In re Bank of New England Corp.

• Decision Date: 10 March 1998
• Docket Number: BAP No. MB 97-054.
• Citation: 218 BR 643
• Parties: In re BANK OF NEW ENGLAND CORPORATION. FLEET DATA PROCESSING CORP., f/k/a Fleet/Norstar Data Processing Corporation, f/k/a Fleet/Norstar Services Corporation, and Fleet Services Corporation, f/k/a Fleet/Norstar Services Corporation, f/k/a Norstar Services, Inc., f/k/a Norstar Data Services, Inc., f/k/a Ubny Data Services, Inc., Appellants, v. Dr. Ben S. BRANCH, Trustee, Appellee.
• Court: U.S. Bankruptcy Appellate Panel, First Circuit

218 B.R. 643 (1998)

In re BANK OF NEW ENGLAND CORPORATION.

FLEET DATA PROCESSING CORP., f/k/a Fleet/Norstar Data Processing Corporation, f/k/a Fleet/Norstar Services Corporation, and Fleet Services Corporation, f/k/a Fleet/Norstar Services Corporation, f/k/a Norstar Services, Inc., f/k/a Norstar Data Services, Inc., f/k/a Ubny Data Services, Inc., Appellants, v. Dr. Ben S. BRANCH, Trustee, Appellee.

BAP No. MB 97-054.

United States Bankruptcy Appellate Panel of the First Circuit.

March 10, 1998.

James D. McGinley, Sarah N.A. Camougis, Edwards & Angell, Boston, MA for Appellants.

Robin Russell, Peter S. Goodman, Lynne M. Fischman Uniman, and Jennifer L. Sulzberger, Andrews & Kurth L.L.P., New York City, for Appellee.

Before VOTOLATO, DEJESUS and HAINES.

HAINES, Bankruptcy Judge.

Fleet Data Processing Corporation ("Fleet") appeals from the bankruptcy court's order granting summary judgment against it, and in favor of the Chapter 7 trustee, on Count VI of the trustee's complaint. By its order, the court determined that Fleet was obligated to indemnify the trustee for the estate's liability, if any, to SEI Corporation ("SEI") and for the trustee's costs and attorneys' fees associated with defense and satisfaction of the SEI claim. The remaining counts of the trustee's complaint joined issue with SEI over the estate's liability for damages attributable to the rejection of SEI's executory contract with the debtor.

After perusing the record and the parties' briefs, we conclude that the Count VI summary judgment order is not a final order and that no exception to the final judgment rule operates to bestow appellate jurisdiction upon this panel. Accordingly, and for the reasons set forth below, we dismiss Fleet's appeal as premature.

BACKGROUND

The bankruptcy court determined Fleet's liability on cross-motions for summary judgment, based upon the terms of an indemnification agreement between the trustee and Fleet, entered into by the parties in association with a sale of estate assets. See Branch v. SEI Corp. (In re Bank of New England Corp.), 210 B.R. 404(Bankr.D.Mass.1997).

Fleet filed a timely notice of appeal on June 6, 1997. (See App. Item 13.) Fleet did not file a "motion for leave to appeal" in accordance with the directive of Fed. R. Bankr.P. 8001(b) or in conformance with the requirements of Fed. R. Bankr.P. 8003(b).¹ The record discloses that at no time has Fleet formally sought, or obtained, leave to appeal in accordance with the rules.

DISCUSSION

1. Jurisdiction — Generally.

Although the issue was left dormant by the parties, this panel is duty-bound to determine its jurisdiction over this appeal before proceeding to the merits. See, e.g., Butler v. Dexter, 425 U.S. 262, 263 n. 2, 96 S.Ct. 1527, 1527, 47 L.Ed.2d 774 (1976)(observing that a court "must take notice on its own motion where jurisdiction does not appear," even if the issue is not raised by the appellee); Berner v. Delahanty, 129 F.3d 20, 23 (1st Cir.1997) ("The general rule is that a court should first confirm the existence of rudiments such as jurisdiction and standing before tackling the merits of a controverted case."); Williams v. United States (In re Williams), 215 B.R. 289, 297 (D.R.I.1997) (stating that "it is incumbent on the court to establish that it may exercise jurisdiction" before embarking on the merits of the appeal); Kelly, Howe & Scott v. Giguere (In re Giguere), 188 B.R. 486, 487 (D.R.I.1995) ("Although neither party has raised the question of jurisdiction, it is a question that must be addressed."); accord Gaines v. Nelson (In re Gaines), 932 F.2d 729, 731 (8th Cir.1991); McGowne v. Challenge-Cook Bros., 672 F.2d 652, 658 (8th Cir.1982).

Pursuant to 28 U.S.C. §§ 158(a) and (b), the Panel may hear appeals from "final judgments, orders, and decrees," § 158(a)(1), or "with leave of the court, from interlocutory orders and decrees." § 158(a)(3).² A party takes an appeal of a § 158(a)(1) final order "as of right" by filing a timely notice of appeal. Fed. R. Bankr.P. 8001(a).

