the
bankruptcy court's judgment was based on a three-day
trial, not a motion decision; and there is no description of
the missing motion proceedings themselves (date, nature of
motion, ruling, result) or the resulting order, and how they
might impact the trial result or any potential issue on
appeal. Nor has Kesto moved in this Court for any relief
concerning the record on appeal or the appellate deadlines.
He only asks that George's motion to dismiss be denied.
But that would leave this appeal in limbo, with no end in
sight.
As
noted above “Federal Rule of Bankruptcy Procedure
[8003(a)(2)] grants the district court authority to dismiss
appeals for non-prosecution.” In re Buscemi's
Int'l, Inc., 64 F. App'x 910, 911 (6th Cir.
2003). Nearly three months have elapsed since Kesto's
brief was due, yet there has been no filing, no request for
more time, no plea for help with the record (the need for
which is uncertain, as the trial transcripts have been
available), and no indication that an appellant's brief
...