[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JULY 23, 2007
No. 07-11075 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket Nos. 06-01076-CV-ORL-22 & 06-00620-BK-KSJ
IN RE: SUSAN WACZEWSKI, Debtor.
_________________________________________________________________
SUSAN WACZEWSKI,
Plaintiff-Appellant,
versus
LAURIE K. WEATHERFORD,
Defendant-Appellee,
CENTRAL FLORIDA INVESTMENTS, INC.,
CFI SALES AND MARKETING, LTD,
WESTGATE VACATION VILLAS, LTD,
Intervenors-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(July 23, 2007)
Before BIRCH, BARKETT and HULL, Circuit Judges.
PER CURIAM:
This is the second appeal in this bankruptcy case. In the first appeal,
appellant Susan Waczewksi challenged the bankruptcy court’s order approving the
settlement of a lawsuit in her bankruptcy estate. We affirmed. In this second
appeal, Waczewski challenges the bankruptcy court’s refusal to set aside the order
affirmed in her first appeal. After review, we conclude that Waczewski’s new
challenge is barred by the doctrine of the law of the case and affirm.
I. BACKGROUND
A. First Appeal
Waczewski filed for Chapter 7 bankruptcy on October 12, 1999.1 At the
time, Waczewksi was a plaintiff in a civil action in state court for injuries against
the owner of certain property and for wrongful termination and
coercion/intimidation against her former employers. Once Waczewski filed for
Chapter 7 bankruptcy, her state court claims became property of her bankruptcy
estate.
The Chapter 7 bankruptcy trustee decided to settle the state court claims.
Waczewski opposed the trustee’s decision to settle the claims against her former
1
Waczewski’s husband also filed for Chapter 7 bankruptcy and was an appellant in the
last appeal to this Court. Mr. Waczewski is not a party to the instant appeal.
2
employers (hereinafter the “second compromise”).2 In an effort to regain control
of those claims, Waczewski filed a number of motions, including a motion to
convert her Chapter 7 bankruptcy to a Chapter 13 bankruptcy. While Waczewski’s
motion to convert was pending, the bankruptcy court entered an order approving
the proposed second compromise. The bankruptcy court also denied Waczewski’s
various motions, including the motion to convert to a Chapter 13 proceeding
because Waczewski had not obtained her husband’s consent.
Waczewski appealed to the district court. The district court affirmed, inter
alia, the bankruptcy court’s orders approving the second compromise and denying
Waczewski’s motion for conversion to a Chapter 13 bankruptcy.
Waczewski appealed to this Court. The Court affirmed the district court’s
order affirming the bankruptcy court’s approval of the second compromise, but
vacated and remanded as to the denial of Waczewski’s motion to convert. This
Court rejected the bankruptcy court’s conclusion that Waczewski required her
husband’s consent to convert to a Chapter 13 bankruptcy. The Court also declined
to affirm the denial of the motion to convert to Chapter 13 bankruptcy on the
ground relied upon by the district court, namely Waczewski’s bad faith in filing the
2
The bankruptcy court approved the trustee’s negotiated settlement with the property
owner without objection by Waczewski. That settlement was the “first compromise.” Thus, the
second compromise involves only her claims against her former employers.
3
motion. The Court explained that the bankruptcy court had not made a finding of
bad faith in the first instance and remanded “for the bankruptcy court to consider
the factual question of whether or not this request was made in bad faith.” This
Court also denied Waczewski’s petition for rehearing.
B. Second Appeal
At an evidentiary hearing on remand, Waczewski testified that she could
accomplish her goal of presenting her creditors with a more beneficial plan only by
regaining control of the lawsuit against her former employers. Waczewski also
presented to the bankruptcy court a Motion to Set Aside Second Compromise and
Motion to Enforce Mandate of the Eleventh Circuit Court of Appeals, which the
bankruptcy court took under advisement.
The bankruptcy court granted Waczewski’s motion to convert to a Chapter
13 bankruptcy. The bankruptcy court noted that Waczewski “was unable to
articulate any way” that Waczewski could regain control of her claims against her
former employers given that “[t]he Eleventh Circuit has entered a final judgment
approving the trustee’s compromise of the lawsuit.” The bankruptcy court further
found that Waczewski “earns insufficient monies to fund any legitimate Chapter 13
plan” and “is not motivated by any desire to pay her creditors but rather wants to
punish her former employer by continuing the litigation against it.” In sum, the
4
bankruptcy court found that Waczewski could not “in good faith propose a Chapter
13 plan.”
Nonetheless, the bankruptcy court concluded, based on uncertainty in the
law, that Waczewski should be given one opportunity to convert to a Chapter 13
case “no questions asked.” However, the bankruptcy court noted that this
conversion “seems an exercise in futility” given that Waczewski could not regain
control of the lawsuit. In a separate order issued the same day, the bankruptcy
court denied Waczewski’s motion to set aside the second compromise.
In denying Waczewski’s motion for reconsideration, the bankruptcy court
explained that it was bound by this Court’s limited remand, as follows:
The Court in its most recent order merely endeavored to
explicitly follow the Eleventh Circuit’s instructions on remand to
consider whether Mrs. Waczewski filed her request to convert her
Chapter 7 case to a case under Chapter 13 in good faith or in bad faith.
The Court does not believe it misconstrued these clear and simple
instructions. Mrs. Waczewski has failed to demonstrate any basis for
reconsideration.
Waczewski appealed to the district court, which affirmed the bankruptcy
court, stating that “[t]he settlement approval is a done deal. It is law of the case.”
The district court further explained that any arguments Waczewski raised about the
bankruptcy court’s approval of the second compromise should have been raised
during her first appeal to this Court and thus had been waived.
