Arrowhead Estates Development Co., In re, s. 93-55530

• Decision Date: 31 October 1994
• Docket Number: 93-56540,Nos. 93-55530,s. 93-55530
• Citation: Arrowhead Estates Development Co., In re, 42 F.3d 1306 (9th Cir. 1994)
• Parties: , 30 Fed.R.Serv.3d 1445, Bankr. L. Rep. P 76,320 In re ARROWHEAD ESTATES DEVELOPMENT CO., Debtor. ARROWHEAD ESTATES DEVELOPMENT CO., Appellant, v. UNITED STATES TRUSTEE, Appellee. In re Larry Edward JARRETT; Susanne Jarrett, Debtors. William H. FISHER, Appellant, v. Larry Edward JARRETT; Susanne Jarrett, Appellees. . Submitted on Briefs *
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1306

42 F.3d 1306

63 USLW 2459, 30 Fed.R.Serv.3d 1445,

Bankr. L. Rep. P 76,320

In re ARROWHEAD ESTATES DEVELOPMENT CO., Debtor.

ARROWHEAD ESTATES DEVELOPMENT CO., Appellant, v. UNITED STATES TRUSTEE, Appellee.

In re Larry Edward JARRETT; Susanne Jarrett, Debtors.

William H. FISHER, Appellant, v. Larry Edward JARRETT; Susanne Jarrett, Appellees.

Nos. 93-55530, 93-56540.

United States Court of Appeals Ninth Circuit.

Submitted on Briefs ^* Oct. 31, 1994.

Argued and Submitted Oct. 31, 1994.

Decided Dec. 30, 1994.

As Amended March 23, 1995.

David Seror and Thomas M. Geher, Epstein, Becker & Green, Los Angeles, CA, for appellant-debtor Arrowhead Estates Development Co.

William H. Fisher, pro se.

No appearance for the appellees.

Appeals from the Ninth Circuit Bankruptcy Appellate Panel.

Before: FLOYD R. GIBSON, ^** HUG, and HAWKINS, Circuit Judges.

HAWKINS, Circuit Judge:

We consider here the timing of notices of appeal. In these appeals, certain of the parties filed notices of appeal after the bankruptcy trial court rendered its oral decision but before the entry of a formal order in the court docket. Because of this timing, the Bankruptcy Appellate Panel for the Ninth Circuit ("BAP") did not reach the full merits of these appeals. Given the choice, we opt for a consideration of the parties' claims on their merits and we return them to the courts below to do just that.

In the first of these appeals, Arrowhead Estates Development Co. ("Arrowhead") appeals from an order of the BAP dismissing its appeal as untimely. In the second, William H. Fisher ("Fisher") appeals the BAP's decision that it had jurisdiction to consider his appeal regarding his motion for reconsideration, but not to consider his appeal of the judgment underlying that motion. For the reasons set forth below, we reverse the BAP's determination in Arrowhead and affirm in part and reverse in part the BAP's ruling in Jarrett. We remand both cases for further proceedings consistent with this opinion.

FACTUAL AND PROCEDURAL HISTORY

A. ARROWHEAD

On May 6, 1992, the United States Bankruptcy Court for the Central District of California entered an order converting Arrowhead's Chapter 11 reorganization petition to a Chapter 7 liquidation. Arrowhead filed a motion for reconsideration on May 15, 1992. The bankruptcy court heard and orally denied Arrowhead's motion on June 9, 1992, but this order was not entered in the court's docket until August 25, 1992. Arrowhead filed a notice of appeal to the BAP on June 16, 1992, after the court's oral ruling, but before its entry in the docket. Arrowhead did not file a new notice of appeal after the order was entered.

On March 2, 1993, the BAP dismissed the appeal concluding that it lacked jurisdiction because Arrowhead filed its notice of appeal before the entry of the formal order denying reconsideration. Arrowhead thereafter pursued this appeal on March 31, 1993. We reverse.

B. JARRETT

On April 9, 1986, Edward Fisher agreed to loan Larry Jarrett and Arthur Clark $10,000, and they agreed to repay him $20,000 on a straight note forty-five days later. The loan was secured by a deed of trust on the Jarretts' home conveyed by Jarrett and Clark. ¹ In separate transactions on April 17 and April 25, 1986, Fisher loaned Clark an additional $25,000 and $5,000 respectively.

On June 16, 1986, Clark repaid $5,000 by personal check. On September 24, 1986, Clark gave Fisher a cashier's check for $25,000, of which Fisher retained approximately $15,000. The remaining balance of the September 24 payment was distributed to Jarrett and a third party to whom Clark owed money. Although these payments amounted to $20,000, Fisher did not release the deed of trust; instead he filed a three-day demand for payment on September 7, 1988. ²

The Jarretts commenced a Chapter 13 filing on April 7, 1989. On May 25, Fisher sued the Jarretts and Clark in state court for fraud. On July 5, 1989, the Jarretts commenced an action in the bankruptcy court to determine the validity of Fisher's deed of trust and for damages against Fisher for willful violation of the automatic stay established by the bankruptcy laws.

