Gary Ozenne v. Chase Manhattan Bank , 841 F.3d 810 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
IN RE GARY LAWRENCE OZENNE, No. 11-60039
Debtor,
BAP No.
11-1208
GARY LAWRENCE OZENNE,
Petitioner-Appellant,
OPINION
v.
CHASE MANHATTAN BANK; OCWEN
LOAN SERVICING; OCWEN FEDERAL
BANK FSB,
Respondents-Appellees.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Kirscher, Markell, and Dunn, Bankruptcy Judges, Presiding
Submitted En Banc September 8, 2016*
San Francisco, California
Filed November 9, 2016
*
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2 IN RE OZENNE
Before: Sidney R. Thomas, Chief Judge, and Alex
Kozinski, Susan P. Graber, M. Margaret McKeown,
Richard A. Paez, Marsha S. Berzon, Consuelo M. Callahan,
N. Randy Smith, Paul J. Watford, John B. Owens and
Michelle T. Friedland, Circuit Judges.
Opinion by Judge N.R. Smith
SUMMARY**
Bankruptcy
Vacating the Bankruptcy Appellate Panel’s order denying
a chapter 13 debtor’s petition for a writ of mandamus, the en
banc court held that the BAP lacked jurisdiction to hear the
mandamus petition.
The mandamus petition challenged the bankruptcy court’s
refusal to consider the debtor’s motion for sanctions for
violations of 11 U.S.C. § 362(a). The en banc court held that
mandamus was not available to the debtor because he filed
the mandamus petition as a substitute for filing the timely
appeal required by the Federal Rules of Bankruptcy
Procedure. The debtor’s failure to file a timely appeal from
the bankruptcy court’s order jurisdictionally barred the BAP
from considering the mandamus petition.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
IN RE OZENNE 3
The en banc court vacated the BAP’s order and remanded
the case with instruction to dismiss the mandamus petition for
lack of jurisdiction.
COUNSEL
Gary Lawrence Ozenne, Corona, California, pro se Petitioner-
Appellant.
Jeffrey S. Allison and Eric D. Houser, Houser & Allison,
Irvine, California, for Respondents-Appellees.
Thomas R. Phinney, President, Sacramento, California, as
and for Amicus Curiae California Bankruptcy Forum.
Paulette Brown, President, American Bar Association,
Chicago, Illinois; Ahmed R. Jinnah and Samuel R. Maizel,
Dentons US LLP, Los Angeles, California; for Amicus
Curiae American Bar Association.
John A.E. Pottow, University of Michigan Law School, Ann
Arbor, Michigan, for Amicus Curiae John A. E. Pottow.
4 IN RE OZENNE
OPINION
N.R. SMITH, Circuit Judge:
This matter comes before the en banc court on an appeal,
filed by Gary Ozenne, from the Ninth Circuit Bankruptcy
Appellate Panel (“BAP”). The BAP determined that it had
jurisdiction to hear Ozenne’s petition for a writ of mandamus
and then denied the petition. However, the BAP did not have
jurisdiction to hear Ozenne’s petition. Mandamus was not
available to Ozenne because he filed the petition as a
substitute for filing the timely appeal required by the Federal
Rules of Bankruptcy Procedure. Ozenne’s failure to file a
timely appeal jurisdictionally barred the BAP from
considering the petition for writ of mandamus.
FACTUAL AND PROCEDURAL BACKGROUND
A. Ozenne’s Initial Bankruptcy Petition
The history of this litigation is lengthy. This case—
Ozenne’s fifth chapter 13 bankruptcy—was filed on May 17,
2001, in the United States Bankruptcy Court for the Central
District of California. At that time, Chase Manhattan Bank,
Ocwen Loan Servicing, and Ocwen Federal Bank FSB (“the
Financial Institutions”) held and/or serviced a mortgage on
Ozenne’s home, and they were scheduled to foreclose on the
mortgage on May 17, 2001. However, Ozenne filed for
bankruptcy that same day in an attempt to stop the
foreclosure. Ozenne was unable to make his scheduled
payments under this fifth chapter 13 plan. Thus, on a motion
to dismiss filed by the trustee, the bankruptcy court dismissed
the case in March 2002. Ozenne filed for chapter 13
bankruptcy at least two more times, and both cases were
IN RE OZENNE 5
dismissed. The Financial Institutions finally successfully
foreclosed on Ozenne’s mortgage on July 31, 2002.
B. Ozenne’s First Attempt to Reopen the Case
In February 2003, Ozenne filed a motion in the
bankruptcy court to reopen this fifth bankruptcy. Ozenne
alleged that his creditors sold his residence unlawfully in
violation of an automatic stay. The bankruptcy court denied
the motion on March 28, 2003. The United States District
Court for the Central District of California affirmed on
August 5, 2003. We affirmed on June 24, 2005, Ozenne v.
