949 F.3d 483 (9th Cir. 2020), 18-60005, In re Marino

• Citation: 949 F.3d 483
• Opinion Judge: LASNIK, District Judge:
• Party Name: IN RE Christopher Michael MARINO; Valerie Margaret Marino, Debtors, Ocwen Loan Servicing, LLC, Appellant/Appellee, v. Christopher Michael Marino; Valerie Margaret Marino, Appellees/Appellants.
• Attorney: Jonathan D. Fink (argued), Wright Finlay & Zak LLP, Newport Beach, California; Christopher Alan James Swift, Wright Finlay & Zak LLP, Las Vegas, Nevada; for Appellant/Appellee. Christopher P. Burke (argued), Reno, Nevada; Christina L. Henry, Henry & DeGraaff PS, Seattle, Washington; for Appellees...
• Judge Panel: Before: J. Clifford Wallace and Mary H. Murguia, Circuit Judges, and Robert S. Lasnik, District Judge.
• Case Date: February 10, 2020
• Court: United States Courts of Appeals, U.S. Court of Appeals — Ninth Circuit

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949 F.3d 483 (9th Cir. 2020)

IN RE Christopher Michael MARINO; Valerie Margaret Marino, Debtors, Ocwen Loan Servicing, LLC, Appellant/Appellee,

v.

Christopher Michael Marino; Valerie Margaret Marino, Appellees/Appellants.

Nos. 18-60005, 18-60006, 18-60040, 18-60041

United States Court of Appeals, Ninth Circuit

February 10, 2020

Argued and Submitted October 22, 2019 San Francisco, California

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[Copyrighted Material Omitted]

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Jonathan D. Fink (argued), Wright Finlay & Zak LLP, Newport Beach, California; Christopher Alan James Swift, Wright Finlay & Zak LLP, Las Vegas, Nevada; for Appellant/Appellee.

Christopher P. Burke (argued), Reno, Nevada; Christina L. Henry, Henry & DeGraaff PS, Seattle, Washington; for Appellees/Appellants.

Appeal from the Ninth Circuit Bankruptcy Appellate Panel, Faris, Lafferty III, and Tighe, Bankruptcy Judges, Presiding, BAP Nos. 16-1229, 16-1238

Before: J. Clifford Wallace and Mary H. Murguia, Circuit Judges, and Robert S. Lasnik,^[*] District Judge.

SUMMARY^[**]

Bankruptcy

The panel dismissed, for lack of jurisdiction, appeals from the Bankruptcy Appellate Panel's decision affirming the bankruptcy court's contempt orders issued against a creditor and reversing and remanding on the issue of punitive damages; and affirmed the BAP's denial of debtors' motion for attorney's fees.

Dismissing in part for lack of jurisdiction, the panel held that the BAP's decision remanding the matter to the bankruptcy court was not final and appealable. Considering the need to avoid piecemeal litigation, judicial efficiency, the systemic interest in preserving the bankruptcy court's role as the finder of fact, and whether delaying review would cause any party irreparable harm, the panel concluded that all four of these factors compelled dismissal of the creditor's appeals.

Affirming in part, the panel held that the BAP did not abuse its discretion in denying debtors' motion for attorney's fees incurred before the BAP. Debtors were not entitled to fees on the ground of a frivolous appeal. They also were not entitled to attorney's fees under a provision in a deed of trust, and 11 U.S.C. § 105 does not authorize an award of fees.

OPINION

LASNIK, District Judge:

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After the bankruptcy court entered a chapter 7 discharge injunction in June 2013, Debtors, Christopher and Valerie Marino, continued to receive letters and telephone calls from Ocwen Loan Servicing LLC ("Ocwen") about the home they had abandoned to foreclosure before filing for bankruptcy. Following an evidentiary hearing, the bankruptcy court found Ocwen in contempt of the discharge injunction and imposed a $119,000 civil contempt sanction.

