Order On Liability But Not Damages Is Interlocutory

Posted by NCBRC - April 28, 2017

Where the bankruptcy court granted partial summary judgment on the debtor’s complaint for willful violation of the automatic stay, but did not decide damages, the order was interlocutory and the Bankruptcy Appellate Panel lacked jurisdiction over the appeal. Lugo Ruiz v. FirstBank Puerto Rico, No. 17-7 (B.A.P. 1st Cir. April 14, 2017).

In dismissing the appeal, the BAP noted that in Vázquez Laboy v. Doral Mortg. Corp. (In re Vázquez Laboy), 647 F.3d 367 (1st Cir. 2011), the First Circuit ruled that where a finding on the merits did not resolve the issue of damages, it was not a “final judgment” and was not ripe for appeal. The panel noted, however, that it had authority to treat the appeal as a motion for leave to file an interlocutory appeal under any one of three conditions. First, if the appealed order falls under the “collateral order doctrine” by “finally determin[ing] claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” The court may also apply the criteria in 28 U.S.C. 158 (and section 1292(b)), which permits appellate review of interlocutory orders where they “have a final and irreparable effect on the rights of the parties” and involve a controlling question of law, as to which there is “substantial ground for difference of opinion’ and where resolution of the appeal may “materially advance the ultimate termination of the litigation.” The third basis upon which a court may accept an interlocutory appeal, the Forgay-Conrad doctrine, contemplates exercising appellate jurisdiction to avoid “irreparable injury” to the aggrieved party.

The panel found no indication in the record that any of these precepts applied and dismissed the appeal.

Lugo Ruiz 1st Cir BAP opinion April 2017


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