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In re Rambo

June 20, 1997


Appeal from the United States Bankruptcy Court for the Western District of Oklahoma Bankr. No. 96-10840 Chapter 13

Before McFEELEY, Chief Judge, Pearson, and Boulden, Bankruptcy Judges.

The opinion of the court was delivered by: Pearson, Bankruptcy Judge.



Lawrence A.G. Johnson ("Johnson") appeals a $2,500 sanction order entered against him under FED. R. BANKR. P. 9011. Because Johnson has failed to provide the Court with an adequate record for reviewing the trial court's sanction, the Court affirms.


At the outset, the Court must examine its jurisdiction to hear this appeal. The United States District Court for the Western District of Oklahoma dismissed a prior appeal of the sanction order as interlocutory. Johnson filed the appeal before the Court the same day the bankruptcy court dismissed the debtors' underlying Chapter 13 case -- more than two months after the entry of the sanction order.

While the dismissal of the bankruptcy case would normally terminate any related proceedings, the Court concludes that Johnson may prosecute this appeal. 11 U.S.C. § 349; In re Statistical Tabulating Corp., 60 F.3d 1286, 1288 (7th Cir. 1995), cert. denied, 116 S.Ct. 815 (1996) (citing In re Morris, 950 F.2d 1531, 1534 (11th Cir. 1992)); Carraher v. Morgan Electronics, Inc. (In re Carraher), 971 F.2d 327, 328 (9th Cir. 1992). The sanction order has no effect on the bankruptcy estate, the creditors, or the debtors' rights, since it stems from Johnson's behavior and not the underlying case itself. Since the matter on appeal is not dependent on the existence of the underlying bankruptcy case, the trial court's dismissal of the debtors' Chapter 13 case does not affect the Court's jurisdiction to decide this appeal. See Statistical Tabulating Corp., 60 F.3d at 1289 (citing In re Income Property Builders, Inc., 699 F.2d 963 (9th Cir. 1982)).

Likewise, the time between the entry of the sanction order and the filing of the notice of appeal raises the question of the timeliness of the appeal. The general rule is that interlocutory orders merge into the final judgment of the case, and an appeal can be had from these interlocutory orders by timely filing a notice of appeal from the entry of that final judgment. E.g., Bowdry v. United Airlines, Inc., 58 F.3d 1483, 1489 (10th Cir. 1995). The fact that Johnson tried unsuccessfully to obtain an interlocutory appeal does not bar him from appealing the same order after entry of a final decision. See Ramsey v. Office of the State Engineer, 1993 WL 53120, 986 F.2d 1428 (table) (10th Cir.), cert. denied, 510 U.S. 890 (1993) (without expressly considering issue, court noted that appellant's prior interlocutory appeal had been dismissed for lack of jurisdiction, but court had jurisdiction over appellant's present appeal from final order). The Court concludes that the dismissal of the underlying case rendered the sanction order final, and this appeal is timely.


While Johnson would cast this matter as some sort of Promethean struggle to bring to the trial court a rule of law allegedly in place in other Oklahoma districts, the reality is much more prosaic. The sole issue before the Court is the sanction assessed against Johnson.

The debtors in the underlying case had previously filed for relief under the Bankruptcy Code. Johnson represented the creditor, Jim Walter Homes ("JWH"), which held a mortgage on the debtors' homestead. JWH had obtained relief from the automatic stay in the prior case and taken the state court foreclosure process through judgment and the sheriff's sale. The debtors filed this Chapter 13 case before the state court confirmed the sheriff's sale.

The debtors' petition, plan, and related pleadings in this case contained a number of deficiencies. Johnson filed a "Motion to Determine Automatic Stay Not in Effect, Motion to Dismiss for Bad Faith Filing, and Motion to Assess Attorney Fees," with a supporting brief. In the brief, Johnson argued that under the principles of res judicata or collateral estoppel, the order lifting the automatic stay in the debtors' previous bankruptcy case precluded the application or enforcement of the automatic stay *fn1 in this case.

On April 22, 1996, the trial court held a hearing on confirmation of the debtors' plan and JWH's motions. The court denied both the motions and confirmation of the plan in an order entered May 22, 1996. In that order, the court commented adversely on the professional conduct of counsel for both parties ...

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