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Judges differ on allowance of trustee's appeal

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Judges on the 7th Circuit Court of Appeals, including Northern District Judge Joseph Van Bokkelen - who was sitting in designation - disagreed whether a bankruptcy trustee's appeal should be dismissed for lack of appellate jurisdiction because he didn't file a petition for permission to appeal.

Judge Diane Sykes dissented from Judges Richard Posner and Van Bokkelen in their decision in In Re: Joel Anthony Turner,  No. 08-2163, that the bankruptcy trustee's failure to file the petition doesn't prevent the Circuit Court from reaching a decision on the merits of the case. The two reversed the bankruptcy court's decision to allow Chapter 13 filer Joel Anthony Turner to continue to deduct more than $1,500 in monthly mortgage payments when he stated he planned to abandon the house to the mortgagee. The trustee in bankruptcy, representing the unsecured creditors, objected to the plan, and the Bankruptcy judge rejected the objection. The Bankruptcy judge certified his order for a direct appeal to the 7th Circuit.

That direct appeal is what caused the judges to dissent. The trustee didn't follow the specified temporary procedures in place at the time of the appeal under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 because he failed to file a petition for permission to appeal. The trustee filed his notice of appeal within the specified time, the bankruptcy court entered its certification order, and the clerk transmitted to the 7th Circuit the certification order and the trustee's request for certification.

Judges Posner and Van Bokkelen, who concurred in part and in the judgment with Judge Posner, determined none of the parties were harmed or inconvenienced by the trustee's failure to file the petition. Judge Posner wrote the filing in the 7th Circuit was both complete and timely, and that in essence, the petition was transferred by the court of the bankruptcy clerk rather than the trustee. The information sent by the clerk contained the same information the trustee would have sent.

"We don't mean to trivialize the requirement of filing a petition for review; in another case the failure to comply might well be fatal," wrote Judge Posner. "...Had Turner challenged the request for certification, it would have behooved the trustee to meet the challenge in a petition for review lodged with this court. But there was, as we said, no challenge, and hence the petition would have said nothing that was not in the request for certification-the request transmitted to us and treated by us as the petition for review, which in every respect except label it was."

The majority reversed the bankruptcy court's decision, agreeing with the 8th Circuit Court of Appeals that while the calculation of disposable income is a starting point for determining a debtor's projected disposable income, the final calculation can take into account changes that have occurred in the debtor's financial circumstances.

In her dissent, Judge Sykes would have dismissed the appeal for lack of appellate jurisdiction because of the trustee's failure to follow the act's requirements that he file a petition for permission to appeal.

"The trustee did not file the functional equivalent of a petition for permission to appeal within the applicable time limit for filing a petition; indeed, he did not file anything within the time limit for filing a petition," she wrote. "The majority permits the bankruptcy clerk's premature transmittal of a portion of the record to stand as the trustee's 'petition.' This is a significant and unwarranted expansion of the functional-equivalence principle."

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  1. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  2. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.

  3. From the article's fourth paragraph: "Her work underscores the blurry lines in Russia between the government and businesses . . ." Obviously, the author of this piece doesn't pay much attention to the "blurry lines" between government and businesses that exist in the United States. And I'm not talking only about Trump's alleged conflicts of interest. When lobbyists for major industries (pharmaceutical, petroleum, insurance, etc) have greater access to this country's elected representatives than do everyday individuals (i.e., voters), then I would say that the lines between government and business in the United States are just as blurry, if not more so, than in Russia.

  4. For some strange reason this story, like many on this ezine that question the powerful, seems to have been released in two formats. Prior format here: http://www.theindianalawyer.com/nominees-selected-for-us-attorney-in-indiana/PARAMS/article/44263 That observed, I must note that it is quite refreshing that denizens of the great unwashed (like me) can be allowed to openly question powerful elitists at ICE MILLER who are on the public dole like Selby. Kudos to those at this ezine who understand that they cannot be mere lapdogs to the powerful and corrupt, lest freedom bleed out. If you wonder why the Senator resisted Selby, consider reading the comments here for a theory: http://www.theindianalawyer.com/nominees-selected-for-us-attorney-in-indiana/PARAMS/article/44263

  5. Why is it a crisis that people want to protect their rights themselves? The courts have a huge bias against people appearing on their own behalf and these judges and lawyers will face their maker one day and answer for their actions.

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