No. 07- .
Supreme Court of the United States.
Kenneth Allen Goldblatt,
Carey D. Ebert, Trustee,
On Petition for Writ of Certiorari to the United States
PETITION FOR WRIT OF CERTIORARI.
Was the “late filing” of the petitioner's Brief which caused the court of appeals to dismiss the petitioner's appeal caused by court personnel rather than by the petitioner and is it a denial of due process to punish a blameless litigant for the mistakes or oversights of court personnel?
Table of Contents
Questions Presented For Review..................................................................................................... i
Table of Contents............................................................................................................................ii
Table of Authorities.........................................................................................................................iii
Citations of Opinions and Orders....................................................................................................
Basis for Jurisdiction in this Court....................................................................................................
Constitutional and Statutory Provisions Involved..............................................................................
Statement of the Case.....................................................................................................................
Argument Supporting Allowance of the Writ...................................................................................
Table of Authorities
[to be completed by printer]
Citations of Opinions and Orders.
The unpublished opinion of the United States Court of Appeals for the Fifth Circuit in In the Matter of Kenneth Allen Goldblatt; Kenneth Allen Goldblatt v. Carey D. Ebert, Trustee, Docket No. 07-10232, decided October 31, 2007, reaffirming the District Court's dismissal of the petitioner's untimely bankruptcy appeal, is set forth in the Appendix hereto(App. _-_).
The published opinion of the United States Court of Appeals for the Fifth Circuit in In the Matter of Kenneth Allen Goldblatt; Kenneth Allen Goldblatt v. Carey D. Ebert, Trustee, Docket No. 05-10747, decided August 18, 2006, and reported at 203 Fed. Appx. 545, 548, affirming the District Court's dismissal of the petitioner's untimely bankruptcy appeal, is set forth in the Appendix hereto(App. _-_).
The unpublished Order of Dismissal by the District Court for the Northern District of Texas at Fort Worth, in Kenneth Allen Goldblatt v. Carey D. Ebert, Trustee, Docket No. 4:04-CV-337-Y, filed February 5, 2005, dismissing the petitioner's appeal from the Bankruptcy Court to the District Court, is set forth in the Appendix hereto(App. _-_).
The unpublished opinion of the United States Court of Appeals for the Fifth Circuit in In the Matter of Kenneth Allen Goldblatt; Kenneth Allen Goldblatt v. Carey D. Ebert, Trustee, Docket No. 07-10232, decided November 28, 2007, denying the petitioner's combined petition for rehearing or for rehearing en banc, is set forth in the Appendix hereto(App. _).
Basis for Jurisdiction in this Court.
The decision of the United States Court of Appeals for the Fifth Circuit reaffirming the District Court's dismissal of the petitioner's appeal from the Bankruptcy Court, was entered on October 31, 2007; and its further order denying the petitioner's timely filed combined petition for panel rehearing or for rehearing en banc was filed and decided on November 28, 2007(App. _;_).
This petition for writ of certiorari is filed within ninety (90) days of November 28, 2007. 28 U.S.C. Section 2101(c).
The jurisdiction of this Court is invoked pursuant to the provisions of 28 U.S.C. Section 1254(1).
Constitutional, Statutory and Rule Provisions
Statement of the Case.
The core substantive issue of this litigation in the original trial court – and in each and every forum in which the issues have since been addressed – is the value of a parcel of commercial real estate located in Grapevine, Texas, which provides the location for a lucrative burial vault manufacturing business.
In 1994, as a favor to friends, the petitioner Kenneth Allen Goldblatt (“the petitioner” or “Goldblatt”) purchased a mortgage note in order to stop the foreclosure of this property in Grapevine, Texas, and to allow the co-executors of an estate owning the property additional time to sell the property for the estate's benefit. The business tenant of the property who had manipulated the property into foreclosure in the first place then sued the petitioner and others in a Texas probate court claiming that Goldblatt had conspired to interfere with its right to purchase the property. The tenant's suit prevented the co-executors from collecting the rents due on the premises and the petitioner was forced to foreclose on the equity of redemption underlying the mortgage note he held.
