Bertoli, In re

• Decision Date: 26 February 1987
• Docket Number: No. 86-5392,86-5392
• Citation: 812 F.2d 136
• Parties: , 16 Collier Bankr.Cas.2d 492, 7 Fed.R.Serv.3d 237, Bankr. L. Rep. P 71,718 In re Richard O. BERTOLI, Debtor in possession. John E. BERTOLI, Appellant, v. Bernard J. D'AVELLA, Jr., Trustee and Cameron F. MacRae, III, as Trustee for Executive Securities Corporation.
• Court: U.S. Court of Appeals — Third Circuit

Page 136

812 F.2d 136

55 USLW 2497, 16 Collier Bankr.Cas.2d 492,

7 Fed.R.Serv.3d 237,

Bankr. L. Rep. P 71,718

In re Richard O. BERTOLI, Debtor in possession.

John E. BERTOLI, Appellant, v. Bernard J. D'AVELLA, Jr., Trustee and Cameron F. MacRae,

III, as Trustee for Executive Securities Corporation.

No. 86-5392.

United States Court of Appeals,

Third Circuit.

Argued Dec. 18, 1986.

Decided Feb. 26, 1987.

Ravin, Sarasohn, Cook, Baumgarten, Fisch & Baime, Roseland, N.J., for appellant; Robert A. Baime, Bernard Schenkler, George R. Hirsch (argued), on the brief.

Hannoch Weisman, Roseland, N.J., for Bernard J. D'Avella, Jr., trustee; (Ronald M. Sturtz (argued), of counsel; Mary Ann Collins, on the brief).

Ravin, Greenberg & Zackin, P.A., Roseland, N.J., for Cameron F. MacRae, III, trustee; Jack M. Zackin and LeBoeuf, Lamb, Leiby & MacRae, New York City, Cameron F. MacRae, III, John S. Kinzey (argued), Lynn A. Dummett, of counsel.

Before HIGGINBOTHAM and BECKER, Circuit Judges, and DUMBAULD, District Judge ^*

OPINION OF THE COURT

BECKER, Circuit Judge.

This appeal presents two discrete questions in the jurisprudence of interlocutory appeals. First, does a motion to the district court for certification of an interlocutory appeal pursuant to 28 U.S.C. Sec. 1292(b) suffice to perfect the appeal in the absence of a formally filed notice of appeal? Second, under the 1984 amendments to the bankruptcy code, may a district court hear an interlocutory appeal from the bankruptcy court without certification by the bankruptcy judge? Because we answer both questions in the affirmative, we must also decide whether the district court correctly dismissed the plaintiff-appellant's claims because they were barred by the res judicata effect of a state court judgment. We agree that the claims were barred by res judicata; hence we affirm the district court's judgment.

I.

This appeal has its roots in a tangled adversary proceeding in the bankruptcy court. The plaintiff, John Bertoli (hereinafter Bertoli), sought to recover various interests in the estate of his brother Richard Bertoli (hereinafter Richard), now administered in Chapter 11 by Bernard D'Avella, Jr., as trustee. Bertoli also sought a declaratory judgment invalidating a New Jersey state court's decree that transferred property to Richard's estate from a partnership of which Bertoli was general partner. Cameron MacRae, III, trustee for Executive Securities, a corporation with claims against the estate, intervened as a defendant.

D'Avella and MacRae together moved for dismissal of the suit on the grounds that the claims were barred by the res judicata effect of the New Jersey adjudication. The bankruptcy judge denied the motion and refused to certify her decision for interlocutory appeal. Despite this refusal, D'Avella and MacRae took an interlocutory appeal to the district court.

Applying the standards that govern interlocutory appeals to this court under 28 U.S.C. Sec. 1292(b), the district court accepted the appeal. Specifically, the district court found: (1) that the appeal presented controlling questions of law on which there were substantial grounds for difference of opinion, and (2) that an immediate appeal from the order would materially advance the ultimate termination of the litigation. On the merits, the district court reversed and entered an order remanding the case to the bankruptcy court for dismissal of all claims.

The district court entered its order on March 6, 1986, 58 B.R. 992. Bertoli filed no notice of appeal to this court during the thirty day period following the judgment allowed by Rule 4(a)(1) of the Federal Rules of Appellate Procedure. ¹ Instead, on April 4, 1986 (within this thirty day period), Bertoli filed a motion and supporting brief in the district court for certification of an interlocutory appeal to this Court pursuant to 28 U.S.C. Sec. 1292(b). D'Avella and MacRae opposed this motion on the ground that the district court's order of March 6, 1986 was a final disposition of the adversary proceeding and entitled Bertoli to appeal as of right.

