Osuji v. U.S. Bank, Nat'l Ass'n, 285 F. Supp. 3d 554

Appellant Samuel Osuji filed an adversary proceeding against U.S. Bank (as trustee) on March 28, 2016; U.S. Bank failed to answer by the deadline and Osuji moved for default judgment on May 2, 2016.
Service of the default-motion papers was by mail to U.S. Bank at an address but did not name a particular officer; no clerk-entered default was recorded.
Wells Fargo, identified as servicer for U.S. Bank, appeared on September 12, 2016 and filed a Motion to Extend time to respond on September 21, 2016; Wells Fargo and the trustee subsequently filed oppositions/affirmations and replies followed.
Bankruptcy Judge Trust denied Osuji’s motion for default judgment in a February 10, 2017 order, concluding Wells Fargo’s participation showed the default was not willful and that courts prefer resolving cases on the merits rather than imposing the extreme sanction of default judgment.
Osuji sought leave to bring an interlocutory appeal to the district court; the district court reviewed whether the appeal met the Section 1292(b) standards (controlling question of law, substantial ground for difference of opinion, and material advancement of litigation).
The district court denied leave to appeal: it found Osuji’s challenge raised mixed questions of fact and law (not a pure controlling question), there was no substantial ground for difference of opinion, and no exceptional circumstances justified piecemeal interlocutory review.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the bankruptcy court erred by denying default judgment where the appearing party (Wells Fargo) lacked documentary proof it was servicer/party-in-interest	Osuji: Wells Fargo did not produce documentary evidence showing it was servicer of U.S. Bank, so it lacked standing to avoid default	U.S. Bank/Wells Fargo: Wells Fargo appeared and acted as servicer on behalf of U.S. Bank; its participation negated willfulness and justified relief from default	Denied leave to appeal. Court held the issue is a mixed question of law and fact, not a pure controlling question, and there is no substantial ground for difference of opinion; interlocutory appeal unwarranted
Whether interlocutory appeal should be permitted under 28 U.S.C. § 1292(b) standards	Osuji: Reversal would terminate the action and thus is controlling; immediate review warranted	U.S. Bank: No novel legal question; ordinary discretionary ruling; no exceptional circumstances or substantial disagreement in law	Denied. Court applied §1292(b) factors and found prongs one and two unmet and no exceptional circumstances

In re Kassover, 343 F.3d 91 (2d Cir. 2003) (district court discretion to grant leave to appeal interlocutory bankruptcy orders)
Buckskin Realty Inc. v. Greenberg, 552 B.R. 40 (E.D.N.Y. 2016) (standards for interlocutory appeal from bankruptcy court; controlling-question analysis)
In re Quigley Co., 323 B.R. 70 (S.D.N.Y. 2005) (apply §1292(b) standards to bankruptcy interlocutory appeals)
S.E.C. v. First Jersey Sec., Inc., 587 F. Supp. 535 (S.D.N.Y. 1984) (appeals presenting mixed law-and-fact questions are inappropriate for §1292(b) certification)
Century Pac., Inc. v. Hilton Hotels Corp., 574 F. Supp. 2d 369 (S.D.N.Y. 2008) (definition of a "pure" question of law for interlocutory certification)
Aristocrat Leisure Ltd. v. Deutsche Bank Tr. Co. Ams., 426 F. Supp. 2d 125 (S.D.N.Y. 2005) (mere disagreement with a decision insufficient to show substantial ground for difference of opinion)
In re Conde-Dedonato, 391 B.R. 247 (Bankr. E.D.N.Y. 2008) (mortgage servicers have standing and may act on behalf of creditors)