The Texas probate court eventually entered a summary judgment declaring that the petitioner's foreclosure had cut off the tenant's rights to purchase the property. However, the court on May 11, 2000, then issued an erroneous judgment markedly different from its earlier rendition finding that the petitioner had engaged in a civil conspiracy to interfere with the tenant's business operations, entering a permanent injunction which prevented the petitioner from interfering with those operations on property which the court had previously found---and reaffirmed in its final rendition----that the petitioner still lawfully owns. It awarded the tenant money damages and erroneously declared the value of the subject real estate to be just $105,000.00 even in the face of appraisals of much higher value.
Once the state probate court litigation was completed, the tenant refused to pay a market-rate rent demanded by petitioner for use of his real estate; he accordingly began proceedings to evict the recalcitrant tenant. Simultaneously, the petitioner filed a Chapter 11 bankruptcy petition in federal bankruptcy court in order to protect the property from judicial foreclosure for the judgment debt while he appealed the flawed state court judgment. In its response to petitioner's appeal of the trial court's errors in the judgment itself, an intermediate appeals court in the State of Texas issued an unpublished opinion which ignored the inconsistencies and conflicts contained in the judgment and affirmed the judgment. The Texas Supreme Court refused the petitioner's plea to clarify the inconsistencies in this ruling.
Subsequently, the tenant filed an action in bankruptcy court to take the property from the petitioner by arguing that the property value set by the state trial court of $105,000.00 was not sufficient to allow the petitioner to successfully complete a voluntary plan of reorganization under Chapter 11, thereby forcing the petitioner into an involuntary dissolution under Chapter 7 of the Bankruptcy Code.
Because the bankruptcy court adopted the diminished value for the property of $105,000 as set by the state court, the petitioner's bankruptcy proceeding was transferred to Chapter 7 status. By this time, the tenant had been in possession of the property for over two years without paying any rent. When the Bankruptcy Trustee refused to seek back rent from the tenant, the petitioner sought to have the Trustee abandon the claims to him by filing a Contested Matter. The Trustee refused and the bankruptcy court upheld the Trustee. Worse, the Trustee abandoned the subject real estate, allowing a judicial foreclosure by the tenant as a judgment holder.
On April 16, 2003, the bankruptcy court denied the petitioner's Motion to Compel the Trustee to Abandon Claim. A Motion for Rehearing and a New Trial was timely filed by the petitioner and then denied on August 5, 2003. The petitioner timely filed a Notice of Appeal on August 12, 2003. On August 20, 2003, the petitioner timely and properly filed his Designation of Record on Appeal. On August 24, 2003, he received a Clerk's Notice of Fees Due and paid the said fee on August 25, 2003. On March 31, 2004 Petitioner filed his 418-page Record on Appeal consisting of ten (10) numbered documents. On June 9, 2004, the District Court issued an Order to Show Cause why the petitioner had not filed his Appellant's Brief and ordering him to do so by June 23, 2004, if he desired to pursue his appeal.
During the pendency of the petitioner's suit against the Trustee to abandon the claims and his subsequent appeal to the District Court from the bankruptcy court's rulings affirming the Trustee's actions , the subject real estate sold at a constable's sale on May 12, 2004, for $320,800.00, a value more than three times the amount the tenant had been claiming for years that the property was worth, a value that invalidates all of the tenant's previous claims about the worth of the property and a value which substantiates the petitioner's repeated assertions that the property was capable of funding his voluntary reorganization plan under Chapter 11 of the Bankruptcy Code.
On June 23, 2004, the petitioner filed his response to the District Court's Order to Show Cause of June 9, 2004, and attached to his response a copy of his Brief as Appellant. Petitioner also attempted to file his appellate brief as required by the Order to Show Cause, as well as a Motion to Supplement the Record of the Appeal to add the Constable's Deed to the record.
At the time the petitioner filed his response together with his appellate brief, the filing clerk told him that it was the District Court's policy not to file his brief until the court ruled on his Motion to Supplement the Record. The petitioner informed the filing clerk that his brief as appellant was being filed in response to an Order to Show Cause. The Clerk file-stamped the Brief on the back page as “Received” as of June 23, 2004 at 1:10 P.M. and informed the petitioner that the action (and stamp) would show that he had complied with the Court's Order to Show Cause and that the Brief would be filed by the Clerk once the District Court had acted on his Motion to Supplement the Record.
