United States District Court, M.D. Florida, Orlando Division
In Re JODELL M. ALTIER, Debtor.
GOSHEN MORTGAGE LLC, Appellee, DARRIN C. LAVINE, Appellant, Bankr. Nos. 6:15-bk-1838-KSJ, 6:15-ap-0156-KSJ, 6:16-ap-0013-KSJ
DALTON JR. UNITED STATES DISTRICT JUDGE.
appeal, Appellant Darrin Lavine (“Lavine”)
challenges a bankruptcy court order granting Justin
Luna's (“Mr. Luna”), counsel for Appellee
Goshen Mortgage LLC (“Goshen”), motion to
substitute as counsel for Grand Legacy Group
(“GLG”) in Chambers v. Altier, Case No.
6:16-ap-00013-KSJ (“2016 Adversary
Proceeding”). (See Doc. 4-2
(“Substitution Order”).) Upon review of the
parties' briefing and the bankruptcy record, the Court
initially expressed concern that this appeal was moot.
(See Doc. 29.) The Court then determined that, even
if not moot, the Court lacks appellate jurisdiction over the
Substitution Order, and the appeal is due to be dismissed.
serpentine nature of the underlying bankruptcy proceedings
requires the Court to recount the relevant events that led to
the instant appeal. On March 4, 2015, Debtor filed a
voluntary petition for bankruptcy. (See In re
Altier, 6:15-bk-1838-KSJ (“Bankruptcy
Action”), Doc. 1.) In connection with the Bankruptcy
Action, Debtor purportedly failed to disclose, inter
alia, her interest in GLG, an incorporated entity that
held Debtor's real property interests. (See
2015 Adversary Proceeding, Doc. 1.) Debtor's failure to
disclose such interests led to the initiation of the 2015 and
2016 Adversary Proceedings, in which Goshen and the acting
bankruptcy trustee, Gene T. Chambers
(“Chambers”), alleged that Debtor had engaged in
misrepresentation and fraud, respectively. (See 2015
Adversary Proceeding, Doc. 1; see also 2016
Adversary Proceeding, Doc. 1.)
initiation of these Adversary Proceedings, on motion by
Chambers, the bankruptcy court ordered Debtor to turn over
possession “of the original ‘bearer shares'
stock certificates for all 1, 000 shares of [GLG]”
(“GLG Shares”) to Chambers. (Bankruptcy Action,
Doc. 100.) Ultimately, Goshen purchased all of the GLG Shares
from Chambers at an auction held by the bankruptcy court on
July 14, 2016 (“Auction”). (See Doc.
5-5, p. 5; see also Doc. 5-17, pp. 25-26.)
result of Goshen's acquisition of the GLG Shares at the
Auction, Mr. Luna moved the bankruptcy court to substitute as
GLG's counsel, replacing Mr. Bull. (2015 Adversary
Proceeding, Doc. 47 (“Substitution Motion”).) In
his Substitution Motion, Mr. Luna represented that GLG's
new sole shareholder, Bill Bymel (“Bymel”): (1)
removed any and all persons seeking to act on behalf of GLG,
which included Lavine; (2) appointed himself as sole director
and officer of GLG; and (3) adopted bylaws for GLG. (See
Id. at 4.) Over Lavine's objection (2015 Adversary
Proceeding, Doc. 56), the bankruptcy court entered the
Substitution Order. (See Doc. 4-2.) In so doing, the
bankruptcy court noted that Goshen was “the 100% owner
of GLG and [held] all the powers of management, direction,
and control related to GLG.” (Id.)
October 31, 2016, Lavine initiated the instant appeal
(“Appeal”). (Doc. 1.) During the pendency of the
Appeal, however, Goshen, Bymel, on behalf of GLG, and Debtor
filed a joint stipulation dismissing the 2016 Adversary
Proceeding. (See Doc. 27; see also 2015
Adversary Proceeding, Doc. 176.) The bankruptcy court
dismissed the 2016 Adversary Proceeding on May 9, 2017.
