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McCoy v. ACE Motor Acceptance Corp.

United States District Court, W.D. North Carolina, Charlotte Division

December 20, 2019

ROBERT MCCOY, JR., Appellant,


          Kenneth D. Bell United States District Judge.

         THIS MATTER is before the Court on Ace Motor Acceptance Corporation's (“Ace”) Motion of Appellee for Order Dismissing Appeal of Interlocutory Order; Motion for Order Awarding Damages for Frivolous Appeal (Doc. No. 2) (“Motion”). Appellant Robert McCoy, Jr., (“McCoy”) has not filed a response to Ace's Motion and the time for doing so has long passed. For the reasons stated briefly herein, the Court will GRANT IN PART and DENY IN PART Ace's Motion (Doc. No. 2).

         I. BACKGROUND

         This appeal stems from an adversarial bankruptcy proceeding between Ace, a former floor plan lender for used car dealerships, and McCoy Motors, LLC, Misty McCoy, and McCoy (collectively, “McCoy Defendants”). Ace claims that the McCoy Defendants owe it more than $1, 000, 000. This adversary proceeding began in the Bankruptcy Court on June 18, 2018 and remains pending in the District Court today with unfortunately little to no progress towards resolution.[1] A more complete and thorough history of this case can be found on the Bankruptcy Court's docket, No. 18-03036, and the District Court's docket, No. 3:18-cv-630.

         McCoy appeals the order of the Bankruptcy Court (Bnk. Doc. No. 130)[2] denying his motion to reconsider the court's prior order (Bnk. Doc. No. 128) denying his motion to quash subpoenas. The lead up to the Bankruptcy Court's ruling is as follows: On November 20, 2018, Ace filed a motion for an order granting it leave to file a second amended complaint with additional parties and additional causes of action. (Bnk. Doc. No. 99). The Bankruptcy Court scheduled a hearing on the motion to be held in late December 2018. Because the McCoy Defendants had failed to provide Ace with financial information (some of which the Bankruptcy Court had already ordered be turned over), counsel for Ace served subpoenas on McCoy Motors and several non-parties seeking relevant financial documents in advance of the hearing. No. subpoena was issued to McCoy. After Ace's filing of Notices of Intent to Serve Subpoenas (Bnk. Doc. Nos. 116, 119), McCoy filed a motion to quash all subpoenas contained in Ace's notices. (Bnk. Doc. No. 125). The Bankruptcy Court denied McCoy's motion, stating:

Although McCoy suggests that it is necessary for the subpoenas to be accompanied by a letter in order to be enforceable in a foreign jurisdiction, this is not an accurate statement of the applicable law. These are Federal subpoenas under Federal Rule of Civil Procedure Rule 45, not State subpoenas. The letter referenced in the Motion is not required for a Federal subpoena. Rule 45 provides that “[a] subpoena may command a person to attend a trial, hearing, or deposition . . . within 100 miles of where the person resides, is employed, or regularly transacts business in person . .
. .” Thus, the subpoenas issued by the Plaintiff's counsel were properly issued and are enforceable.

(Bnk. Doc. No. 127; Doc. No. 1-1). The day after the Bankruptcy Court's order was filed, McCoy filed a motion to reconsider. (Bnk. Doc. No. 128). The Bankruptcy Court denied McCoy's motion to reconsider because the motion did “not demonstrate any grounds to reconsider under Federal Rule of Bankruptcy Procedure 9024 or Federal Rule of Civil Procedure 60.” (Bnk. Doc. No. 130; Doc. No. 1-2). McCoy filed this appeal on December 14, 2018, using a standard check-box notice of appeal form. (Doc. No. 1)


         A. Jurisdiction

         This Court may exercise jurisdiction only over final orders, 28 U.S.C. § 1291 (2012), and certain interlocutory and collateral orders, 28 U.S.C. § 1292 (2012); Fed.R.Civ.P. 54(b); Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545-46 (1949). The order McCoy seeks to appeal is neither a final order nor an appealable interlocutory or collateral order. Accordingly, the Court will dismiss the appeal for lack of jurisdiction.

         Any “final judgment, order, or decree of a bankruptcy judge” may be appealed. 28 U.S.C. § 158(a), Fed.R.Bankr.P. 8001(a) (district courts from bankruptcy courts); 28 U.S.C. §§ 158(d), 1291 (circuit courts from district courts). Generally, a case in federal district court culminates in a final decision when “a ruling ‘by which a district court disassociates itself from a case'” is entered. Bullard v. Blue Hills Bank, 135 S.Ct. 1686, 1691 (2015)(alteration in original) (quoting Swint v. Chambers Cty. Comm'n, 514 U.S. 35, 42 (1995)). However, “[t]he rules are different in bankruptcy. A bankruptcy case involves ‘an aggregation of individual controversies,' many of which would exist as stand-alone lawsuits but for the bankrupt status of the debtor.” Id. at 1692 (quoting 1 Collier on Bankruptcy ¶ 5.08 (16th ed. 2014)). Thus, the “concept of finality in bankruptcy cases ‘has traditionally been applied in a more pragmatic and less technical way . . . than in other situations.'” In re Computer Learning Ctrs., Inc., 407 F.3d 656, 660 (4th Cir. 2005) (quoting A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1009 (4th Cir. 1986)). As a guiding principal, “Congress has long provided that orders in bankruptcy cases may be immediately appealed if they finally dispose of discrete disputes within the larger case.” Bullard, 135 S.Ct. at 1692.

         Numerous courts have held generally that a bankruptcy court's discovery orders lack finality and are interlocutory for the purposes of § 158(a). See, e.g., In re Tullius, 500 Fed.Appx. 286, 289 (5th Cir. 2012) (“Notwithstanding this more flexible approach to finality in bankruptcy appeals, federal courts have concluded overwhelmingly that a bankruptcy court's discovery orders are interlocutory decisions from which an appeal to the district court does not lie as a matter of right.”); Coleman v. Simpson (In re Coleman Craten, LLC), 15 Fed.Appx. 184 (table), 2001 WL 987034 (4th Cir. 2001) (denying the district court's order denying party's motion for leave to appeal the bankruptcy court's order granting in part and denying in part the trustees' motion to compel); Vance v. Lester (In re Vance), 165 F.3d 34 (table), 1998 WL 783728, at *1 (7th Cir. 1998) (noting that a bankruptcy court's discovery orders are interlocutory); In re Jeannette Corp., 832 F.2d 43, 46 (3d Cir. 1987) (“In civil litigation, discovery orders are, with rare exception, non-appealable. A similar approach applies in bankruptcy cases.”) (citations omitted); W.S. Badcock v. Corp. v. Beaman, No. 4:14-CV-169-BO, 2015 WL 575422, at *2 (E.D. N.C. Feb. 11, 2015) (noting that bankruptcy discovery orders are interlocutory).

         Outside the context of bankruptcy court, the Supreme Court has held “that one to whom a subpoena is directed may not appeal the denial of a motion to quash that subpoena but must either obey its commands or refuse to do so and contest the validity of the subpoena if he is subsequently cited for contempt on account of his failure to obey.” United States v. Ryan, 402 U.S. 530, 532 (1971) (citing Cobbledick v. United States, 309 U.S. 323 (1940)). Similarly, the Fourth Circuit has held that “[o]rders enforcing subpoenas issued in connection with civil and criminal actions, or with grand jury proceedings, are normally not considered final. To obtain immediate review of such a district court enforcement order, the party to whom it is issued must defy it so that a contempt order, which is considered final, is entered against him.” Reich v. Nat'l Eng'g & Contracting Co., 13 ...

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