5
Waczewski filed this appeal.
II. DISCUSSION
On appeal, Waczewski challenges the bankruptcy court’s denial of her
motion to set aside the order approving the second compromise. The problem for
Waczewski is that our prior opinion remanding the Chapter 13 conversion portion
of her case also affirmed the bankruptcy court’s order approving the second
compromise and remanded solely for the purpose of allowing the bankruptcy court
to make a factual finding regarding whether Waczewski sought conversion in good
or bad faith.3 Thus, the threshold issue is whether, given this Court’s limited
remand, the law of the case doctrine and the mandate rule precluded the
bankruptcy court from setting aside the order approving the second compromise.4
“The law of the case doctrine bars relitigation of issues that were decided,
either explicitly or by necessary implication, in an earlier appeal of the same case.”
United States v. Jordan, 429 F.3d 1032, 1035 (11th Cir. 2005). “The mandate rule
3
The bankruptcy court noted a split in the courts over whether a debtor’s request to
convert to a Chapter 13 proceeding could be denied based on the debtor’s bad faith given that
§ 706(a) of the Bankruptcy Code permits debtors a “one time absolute right” to convert to a
Chapter 13 proceeding. The bankruptcy court also noted that a petition for certiorari raising this
issue was pending in the Supreme Court. The Supreme Court ultimately granted certiorari and
concluded that the bankruptcy court could disallow conversion based on a finding of the debtor’s
bad faith. See Marrama v. Citizens Bank of Mass., 549 U.S. ___, 127 S. Ct. 1105, 1111-12
(2007).
4
We review de novo whether the law of the case doctrine applies. Alphamed, Inc. v. B.
Braun Med., Inc., 367 F.3d 1280, 1285 (11th Cir. 2004).
6
is simply an application of the law of the case doctrine to a specific set of facts.”
Litman v. Mass. Mut. Life Ins. Co., 825 F.2d 1506, 1511 (11th Cir. 1987) (en
banc). “A district court when acting under an appellate court’s mandate, cannot
vary it, or examine it for any other purpose than execution; or give any other or
further relief; or review it, even for apparent error, upon a matter decided on
appeal; or intermeddle with it, further than to settle so much as has been
remanded.” Id. at 1510-11 (quotation marks omitted). The trial court “must
implement both the letter and the spirit of the mandate, taking into account the
appellate court’s opinion, and the circumstances it embraces.” Piambino v.
Bailey, 757 F.2d 1112, 1119 (11th Cir. 1985) (citations omitted). Thus,
“[a]lthough the trial court is free to address, as a matter of first impression, those
issues not disposed of on appeal, it is bound to follow the appellate court’s
holdings, both expressed and implied.” Id. (citations omitted).
Waczewski argues that, when this Court’s prior opinion is read carefully and
in context, its mandate did not foreclose setting aside on remand the order
approving the second compromise. Waczewski acknowledges that by affirming
the district court’s order approving the second compromise, the Court’s ruling
“appears to be a specific mandate.” However, she contends that the mandate
“becomes ambiguous” when it is read in context.
7
We do not find the mandate of the Court’s prior opinion ambiguous. With
regard to the Chapter 13 conversion, this Court concluded that Waczewski had an
absolute right to convert to a Chapter 13 proceeding, provided she had not
requested the conversion in bad faith.5 The Court remanded solely to determine
whether Waczewski filed her motion for conversion in good faith. Furthermore,
the Court necessarily addressed whether the state court action remained in
Waczewski’s estate when it affirmed the bankruptcy court’s order approving the
second compromise. Had the Court intended for Waczewski’s state court action to
remain in her estate if her case was converted to a Chapter 13 proceeding, the
Court would have vacated rather than affirmed the bankruptcy court’s approval of
the second compromise.6 The letter and spirit of this Court’s prior opinion is that,
upon a showing of good faith, Waczewski should be permitted to convert her case
to a Chapter 13 bankruptcy, but that the civil claims against her former employer
were properly settled and were no longer part of Waczewski’s bankruptcy estate.7
5
This conclusion is consistent with Marrama v. Citizens Bank of Massachusetts, 549 U.S.
__, 127 S. Ct. 1105 (2007). Thus, to the extent Waczewski argues that Marrama presents an
intervening change in the law that excepts her case from application of the law of the case
doctrine, that argument is without merit.
6
Indeed, Waczewski urged the Court in her petition for rehearing to vacate as premature
the order approving the second compromise, and the Court denied her petition for rehearing.
7
The gravamen of Waczewski’s argument is essentially that affirming the approval of the
Chapter 7 trustee’s second compromise while at the same time requiring the bankruptcy court to
permit Waczewski to convert to a Chapter 13 proceeding absent a finding of bad faith is
inconsistent with § 706(a). Even assuming arguendo that this issue was not addressed in the first
8
Having already been reviewed and settled in her first appeal, the propriety of
approving the second compromise became the “law of the case” and was outside
the scope of this Court’s limited remand. Therefore, the bankruptcy court did not
err in denying Waczewski’s motion to set aside the second compromise.
AFFIRMED.
appeal and not prohibited by the law of the case doctrine, the issue was ripe and should have
been timely raised in the first appeal. Thus, even if Waczewski is not barred by the doctrine of
the law of the case, she is barred by the doctrine of waiver. See Martin v. Atl. Coast Line R.R.
Co., 289 F.2d 414, 416 (5th Cir. 1961) (refusing to consider argument raised in second appeal
that could have been raised in first appeal); see also United States v. Fiallo-Jacome, 874 F.2d
1479, 1482 (11th Cir. 1989) (concluding that criminal defendant waived issues raised in his
second appeal that could have been raised in first appeal).
9