Bank of New York Mellon v. Nicholas Lee Watt
867 F.3d 1155
| 9th Cir. | 2017Background
- Nicholas and Patricia Watt owned a Newport, OR property subject to CCRs enforced by Meritage Homeowners’ Association; mortgage debt exceeded property value and multiple liens existed (BNY Mellon first lien, Bank of America second, Meritage judgment and statutory liens).
- The Watts filed Chapter 13 in March 2014 and proposed plans disposing of the Property; an amended plan included a nonstandard mandatory-vesting provision that would vest title to BNY Mellon without altering lien priorities.
- Bankruptcy court confirmed the Watts’ plan over BNY Mellon’s objection; BNY Mellon appealed to the district court.
- The district court vacated confirmation, holding a Chapter 13 plan cannot force an unconsenting creditor to take title, and remanded to the bankruptcy court.
- While this appeal was pending, the Watts arranged a § 363 sale of the Property to BNY Mellon, filed an amended plan reflecting the sale, and the bankruptcy court confirmed that new plan; the Watts did not timely object to or appeal that confirmation.
Issues
| Issue | Plaintiff's Argument (Watts) | Defendant's Argument (BNY Mellon) | Held |
|---|---|---|---|
| Whether this Court has jurisdiction to hear an appeal from a district court order vacating confirmation and remanding | Watts argued the district court order was final and appealable under § 158(d) | BNY Mellon argued the district court order was not final because it remanded for further proceedings | Court held there is no appellate jurisdiction: the district court order was not final for § 158(d) purposes |
| Whether a district court ruling that a plan is unconfirmable can be appealed separately from final confirmation or dismissal | Watts contended the legal question was final and suitable for immediate review | BNY Mellon contended appellate review must await final disposition or use interlocutory certification routes | Court held Bullard controls: orders rejecting confirmation that leave the overall proceeding ongoing are not final |
| Whether interlocutory certification could have been used to obtain appellate review | Watts did not pursue certification under § 1292(b) or § 158(d)(2) | BNY Mellon noted parties failed to seek certification | Court noted parties forewent available certification mechanisms and thus cannot invoke appellate jurisdiction now |
| Whether the Watts’ post-remand confirmation or sale provided an alternative route for appeal | Watts did not appeal the later confirmation after § 363 sale | BNY Mellon pointed to the post-sale confirmed plan as the appropriate final order to appeal | Court held the Watts could have appealed the later confirmation but did not; lack of appeal forecloses jurisdiction here |
Key Cases Cited
- In re Bonner Mall P’ship, 2 F.3d 899 (9th Cir. 1993) (court has independent duty to examine subject-matter jurisdiction)
- Blausey v. U.S. Trustee, 552 F.3d 1124 (9th Cir. 2009) (appellate courts have authority to determine their own jurisdiction)
- Bullard v. Blue Hills Bank, 135 S. Ct. 1686 (2015) (denial of confirmation is not a final appealable order because plan process is ongoing until confirmation or dismissal)
- In re Gugliuzza, 852 F.3d 884 (9th Cir. 2017) (after Bullard, remands for further factfinding are rarely final; ministerial exceptions)
- In re Landmark Fence Co., 801 F.3d 1099 (9th Cir. 2015) (limitations on finality where remand requires further proceedings)
- Conn. Nat’l Bank v. Germain, 503 U.S. 249 (1992) (§ 1292(b) applies in bankruptcy context)
- In re O&S Trucking, Inc., 811 F.3d 1020 (8th Cir. 2016) (debtor may have standing to appeal confirmation under person-aggrieved standard)
- In re Lowenschuss, 170 F.3d 923 (9th Cir. 1999) (articulating equitable mootness doctrine in bankruptcy appeals)
- In re Transwest Resort Props., Inc., 801 F.3d 1161 (9th Cir. 2015) (four-factor equitable-mootness test)
- In re Thorpe Insulation Co., 677 F.3d 869 (9th Cir. 2012) (equitable-mootness factors and analysis)