Butler v. State of Maryland

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: EDWARD R. BUTLER,
Debtor.

EDWARD R. BUTLER,
Plaintiff-Appellant,

v.

STATE OF MARYLAND COMPTROLLER OF
No. 96-1523
THE TREASURY,
Defendant-Appellee,

v.

RESOLUTION TRUST CORPORATION, as
Receiver for Baltimore Federal
Financial, F.S.A.; TERRY L. MUSIKA,
United States Trustee,
Parties in Interest.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Alexander Harvey II, Senior District Judge.
(CA-96-672-H, BK-90-3087-5-JS)

Submitted: October 31, 1996

Decided: November 20, 1996

Before HAMILTON, WILLIAMS, and MOTZ, Circuit Judges.

_________________________________________________________________

Vacated and remanded by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

Edward R. Butler, Appellant Pro Se. Wallace E. Hutton, OFFICE OF
THE COMPTROLLER OF THE STATE OF MARYLAND, Balti-
more, Maryland, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Edward R. Butler appeals from the district court's order dismissing
his appeal from the bankruptcy court for failing to timely file a desig-
nation of the record on appeal and statement of issues and from the
order denying reconsideration. We vacate the district court's orders
and remand this action to the district court for further proceedings.

In an earlier appeal, this court vacated and remanded the district
court's order dismissing as untimely Butler's appeal from the bank-
ruptcy court's denial of his motion for reconsideration of the order
converting his bankruptcy case from a Chapter 11 reorganization pro-
ceeding to a Chapter 7 liquidation. On further remand to the bank-
ruptcy court, the bankruptcy judge reviewed the audiotape of the
hearing on the motion to vacate and entered an order denying the
motion. The bankruptcy court found that Butler's misconduct while
acting as debtor-in-possession justified the conversion of his bank-
ruptcy case from Chapter 11 to Chapter 7.

Butler timely noted his appeal from the order denying his motion
to vacate the conversion order but failed to timely file his designation
of the record and his statement of issues for appeal. Based on this fail-
ure, the district court dismissed the appeal for failure to comply with
Bankruptcy Rule 8006. After the district court dismissed Butler's

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motion for reconsideration of the dismissal, Butler timely noted his
appeal to this court.

Bankruptcy Rule 8006 provides that an appellant must designate
the items to be included in the record on appeal and file a statement
of the issues within ten days of filing the notice of appeal. To deter-
mine whether to dismiss a bankruptcy appeal for failure to timely file
the designation of the record or the statement of issues, the district
court must exercise its discretion under Bankruptcy Rule 8001(a). In
re SPR Corp., 45 F.3d 70, 74 (4th Cir. 1995). In applying Rule
8001(a), the district court must take one of the four steps outlined in
In re Serra Builders, Inc., 970 F.2d 1309 (4th Cir. 1992). Specifically,
the court must: "(1) make a finding of bad faith or negligence; (2)
give the appellant notice or an opportunity to explain the delay; (3)
consider whether the delay had any possible prejudicial effect on the
other parties; or (4) indicate that it considered the impact of the sanc-
tion and available alternatives," keeping in mind that dismissal is a
"harsh sanction which the district court must not impose lightly." Id.
at 1311. Proper application of the Serra test requires the court to con-
sider and balance all relevant factors.

In this case, Butler admittedly did not timely file the designation
of the record or the statement of issues as required by Rule 8006. The
district court dismissed the appeal, citing Rule 8006. However, the
district court did not examine Butler's failure to make this non-
jurisdictional filing in light of Rule 8001(a) and the balancing test set
forth in Serra Builders and explained in SPR Corp. This failure by the
district court to actually exercise its discretion by considering and bal-
ancing all relevant factors amounts to an abuse of discretion. See
James v. Jacobson, 6 F.3d 233, 239 (4th Cir. 1993).

Accordingly we vacate the district court orders dismissing Butler's
appeal and denying reconsideration and remand this case to the dis-
trict court for application of Bankruptcy Rule 8001(a), as explained
in Serra Builders and SPR Corp.. We dispense with oral argument
because the facts and legal contentions are adequately presented in the
materials before the court and argument would not aid the decisional
process.

VACATED AND REMANDED

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