Schimmels, In re
| Decision Date | 30 May 1996 |
| Docket Number | No. 95-15974,95-15974 |
| Citation | 85 F.3d 416 |
| Parties | , 34 Fed.R.Serv.3d 1596, 96 Cal. Daily Op. Serv. 3808 In re H. Edwin SCHIMMELS; Mary Jo Schimmels, Debtors. UNITED STATES of America ex rel. Stephen RUDD; Mark Lanterman; Deborah Gibson; Henry Winburn, and Howard L. Hamby, Plaintiffs-Appellants, v. H. Edwin SCHIMMELS; Mary Jo Schimmels, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Daniel S. Kozma, Connerton, Ray & Simon, Washington, DC, for plaintiffs-appellants.
Alan R. Smith, Smith & Cope, Reno, Nevada, for defendants-appellees.
Appeal from the United States District Court for the District of Nevada, David Warner Hagen, District Judge, Presiding.
Before HUG, Chief Judge, D. W. NELSON and FERNANDEZ, Circuit Judges.
This case asks us to determine whether the appellants' untimely filing of their notice of appeal is excused because the bankruptcy court failed to follow the separate judgment rule of Bankruptcy Rule 9021. The appellants missed the deadline to file their notice of appeal in bankruptcy court, and the district court determined that it was accordingly without jurisdiction to entertain the appeal and dismissed the action. The appellants now contend that their notice of appeal was timely filed because the bankruptcy court failed to enter a separate judgment, under Bankruptcy Rule 9021, and that therefore, the clock never started running with respect to the ten days in which the notice of appeal must be filed. We have jurisdiction under 28 U.S.C. § 158(d), and we affirm.
The appellants are a group of former employees of General Contractors Inc. ("GCI") who filed a qui tam action under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3731, in the Eastern District of Washington. 1 The appellants' suit alleged that GCI, along with Ed and Mary Jo Schimmels, GCI's president and assistant treasurer respectively, defrauded the federal government by failing to compensate their employees properly. Specifically, the suit alleged that GCI and the Schimmels violated the Davis-Bacon Act, 40 U.S.C. § 276a, by over-deducting from employees' paychecks for health care, deducting portions of employees' paychecks for a training program that was incapable of being used to train GCI employees, and refusing to pay overtime. 2 These violations defrauded the federal government out of several thousand dollars in payroll taxes, Social Security taxes, and unemployment and workers compensation payments. GCI settled with the appellants, and the Schimmels were left as the only remaining defendants.
On March 12, 1993, the District Court for the Eastern District of Washington entered partial summary judgment for the appellants. The court held that the Schimmels had submitted 149 separate false claims over a period of four years and that the false statements had defrauded the federal government out of $14,958.16. The court reserved ruling on the amount of the mandatory statutory civil penalty it would impose (between $5,000 to $10,000 for each violation--with potential liability of over $2 million). With two other motions for summary judgment pending and scheduled for oral argument, the Schimmels filed a Chapter 11 bankruptcy petition in Reno, Nevada. The district court entered an order staying the suit pursuant to 11 U.S.C. § 362(a). 3
After unsuccessfully attempting to gain relief from the automatic stay in order to pursue an entry of final judgment in the FCA action, the appellants filed an adversarial proceeding in the bankruptcy court in order to establish the nondischargeability of the FCA debts. On January 4, 1994, the bankruptcy court granted a motion for summary judgment by the Schimmels and held that the debt was dischargeable. The appellants filed a timely motion for reconsideration on January 14, 1994. This tolled the time for appealing the order for summary judgment until the bankruptcy judge ruled on the motion to reconsider. The bankruptcy judge entered an order denying the motion for reconsideration on April 6, 1994.
The appellants had ten days, commencing on April 7, to file a notice of appeal. See Bankr.R. 8002(a); Bankr.R. 9006(a). The ten days expired on April 16, a Saturday. Therefore the deadline was automatically extended to Monday, April 18, 1994. Bankr.R. 9006(a). Because the court mailed the order denying the motion for reconsideration to the parties, the appellants mistakenly believed that Bankruptcy Rule 9006(f), which gives three additional days to undertake a proceeding when notice is served by mail, extended the time to file a notice of appeal until April 19. 4 Accordingly, the appellants filed their notice of appeal on Tuesday, April 19--one day late.
The Schimmels filed a motion to dismiss the appeal as untimely in the United States District Court for the District of Nevada. The appellants conceded that they incorrectly interpreted Rule 9006(f) as extending the deadline. The appellants contended, however, that the clock did not begin to run on April 7, 1994, because the bankruptcy court did not enter a separate judgment as required by Bankruptcy Rule 9021. The district court agreed that the bankruptcy court failed to enter separate judgments pursuant to Rule 9021 but nonetheless dismissed the appeal as untimely, holding that the appellants had waived this contention by treating the court's order as a final judgment. We affirm the dismissal on the ground that the judgments entered by the bankruptcy court did comply with the separate judgment requirement of Rule 9021.
