938 F. Supp. 2d 202
D.P.R.2013Background
- Borges, a creditor in Domenech's Chapter 7 case, challenged two bankruptcy court orders dated January 12, 2012.
- First order disqualified Borges’ counsel (Albizu) due to a conflict of interest in both adversary and estate-related representations.
- Second order denied Borges’ motion to lift the automatic stay to pursue division and liquidation of conjugal funds in state court.
- The bankruptcy court treated both orders as related decisions within the same overall dispute and consolidated the appeals.
- The district court concluded the orders were not final under 28 U.S.C. § 158(a) and dismissed for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the disqualification and stay-denial orders final or interlocutory? | Borges argues both orders are final under § 158(a)(1). | Trustee argues both are interlocutory under § 158(a) and not reviewable as of right. | Both orders are interlocutory; appeal dismissed for lack of jurisdiction. |
| Is there discretionary jurisdiction to hear the appeals with leave under § 158(a)(3)? | Borges seeks leave to appeal under § 158(a)(3). | Trustee contends leave should not be granted absent exceptional circumstances. | Court declines to exercise discretionary leave; no exceptional circumstances shown. |
Key Cases Cited
- Roller v. NRA Political Action Comm., 472 U.S. 424 (U.S. 1985) (disqualification orders generally not appealable as collateral, nonfinal)
- Flanagan v. U.S., 465 U.S. 259 (U.S. 1984) (interlocutory appeals denied in criminal contexts)
- Risjord, 449 U.S. 368 (U.S. 1981) (collateral order doctrine limits to final review)
- In re Bushkin Associates, Inc., 864 F.2d 241 (1st Cir. 1989) (recognizes strict limits on interlocutory disqualification appeals)
- In re Continental Investment Corp., 637 F.2d 1 (1st Cir. 1980) (disqualification orders not immediately appealable in bankruptcy)
- In re Rivera Torres, 432 F.3d 20 (1st Cir. 2005) (bankruptcy finality doctrine and adversary proceedings context)
- Calore Express Co., Inc., 288 F.3d 22 (1st Cir. 2002) (finality of stay-relief orders depends on disposition of discrete dispute)
- Bank of New Eng. Corp., 218 B.R. 643 (1st Cir. BAP 1998) (bankruptcy appellate panel on discretionary interlocutory review )
- Howard Delivery Service, Inc. v. Zurich American Ins. Co., 547 U.S. 651 (U.S. 2006) (finality in bankruptcy cases and discrete disputes within larger cases)