Denial of Motion to Dismiss Chapter 13 Is Not Appealable, BAP Says

Combining the Supreme Court’s Bullard decision with an opinion handed down by the Sixth Circuit on October 16, the Sixth Circuit Bankruptcy Appellate Panel held that denial of a motion to dismiss a chapter 13 case after confirmation is not final and is therefore not appealable as of right. The appellants were not sympathetic litigants. They had their shot at defeating the debtors’ plan and failed. They did not appeal confirmation of the plan. Instead, they filed a motion to dismiss the chapter 13 case about two weeks after confirmation. The creditors had purchased a home from the debtor and soon found the house infested with mold. Ultimately, the creditors won a judgment against the debtor for about $125,000, prompting the debtor to file a chapter 13 petition. The creditors settled most of their disputes about the plan’s treatment of their claim, and the bankruptcy judge ruled on the remainder. The creditors did not appeal the confirmation order. Instead, they filed a motion to dismiss soon after confirmation. When the bankruptcy judge denied the motion to dismiss, they appealed pro se. Citing Ritzen Group Inc. v. Jackson Masonry LLC (In re Jackson Masonry, LLC), Nos. 18-5157/5161, 2018 WL 4997779 (6th Cir. Oct. 16, 2018), Judge Dales described how the Sixth Circuit “recently prescribed a two-step approach for determining whether an order of a bankruptcy court is immediately appealable under 28 U.S.C. § 158(a)(1).” To decide whether an order is appealable, Ritzen requires identifying the “judicial unit” and then analyzing whether it is “final.”

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