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Lee v. Field

United States District Court, D. Hawaii

November 15, 2019

ADAM LEE, Debtor-Appellant,
DANE S. FIELD, Trustee-Appellee.



         Before the Court is pro se Debtor-Appellant Adam Lee's (“Lee”) appeal from the bankruptcy court's Order Granting in Part Trustee's Motion for Turnover and/or Monetary Judgment Against the Debtor in the Amount of $162, 488.97 (“Appeal” and “2019 Turnover Order”), filed on April 15, 2019, in In re Adam Lee, Bankruptcy No. 13-01356 (“BK”). [Dkt. no. 1-4.] Lee did not timely file his opening brief by the July 3, 2019 deadline. On August 2, 2019, Chapter 7 Trustee-Appellee Dane S. Field (“Trustee”) filed his Brief and Motion to Dismiss for Failure to Prosecute and for Lack of Appellate Jurisdiction (“Trustee's Brief”). [Dkt. no. 6.] On August 13, 2019, Lee filed his untimely Appellant's Brief (“Lee's Brief”). [Dkt. no. 8.] The Court finds this matter suitable for disposition without a hearing pursuant to Rule LR7.1(c) of the Local Rules of Practice for the United States District Court for the District of Hawaii (“Local Rules”). The Trustee's motion to dismiss for failure to prosecute and for lack of appellate jurisdiction are hereby denied, the Final Judgment is affirmed, and Lee's appeal is denied.


         On August 12, 2013, Lee filed his voluntary petition for bankruptcy, pursuant to Chapter 7 of the Bankruptcy Code. [BK, dkt. no. 1.] The Trustee was appointed on August 12, 2013. [BK, Minutes (dkt. no. 3).] On May 18, 2015, the Trustee filed a motion seeking an order requiring Lee to turn over to the Trustee: 1) certain financial information and records; 2) certain personal property of the estate; 3) two real properties located at 4014 Palua Place, Honolulu, Hawai`i, (“Palua 1” and “Palua 2”); and 4) rents received by Lee (or Lee's mother) from the tenants at Palua 1 and Palua 2 for the period of March 11, 2015 through April 30, 2015 (“2015 Turnover Motion”). [BK, dkt. no. 209.] On June 29, 2015, the bankruptcy court issued an order granting the 2015 Turnover Motion (“2015 Turnover Order”). [BK, dkt. no. 224.] On July 17, 2015, Lee appealed to the district court, appealing only the portion of the 2015 Turnover Order requiring Lee to turn over possession of Palua 1 and Palua 2 to the Trustee (“2015 Palua Possession Appeal”). [BK, dkt. no. 239.] On November 17, 2015, the district court issued its Order Affirming Bankruptcy Court Order (“11/17/15 District Court Order”). [Lee v. Field (In re Lee), CV 15-00278 SOM-RLP, dkt. no. 27.[1] Lee appealed to the Ninth Circuit. On May 7, 2018, the Ninth Circuit affirmed the 11/17/15 District Court Order. Lee v. Field (In re Lee), 889 F.3d 639 (9th Cir. 2018).

         On March 4, 2019, the Trustee filed his second Motion for Turnover and/or Monetary Judgment Against Debtor in the Amount of $162, 488.97 (“2019 Turnover Motion”).[2] [BK, dkt. no. 594.[3] In contrast to the 2015 Turnover Motion, in his 2019 Turnover Motion, the Trustee sought Palua 1 and Palua 2 post-petition rents running from the petition date through April 2015. [Mem. in Sup. of 2019 Turnover Motion at 21.] Also in his 2019 Turnover Motion, the Trustee sought the value of Lee's non-exempt IRA, the value of the non-exempt firearms, the amount by which the Trustee was required to compensate the buyers of Palua 1 for Lee's failure to timely vacate the property, other post-petition rents, and the proceeds from Lee's alleged sale of stock in the company [Id. at 21-22.]

         On March 25, 2019, Lee filed his opposition to the 2019 Turnover Motion (“2019 Turnover Opposition”), and, on April 1, 2019, the Trustee filed a reply in support of the 2019 Turnover Motion. [BK, dkt. nos. 621, 627.[4] On April 15, 2019, the bankruptcy court issued the 2019 Turnover Order, ordering Lee to turn over $72, 488.97 to the estate, representing the value of properties of the estate that had not been turned over to the Trustee. [2019 Turnover Order at 2.] The bankruptcy court ruled that, if Lee did not turn the $72, 488.97 over within ten days, the Trustee's counsel was to file a declaration to that effect, and to submit a proposed final judgment as to any amounts not turned over to the estate. [Id. at 2-3.] On April 27, 2019, the Trustee's counsel, Enver W. Painter, Jr., Esq., filed a declaration stating Lee had not turned over the funds and submitted a proposed final judgment. [BK, dkt. no. 652.[5] On April 29, 2019, Lee filed this Appeal. [Dkt. no. 1-3 (Notice of Appeal and Statement of Election).] On April 30, 2019, the bankruptcy court issued its Final Judgment Re Debtor's Non Compliance with Order Granting in Part Trustee's Motion for Turnover and/or Monetary Judgment (“Final Judgment”). [BK, dkt. no. 660.]

