Summary
noting this authority but not deciding the issue (citing In re Ribkov Realty Corp., No. 99–CV–984, 1999 WL 529557, at *14 (E.D.N.Y. July 21, 1999) (“[T]he dismissal of an adversary proceeding without prejudice is not an appealable final order.”))
Summary of this case from Pal Family Trust v. Ticor Title Ins.Opinion
No. 04 Civ. 5394 (DLC).
August 30, 2004
Denise L. Savage, JennyAnn Carles, Savage Associates, P.C., White Plains, New York, for the Appellant.
Joseph H. Smolinsky, Francisco Vazquez, Jeffrey I. Wasserman, Chadbourne Parke LLP, New York, New York, for the Appellees.
MEMORANDUM OPINION AND ORDER
Savage Associates, P.C., the appointed Unsecured Claims Estate Representative (the "plaintiff") of Teligent, Inc. ("Teligent"), appeals rulings by the Honorable Stuart M. Bernstein, Chief Judge of the United States Bankruptcy Court: (1) dismissing without prejudice for lack of personal jurisdiction a complaint it filed against Banda 26 S.A. (the "defendant") (the "Bankruptcy Decision"), and (2) dismissing the plaintiff's motion for reconsideration of arguments raised in its sur-reply as moot. The plaintiff contends that the Bankruptcy Court failed to address the plaintiff's fully briefed motion to amend the complaint. In its opposition to this motion, the defendant moves to strike certain documents from the record on appeal. For the reasons discussed below, the appeal is denied and the motion to strike is denied as moot.
The defendant has been placed into voluntary liquidation pursuant to the laws of Spain. It maintains that it does not intend either by its appearance in the Bankruptcy Court for the limited purpose of filing a motion to dismiss or by its appearance in opposition to the plaintiff's appeal to this Court to subject itself to the jurisdiction of the United States.
Background
Teligent was in the business of providing domestic and international telecommunication services, including local and long distance telephone and internet access. In 2000, in an attempt to expand its business internationally, Teligent entered into various joint ventures in Europe. To facilitate such ventures, Teligent established a wholly-owned subsidiary organized under the laws of Spain. In or about August 2000, the subsidiary entered into a joint venture in Spain in which it became a 40% shareholder in the defendant, also a Spanish company.
On May 21, 2001, Teligent filed a voluntary petition for relief under Chapter 11 of Title 11 of the Bankruptcy Code. On one of the schedules it was required to file pursuant to the Bankruptcy Code, Teligent listed certain transfers made by its subsidiaries to the defendant, which transfers constitute the underlying claim in this action. On September 5, 2002, Teligent's plan of reorganization (the "Plan") was confirmed.
On approximately May 21, 2003, the plaintiff commenced an adversary proceeding against the defendant. On September 29, the defendant filed its motion to dismiss for lack of personal jurisdiction and insufficiency of process. The plaintiff filed its opposition on October 30. The motion was fully briefed on November 17. Approximately four days later, the plaintiff filed a motion to amend, seeking to add additional defendants. On November 24, the plaintiff filed a sur-reply to the motion to dismiss in which it argued that new research revealed that jurisdiction over the defendant was proper based on a domination/alter-ego theory. The plaintiff had not previously argued this theory to the Bankruptcy Court.
The Bankruptcy Court denied the defendant's motion insofar as it was based on insufficiency of process. This determination is not on appeal to this Court.
On November 25, the Bankruptcy Court held a hearing on the motion to dismiss. The Bankruptcy Court informed the parties that it would not consider the arguments raised by the plaintiff for the first time in the sur-reply. On December 4, the plaintiff filed a motion for reconsideration of the Bankruptcy Court's decision not to consider the sur-reply. On March 30, 2004, the Bankruptcy Court issued an order granting the defendant's motion to dismiss for lack of personal jurisdiction (the "Bankruptcy Decision"). The Bankruptcy Court granted the plaintiff leave to amend the complaint to include "legally sufficient, non-conclusory allegations establishing a prima facie case of personal jurisdiction" over the defendant. (Emphasis in original.) Because the Bankruptcy Court dismissed the complaint without prejudice, it denied the motion for reconsideration as moot.