Chase Manhattan Bank (In re Ozenne), 137 F. App’x 62 (9th
Cir. 2005) (unpublished), and the Supreme Court denied
certiorari, Ozenne v. Chase Manhattan Bank, 546 U.S. 1178
(2006).
C. Ozenne’s Second Attempt to Reopen the Case
In April 2007, Ozenne filed another motion in the
bankruptcy court. This time he sought to set aside the
bankruptcy court’s judgment under Federal Rule of Civil
Procedure 60 and sought damages under 11 U.S.C. § 362.
Section 362(k) permits a debtor to recover damages in the
case of a violation of a bankruptcy stay. The bankruptcy
court returned the motion to Ozenne, stating that the case had
been dismissed and that the court no longer had jurisdiction
to consider the case.1
Ozenne appealed to the district court, contesting the
bankruptcy court’s determination that it lacked jurisdiction
1
These documents do not appear on the bankruptcy court docket but
were submitted in the parties’ excerpts of record.
6 IN RE OZENNE
over the case. The district court affirmed on the ground that
the Rule 60 motion was filed four years too late. Ozenne
appealed the ruling to this court, and we affirmed on June 30,
2009. However, before we ruled on the appeal, Ozenne filed
a petition for writ of mandamus here in February 2009. The
petition asserted that Chase Manhattan Bank “unlawfully
issued a trustees [sic] deed” for his property to a third party
“in violation of the bankruptcy automatic stay” and sought “a
hearing under 11 [U.S.C. §] 362(k) . . . to determine the
damages caused by this violation of law.” We denied the
petition, and the Supreme Court denied Ozenne’s petition for
writ of certiorari. Ozenne v. Chase Manhattan Bank,
559 U.S. 943 (2010).
D. Ozenne’s Third Attempt to Reopen the Case
On November 13, 2009, Ozenne filed another motion for
sanctions with the bankruptcy court for violations of
11 U.S.C. § 362(a). On January 27, 2011, the bankruptcy
court again denied the motion and returned it to Ozenne,
reiterating that the case was closed and that the court lacked
jurisdiction to hear the motion.2
Ozenne never appealed this denial. Instead, on May 2,
2011, he filed a petition for writ of mandamus with the BAP,
asking the BAP to order the bankruptcy court to hold a trial
or hearing on the alleged § 362(a) violations. On May 20,
2011, without receiving a response from the Financial
Institutions, the BAP determined that it had the authority to
issue a writ of mandamus but denied the petition because
Ozenne “ha[d] not met the burden to establish that a writ of
2
This denial also does not appear on the bankruptcy court’s docket
but was submitted in the excerpts of record.
IN RE OZENNE 7
mandamus should be issued.” Ozenne filed his notice of
appeal to this court on June 20, 2011. That appeal is
currently before us.
The Financial Institutions claim they received no notice
of the petition, the BAP’s decision, or the appeal. When the
Financial Institutions had not filed a response by October 24,
2012, this court issued a notice, informing them that they had
fourteen days to file an answering brief. Despite this notice,
the Financial Institutions did not appear until August of 2015.
After allowing the Financial Institutions to file a late brief, a
three-judge panel issued an opinion on March 25, 2016,
vacating the BAP’s order. The majority held that the BAP
lacked jurisdiction under the All Writs Act, because the BAP,
established by the circuit judicial council pursuant to
28 U.S.C. § 158(b)(1), was not “established by Act of
Congress.” Ozenne v. Chase Manhattan Bank (In re Ozenne),
818 F.3d 514, 515 (9th Cir. 2016) (quoting 28 U.S.C.
§ 1651(a)). Accordingly, the panel “remand[ed] the case with
instructions to dismiss the petition for lack of jurisdiction.”
Id. at 522. Judge Bybee “concurr[ed] in the judgment but
vigorously disagree[d] with” the majority’s decision to raise
constitutional issues when the appeal could have been
decided on alternate grounds, and also disagreed with the
majority’s characterization of the BAP. Id. (Bybee, J.,
dissenting).
Thereafter, we asked the parties to submit briefs as to
whether the case should be heard en banc. A majority of non-
recused active judges ultimately voted to rehear the case en
banc.3
3
Ozenne v. Chase Manhattan Bank (In re Ozenne), 828 F.3d 1012
(9th Cir. 2016) (order granting rehearing en banc).
8 IN RE OZENNE
DISCUSSION
We have jurisdiction to hear Ozenne’s appeal from the
BAP. See 28 U.S.C. § 158(d)(1). We address whether the
BAP had jurisdiction to hear Ozenne’s mandamus petition.
