United States District Court, E.D. Virginia, Richmond Division
BRIAN K. FAILON, Appellant,
COMPASS CHEMICAL INTERNATIONAL, LLC, Appellee.
A. Gibney, Jr. Richmond, United States District Judge.
Chemical International, LLC ("Compass"), filed a
two-count complaint against a debtor in bankruptcy, Brian K.
Failon, in the U.S. Bankruptcy Court for the Eastern District
of Virginia (the "Bankruptcy Court"), thus
initiating an adversary proceeding. On March 29, 2016, the
Bankruptcy Court entered an order granting Compass's
partial motion for summary judgment (the "Order").
On May 26, 2016, Failon filed a notice of appeal. Compass
moved to dismiss the appeal as untimely. Because the Order
does not qualify as a final order, however, the Court
dismisses the appeal for lack of jurisdiction.
courts have jurisdiction over appeals from orders entered in
bankruptcy court, specifically "from final judgments,
orders, and decrees, " or from certain interlocutory, or
non-final, orders. 28 U.S.C. § 158(a); see In re
Robinson, 194 B.R. 697, 699-700 (Bankr. N.D.Ga. 1996).
In the bankruptcy context, a "final order" is one
that resolves a discrete dispute within the larger bankruptcy
proceeding. In re Computer Learning Ctrs., Inc., 407
F.3d 656, 660 (4th Cir. 2005) (citing A//. Robins Co.,
Inc. v. Piccinin, 788 F.2d 994, 1009 (4th Cir. 1986);
In re Saco Local Dev. Corp., 711 F.2d 441, 444 (1st
Cir. 1983) (Breyer, J.)). "Most adversary proceedings .
. . will satisfy the . . . test of being discrete disputes
within the larger case . . . ." Sumy v. Schlossberg,
111 F.2d 921, 923 (4th Cir. 1985) (citation omitted). In
other words, the adversary proceeding itself is the discrete
dispute, so an order ending an adversary proceeding would
qualify as a final order, ripe for appeal.
generally do not parse even further to find discrete disputes
within the discrete dispute of the adversary proceeding.
See, e.g., In re Moody, 825 F.2d 81, 85-86 (5th Cir.
1987) ("Where . . . parties bring multiple claims or
seek multiple forms of relief in a single adversary
proceeding, as a general rule finality for appeal purposes
does not occur until the court has settled all the issues
pending between the parties in that proceeding.");
In re Robinson, 194 B.R. at 700 ("Partial
summary judgments . . . very rarely give rise to a final
order for the purposes of appeal.") (citing Ernst
& Young v. Matsumoto (In re United Ins. Mgmt.,
Inc.), 14 F.3d 1380, 1383 (9th Cir. 1994)). For example,
in a situation similar to this case, the Second Circuit
The disposition of a discrete dispute is generally considered
to be the resolution of an adversary proceeding within the
bankruptcy action. This pragmatic approach to finality
permits the courts to address the specific needs of complex
bankruptcy proceedings, but does not overcome the general
aversion to piecemeal appeals. In the action now before us,
the discrete dispute is the adversary proceeding commenced by
LTV in 1988 consisting of two claims. The bankruptcy
court's orders granting partial summary judgment did not
resolve the discrete dispute, but instead disposed of only
one of the pending claims. The [other claim] still remains to
In re Chateaugay Corp., 922 F.2d 86, 90 (2d Cir.
case, the Order granted Compass's partial motion for
summary judgment as to Count II of the complaint. The Order
did not resolve Count I, meaning the Order was an
interlocutory order within the adversary proceeding-not a
final order. Because the Order is neither a final order
nor an appealable interlocutory order, see 28 U.S.C.
§ 158(a), the Court does not have appellate
jurisdiction. Accordingly, the Court dismisses the appeal for
lack of jurisdiction and remands the case to the Bankruptcy
Court. Once the Bankruptcy Court resolves Count I of the
complaint, the Order "will become part and parcel of
[the] final order, and it may be appealed at that time."
In re Robinson, 194 B.R. at 701.
Court will enter an appropriate order.
Clerk send a copy of this Opinion to all counsel of record.
In his opposition, Failon admits that
he appealed an interlocutory order. (Opp'n Mot. Dismiss
1.) In its reply, Compass states that the parties and the
Bankruptcy Court understood Count I as moot because Compass
abandoned the claims underlying Count I. (Reply Supp. Mot.
Dismiss 2-3.) Yet nothing on the record reilects this
understanding. From this Court's perspective, the Order
speaks only to Count II, as does Compass's partial motion
for summary judgment. (See Mot. Partial Suram. J.,
Compass Chem. Int'l, LLC v. Fallon (In re
Failon), AP No. 11-03229-KLP (Bankr. E.D. Va. June 26,
2015), ECF No. 50). Nothing on the record reflects resolution
of Count I or the discussions between the parties and the
Bankruptcy Court regarding Count I. While Compass correctly
states that the Bankruptcy Court need not employ explicit