         The Trustee's Brief includes a motion to dismiss the Appeal on two alternate grounds. First, for failure to prosecute, arguing the Appeal should be dismissed because Lee's brief was due on July 3, 2019 and had not been filed at the time the Trustee filed his brief on August 2, 2019. [Trustee's Brief at 4.] Second, for lack of appellate jurisdiction. [Id. at 6.] The Trustee identifies four points in arguing this Court lacks appellate jurisdiction: 1) the 2019 Turnover Order was not a final order because it did not address all of the claims for relief, therefore it was interlocutory; 2) the Appeal is from the 2019 Turnover Order, therefore it was premature; 3) the premature appeal cannot be cured by a subsequent filing because more than a ministerial execution of the judgment remained to be completed by the bankruptcy court at the time the Appeal was filed; and 4) Lee did not obtain leave from the bankruptcy court to file an interlocutory appeal. [Id. at 6-8.]

         As to the merits of the Appeal, the Trustee argues that, in its 2019 Turnover Order and Final Judgment, the bankruptcy court ordered Lee to turn over to the Trustee $72, 488.97. [2019 Turnover Order at 2; Final Judgment at 2.]

         The sum of $72, 488.97 represents the following amounts:

-Palua 1 rents of $9, 450.00;
-Palua 2 rents of $54, 500;
-TD Ameritrade Roth IRA of $2, 453.16;
-the value of four firearms of $2, 000.00;
-the cost incurred by the estate as a result of Lee's delay in vacating Palua 1 of $585.81; and
-other post-petition rents collected of $3, 500.

[2019 Turnover Order at 2.]

         As to Palua 1, Palua 2, and the other post-petition rents, Lee argues the Trustee did not provide sufficient evidence for the bankruptcy court to find that the amounts listed in the 2019 Turnover Motion were accurate calculations of the amounts due. [Lee's Brief at 2.] Lee further argues: “Any amounts that were not proven to be collected by the Appellant cannot be ordered to be turned over because they were not proven to be collected by Appellant. It is a simple matter of not being responsible for funds that were never collected.” [Id. at 4.]

         In regard to the TD Ameritrade Roth IRA funds, Lee argues they should not be turned over because the issue of exemptions is still being litigated in the AP. [Id. at 5] In regard to the amount owed for firearms, Lee argues he should not be required to turn over the $2, 000 because the firearms were seized by the Honolulu Police Department (“HPD”), and the Trustee can acquire them from the police. In his brief, Lee does not discuss the $585.81 representing the cost incurred by the estate as a result of Lee's delay in vacating Palua 1.


         I. Failure to Prosecute

         The imposition of sanctions for non-compliance with non-jurisdictional bankruptcy procedural requirements is within the discretion of the district court. See Sierra Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705, 706 (9th Cir. 1986) (reviewing the district court's decision regarding non-jurisdiction bankruptcy procedural sanctions for abuse of discretion). Fed.R.Bankr.P. 8018(a) states that: the appellant must serve and file a brief within thirty days; and, if the brief is not filed, the district court may, after notice, dismiss the appeal.

         Ninth Circuit law

Require[s] the district court to weigh five factors to determine whether to dismiss a case for lack of prosecution: 1) the public's interest in expeditious resolution of litigation; 2) the court's need to manage its docket; 3) the risk of prejudice to the defendants; 4) the public policy favoring the disposition of cases on their merits; and 5) the availability of less drastic sanctions.

Moneymaker v. CoBen (In re Eisen), 31 F.3d 1447, 1451 (9th Cir. 1994) (citation omitted).

         II. Lack of Appellate Jurisdiction

         Under 28 U.S.C. § 158(a), the district courts of the United States have jurisdiction to hear appeals of the following documents entered by the bankruptcy court: 1) final judgments, orders, and decrees; 2) interlocutory orders and decrees under 11 U.S.C. § 1121; and 3) other interlocutory orders and decrees, with leave of court. See, e.g., Rosson v. Fitzgerald (In re Rosson), 545 F.3d 764, 769 (9th Cir. 2008) (stating that the district court's jurisdiction to review the bankruptcy court's order was pursuant to § 158(a)).

         III. Bankruptcy Appeal

         “A district court sitting in appellate jurisdiction over a bankruptcy court's order under 28 U.S.C. § 158(a)(1) applies the same legal standard as a federal court of appeals.” Kim v. Field, CIVIL NO. 18-00168 JAO-KSC, 2018 WL 6184880, at *2 (D. Hawai`i Nov. 27, 2018) (citing Bank v. Crystal Properties ...

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