Generally, a federal court must first determine whether it
has jurisdiction before reaching the merits of a case.
Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S.
422, 430–31 (2007). On appeal, the appellant has the burden
of establishing that the appellate court has jurisdiction to hear
the case. Melendres v. Maricopa Cty., 815 F.3d 645, 649 (9th
Cir. 2016). The deadline to file an appeal is “mandatory and
jurisdictional.” Browder v. Dir., Dep’t of Corr., 434 U.S.
257, 264 (1978) (internal quotation marks and citation
omitted); see also Melendres, 815 F.3d at 649 (“[W]e are not
at liberty to overlook a defect with the notice of appeal no
matter how compelling an appellant’s argument may be.”).
This rule also applies to federal bankruptcy appeals.
Anderson v. Mouradick (In re Mouradick), 13 F.3d 326,
327–28 (9th Cir. 1994) (“[T]he untimely filing of a notice of
appeal deprives the appellate court of jurisdiction to review
the bankruptcy court’s order.”).
A party to a bankruptcy proceeding has fourteen days to
appeal a bankruptcy judge’s order. Fed. R. Bankr. P.
8002(a)(1). Ozenne’s November 2009 motion asked the
bankruptcy court “to conduct a hearing or a trial with a jury
of peers under 11 [U.S.C. §] 362(k), to legally inspect these
violations of bankruptcy law, and determine damages.”
Ozenne had the right to appeal the bankruptcy court’s January
27, 2011 decision that it lacked jurisdiction to hear this
motion either to the district court or to the BAP. See Fed. R.
Bankr. P. 8003; 28 U.S.C. § 158(a). Ozenne did not appeal
IN RE OZENNE 9
the decision within the mandatory and jurisdictional time
limit.4 Therefore, the BAP lacked jurisdiction to consider any
appeal of this decision.
Instead of filing a timely appeal, Ozenne filed a
mandamus petition with the BAP on May 2, 2011. Ozenne’s
petition sought “an order from [the BAP] ordering a trial or
hearing for the violations of law under 11 [U.S.C. §] 362.”
Thus, Ozenne’s mandamus petition sought exactly what a
proper appeal of the bankruptcy court’s January 2011 order
would have sought: relief from the bankruptcy court’s
determination that it did not have jurisdiction to hear the case.
The mandamus petition sought the precise relief that would
have been available in an appeal had Ozenne filed a timely
notice of appeal. We must then determine whether such a
writ of mandamus can substitute for a timely appeal.
We acknowledge that “a federal court has leeway ‘to
choose among threshold grounds for denying audience to a
case on the merits.’” Sinochem, 549 U.S. at 431 (quoting
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 585 (1999)).
However, as a “fundamental rule of judicial restraint,” we
“must consider nonconstitutional grounds for decision”
before “reaching any constitutional questions.” Jean v.
Nelson, 472 U.S. 846, 854 (1985) (citations and internal
quotation marks omitted). Accordingly, we must first address
4
Ozenne has stated that he did not become aware of the bankruptcy
court’s order until February 14, 2011, a few days after the fourteen-day
deadline to appeal had passed. However, Ozenne still had time to file a
motion for extension of time to appeal. Fed. R. Bankr. P. 8002(d)(1)(B)
(permitting a party to file a motion to extend the time to appeal, so long
as the motion is filed within twenty-one days of the fourteen-day deadline
and the party shows excusable neglect). Ozenne failed to file such a
motion; rather, he filed nothing until his petition for writ of mandamus.
10 IN RE OZENNE
whether the BAP had jurisdiction to hear Ozenne’s appeal as
a matter of procedure and only reach the constitutional
question of whether the BAP had jurisdiction to hear
Ozenne’s appeal under the All Writs Act if we determine
there is no procedural bar.
Procedurally, a writ of mandamus cannot substitute for a
timely appeal. Calderon v. U.S. Dist. Court for Cent. Dist. of
Cal., 137 F.3d 1420, 1421 (9th Cir. 1998) (dismissing a
mandamus petition for lack of jurisdiction where the
petitioner had filed it after the deadline to file a notice of
appeal, and explaining that “[b]ecause [the petitioner] could
have obtained review of the district court’s order through an
ordinary appeal, mandamus is not available”). Thus, where
a party has the option of filing “a contemporaneous ordinary
appeal,” mandamus relief “is not available.” Herrington v.