(See 2015 Adversary Proceeding, Doc. 181
(“Dismissal Order”).) In light of the Dismissal
Order, the Court directed Lavine to show cause why the Appeal
should not be dismissed as moot. (Doc. 29 (“Show Cause
Order”).) Lavine timely responded to the Show Cause
Order. (Doc. 30.)
courts operate under “a continuing obligation to
inquire into the existence of subject matter jurisdiction
whenever it may be lacking.” RES-GA Cobblestone,
LLC v. Blake Constr. & Dev., LLC, 718 F.3d 1308,
1313 (11th Cir. 2013). In reviewing decisions of a bankruptcy
court, a district court functions as an appellate court.
In re Colortex Indus., Inc., 19 F.3d 1371, 1374
(11th Cir. 1994). As such, a district court has appellate
jurisdiction over “final judgments, orders and
decrees” from the bankruptcy court. 28 U.S.C. §
158(a)(1). Unless leave to appeal is first granted, a
district court lacks appellate jurisdiction over
interlocutory orders from the bankruptcy court. 28 U.S.C.
§ 158(a)(2), (3).
order is final if it “ends the litigation on the merits
and leaves nothing for the court to do but execute the
judgment.” Catlin v. United States, 324 U.S.
229, 233 (1945). In the bankruptcy context, “finality
is given a more flexible interpretation . . . because
bankruptcy is an aggregation of controversies and suits,
” which involves multiple parties and is protracted in
nature. In re Donovan, 532 F.3d 1134, 1136-37 (11th
Cir. 2008). Hence a bankruptcy court's order is final if
it “completely resolves all the issues pertaining to a
discrete claim, including issues as to the proper
relief.” Id. at 1136-37 (quoting In re
Atlas, 210 F.3d 1305, 1308 (11th Cir. 2000)). The
Substitution Order does not completely resolve issues related
to a discrete claim. Moreover, courts that have addressed the
character of substitution orders have concluded that such
orders are interlocutory. See In re M.T.G., 403 F.3d
410, 413 (6th Cir. 2005) (“Generally a bankruptcy
court's order approving or substituting counsel in a
bankruptcy proceeding is not appealable.”) (quoting
In re Cottrell, 876 F.2d 540, 542 (6th Cir. 1989));
In re Sylvania Elec. Prods., 220 F.2d 423, 424 (1st
Cir. 1955) (noting that an order granting party substitution
“was obviously interlocutory in
the Substitution Order is an interlocutory order, Lavine was
required to seek leave of court. See 28 U.S.C.
§ 158(a)(3). Though Lavine failed to specifically do so,
the Court elects to exercise its discretion to treat
Lavine's notice of appeal as a motion for leave to appeal
the Substitution Order. See Fed. R. Bankr. P.
8004(b). However, doing so is to no avail.
interlocutory order is appealable under § 1292(b) where
it is not otherwise explicitly appealable under the other
sections of the Interlocutory Decisions Statute, 28 U.S.C.
§ 1292. Under § 1292(b), an interlocutory order may
become appealable if the district court finds that: (1) the
order involves a controlling question of law as to which
there is substantial ground for difference of opinion; and
(2) immediate appeal from the order may materially advance
the ultimate termination of the litigation. See Mamani v.
Berzain, 825 F.3d 1304, 1312 (11th Cir. 2016). An order
involves a controlling question of law if it involves a
matter that can be resolved without examining the record.
See McFarlin v. Conseco Servs., L.L.C., 381 F.3d
1251, 1258 (11th Cir. 2004).
the issue of whether the bankruptcy court properly
substituted counsel for GLG is not explicitly appealable
under the other sections of the Interlocutory Decisions
Statute. Applying § 1292(b), the Court finds that this
issue does not present a “pure” legal question.
Rather, to determine whether the bankruptcy court properly
substituted Mr. Luna as GLG's counsel requires the Court
to examine the series of transactions that led to
Goshen's acquisition of the GLG Shares-an inquiry that
necessarily involves review of the facts. See, e.g.,
Amos v. Glynn Cty. Bd. of Tax Assessors, 347 F.3d
1249, 1254 (11th Cir. 2003), abrogated on other grounds
by Exxon Mobil v. Saudi Basic Indus. Corp.,544 U.S. 280
(2005) (denying interlocutory appeal under § 1292(b)
because review would have been “too fact-intensive an
inquiry”). Therefore, the ...