Schwab Industries, Inc. v. Huntington National Bank
679 F. App'x 397
| 6th Cir. | 2017Background
- Jerry Schwab created an irrevocable trust naming Huntington Trust Co. as trustee; Schwab Industries (Schwab Inc.) agreed to pay life-insurance premiums and received collateral interests in the policies.
- Schwab Inc. filed Chapter 11 in 2010; related state-law claims against the bank and Schwab’s former law firm were removed to the bankruptcy court as adversary proceedings.
- The bankruptcy court denied Schwab Inc.’s motions to remand and to withdraw the reference in 2014; Schwab appealed to the district court but did not obtain interlocutory-leave; the district court nonetheless reviewed and found no basis for interlocutory appeal.
- On September 21, 2015, the bankruptcy court granted motions to dismiss for lack of standing; Schwab filed a notice of appeal to the district court two days late (i.e., beyond the 14-day Rule 8002 deadline).
- The district court dismissed the appeal as untimely; Schwab argued the bankruptcy court lacked authority to enter final judgments on non-core state-law claims (Stern/Wellness issues) and that finality was therefore contested.
- The Sixth Circuit affirmed dismissal for lack of jurisdiction because the appeal was untimely and no excuse or extension was sought.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy-court orders were final for appeal purposes | Schwab: bankruptcy court lacked authority to enter final judgment on non-core state-law claims, so finality was contested and timeliness irrelevant | Bank/defendants: orders were final and appealable | Court: did not reach finality question because appeal was untimely; affirmed dismissal for lack of jurisdiction |
| Whether the district court had jurisdiction over untimely bankruptcy appeal | Schwab: district court’s prior actions (setting briefing schedule) tainted jurisdiction and timing is immaterial given Stern issues | Defendants: statutory deadline is jurisdictional; no extension requested | Court: Rule 8002 14-day deadline is jurisdictional; untimeliness deprives district court of jurisdiction |
| Whether exceptions to Rule 8002 apply | Schwab: (implicitly) exceptions or excusable delay may apply due to contested finality | Defendants: no motion for extension or substantial-compliance claimed | Court: no exception applies; appellant gave no excuse; strict compliance required |
| Whether prior district-court handling (interlocutory review) waived timeliness defect | Schwab: district court’s earlier interlocutory-like review and briefing schedule estops enforcement of deadline | Defendants: procedural history does not cure statutory deadline violation | Court: prior handling irrelevant; statutory timing governs jurisdiction |
Key Cases Cited
- Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (U.S. 2007) (federal courts must confirm jurisdiction before reaching merits)
- Browder v. Dir., Dep’t of Corr., 434 U.S. 257 (U.S. 1978) (statutory appeal deadlines are mandatory and jurisdictional)
- Bowles v. Russell, 551 U.S. 205 (U.S. 2007) (courts routinely dismiss untimely appeals for lack of jurisdiction)
- Stern v. Marshall, 564 U.S. 462 (U.S. 2011) (limits on bankruptcy courts’ authority to enter final judgments on certain non-core claims)
- Wellness Int’l Network, Ltd. v. Sharif, 135 S. Ct. 1932 (U.S. 2015) (further clarifies bankruptcy court final-judgment limits under Article III)
- Internal Revenue Serv. v. Hildebrand (In re Brown), 248 F.3d 484 (6th Cir. 2001) (appellate review of jurisdictional questions is de novo)