Anjum v. Mukamal (In re Kumar)

In re SHEELA KUMAR, Debtor.

ZAFIR ANJUM, Appellant, v. BARRY MUKAMAL, trustee of the estate of Sheila Kumar, Appellee.

Case No. 15-cv-21159-GAYLES

Bankruptcy Case No. 11-15802-RAM

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

December 9, 2016

ORDER

THIS CAUSE comes before the Court on Appellee's Motion to Dismiss Appeal ("Motion") [ECF No. 18]. The Court has reviewed the Motion, the parties' briefs, and the record, and it has heard oral argument by counsel. Accordingly, the Court grants the Motion.¹

I. BACKGROUND

A. Factual Background

The facts of this case are fully set out in the bankruptcy court's record below. This Court briefly recounts the relevant facts for context. On March 18, 2005, Appellant and Sheela Kumar separated, and on September 16, 2005, divorce proceedings commenced in California. Duringthe pendency of those proceedings, and in violation of California law restraining the transfer of property subject to marriage dissolution proceedings, Kumar conveyed title of a property in Weed, California ("Weed Property") to a British Virgin Islands company called Evidale Worldwide Limited on November 30, 2007. By order of the California Superior Court, Butte County, Case No. FL029986, on September 17, 2010, Kumar received title to several properties, including the "Weed Property," that were part of the parties' community and quasi-community estate on March 18, 2005—the date of valuation. That court ordered Kumar to pay Appellant the sum of $1,050,040 to equalize the division of the estate. [ECF No. 8-3 at 98-100, 136]. On March 4, 2011, that court entered judgment for Appellant against Kumar in the amount of $163,675 in child support overpayment [ECF No. 8-4 at 179]. On March 4, 2011, Kumar filed a voluntary petition under Chapter 7 of Title 11 of the United States Code, commencing this bankruptcy case. On April 8, 2011, Appellant commenced a quiet title action in California state court, where, on August 16, 2011, Appellant obtained a judgment that declared title to the Weed Property in the names of "Zafir Anjum and Sheela Kumar, as community property" and enjoined Evidale Worldwide Limited from making any further claim to the Weed Property. [ECF No. 8-4 at 187].

B. Procedural Background

On March 6, 2015, the bankruptcy court issued an order on the summary judgment motions regarding Appellant's claims against Kumar's bankruptcy estate. [ECF No. 1 at 1-6]. The court ordered, inter alia, that Appellant's claims from the September 17, 2010 judgment and the March 4, 2011 order on child support overpayment were "allowed as a general unsecured claim." [Id. at 3]. The court further ordered that the claim would be subject to setoff in theamount Appellant receives for his one-half interest in the Weed Property. Appellant subsequently filed a Motion for Reconsideration, in which he argued that the court had erred in ordering his claim be offset by sale of the Weed Property. [ECF No. 8-6 at 140-43]. The court denied Appellant's motion on March 18, 2015. [ECF No. 1 at 7].

This matter came before this Court upon Appellant's bankruptcy appeal pursuant to 28 U.S.C. § 158(a). Appellant appeals the bankruptcy court's Order on Objections to Anjum Claim and Related Summary Judgment Motions and its Order Denying Motion to Reconsider [ECF No. 1]. In his Designation of Record and Issues on Appeal, Appellant stated the issue on appeal as follows: "Did the Bankruptcy Court err in reducing and/or mis-characterizing the claims of Zafir Anjum?" [ECF No. 8-2 at 2]. Appellant subsequently filed his initial brief, in which he provided two issues for this Court to consider: (1) "Did the Bankruptcy Court err in allowing Claim # 1-4 to the extent of $163,675 as a general unsecured claim instead of the asserted priority as a domestic support obligation?" and (2) "Did the Bankruptcy Court err in offsetting Mr. Anjum's claim with half of the proceeds of the sale of a house in Weed, CA, which house is not included in the bankruptcy estate?" [ECF No. 14 at 6].

Appellee Barry Mukamal—trustee of the estate of Sheila Kumar—subsequently filed this Motion to Dismiss Appeal, in which he argues that this Court should dismiss Appellant's appeal because the issues raised in the initial brief are not inferable from Appellant's blanket statement that the bankruptcy court "erred." Appellee further argues that the issues presented are raised for the first time on appeal and that this Court should therefore decline to address them.

II. LEGAL STANDARD

The district court has jurisdiction to hear appeals from final judgments and orders of bankruptcy judges pursuant to 28 U.S.C. § 158(a). "In reviewing bankruptcy court judgments, a district court functions as an appellate court." Rush v. JLJ Inc. (In re JLJ Inc.), 988 F.2d 1112, 1116 (11th Cir. 1993). The district court reviews the bankruptcy court's findings of fact for clear error and its conclusions of law de novo, and it cannot make independent factual findings. See Torrens v. Hood (In re Hood), 727 F.3d 1360, 1363 (11th Cir. 2013); see Englander v. Mills (In re Englander), 95 F.3d 1028, 1030 (11th Cir. 1996).