Appeal of an interlocutory order is to be taken "by leave" pursuant to § 158(a)(3). Such an appeal "shall be taken by filing a notice of appeal . . . accompanied by a motion for leave to appeal prepared in accordance with Rule 8003." Fed. R. Bankr.P. 8001(b) (emphasis added). A motion for leave to appeal must include a statement of facts, a statement of the questions on appeal and the relief sought, a statement of the grounds for appeal, and a copy of the judgment, order, or decree for which review is sought. See Fed. R. Bankr.P. 8003(a). As discussed below, such a motion is not a prerequisite to appellate jurisdiction over interlocutory orders. So long as the order appealed from satisfies certain requirements, we may review an interlocutory order without first entertaining a motion requesting that we do so.

2. Final Order Analysis.

We first consider whether the court's summary disposition of Count VI was sufficiently "final" to provide Fleet with an appeal of right. We assess the order's character in view of § 158(a)(1)'s grant of jurisdiction over a bankruptcy court's "final judgments, orders, and decrees." That assessment is properly informed by the same principles that govern finality determinations under § 1291 (civil appeals from district court final orders to court of appeals) and § 158(d)(limiting court of appeals jurisdiction for secondtier bankruptcy appeals to final determinations of the first-tier appellate forum).³

Addressing the finality requirements of 28 U.S.C. § 1291, the Supreme Court has recognized legislative intent to "disallow appeal from any decision which is tentative, informal or incomplete." Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Before addressing what is now known as the "collateral order doctrine" (discussed below), the Cohen Court noted that the jurisdictional statutes do not "permit appeals, even from fully consummated decisions, where they are but steps towards final judgment in which they will merge." Id. "So long as the matter remains open, unfinished or inconclusive, there may be no intrusion by appeal," the Court observed, the statutory objective being "to combine in one review all stages of the proceeding that effectively may be reviewed and corrected if and when final judgment results." Id. "Were appellate review available on demand whenever a district court definitively resolved a contested legal issue, without regard to whether the entire adversary proceeding has been resolved, the `finality rule' would be eviscerated." In re Harrington, 992 F.2d at 6. See also Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374, 101 S.Ct. 669, 673-74, 66 L.Ed.2d 571 (1981) (citing reasons for final judgment rule as including deference to the trial judge, the potential that piecemeal litigation will undermine the role of the trial judge, efficient judicial administration, and avoidance of harassment and cost of successive appeals from intermediate rulings).

A decision is final if it "ends the ligation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945). See also Coopers & Lybrand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454, 2457, 57 L.Ed.2d 351 (1978) (quoting Catlin); (In re IBI Security Serv., Inc.), 174 B.R. at 668 (quoting Catlin).⁴ An interlocutory order, on the other hand, is one which "only decides some intervening matter pertaining to the cause, and which requires further steps to be taken in order to enable the court to adjudicate the cause on the merits." In re American Colonial Broad. Corp., 758 F.2d 794, 801 (1st Cir.1985) (quoting In re Merle's, Inc., 481 F.2d 1016 (9th Cir.1973)).

Bankruptcy matters, with assorted disputes — e.g., adversary proceedings, administrative applications, and contested matters — within the larger liquidation or reorganization case, are the object of "special considerations" under the finality doctrine. Stubbe v. Banco Central Corp. (In re Empresas Noroeste, Inc.), 806 F.2d 315, 316 (1st Cir.1986). See also In re Harrington, 992 F.2d at 6 n. 3 (describing three distinct types of proceedings in a bankruptcy case and comparing each to ordinary civil actions); Official Bondholders Comm. v. Chase Manhattan Bank (In re Marvel Entertainment Group, Inc.), 209 B.R. 832, 835-36 (D.Del.1997) ("Considerations unique to bankruptcy proceedings require courts to adopt a pragmatic approach in determining the finality of bankruptcy orders."); McGowan v. Global Indus., Inc. (In re National Office Prods., Inc.), 116 B.R. 19, 20 (Bankr.D.R.I.1990) (citing a more liberal approach to finality in bankruptcy proceedings relative to civil litigation).

Compared to the traditional civil case, a bankruptcy case holds more potential for the resolution of discrete disputes that might qualify as "judicial units" for purposes of appeal.⁵ Nevertheless, a bankruptcy court order is not appealable "unless it conclusively determines `a discrete dispute within the larger case.'" In re Harrington, 992 F.2d at 5 (quoted source not provided). Accord e.g., In re American Colonial Broad. Corp., 758 F.2d at 801; In re Saco Local Dev. Corp., 711 F.2d 441, 444 (1983); In re National Office Prods., Inc., 116 B.R. at 20.

The adversary proceeding initiated by the trustee's six count complaint is the relevant judicial unit upon which our finality analysis focuses. An adversary proceeding is perhaps the clearest example of a "discrete dispute" or "judicial unit" within the bankruptcy case. See Robinson v. Robinson (In re Robinson), 194 B.R. 697, 700 (Bankr.N.D.Ga. 1996)("`The disposition of a discrete dispute' generally is considered to mean the resolution of an adversary proceeding within the bankruptcy case."); see also In re Harrington, 992 F.2d at 6 n. 3 (noting the "great similarity" between the adversary proceeding in bankruptcy and the ordinary...