Sonoma Cty., 706 F.2d 938, 940 (9th Cir. 1983) (citing Moses
H. Cone Mem’l Hosp. v. Mercury Constr. Co., 460 U.S. 1, 8
n.6 (1983)). In short, an appellate court does not have
“mandamus jurisdiction over a matter subject to direct
appeal.” Diamond v. U.S. Dist. Court for Cent. Dist. of Cal.,
661 F.2d 1198, 1198 (9th Cir. 1981) (order) (citation omitted)
(refusing to construe a mandamus petition as a notice of
appeal when the petitioner filed the mandamus petition after
the deadline for filing a notice of appeal had passed); see also
Roche v. Evaporated Milk Ass’n, 319 U.S. 21, 26 (1943)
(“[Mandamus] may not appropriately be used merely as a
substitute for the appeal procedure prescribed by the
statute.”); Ex parte Rowland, 104 U.S. 604, 617 (1881) (“The
general principle which governs proceedings by mandamus
is, that whatever can be done without the employment of that
extraordinary remedy, may not be done with it. It only lies
when there is practically no other remedy.” (emphasis in
original)). To allow a party to seek a writ of mandamus in an
IN RE OZENNE 11
appellate court in order to obtain relief from an appealable
district court decision—after the time to appeal that decision
has passed—would be a plain evasion of rules that are, as
noted above, mandatory and jurisdictional.
Finally, a writ of mandamus could not issue. The writ of
mandamus is “one of ‘the most potent weapons in the judicial
arsenal.’” Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367,
380 (2004) (quoting Will v. United States, 389 U.S. 90, 107
(1967)). Accordingly, three conditions must be present
before a writ of mandamus may issue. Id. “First, ‘the party
seeking issuance of the writ [must] have no other adequate
means to attain the relief he desires.’” Id. (alteration in
original) (quoting Kerr v. U.S. Dist. Court for N. Dist. of Cal.,
426 U.S. 394, 403 (1976)). Second, the petitioner’s right to
issuance of the writ must be “clear and indisputable.” Id. at
381 (quoting Kerr, 426 U.S. at 403). “Third, even if the first
two prerequisites have been met, the issuing court, in the
exercise of its discretion, must be satisfied that the writ is
appropriate under the circumstances.” Id. (citation omitted).
The Ninth Circuit has also articulated the following five
factors, laid out in Bauman v. U.S. District Court, 557 F.2d
650 (9th Cir. 1977), in determining whether mandamus relief
is appropriate:
(1) The party seeking the writ has no other
adequate means, such as a direct appeal, to
attain the relief he or she desires. (2) The
petitioner will be damaged or prejudiced in a
way not correctable on appeal. (This
guideline is closely related to the first.)
(3) The district court’s order is clearly
erroneous as a matter of law. (4) The district
court’s order is an oft-repeated error, or
12 IN RE OZENNE
manifests a persistent disregard of the federal
rules. (5) The district court’s order raises new
and important problems, or issues of law of
first impression.
United States v. U.S. Dist. Court for Dist. of Nev. (In re
United States), 791 F.3d 945, 955 & n.7 (9th Cir. 2015)
(quoting Bauman, 557 F.2d at 654–55).
Although Ozenne fails to satisfy any of the conditions for
mandamus relief, we need only discuss the first condition in
determining whether a writ could issue: The party seeking
issuance of the writ must have no other adequate means to
attain the desired relief. The first condition is “designed to
ensure that the writ will not be used as a substitute for the
regular appeals process.” Cheney, 542 U.S. at 380–81 (citing
Ex parte Fahey, 332 U.S. 258, 260 (1947)). Because
appellate review of the bankruptcy court’s order dismissing
the motion for sanctions was available to Ozenne, a writ of
mandamus granting him relief from that order could not
issue.
CONCLUSION
Ozenne could have appealed the bankruptcy court’s
January 2011 decision. But he did not. Instead Ozenne
waited for the notice of appeal deadline to pass and then filed
a mandamus petition seeking precisely the same relief he
would have sought in an appeal. In effect, then, despite its
label, the petition was an untimely appeal. The BAP would
not have had jurisdiction to consider the untimely appeal. See
In re Mouradick, 13 F.3d at 327. As a writ of mandamus
cannot substitute for a timely appeal, the BAP also did not
have jurisdiction to consider the appeal labeled as a
IN RE OZENNE 13
mandamus petition. See Calderon, 137 F.3d at 1422;
Diamond, 661 F.2d at 1198. Ozenne will not be permitted to
use mandamus to circumvent the jurisdictional requirement
that he file a timely appeal. The BAP should have dismissed
the petition for that reason.5
We vacate the BAP’s May 20, 2011, Order and remand
the case with instruction to dismiss the petition for lack of
jurisdiction. Parties shall bear their own costs for the appeal.
VACATED and REMANDED.
5
Because of the ground on which we resolve this appeal, we need not
and do not decide whether the BAP had consensual jurisdiction to hear
Ozenne’s mandamus petition, whether the BAP required consensual
jurisdiction to hear it, or whether the BAP had authority to entertain
petitions under the All Writs Act.