Petitioner specifically asked the Clerk if any other action on his or his attorney's part would be required to perfect the filing of his appellate Brief and the Clerk told him that the Clerk's Office would “take care of it”without any further action by him or his attorney once the Court had ruled on his Motion to Supplement the Record of the Appeal.
On June 28, 2004 the District Court issued an Order striking/un-filing the Motion to Supplement the Record because it did not contain a Certificate of Conference. On July 21, 2004, the petitioner's counsel re-filed the Motion with the required Certificate of Conference. Petitioner's counsel also inquired about the refusal of the Clerk to file the petitioner's appellate Brief which had been appended to his response to the District Court's Order to Show Cause of June 9, 2004, stating that he had copies of the Brief “stamped as received by the Clerk's office on June 23, 2004, at 1:10 P.M..” The Clerk's Office did not respond to this inquiry.
On September 16, 2004, the District Court issued its Order Granting the petitioner's Motion to Supplement Record . However, on February 25, 2005, the District Court issued another order dismissing in its entirety the petitioner's appeal to the District Court from the bankruptcy court's rulings affirming the Trustee's actions because his appellate Brief has not yet been filed and was “over nine months late”(App. ).
On March 7, 2005, the petitioner timely filed a Motion for New Trial which recounted all of his actions in perfecting the Appeal and in filing his appellate Brief on June 23, 2004. In addition, the petitioner again filed his appellate Brief as the Appellant separately on March 7, 2005, and referenced this filing of the Brief in his Motion for New Trial.
On May 4, 2005, the District Court denied the petitioner's Motion for New Trial erroneously holding in part “the appellate brief never was filed separately as its own document. . .” and that the petitioner's recollection of events incident to the filing of his appellate Brief must be inaccurate since a Clerk would never refuse to file his such a document(App. ). The Order also observed that “[t]he response to the show-cause order was not thereafter re-filed, and the appellant brief was never filed separately with the clerk”(App. ).
In fact, the record clearly indicates otherwise, i.e., that the filing of the petitioner's Brief separately was confused by the actions of an employee of the Clerk's office and the failure of the Clerk's staff to file the Brief properly when it was proffered by the petitioner on June 23, 2004, and/or after the Motion to Supplement the Record was heard as the petitioner was informed that it would be. In either case, the petitioner is blameless but is suffering for the errors of employees/agents of the Clerk's Office over whom he has no control.
The Order also stated that the petitioner “has wholly failed to submit any evidence supporting his version of events, nor has he specifically identified the deputy Clerk who [sic] he alleges refused to file his brief or submitted a copy of the brief that he alleges was received-stamped on the back(App. ). In fact, however, the petitioner's Motion for New Trial included a complete copy of the Brief showing a Certificate of Service dated June 23, 2004, including a file stamp of the Clerk's Office as well as an “ORIGINAL” stamp with a filing Clerk's initials above this latter stamp. All of this was enough evidence to identify the file Clerk in question and allow the Court to identify in its files the originally-filed copy of the Brief with the “received” stamp on the back of the final page.
On June 1, 2005, the petitioner filed his notice of appeal. On August 18, 2006, the court of appeals for the Fifth Circuit affirmed the District Judge's dismissal of the petitioner's appeal and the denial his motion for a new trial(App. ). In reaching this result, the court noted that while the petitioner's Brief was not separately filed strictly in accord with Bankruptcy Rule 8009(a), it “was filed [on June 23, 2004] as an attachment within the extension delay”(App. ). Moreover, it thought that “[a]rguably, Goldblatt initially did not willfully fail to file his brief” and noted that the Trustee had received the petitioner's Brief and was not prejudiced.(App. ).
However, the court concluded that the petitioner did not separately file his Brief in the wake of an order by the District Court on June 28, 2004, to “unfile” his response to the Order to Show Cause to which his Brief was appended(App. ). In addition, it found that the petitioner's failure to separately re-file his Brief until March of 2005 “demonstrates a certain stubbornness or willfulness sufficient to warrant dismissal”(App. ).
On September 18, 2006, the petitioner filed a motion for rehearing in the bankruptcy court which was denied on October 2, 2006. He filed another notice of appeal with the bankruptcy court on October 20, 2006. In pursuit of the re-filing of the appeal to the district court, the petitioner's attorney contacted the District Clerk for the Fort Worth District who admitted that the original intake clerk made “a mistake” in un-filing the petitioner's separately filed brief and told the attorney that since the incident occurred, the procedure within the District Clerk's office had been changed.