Ocwen appeals from that order, as well as from the bankruptcy court’s order denying its motion for reconsideration. Ocwen also appeals from the Bankruptcy Appellate Panel’s ("BAP") conclusion that it was "error for the bankruptcy court to preclude itself from considering an award of punitive damages" under 11 U.S.C. § 105(a).¹ For their part, the Marinos appeal from the BAP’s denial of their motion for attorney’s fees incurred on appeal.

We dismiss Ocwen’s appeals for lack of jurisdiction and affirm the BAP’s denial of the Marinos’ motion for attorney’s fees.

I.

The Marinos purchased a home in Verdi, California, with a loan that was later serviced by Ocwen. The Marinos fell behind on their mortgage payments and decided to leave their home and allow Ocwen to foreclose on it. The Marinos then filed for chapter 7 bankruptcy and received a discharge injunction a few months later.

Despite the discharge injunction, the Marinos continued to receive letters and telephone calls from Ocwen about their former home. The Marinos presented evidence at a hearing showing that they had received letters and calls from Ocwen, causing them severe emotional distress.

The bankruptcy court concluded that Ocwen violated the discharge injunction and imposed a civil contempt sanction of $1,000 for every violation, totaling $119,000. The bankruptcy court also concluded that it lacked the inherent authority to award punitive damages for a violation of a discharge injunction. Finally, the bankruptcy court denied Ocwen’s motion for reconsideration.

The BAP affirmed the bankruptcy court’s contempt and reconsideration orders but reversed and remanded on the issue of punitive damages. The BAP also denied the Marinos’ motion for appellate attorney’s fees.

Ocwen appeals from the bankruptcy court’s contempt and reconsideration orders. Ocwen also appeals from the BAP’s decision reversing the bankruptcy court on the scope of its inherent authority to award punitive damages for a discharge injunction violation. The Marinos appeal the BAP’s decision on attorney’s fees.

II.

A.

Under 28 U.S.C. § 158(d)(1), our jurisdiction is limited to "decisions, judgments, orders, and decrees that are ‘final’

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[for] we have no authority ... to consider interlocutory orders and decrees." In re Gugliuzza, 852 F.3d 884, 891 (9th Cir. 2017) (citing Conn. Nat’l Bank v. Germain, 503 U.S. 249, 252, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)). Because bankruptcy cases are often complex and litigated in various discrete proceedings, BAP orders may be immediately appealed only if they "finally dispose of discrete disputes within the larger case." Id. at 892 (quoting Bullard v. Blue Hills Bank, 575 U.S. 496, 135 S.Ct. 1686, 1692, 191 L.Ed.2d 621 (2015)). "Correct delineation of the dimensions of a bankruptcy ‘proceeding’ is a matter of considerable importance" for "[a]n erroneous identification of an interlocutory as a final decision may yield an appeal over which the appellate forum lacks jurisdiction." Ritzen Grp., Inc. v. Jackson Masonry, LLC, 589 U.S. __, __ (slip op. at 3), 140 S.Ct. 582, __ L.Ed.2d __ (2020). An order in a bankruptcy proceeding is final and thus appealable if it "alters the status quo and fixes the rights and obligations of the parties ... [or] alters the legal relationships among the parties." In re Gugliuzza, 852 F.3d at 893 (quoting Bullard, 135 S.Ct. at 1692, 1695).

However, an order from the BAP is not final if it "remands for factual determinations on a central issue[.]" Id. at 895 (quoting In re Vylene Enters., 968 F.2d 887, 895 (9th Cir. 1992)). We have departed from this rule only when the BAP remands for "purely mechanical or computational task[s] such that the proceedings on remand are highly unlikely to generate a new appeal." In re Landmark Fence Co., Inc., 801 F.3d 1099, 1103 (9th Cir. 2015) (alteration in original) (quoting In re Saxman, 325 F.3d 1168, 1172 (9th Cir. 2003)). We limit the exception to our general rule against exercising appellate jurisdiction when the BAP remands to the...