United States Court of Appeals
For the First Circuit
No. 05-1892
IN RE: JEAN MILES,
Debtor,
JEAN MILES,
Debtor, Appellee,
vs.
BENEFICIAL MASSACHUSETTS, INC.,
Creditor, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, Chief U.S. District Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Howard, Circuit Judge.
Thomas E. Carlotto, with whom Shechtman Halperin Savage, LLP
was on brief, for appellant.
Paul Collier, III, with whom Law Offices of Paul Collier,
Kimberly Breger, and Legal Services Center of Harvard Law Center,
were on brief, for appellee.
February 7, 2006
HOWARD, Circuit Judge. This bankruptcy appeal arrives
before us in a procedural tangle. The case began when Jean Miles,
the debtor, filed a petition for relief under chapter 13 of the
Bankruptcy Code to forestall a scheduled foreclosure by creditor
(and appellant) Beneficial Massachusetts, Inc., which holds a
mortgage on her residence. Despite the mortgage, Miles listed
Beneficial in her chapter 13 plan as an unsecured creditor,
apparently because, in Miles' view, Beneficial violated a number of
federal and Massachusetts consumer protection statutes when it
closed the loan which the mortgage secures. The plan stated that
Miles would bring an adversary action to vindicate the allegations
about Beneficial's unlawful behavior and, presumably, the decision
to list Beneficial as an unsecured creditor. But Miles did not
file the promised adversary proceeding prior to the confirmation of
her plan.
Beneficial received notice of the proposed plan but
permitted the plan to be confirmed by the bankruptcy court without
objection. Beneficial also received and accepted payments from
Miles under the confirmed plan. A short time after confirmation,
however, Beneficial filed with the bankruptcy court a proof of
secured claim. Beneficial filed this proof of claim on its own,
not through counsel. Strangely, the claim form incorrectly named
the debtor as "Jean Murphy" and misstated the date of the loan.
Perhaps for these reasons, the form was never docketed in the
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court's electronic docketing system. Stranger still, Beneficial
followed up this filing with a (counseled) motion for relief from
the automatic stay (imposed when Miles filed her petition) which
was supported by a "Loan Repayment and Security Agreement"
containing the same wrong information -- including a signature by
one Jean Murphy -- included on the claim form.
Subsequently, Beneficial filed a motion for post-
confirmation relief to determine the validity of its lien or,
alternatively, for vacatur of the order confirming the plan. The
bankruptcy court did not vacate its confirmation order but held
that the order did not affect the validity of Beneficial's
mortgage. The court also granted Beneficial's motion for relief
from the automatic stay to permit Beneficial to seek to foreclose
on the mortgage in state court. Miles moved for reconsideration
and contemporaneously filed an adversary action contesting the
validity of Beneficial's mortgage ab initio under the same theories
mentioned in her chapter 13 plan. The court summarily denied
Miles' motion, and Miles appealed to the district court.
In her brief to the district court, Miles argued that
confirmation of the chapter 13 plan listing Beneficial as an
unsecured creditor, coupled with Beneficial’s acceptance of
payments pursuant to the plan, rendered Beneficial an unsecured
creditor. As a remedy, Miles sought, inter alia, declaratory
relief to this effect. Alternatively, in the concluding paragraph
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of her brief, Miles asked that the district court vacate the
bankruptcy court orders and reimpose the automatic stay for so long
as her newly-filed adversary action remained pending. In its
responsive brief, Beneficial countered Miles’ primary argument but
did not address Miles’ alternative request for relief.
The district court scheduled the matter for oral argument
but, when the hearing convened, proceeded directly to Miles’
request for alternative relief. The court opined that addressing
the merits of Miles’ primary argument would be premature because
the pending adversary action sought a declaration that Beneficial's
mortgage had been unlawfully procured. Because the validity of the
mortgage was an essential premise of the bankruptcy court’s ruling,
the court suggested, the primary issue would not ripen unless and
until Beneficial was deemed to have been a secured creditor at the
time Miles filed for chapter 13 relief. The court therefore
reimposed the stay to preserve the status quo ante and
administratively closed the case without entry of judgment and
without prejudice to reopening it, if appropriate, upon termination
of the bankruptcy court proceedings.
