Bankruptcy Appellate Practice: The Entry of Bankruptcy Court Orders and the 14-Day Period to Appeal
An appeal from a bankruptcy court’s final judgment must be filed within 14 days of when an appealable order is entered on the docket. Parties should not delay past the 14 days even if, for instance, the bankruptcy court must still decide a related request for an award of attorneys’ fees. Otherwise, an appeal will be untimely under Federal Rule of Bankruptcy Procedure 8002(a)(1).
There are three ways for decisions to be entered. The most common is for a judgment, order, or decree to be entered in a “separate document” from the underlying decision under Federal Rules of Civil Procedure 58(a), (c)(2)(A) and Federal Rule of Bankruptcy Procedure 7058. But if the court doesn’t enter a separate document within 150 days from when a decision is issued, then the entry date is deemed to be the 150th day after the decision was issued, and appeals must be filed within 14 days of that date. Fed. R. Civ. P. 58(c)(2)(B). Finally, certain other rulings don’t need to be entered in a separate document. Id. 58(a)(1)-(5).[i]
A recent appellate decision shows how these rules work and offers helpful guidance for practitioners. PC Puerto Rico, LLC v. Empresas Martinez Valentin Corp. (In re Empresas Martinez Valentin Corp.), No. 18-2103, 2020 U.S. App. LEXIS 2701 (1st Cir. Jan. 28, 2020). The debtor, Empresas Martinez Valentin Corp. (“EMV”), filed for chapter 11 in the U.S. Bankruptcy Court for the District of Puerto Rico. After the case was filed, PC Puerto Rico, LLC (“PCPR”), a party in litigation with EMV, seized personal property that EMV owned. EMV obtained a ruling that PCPR’s actions violated the Bankruptcy Code’s automatic stay and an award of damages.
The court’s decision was issued on April 4, but an appealable order wasn’t docketed then. Meanwhile, on April 18, EMV filed a motion for reconsideration seeking more damages than those awarded. The bankruptcy court denied that motion on May 30. On November 27, the bankruptcy court issued opinions and orders awarding EMV attorneys’ fees and costs and entered a judgment in EMV’s favor that referenced those awards and the April 4th ruling on the stay violation. On December 8, PCPR appealed to the district court.
EMV moved to dismiss the appeal, arguing that it was untimely. The district court denied the motion and affirmed the bankruptcy court’s rulings concerning the stay violation and the fees and costs. PCPR then appealed to the U.S. Court of Appeals for the First Circuit. That Court reversed, holding that PCPR’s appeal was untimely.
The court noted that the initial April 4 decision was “a final judgment for appeal purposes.” 2020 U.S. App. LEXIS 2701, at *6. But the bankruptcy court didn’t enter an order during the next 150 days, or by September 1. Therefore, under the second option outlined above, the April 4th order was deemed entered on September 1, and the 14-day appeal period ran until September 15. Therefore, PCPR’s appeal filed on December 8 was untimely.
PCPR had argued that the 14-day appeal period should have been calculated from November 27, when the bankruptcy court docketed the orders awarding fees and costs and the judgment. PCPR asserted that the fees and costs were “compensatory damages” that were part of the damages for the stay violation. But U.S. Supreme Court precedent makes clear that an award of fees related to an underlying litigation is considered “collateral” to the final order and doesn’t impact the calculation of when a party in PCPR’s position must appeal. Ray Haluch Gravel Co. v. Cent. Pension Fund of Int’l Union of Operating Eng’rs & Participating Emp’rs, 571 U.S. 177 (2014); and Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988).
PCPR’s appeal would also have been late if the 150-period ran from when the bankruptcy court denied EMV’s motion for reconsideration on May 30. The 150th day from May 30 was October 28. The 14-day appeal period would have expired on November 11. And, thus again, the appeal filed on December 8 was untimely. 2020 U.S. App. LEXIS 2701, at *8.
The First Circuit made two final points. First, Bankruptcy Rule 8002’s deadline for parties to appeal is a jurisdictional one that can’t be waived. And, second, this rule “points counsel to a safe harbor that avoids all of this: when in doubt, file your notice of appeal, because a premature notice, unlike a late notice, can still be effective.” 2020 U.S. App. LEXIS 2701, at *11.
[i] A separate docket entry isn’t required for an order disposing of a motion for a judgment under Rule 50(b); to amend or make additional findings under Rule 52(b); for attorneys’ fees under Rule 54; for a new trial, or to alter or amend the judgment, under Rule 59; or for relief under Rule 60.