The Bankruptcy Rules state:
Except as otherwise provided herein, Rule 58 F.R.Civ.P. applies in cases under the Code. Every judgment entered in an adversary proceeding or contested matter shall be set forth on a separate document.
Bankr.R. 9021. The separate document rule of Bankruptcy Rule 9021 is identical to Federal Rule of Civil Procedure 58. Reid v. White Motor Corp., 886 F.2d 1462, 1468 (6th Cir.1989), cert. denied, 494 U.S. 1080, 110 S.Ct. 1809, 108 L.Ed.2d 939 (1990); In re Seiscom Delta, Inc. (Seiscom Delta, Inc. v. Two Westlake Park), 857 F.2d 279, 285 (5th Cir.1988); In re Kilgus (Reichman v. United States Fire Ins. Co.), 811 F.2d 1112, 1117 (7th Cir.1987); see also Fed.R.Civ.P. 58 ().
A bankruptcy court is required to enter a separate judgment for every final disposition. Bankr.R. 9021. Bankruptcy Rule 9001(7) defines a "judgment" as "an appealable order." For the purposes of this rule, a "judgment" and an "order" are interchangeable--both are appealable and must be recorded as a separate document. See Beaudry Motor Co. v. Abko Properties, Inc., 780 F.2d 751, 755 n. 3 (9th Cir.), cert. denied, 479 U.S. 825, 107 S.Ct. 100, 93 L.Ed.2d 51 (1986); In re Pederson (Pederson v. Stedman), 78 B.R. 264, 265 (9th Cir. BAP 1987), aff'd, 875 F.2d 781 (9th Cir.1989). "A separate document means one separate from an opinion or memorandum of the court." In re Rehbein (Horton v. Rehbein), 60 B.R. 436, 439 (9th Cir. BAP 1986) (citing Calhoun v. United States, 647 F.2d 6, 9 (9th Cir.1981)).
In In re Slimick (Slimick v. Silva), 928 F.2d 304 (9th Cir.1990), the bankruptcy court held a hearing on an objection by a trustee to a debtor's request to exempt certain assets. Id. at 305. The court entered an "Order Sustaining Trustee's Objection" stating that it was "of the opinion that the trustee's objection ... should be granted for the reasons set forth in trustee's points and authorities" and concluding, "IT IS THEREFORE ORDERED that the objection ... is, hereby sustained." Id. Several months later, at the debtor's request, the bankruptcy court entered Findings of Fact and Conclusions of Law and a separate judgment sustaining the objection. The debtor appealed to the Ninth Circuit's Bankruptcy Appellate Panel which dismissed the appeal as untimely. This court affirmed and held that the initial order was the final appealable order and that the later Findings of Fact and judgment were irrelevant. Id. at 307. Although Slimick did not discuss the separate judgment rule in depth, implicit in the opinion was a conclusion that the earlier order satisfied the separate judgment requirement of Rule 9021. Id. at 309.
The purpose of the separate judgment rule is "to promote certainty as to the relatively short time that a party has to appeal a final order." In re San Joaquin Roast Beef (Ford v. Union Bank), 7 F.3d 1413, 1417 (9th Cir.1993). A separate judgment is required in order to eliminate "uncertainties as to when a judgment is entered" and when the time for appeal begins. United States v. Indrelunas, 411 U.S. 216, 219, 93 S.Ct. 1562, 1563, 36 L.Ed.2d 202 (1973); Rehbein, 60 B.R. at 439. "Wherever the rules establish a time requirement that limits a litigant's ability to obtain relief from a final judgment, it is imperative that the ... court provide a clear signal that the time period within which that relief can be sought has begun to run." Carter v. Beverly Hills Sav. & Loan Ass'n, 884 F.2d 1186, 1189 (9th Cir.1989), cert. denied, 497 U.S. 1024, 110 S.Ct. 3270, 111 L.Ed.2d 780 (1990).
The separate judgment rule does not always require the filing of two separate documents. As Slimick made clear, when a court enters a short order that clearly constitutes a final decision, that short order meets the separate judgment rule. Similarly, if a court grants a summary judgment without writing an opinion or memorandum, then the order granting summary judgment is enough to meet the separate document requirement.
[The separate judgment rule] does require every judgment to be set forth on a separate document. Appellant, however interprets this to mean that two documents are required in all cases. This is unfounded. [The separate judgment rule] applies where it is uncertain whether a final judgment has been entered, as where a trial judge writes an opinion or memorandum providing only...
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