The Bankruptcy Court permitted the plaintiff to make a record of the new arguments.
On April 13, the Bankruptcy Court issued an Order memorializing its Decision (the "Order"). The Order, which was submitted by both parties after negotiating its terms, provided that "[t]he Motion to Dismiss is granted without prejudice to Plaintiff filing an amended complaint against [the defendant] within 30 days from the date of the Decision." The Bankruptcy Decision did not address whether the leave to amend would "relate back" to the original complaint; thus, on April 22, the plaintiff filed a motion for clarification. The Bankruptcy Court's schedule precluded a hearing on the motion for clarification prior to the ten-day period in which the plaintiff was required to file a notice of appeal to this Court. Therefore, also on April 22, the plaintiff filed an Amended Complaint and the instant appeal. The parties have stipulated to a stay of all matters in the Bankruptcy Court, including the motion for clarification, pending a ruling by this Court.
Discussion
District courts are vested with appellate jurisdiction over bankruptcy court rulings pursuant to 28 U.S.C. § 158(a), and "may affirm, modify, or reverse a bankruptcy judge's judgment, order, or decree." Bankruptcy Rule ¶ 8013. The Bankruptcy Court's findings of fact "shall not be set aside unless clearly erroneous," but a Bankruptcy Court's determination of the law is reviewed de novo. Id.
An appeal of a bankruptcy court's "final order" may be taken as of right, but an interlocutory appeal may only be taken with leave of court. See 28 U.S.C. §§ 158(a)(1) and (3). See also In re Pegasus Agency, Inc., 101 F.3d 882, 885 (2d Cir. 1996);In re Chateaugay Corp., 880 F.2d 1509, 1511 (2d Cir. 1989). The "standard for finality in bankruptcy matters is more flexible than in ordinary civil litigation." Pegasus, 101 F.3d at 885. An order of a bankruptcy court is final if it "completely resolves all of the issues pertaining to a discrete claim, including issues as to the proper relief." Id. (citation omitted). See also In re Johns Manville Corp., 824 F.2d 176, 179 (2d Cir. 1987).
There is authority in this Circuit for the proposition that a bankruptcy court's order granting a motion to dismiss an adversary proceeding without prejudice is an interlocutory order.See, e.g., In re Ribkov Realty Corp., No. 99 Civ. 984 (JG), 1999 WL 529557, at *14 (E.D.N.Y. July 21, 1999). See also In re Chateaugay Corp., 120 B.R. 707, 712 (S.D.N.Y. 1990) (order denying discovery request without prejudice is an interlocutory order). It is unnecessary to reach the legal question of whether a dismissal of a complaint without prejudice can ever constitute a final order because the plaintiff has conceded the untimeliness of its appeal to this Court. In its reply, the plaintiff states that it has "no objection to the remand of this case to the Bankruptcy Court for further proceedings in connection with the Amended Complaint. . . . [The plaintiff] does not seek to utilize this Court's time if the matters at bar can be resolved in the Bankruptcy Court."
The procedural posture of this case leaves no doubt that it is not ripe for an appeal to this Court. The plaintiff has filed an Amended Complaint that incorporates the allegations it presented to the Bankruptcy Court in its sur-reply. The Bankruptcy Court has not yet ruled on whether the allegations contained in the Amended Complaint relate back to the original Complaint or support a finding of personal jurisdiction over the foreign defendant. Since this appeal is dismissed, it is unnecessary to reach the defendant's motion to strike from the record on appeal documents it claims were not considered by the Bankruptcy Court in reaching the rulings contested in this appeal.
Conclusion
The plaintiff's appeal is denied. The defendant's motion to strike is denied as moot.
SO ORDERED: