In re Wiston XXIV Ltd. Partnership

• Decision Date: 15 July 1994
• Docket Number: Civ. A. No. 93-4097-DES. Bankruptcy No. 91-40410-11.
• Citation: 170 BR 453
• Parties: In re WISTON XXIV LIMITED PARTNERSHIP. BALCOR PENSION INVESTORS V, Plaintiff/Appellee/Cross-Appellant, v. WISTON XXIV LIMITED PARTNERSHIP, Defendant/Appellant/Cross-Appellee.
• Court: U.S. District Court — District of Kansas

170 B.R. 453 (1994)

In re WISTON XXIV LIMITED PARTNERSHIP.

BALCOR PENSION INVESTORS V, Plaintiff/Appellee/Cross-Appellant, v. WISTON XXIV LIMITED PARTNERSHIP, Defendant/Appellant/Cross-Appellee.

Civ. A. No. 93-4097-DES. Bankruptcy No. 91-40410-11.

United States District Court, D. Kansas.

July 15, 1994.

COPYRIGHT MATERIAL OMITTED

William H. Zimmerman, Jr., Minter, Case & Zimmerman, Wichita, KS, Joel Pelofsky, Shughart, Thomson & Kilroy, Kansas City, MO, for Wiston XXIV Ltd. Partnership.

Harry D. Dixon, Jr., Dixon & Dixon P.C., Omaha, NE, for Robert L. Thompson and Wiston Management Inc.

Jonathan A. Margolies, McDowell, Rice & Smith, P.C., Kansas City, MO, Michael L. Molinaro, Katten, Muchin & Zavis, Chicago, IL, for Balcor Pension Investors V.

Daniel M. Runion, Western Resources, Inc., Topeka, KS, Douglas G. Peterson, Missouri

Gas Energy, Law Div., Kansas City, MO, for Western Resources, Inc.

MEMORANDUM AND ORDER

SAFFELS, Senior District Judge.

This matter is before the court on the appeal taken by the debtor, Wiston XXIV Limited Partnership ("Wiston") from the orders of the bankruptcy court filed on April 2, 1993, denying confirmation of the debtor's fourth amended plan of reorganization under Chapter 11 and granting relief from the automatic stay to Wiston's primary creditor, Balcor Pension Investors V ("Balcor").¹ Balcor cross-appeals from the order denying confirmation and from certain other orders of the bankruptcy court.

The facts underlying this dispute have previously been set forth in the memorandum decision of this court filed November 12, 1992. See In re Wiston XXIV Ltd. Partnership, 147 B.R. 575, 577-78 (D.Kan.1992), appeal dismissed, 988 F.2d 1012 (10th Cir. 1993). On remand, the bankruptcy court entered orders on April 2, 1993, denying confirmation of the debtor's fourth amended plan and granting Balcor relief from the automatic stay so that it could proceed with the foreclosure sale of the debtor's apartment complex. Wiston, pursuant to Bankruptcy Rule 9023, timely filed a motion for reconsideration.

A hearing was held on the motion to reconsider on April 13, 1993, at which time the bankruptcy court orally issued its ruling denying Wiston's motion to reconsider. The bankruptcy court directed counsel for Balcor to prepare and submit a written order. The court signed the order denying reconsideration on April 20, 1993. The order was entered on the bankruptcy court's docket on April 21, 1993.

Wiston filed its notice of appeal with the clerk of the bankruptcy court, pursuant to Bankruptcy Rule 8001(a), on April 20, 1993. The notice of appeal stated Wiston's intent to appeal the final judgments entered by the bankruptcy court on April 2, 1993. On April 30, 1993, Balcor filed its notice of cross-appeal as permitted by Bankruptcy Rule 8002(a).

Balcor contends that this court lacks subject matter jurisdiction to consider Wiston's appeal because its notice of appeal was untimely filed. The court agrees, but for different reasons than those advanced by Balcor.²

The untimely filing of a notice of appeal is a jurisdictional defect barring appellate review. E.g., In re Herwit, 970 F.2d 709, 710 (10th Cir.1992); In re Slimick, 928 F.2d 304, 306 (9th Cir.1990); In re Colorado Energy Supply, Inc., 728 F.2d 1283, 1285 (10th Cir.1984); In re Cordry, 149 B.R. 970, 975 (D.Kan.1993); see Fed.R.Bankr. 8001(a) (failure of appellant to take any step other than timely filing of notice of appeal does not affect validity of appeal). The court may consider the timeliness of an appeal sua sponte. In re Nucorp Energy, Inc., 812 F.2d 582, 584 (9th Cir.1987); In re Stagecoach Utilities, Inc., 86 B.R. 229, 230 (9th Cir. BAP 1988).

As a general rule, the notice of appeal must be filed with the clerk of the bankruptcy court within ten days of the entry date of the judgment or order from which the appeal was taken. Fed.R.Bankr. 8002(a). The filing date is the date the notice of appeal was received by the bankruptcy court clerk. Fed.R.Bankr. 8008(a); In re Herwit, 970 F.2d at 710 n. 2. In this instance, Wiston brings its appeal from the order denying confirmation and granting relief from the stay, entered on April 2, 1993. Under the general rule, therefore, Wiston's notice of appeal filed with the bankruptcy clerk on April 20, 1993, would have been untimely.

