447 B.R. 524
E.D. Mich.2011Background
- Derrick Gray filed a voluntary Chapter 13 petition on June 29, 2010; Wells Fargo held and serviced the mortgage and filed a proof of claim including Inspection Fees and Other Advance—Property Preservation.
- The Trustee questioned the reasonableness and necessity of those fees and sought discovery and an examination under Bankruptcy Rule 2004.
- Wells Fargo opposed the Rule 2004 motion, arguing scope and lack of good cause; the Trustee pressed for topics and documents related to fee reasonableness, procedures, and the claim reliance.
- The Bankruptcy Judge granted the Rule 2004 examination and subpoena duces tecum after hearings, prompting Wells Fargo to appeal.
- The district court analyzed finality, collateral order, and discretionary leave to appeal, and ultimately denied Wells Fargo’s appeal and stay motions, leaving the Rule 2004 order in place.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Rule 2004 order exceeded permissible scope. | Trustee argued scope encompassed relevant account and claim issues. | Wells Fargo argued scope was overly broad. | Not final; order not appealable as final. |
| Whether good cause was shown for the Rule 2004 examination. | Trustee asserted transparency and fee reasonableness concerns justified examination. | Wells Fargo contended no good cause was shown. | Court found good cause supported the examination. |
| Whether the Rule 2004 order is appealable under collateral order doctrine. | Trustee favored immediate review as collateral to proceedings. | Wells Fargo urged collateral order applicability. | Collateral order doctrine inapplicable. |
| Whether the district court should grant leave to appeal under 28 U.S.C. § 158(a)(3). | N/A | Wells Fargo sought immediate appellate review. | Discretion not exercised; leave to appeal denied. |
Key Cases Cited
- Dow Corning Corp. v. Dow Corning Corp., 86 F.3d 488 (6th Cir. 1996) (bankruptcy discovery orders reviewed flexibly for finality and collateral issues)
- In re Blinder, Robinson & Co. Inc., 127 B.R. 267 (D. Col. 1991) (finality of Rule 2004 orders analyzed per case-by-case approach)
- Johns-Manville Corp. v. Keene Corp., 42 B.R. 362 (S.D.N.Y. 1984) (Rule 2004 discovery scope and finality considerations)
- Pogue v. Diabetes Treatment Centers of America, Inc., 444 F.3d 462 (6th Cir. 2006) (discovery orders generally not final; contempt route for review)
- Winget v. JP Morgan Chase Bank, N.A., 537 F.3d 565 (6th Cir. 2008) (bankruptcy finality standard is flexible in reviewing appeals)