In Re: Samson Resources Corporation
1:16-cv-01156
D. Del.Aug 24, 2017Background
- Appellants Lloyd and Mary Ness owned fractional royalty interests under an oil & gas lease; Debtors (Samson Resources and affiliates) drilled wells and paid royalties, deducting post-production costs.
- Debtors filed Chapter 11 on Sept. 16, 2015; the Nesses filed several proofs of claim alleging underpayment of royalties and improper deductions (claims sought secured/priority treatment and damages).
- Debtors objected to the Ness Claims; after discovery the Bankruptcy Court held an evidentiary hearing and issued a Memorandum Order (Sept. 13, 2016) reclassifying the claims, finding North Dakota law permits post-production deductions, and disallowing and expunging the Ness Claims.
- The Nesses moved for reconsideration (treated under Fed. R. Civ. P. 59); the Bankruptcy Court denied reconsideration after a hearing on Nov. 16, 2016. The Nesses filed a district-court appeal on Dec. 7, 2016.
- The District Court found the appeal untimely under Bankruptcy Rule 8002 (14-day appeal period), observed no timely motion to extend (Rule 8002(d)) was filed, and concluded it lacked subject-matter jurisdiction; appeal dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court has jurisdiction over the appeal | Ness argued appeal should be heard despite timing; cited health issues and mailing date | Debtors argued appeal was untimely under Fed. R. Bankr. P. 8002 and jurisdictional time limits | Appeal dismissed for lack of jurisdiction because notice was filed after the 14-day rule and no timely extension motion was made |
| Whether excusable neglect could salvage the late appeal | Ness claimed health-related excusable neglect and that notice was mailed Dec. 5 | Debtors argued Rule 8002(d) requires a motion within 21 days after the 14-day period; no such motion was filed | Court rejected excuse: no motion for extension filed within required 21 days, so excusable neglect could not be considered |
| Whether mailbox/mailed notice rules or non-ECF filer rules extend the appeal deadline | Ness claimed notice was signed/mailed Dec. 5 and believed non-ECF filers get extra USPS days | Debtors argued timeliness is measured by clerk’s receipt, and Federal Rule 6(d)/Bankr. R. 9006(f) do not extend time measured from entry of order | Court held filing date is when clerk receives notice; mailing date does not change jurisdictional deadline; 6(d)/9006(f) inapplicable because time ran from entry of order |
| Merits arguments about royalty deductions and stay/abstention | Ness argued North Dakota law or lease pre-dated controlling law, and asked to modify stay/abstain | Debtors argued deductions were proper under North Dakota law and bankruptcy court should decide | Court did not reach merits due to lack of jurisdiction; Bankruptcy Court had previously found post-production deductions permissible under North Dakota law |
Key Cases Cited
- In re Caterbone, 640 F.3d 108 (3d Cir.) (statutory incorporation of Rule 8002 renders its time limits jurisdictional)
- Siemon v. Emigrant Sav. Bank, 421 F.3d 167 (2d Cir.) (failure to seek timely extension deprives court of jurisdiction)
- In re B.J. McAdams, Inc., 999 F.2d 1221 (8th Cir.) (time to file appeal runs from entry of judgment, not service)
- Shareholders v. Sound Radio, Inc., 109 F.3d 873 (3d Cir.) (timeliness rules for bankruptcy appeals are jurisdictional)
- Whitemere Dev. Corp. v. Cherry Hill Twp., 786 F.2d 185 (3d Cir.) (bankruptcy appeal deadlines are non-waivable jurisdictional requirements)
- In re Universal Minerals, Inc., 755 F.2d 309 (3d Cir.) (same principle on jurisdictional appeal deadlines)