In a published opinion entered on April 8, 2016, the Eleventh Circuit Court of Appeals held that District Courts are obliged to use and apply the Federal Rules of Bankruptcy Procedure rather than the Federal Rules of Civil Procedure when trying a case that “arises under” Title 11 (28 U.S.C. §1334). In Rosenberg v. DVI Receivables, LLC, et al., No. 14-14620, 2016 WL 1392642 (11th Cir. April 8, 2016) (click here for .pdf of opinion), the issue before the Court was the timeliness of the Defendants’ Motion for Judgment as a Matter of Law after a jury trial. Pursuant to Civil Procedure Rule 50(b), the deadline to file the Motion was 28 days after the entry of judgment. However, under Federal Rule of Bankruptcy Procedure 9015(c) the deadline is reduced to only 14 days after the entry of the judgment. The Defendants’ Motion was filed 28 days after the judgment against them was entered, making it timely under the Civil Rules, but not the Bankruptcy Rules. The District Court granted the Motion on the merits, and the Plaintiff appealed.
The underlying case involved an involuntary petition filed against the Plaintiff by the Defendants. The case was dismissed, but the Bankruptcy Court retained jurisdiction to determine damages pursuant to 11 U.S.C. §303(i). Plaintiff filed an adversary proceeding to recover damages, and requested a jury trial. The District Court withdrew the reference and conducted a jury trial that resulted in an award of $1,120,000 in compensatory damages and $5,000,000 in punitive damages. Defendants subsequently filed their Motion 28 days after entry of the judgment. The District Court granted the Motion on the merits, and the Plaintiff appealed and argued the Motion was filed out of time. Continue Reading