Beneficial appeals the district court's decision, arguing
that the district court's decision to reimpose the stay constituted
legal error because the bankruptcy court’s decision to lift the
stay was premised on a sound view of the law and well within its
discretion on the record then before it. Miles responds to
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Beneficial's merits argument, but also contends that (1) Beneficial
has waived its right to bring this appeal by affirmatively agreeing
to the course of action taken by the district court, and (2) there
is no appellate jurisdiction to review the court's order, which was
not final. Beneficial did not file a reply brief responding to
Miles' waiver and jurisdictional arguments. At oral argument,
Beneficial contested Miles' waiver argument at some length, but had
little to say about the jurisdictional argument other than that the
district court's order was final because the issue before the court
was whether to reimpose the stay, and because the court decided
that issue without a formal remand to the bankruptcy court. Cf. In
re Gould & Eberhardt Gear Mach. Corp., 852 F.2d 26, 29 (1st Cir.
1988) ("When a district court remands a matter to the bankruptcy
court for significant further proceedings, there is no final order
. . . and the court of appeals lacks jurisdiction.") (emphasis
supplied).
Miles' waiver argument has some allure: Beneficial's
counsel never objected to the district court's proposed course of
action, told the court that "it does make sense," and then never
sought reconsideration before appealing to us. Cf. Pomerleau v.
West Springfield Public Schools, 362 F.3d 143, 146-47 (1st Cir.
2004) (enforcing a forfeiture in somewhat similar circumstances for
reasons of judicial efficiency). But we shall resolve this appeal
against Beneficial on straightforward grounds suggested (although
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not directly raised) by Miles’ appellate jurisdiction argument, an
argument that itself we shall not engage because it implicates
difficult issues that have not been fully joined. See Restoration
Pres. Masonry, Inc. v. Grove European, Ltd., 325 F.3d 54, 59 (1st
Cir. 2003) (observing that, notwithstanding the ban on
“hypothetical jurisdiction” imposed by Steel Co. v. Citizens for a
Better Env't, 523 U.S. 83, 94 (1998), courts may bypass difficult
issues pertaining to statutory appellate jurisdiction where the
merits of an appeal are easily resolved against the party asserting
appellate jurisdiction); see also, e.g., Okymansky v. Herbalife
Int'l of America, Inc., 415 F.3d 154, 158 (1st Cir. 2005)
(appellate courts may affirm a district court ruling on any ground
supported by the record).
As set forth above, Beneficial argues to us that the
district court erred in reimposing the stay because the bankruptcy
court’s order lifting the stay was within its discretion on the
record then before it. There is a logical flaw in this argument,
and the flaw is fatal to Beneficial’s appeal. The order lifting
the stay may well have been well within the bankruptcy court's
discretion at the time it was made, but it does not follow a priori
that the district court erred in reimposing the stay. The district
court’s decision to reimpose the stay was based on the fact that,
in its estimation, the underlying circumstances had materially
changed after the bankruptcy court issued its order. Miles had
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filed an adversary action challenging as invalid ab initio the
mortgage on Miles’ residence, and yet the bankruptcy court’s ruling
was premised on the assumption that Beneficial's mortgage was at
least initially valid. Beneficial does not argue to us that the
district court erred in so reasoning. And without directly or
indirectly calling into question the correctness of the district
court’s rationale, which certainly does not strike us as plainly
wrong, Beneficial cannot prevail in this appeal. See generally
Carcamo-Recinos v. Ashcroft, 389 F.3d 253, 257 (1st Cir. 2004)
(appellant's failure to address lower court's apparently sufficient
rational is fatal to the appeal).
Affirmed. Costs to appellee.
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