August 14, 2018

Tenth Circuit: Debtor May Not Appeal from Bankruptcy Court to Both Bankruptcy Appellate Panel (BAP) and District Court

The Tenth Circuit issued its opinion in Woodman v. Concept Construction on Thursday, October 25, 2012.

Mr. and Mrs. Woodman filed for bankruptcy in 2008. On December 1, 2009, the bankruptcy court ruled that Peter Woodman owed Concept Construction, his former employer, over $600,000, a debt not dischargeable in bankruptcy since it was obtained through embezzlement. Mr. Woodman filed two timely notices of appeal from this decision by the bankruptcy court.  One appeal was heard by the bankruptcy appellate panel (BAP), which dismissed the appeal a month later for failure to prosecute.  The other appeal was heard by the district court, which decided to consider the matter despite the prior BAP ruling, but ruled against Mr. Woodman on the merits.  Mr. Woodman appealed from the judgment of the district court.

Bankruptcy appellate panels were designed to provide an alternative, not a supplement, to an appeal to the district court. Nothing in the statutory language creating the panels suggests that Congress would tolerate the confusion and waste of resources that would result from simultaneous appeals of the same bankruptcy court decision to both the district court and a panel. To the contrary, the statute authorizing appeals from the bankruptcy court speaks in terms of alternatives, giving a party a choice—an election—between the two appellate forums.

Accordingly, The Tenth Circuit concluded that Mr. Woodman’s second notice of appeal to the district court was a nullity. He could not have filed a second appeal to the district court so long as he had a pending appeal before the BAP. His “Notice Voluntary Withdrawal of Appeal” did not comply with the bankruptcy rules.

Therefore, the district court did not have jurisdiction to review the decision of the bankruptcy court. The district court’s judgment is VACATED and the case is REMANDED to that court for dismissal of the appeal from the bankruptcy court.

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