United States Court of Appeals
For the First Circuit
No. 01-9006
IN RE: V&M MANAGEMENT, INC.,
Debtor,
_____________________
ALPHONSE MOURAD,
Appellant,
v.
DONALD F. FARRELL, ET AL.,
Appellees.
APPEAL FROM THE BANKRUPTCY APPELLATE PANEL
OF THE FIRST CIRCUIT
Before
Boudin, Chief Judge,
Torruella, Circuit Judge,
and Stahl, Senior Circuit Judge.
Alphonse Mourad on brief pro se.
Harold B. Murphy, Andrew G. Lizotte and Hanify & King, P.C. on
brief for appellees Donald F. Farrell, Harold B. Murphy, and Hanify
& King, P.C.
Paul D. Moore, Anthony J. Fitzpatrick, Mobina F. Mohsin and
Duane Morris LLP on brief for appellee Stephen S. Gray.
February 24, 2003
Per Curiam. Alphonse Mourad appeals from the bankruptcy
court's dismissal of his claims, which were removed from state
court pursuant to 28 U.S.C. 1452(a), and its denial of his motion
to remand.1 The Bankruptcy Appellate Panel for the First Circuit
affirmed the bankruptcy court judgment and adopted its findings of
fact and conclusions of law. On appeal, we review the bankruptcy
court's findings of fact for clear error, and afford de novo review
to its conclusions of law. In re Healthco Int'l, Inc., 132 F.3d
104, 107 (1st Cir. 1997).
Appellees--Trustee Stephen Gray and the Hanify & King
firm ("H&K") and the latter's attorneys--argue that this court
lacks jurisdiction to review the bankruptcy court's decision
denying Mourad's motion to remand this case to state court. See 28
U.S.C. § 1452(b) (2000). However, Mourad argues that "the U.S.
Bankruptcy Court has no or questionable jurisdiction to rule upon
any matters regarding the State Court malpractice suit filed in the
Suffolk Superior Court." Because this argument attacks the lower
court's subject matter jurisdiction, we not only have jurisdiction
to review but are obligated to do so. See Things Remembered, Inc.
v. Petrarca, 516 U.S. 124, 131 n.1 (1995) (Ginsburg, J.,
concurring)(citing Mansfield, C. & L. M. R. Co. v. Swan, 111 U.S.
379, 382 (1884)); In re Celotex Corp., 124 F.3d 619, 625 (4th Cir.
1
The bankruptcy court granted the motion to remand one of
Mourad's claims but dismissed the remaining claims on non-
jurisdictional grounds.
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1997).
Mourad's state law claims consist of various allegations
of fraud, professional malpractice, and breach of fiduciary duty on
the part of Gray, H&K and its attorneys who served as legal counsel
to the debtor corporation ("the Debtor" or "V&M"). The claims
retained by the bankruptcy court wholly arise out of the trustee
and counsel's performance of their duties with respect to the
Debtor after the petition for bankruptcy was filed, and we have
little difficulty in finding that these state law claims are civil
proceedings "arising under title 11, or arising in or related to [a
case] under title 11." 28 U.S.C. § 1334(b) (2000). See, e.g., In
re Southmark Corp., 163 F.3d 925, 931 (5th Cir. 1999) (finding
jurisdiction over accountant malpractice claims), cert. denied, 527
U.S. 1004 (1999).
Whether these state law claims are core or non-core is
largely immaterial--Mourad never challenged the district court's
reference of these claims to the bankruptcy court, see 28 U.S.C. §
157 (2000)--except to the extent that this distinction might shed
light on how to classify Mourad's claims under the jurisdictional
headings of section 1334(b). But this further question (whether
his claims qualify for the "arise under" or "arise in" heading
rather than the "relate to" heading) is not presented to us, for
Mourad has not moved for mandatory abstention pursuant to section
1334(c)(2), see also Fed. R. Bankr. P. 5011, and the abstention
provision, which is waivable by the parties, does not detract from
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the district court's subject matter jurisdiction. See Celotex, 124
F.3d at 627 n.4. Mourad's jurisdictional attack having failed,
there is no other ground upon which a review of the bankruptcy
court's remand decision can be had. 28 U.S.C. § 1452(b).
This brings us to the issue of Mourad's standing to bring
these claims as former president, sole director and sole
shareholder of V&M. In dismissing Mourad's non-remanded claims for
lack of standing, the bankruptcy court found that Mourad was
precluded from re-litigating the issue of his standing. The court
relied upon its prior ruling, as part of the confirmation of the
reorganization plan, that Mourad's equity interest in the Debtor
had no value. The court also relied upon the preclusion effect of
its prior determinations, in at least three proceedings in the V&M
bankruptcy case, that Mourad lacked standing.
Applying the doctrine of collateral estoppel, the
bankruptcy court concluded that its prior ruling on the value of
Mourad's equity interest precluded him from contending that his
equity interest "had (or could have) such value as would give him
standing in the present matter." Because the only harm to himself
which Mourad's non-remanded claims alleged was in his capacity as
an equity security holder in the Debtor, the court reasoned, he was
precluded from arguing that he had standing to pursue the present
claims.
In support of his standing, Mourad now disputes the
bankruptcy court's finding that his equity interest in the Debtor
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had no value. We agree with the bankruptcy court that Mourad is
precluded from re-litigating the issue of the value of his equity
interest. As the bankruptcy court stated, "[b]y the 1997 order
confirming the Joint Plan of Reorganization, the [bankruptcy court]
has already adjudicated that Mr. Mourad's equity interest in the
Debtor is of no value." The requirements of issue preclusion are
satisfied. See Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26, 30
(1st Cir. 1994).2
Mourad attempts on appeal, as he did in his opposition to
defendants' motion to dismiss, to base his standing on his 1)
personal liability (as sole shareholder of a subchapter S
corporation) for certain debts owed by the Debtor, and 2) stake in
the opportunity to recover the value of his equity. We need not
decide whether standing can be supported on these grounds, because
these allegations could have been raised in the prior bankruptcy
proceedings where Mourad's standing was adjudicated. To the extent
that Mourad now seeks to add these new (but previously available)
factual allegations to establish his standing to bring the present
claims, such assertions do not defeat the bar of issue preclusion.
See Perry v. Sheahan, 222 F.3d 309, 318 (7th Cir. 2000).
In his brief on appeal, Mourad does not dispute (and
2
Specifically, the bankruptcy court found that "Mr. Mourad
was a party to and active participant in the Plan confirmation
process; this matter was actually litigated; the quantification of
Mr. Mourad's interest was necessary for confirmation of the plan;
and the confirmation order is a valid final judgment." Mourad has
not disputed any of those findings, nor does there appear to be any
valid basis for doing so.
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appears to concede) that the issue of standing has been previously
adjudicated. His only challenge to the court's dismissal of his
claims on preclusion grounds is that "the [bankruptcy court] has
been and continues to be biased towards Mourad." This contention,
which is based on judicial rulings against him, is groundless. See
Liteky v. United States, 510 U.S. 540, 554 (1994). Moreover,
Mourad's brief contains no developed argument challenging the
bankruptcy court's determination of no bias (made in connection
with denial of the motion for recusal in this case). "Our general
rule with regard to such poorly developed arguments is to treat
them as forfeited." Donahue v. City of Boston, 304 F.3d 110, 122
(1st Cir. 2002).
The bankruptcy appellate panel's decision dated February 26,
2001, is affirmed.
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