After being notified by the bankruptcy court that his suit violated the automatic stay, Fisher dismissed his state court claims as to the Jarretts. ³ Fisher was not present when the trial on the deed of trust began on October 20, 1989, but Fisher did attend when the trial was continued to November 9, 1989, and the court granted the Jarretts' summary judgment motion for $1,000 damages against Fisher for violation of the stay. Trial on the deed of trust was continued to December 7, 1989. Again, Fisher did not attend that proceeding. ⁴

At trial, Jarrett and Clark testified that the payments made by Clark to Fisher in June and September of 1986 were intended to repay the original $20,000 debt that was secured by the deed of trust. Satisfied with this testimony, the bankruptcy court entered an order nullifying the deed of trust on December 20, 1989. Fisher moved for reconsideration of this order on December 27. The trial court heard and orally announced its denial of Fisher's motion on February 8, 1990, but this order was not entered in the court's docket until March 5. After the denial was announced, but before the entry in the docket, Fisher filed an application for leave to appeal on February 21, 1990. ⁵ He did not file a new notice of appeal after the order was entered.

DISCUSSION

These appeals concern the effectiveness of a notice of appeal filed after a trial court orally announces its decision but before the formal entry of an order on the court's docket. ⁶

A. ARROWHEAD

In its brief, Arrowhead first contends that the BAP's reliance on Acosta v. Louisiana Dep't of Health & Human Res., 478 U.S. 251, 106 S.Ct. 2876, 92 L.Ed.2d 192 (1986), and In re Sweet Transfer & Storage, Inc., 896 F.2d 1189 (9th Cir.1990), was misplaced because those cases interpreted older and different versions of Federal Rule of Appellate Procedure ("FRAP") 4(a)(4) and Federal Rule of Bankruptcy Procedure ("Bankruptcy Rule") 8002(b) than are currently in force. Second, Arrowhead argues that the unique circumstances of its appeal warrant a finding that the appeal was timely. Our disposition of the first argument makes consideration of the second unnecessary.

Acosta sought to resolve a conflict in the circuits concerning the proper interpretation of FRAP 4(a). 478 U.S. at 252-253, 106 S.Ct. at 2876-77. In Calhoun v. United States, 647 F.2d 6 (9th Cir.1981), this Court held that a notice of appeal filed after the announcement but before the entry of a decision on a motion for reconsideration was effective. According to Calhoun, "the word 'disposition' means announcement of the court's decision on the motion." Id. at 10. The Fifth Circuit, on the other hand, held the view that a notice of appeal filed any time before the entry of the court's decision is premature and has no effect. Acosta v. Louisiana Health & Human Res., 776 F.2d 1046 (5th Cir.1985) (table); see also Ross v. Global Marine, Inc., 859 F.2d 336, 340 (5th Cir.1988).

To resolve this conflict, the Supreme Court relied on the portion of FRAP 4(a)(4) that provided: "A notice of appeal filed before the disposition of [a motion for reconsideration] shall have no effect. A new notice of appeal must be filed within the prescribed time measured from the entry of the order disposing of the motion." The Court held that the Calhoun decision failed to comport "with the plain wording of the Rules." Acosta, 478 U.S. at 253, 106 S.Ct. at 2877. Additionally, the Court noted FRAP 4(a)(2)'s statement that " '[e]xcept as provided in (a)(4) of this Rule 4, a notice of appeal filed after the announcement of a decision or order but before the entry of the judgment or order shall be treated as filed after such entry and on the day thereof.' " Id. at 254, 106 S.Ct. at 2877-78 (emphasis in original). Calhoun 's interpretation, said the Court, would effectively read this exception out of the Rule. Id.

In Sweet Transfer, 896 F.2d at 1189, this Court considered the effect of Acosta on our interpretation of Bankruptcy Rule 8002. We pointed out that Rule 8002(b) historically has been construed to be consistent with FRAP 4(a)(4), so Acosta controlled the issue of timeliness in bankruptcy appeals. Id. at 1192. Additionally, we stated that "given the stricter language of the bankruptcy rule (there is no equivalent to Fed.R.App.P. 4(a)(2) in BR 8002) it should not be construed more liberally." Id.

However, in 1991, Bankruptcy Rule 8002(a) was amended to provide that "[a] notice of appeal filed after the announcement of a decision or order but before the entry of the judgment, order, or decree shall be treated as filed after such entry and on the date thereof." The purpose of this amendment was "to conform with rule 4(a)(2) which is designed to avoid the loss of the right to appeal when a notice of appeal is filed prematurely." Bankruptcy Rule 8002(a) (Advisory Committee's note to 1991 amendment). Thus, it appears that Sweet Transfer's concerns regarding liberally construing Bankruptcy Rule 8002 were resolved by that amendment. ⁷

Additionally, a recent amendment to FRAP 4(a) essentially enacts the Calhoun interpretation of the Rule. The amendment eliminated the exception language from FRAP 4(a)(2), making the provision that "[a] notice of appeal filed after the court announces a decision or order but before entry of the judgment or order is treated as filed on the date of and after entry" applicable to all judgments, even those concerning the motions enumerated in Rule 4(a)(4). ⁸ Moreover, subparagraph (a)(4) was also amended to provide:

(4) If any party makes a timely motion of a type specified immediately below, the time for appeal for all parties runs from the entry of the order disposing of the last such motion outstanding. This provision applies to a timely motion under the Federal Rules of Civil Procedure: ...