III. DISCUSSION

Upon appealing an order from the bankruptcy court, "[t]he appellant must file with the bankruptcy clerk and serve on the appellee a designation of the items to be included in the record on appeal and a statement of the issues to be presented." Fed. R. Bankr. P. 8009(1)(A). The Eleventh Circuit has construed this Rule as follows: "An issue that is not listed pursuant to this rule and is not inferable from the issues that are listed is deemed waived and will not be considered on appeal." Snap-On Tools, Inc. v. Freeman (In re Freeman), 956 F.2d 252, 255 (11th Cir. 1992) (emphasis added). "To 'infer' means 'to derive by reasoning or implication,' 'to conclude from facts or from factual reasoning,' or 'to reason from one thing to another.'" In re Hydratech Util., Inc., Nos. 08-cv-0331, 08-cv-0523, 2009 WL 482275, at *2 (M.D. Fla. Feb. 25, 2009) (footnotes and citations omitted). "The Eleventh Circuit has not set forth a test for determining when an issue/ is inferable." Bracewell v. Kelley (In re Bracewell), 322 B.R. 698, 702 (M.D. Ga. 2005). It may be sufficient for the court to consider an issue if "the substance of the issue is clearly inferable from [the] arguments below," particularly those that "rely upon thesame cases." Iberiabank v. FFS Data, Inc. (In re FFS Data, Inc.), 776 F.3d 1299, 1306 n.7 (11th Cir. 2015). "As long as an issue is inferable, then Rule [8009] is not intended to bind either party to the appeal as to the issues that are to be presented." PaeTec Commc'ns, Inc. v. Bull, (In re Bull), 528 B.R. 473 (M.D. Fla. 2015) (quoting In re Bracewell, 322 B.R. at 701-02). "The fact that the briefed issues are more detailed . . . does not mean that the issues cannot be 'inferred' from the initial Statement of the Issues." Id. at 485-86.

The Middle District of Georgia has applied a three-prong test derived from other courts to determine whether an issue is "inferable" from the Rule 8006 (now Rule 8009) statement of the issues:

First, the issue must have been raised in the bankruptcy court because an appellate court generally will not consider issues not adjudicated below. Second, and in conjunction with the previous point, the issue must not require the court to make any independent factual findings. Third, the issue must present no surprise to the other litigant.

In re Bracewell, 322 B.R. at 702 (citations omitted). This same three-prong test has been applied in the Southern District of Florida. See, e.g., Sundale, Ltd. v. Ocean Bank, 441 B.R. 384 (S.D. Fla. 2010). A blanket Rule 8009 statement "that merely accuses the bankruptcy court of having 'erred' is insufficient to infer specific grounds for error upon appeal." See Seidling v. Kelly (In re Seidling), 611 F. App'x 668, 670 (11th Cir. 2015) (per curiam) (citation omitted). "Rules are essential for the orderly processing of litigation, and a party's disregard of a rule, without good cause, ought not to be condoned." City Sanitation, LLC v. Allied Waste Servs. of Mass., LLC (In re Am. Cartage, Inc.), 656 F.3d 82, 91 (1st Cir. 2011). Accordingly, where "there are no exceptional circumstances, failure to comply with Rule [8009] waives the omitted issue on appeal." See id.

The issue before the Court is the sufficiency of Appellant's Designation of Record and Issues on Appeal—"Did the Bankruptcy Court err in reducing and/or mis-characterizing the claims of Zafir Anjum?" [ECF No. 8-2 at 2]—when coupled with the two issues raised within Appellant's subsequently filed initial brief—(1) "Did the Bankruptcy Court err in allowing Claim # 1-4 to the extent of $163,675 as a general unsecured claim instead of the asserted priority as a domestic support obligation?" and (2) "Did the Bankruptcy Court err in offsetting Mr. Anjum's claim with half of the proceeds of the sale of a house in Weed, CA, which house is not included in the bankruptcy estate?" [ECF No. 14 at 6]. The Court holds that Appellant's appeal should be dismissed because the two issues raised by Appellant in his initial brief are not properly before the Court.²

A. Overpayment of Child Support

Appellee argues that the issue of overpayment of child support as determined by the bankruptcy court as a general unsecured claim "only appears, for the first time, in the Appellant's Initial Brief" and that "the record is totally devoid of any record of Appellant Anjum raising the Overpayment issue." [ECF No. 18 ¶¶ 20, 23]. Appellee further argues that because the overpayment issue fails all three elements of the Bracewell test, the Court should hold the issue noninferable from the Designation of Record and Issues on Appeal, and it should dismiss the appeal. [Id. ¶ 20]. Appellant concedes that the "re-characterization issue was not arguedbelow, by any party, because the court below took it upon itself to take that action." [ECF No. 20 at 7]. However, Appellant argues that the...