The district court heard oral argument on April 28, 1986, at which it indicated its agreement that the March 6 order was a final disposition. Bertoli then moved, unopposed, for an extension of time within which to file his appeal in accordance with Appellate Rule 4(a)(5). The district court agreed and signed an order submitted by Bertoli on May 9, 1986 purporting to extend the time to appeal by thirty days. Bertoli filed his notice of appeal on May 29, 1986, within the time provided by the district court's order. ²

Under Rule 4(a)(5), the district court has the authority, on a showing of excusable neglect, to extend the notice of appeal period only to the later of thirty days after the end of the original notice of appeal period or ten days after the district court grants the extension. In this case, thirty days after the original filing deadline was May 7, and ten days after the extension order was May 19. Bertoli's official notice of appeal was therefore filed ten days after the time limitations provided in the rule.

Noting that Rule 4(a) has been characterized as both mandatory and jurisdictional, see Browder v. Director, Dept. of Corrections of Ill., 434 U.S. 257, 264, 98 S.Ct. 556, 560, 54 L.Ed.2d 521 (1978); United States v. McKnight, 593 F.2d 230, 231 (3d Cir.1979), D'Avella and MacRae have moved to dismiss the appeal. Bertoli rejoins that his Sec. 1292(b) motion within the period provided by Rule 4(a)(1) satisfies the requirements for a notice of appeal under Appellate Rule 3(c). The motions panel referred this issue to us for consideration along with Bertoli's challenge to the district court's judgment.

Assuming his appeal is properly before us, Bertoli claims that the district court's decision should be reversed because the district court lacked jurisdiction to entertain an interlocutory appeal without certification by the bankruptcy judge. Bertoli also challenges the merits of the district court's dismissal of his claims based on res judicata.

II.

We first consider whether Bertoli's motion for certification of an interlocutory appeal provided an effective notice of appeal within the requirements of Rule 3(c) of the Federal Rules of Appellate Procedure.

Rule 3(c) provides:

The notice of appeal shall specify the party or parties taking the appeal; shall designate the judgment, order or part thereof appealed from; and shall name the court to which the appeal is taken.... An appeal shall not be dismissed for informality of form or title of the notice of appeal.

This final sentence was added in 1979. Exactly "[b]ecause ... the notice of appeal has been characterized as jurisdictional," the advisory committee notes to the 1979 amendment stressed, "it is important that the right to appeal not be lost by mistakes of mere form.... [S]o long as the function of notice is met by the filing of a paper indicating an intention to appeal, the substance of the rule has been complied with." The advisory committee cited with approval Cobb v. Lewis, 488 F.2d 41 (5th Cir.1974), which held a petition for leave to appeal sufficient to constitute a notice of appeal.

Even prior to the 1979 amendments, this Court had adopted a substance-oriented approach to notices of appeal. In Frace v. Russell, 341 F.2d 901, 903 (3d Cir.), cert. denied, 382 U.S. 853, 86 S.Ct. 127, 15 L.Ed.2d 101 (1965), we treated a "Brief for Appeal" as a timely notice of appeal. Similarly, in Fitzsimmons v. Yeager, 391 F.2d 849, 853-855 (3d Cir.) (en banc), cert. denied, 393 U.S. 868, 89 S.Ct. 154, 21 L.Ed.2d 137 (1968), we held that an application for a certificate of probable cause operated as a timely notice of appeal and stated that we would treat a paper as a notice of appeal "so long as from its nature it evidences an intention to appeal."

Bertoli's "Notice of Motion for the Certification of An Interlocutory Appeal Pursuant to 28 U.S.C. Sec. 1292(b)" complies with Rule 3(c). It communicates Bertoli's intention to appeal, and it identifies the judgment to be appealed and the court to which the appeal would be taken. We therefore consider this case properly before us.

III.

We turn to Bertoli's claim that the district court lacked jurisdiction because the bankruptcy judge refused to certify the interlocutory appeal. Under Bankruptcy Rules 8001 and 8003 promulgated in 1983, motions for leave to file an interlocutory appeal are directed entirely at the district court. Bertoli claims, however, that 28 U.S.C. Sec. 158, enacted by the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98-353, 98 Stat. 333, 341 (1984), has supplemented this rule. The relevant portions of Sec. 158 provide:

(a) The district courts of the United States shall have jurisdiction to hear appeals from final judgments, orders, and decrees, and, with leave of the court, from interlocutory orders and decrees, of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of this title.

* * *

(c) An appeal under subsections (a) and (b) of this section shall be taken in the same manner as appeals in civil proceedings generally are taken to the courts of appeals from the district courts and in the time provided by Rule 8002 of the Bankruptcy Rules.

Bertoli claims that the "same manner" stipulation in subsection (c) incorporates the provision in 28 U.S.C. Sec. 1292(b) that interlocutory appeals be certified by the district court and therefore mandates certification by bankruptcy judges for interlocutory appeals to district courts. In support, Bertoli cites two bankruptcy court decisions that have so held and one district court decision that has suggested this view. Connelly v. Shatkin Inv. Corp., 57 B.R. 794, 796 (N.D.Ill.1986); In re United Press Int'l, Inc., 60 B.R. 265, 275 (Bankr. D.D.C.1986); In re Trak Microcomputer Corp., 58 B.R. 708, 713 n. 1 (Bankr. N.D.Ill.1986). In contrast, two ...