However, a motion to reconsider pursuant to Rule 9023³ brings into question the correctness of the underlying decision, and therefore tolls the time for filing a notice of appeal until entry of the order granting or denying the motion to reconsider. See In re Shields, 150 B.R. 259, 260 (D.Colo.1993); In re Frontier Airlines, Inc., 108 B.R. 274, 275-76 & n. 3 (D.Colo.1989). In this event, Rule 8002(b) governs the time for filing the notice of appeal. It reads as follows:

(b) Effect of motion on time for appeal

If a timely motion is filed by any party: (1) under Rule 7052(b) to amend or make additional findings of fact, whether or not an alteration of the judgment would be required if the motion is granted; (2) under Rule 9023 to alter or amend the judgment; or (3) under Rule 9023 for a new trial, the time for appeal for all parties shall run from the entry of the order denying a new trial or granting or denying any other such motion. A notice of appeal filed before the disposition of any of the above motions shall have no effect; a new notice of appeal must be filed. No additional fees shall be required for such filing.

(Emphasis added.) Hence, when a timely motion is filed to reconsider or to alter or amend the bankruptcy court's order, the ten-day time for filing the notice of appeal runs from the date of entry of the order granting or denying the motion. In re American Freight System, Inc., 153 B.R. 316, 319 (D.Kan.1993).

The time requirements of Rule 8002 are strictly construed and require strict compliance. See In re Herwit, 970 F.2d at 710; In re Slimick, 928 F.2d at 306; In re Souza, 795 F.2d 855, 857 (9th Cir.1986); In re Weston, 139 B.R. 543, 546 (D.Utah 1992), aff'd, 18 F.3d 860 (10th Cir.1994). The language of the rule explicitly requires the notice of appeal to be filed within the ten days after the entry of the order denying reconsideration. In re Sweet Transfer & Storage, Inc., 896 F.2d 1189, 1192 (9th Cir.1990). Notice filed before entry or more than ten days later is ineffective. Id. This rule is consistent with the principle that a judgment of the bankruptcy court is final, and therefore appealable, only after it has been entered on the docket of the bankruptcy case. See Fed. R.Bankr. 9021(a) (judgment effective when entered pursuant to Rule 5003); Fed. R.Bankr. 5003(a) (entry of judgment or order in a docket shall show the date entry is made); see also In re Rozark Farms, Inc., 139 B.R. 463, 464 (E.D.Mo.1992).

In this case, Wiston's notice of appeal was received by the bankruptcy court clerk and filed on April 20, 1993. Although the bankruptcy court orally denied the motion to reconsider on April 13, 1993, the written order he signed on April 20 was not entered by the bankruptcy court clerk until April 21, 1993. To take an appeal, Wiston was therefore required to file its notice of appeal within the ten day period commencing with the date the document was entered representing final disposition of the issue from which the appeal was taken, in this case April 21, 1993. See In re Weston, 139 B.R. at 547 (time for appeal commences with entry of document representing final disposition of issue appealed from); see also Stelpflug v. Federal Land Bank of St. Paul, 790 F.2d 47, 49-50 (7th Cir.1986) (entry of judgment means the date of docket entry).

Wiston's notice of appeal filed one day early was therefore premature and ineffective under Rule 8002(b). See In re Sweet Transfer & Storage, 896 F.2d at 1191-92 (motion for reconsideration orally denied July 24, 1987; first notice of appeal filed July 24; order denying reconsideration and judgment signed and filed July 28; amended notice of appeal filed July 29; orders appealed from entered August 6; notice of appeal held prematurely filed and appeal dismissed); In re Rozark Farms, Inc., 139 B.R. at 464 (motion to amend and notice of appeal filed February 4, 1991; motion to amend denied on February 5; written order entered on docket February 6; notice of appeal held prematurely filed and appeal dismissed); In re Crystal Sands Properties, 84 B.R. 665, 668 (9th Cir. BAP 1988) (motion for reconsideration filed October 14, 1986; notice of appeal filed October 28; motion for reconsideration denied at hearing held November 11; order entered denying reconsideration December 3; notice of appeal held premature and appeal dismissed); see also In re Blinder, Robinson & Co., Inc., 127 B.R. 267, 276 (D.Colo.1991) (distinguishing In re Sweet Transfer & Storage after discussing it with approval).⁴ Wiston's appeal must therefore be dismissed for lack of jurisdiction, because its notice of appeal was untimely filed.

Although the notice of appeal filed by Wiston was a nullity, Balcor's notice of cross-appeal was filed within ten days after entry of the order denying reconsideration and therefore may be construed as a timely notice of appeal. See Fed.R.Bankr. 8002(b) (time for appeal for all parties runs from entry of order granting or denying motion).

In its appellate brief, Balcor limits its appeal to a challenge of the bankruptcy court's order entered on June 9, 1992, in which the court refused to include as part of Balcor's claim liquidated damages under a provision of the promissory note Wiston had executed in favor of Balcor. The note provided for the debtor to pay ordinary interest at specified rates that increased over the life of the loan, various types of additional interest, attorney's fees and costs in the event Balcor employed counsel with respect to the note and mortgage, and, upon default, late charges and a higher interest rate. In addition, the note required Wiston, upon default, to pay liquidated...