On January 16, 2007, the District Court held a telephone hearing with the parties and the petitioner's appeal was dismissed(App. ). The minutes of that hearing indicate that the petitioner's appeal was dismissed for “untimeliness of, inter alia , bankruptcy appeal, designation of record on appeal, and filing of appellate brief”(App. ).
The petitioner appealed to the court of appeals for the Fifth Circuit for the second time on this single issue on February 15, 2007. In preparing his appellate Brief, the petitioner discovered that the designated documents of the Record on Appeal were never delivered to the District Clerk's Office and were still not a part of the file. Thus the reasons cited for the dismissal were erroneous and constitute an abuse of discretion on the part of the district court and gross negligence on the part of the Clerk Office.
Nevertheless, the court of appeals affirmed the dismissal of the petitioner's appeal because the notice of appeal he filed on October 16, 2006, was beyond the ten-day period allowed by Bankruptcy Rule 8002(a), and therefore untimely(App.). The court of appeals denied the petitioner's combined petition for rehearing or for rehearing en banc on November 28, 2007(App. ).
Argument Support Allowance of the Writ.
Imposing The Most Severe Sanction of Dismissal Upon An Innocent
The District Court erroneously dismissed the petitioner's appeal for failure to file an appellate Brief when, in fact, the petitioner had filed copies of the Brief three separate times but had the separately filed Brief “un-filed” due to an error by the Clerk's Office. The petitioner appealed the dismissal to the court of appeals which upheld the dismissal. The petitioner immediately re-filed his appeal which was then dismissed again for reasons not stated in the final judgment of the District Court but which served to deny the petitioner his day in court on the critical and important issues of this case, i.e., the value of a parcel of commercial real estate he owns in Grapevine, Texas.
The record indicates that the separate filing of the petitioner's Brief was confused by the actions of an employee of the Clerk's Office and the failure of the Clerk's staff to file the Brief properly when it was proffered by the petitioner for filing on June 23, 2004, and/or after the Motion to Supplement the Record was heard as the petitioner was informed that it would be. In either case, the petitioner is blameless but is suffering through the dismissal of his appeal for the errors of employees/agents of the Clerk's Office over whom he has no control and for whom he is not responsible.
This Court has repeatedly acknowledged that the federal courts have a “virtually unflagging obligation...to exercise [the] jurisdiction given them” by Article III and by federal legislation. Quackenbush, 517 U.S. 706, 716(1996). Colorado River Water Conservation District v. United States, 424 U.S. 800, 821(1976). England v. Louisiana Bd. of Medical Examiners, 375 U.S. 411, 415(1964). Wilcox v. Consolidated Gas Co., 212 U.S. 19, 40(1909). Cohens v. Virginia, 19 U.S. 264 (1821).
In addition, this Court has the responsibility in its superintendency role over the federal courts and the federal system to formulate the controlling rules for hearings and proof which precede the entry of default judgments and dismissals in order that those rules of procedure provide the parties with due process in their reach and result. Klapprott v. United States, 335 U.S. 601, 611(1949) (Black, J.) citing McNabb v. United States, 318 U.S. 332, 341(1943).
Goldblatt submits that imposing the most severe sanction of the dismissal of his appeal upon an innocent and faultless litigant such as himself for the neglect and oversight of the Clerk's Office in communicating with him about his appellate Brief—indeed, promising “to take care of” the filing for him after the District Court had ruled upon a pending motion---is at odds with fundamental fairness and denied him due process. While this Court has yet to rule on this precise question, as the tribunal with the final authority in how rules of civil procedure are implemented so that they provide fundamental fairness and due process to litigants, it should allow Goldblatt's Petition and take this opportunity to define with precision the kind of neglect by a third party which will be imputed to litigants in order to punish them with dismissal of their appeal for its commission.
This Court should therefore grant the petition and issue a writ of certiorari to review the judgment of the United States Court of Appeals for the Fifth Circuit and, ultimately, vacate and reverse this judgment and remand the matter to the United States District Court for the Western District of Texas at Fort Worth, with instructions that the petitioner be given the opportunity to prosecute his claims against the Trustee in Bankruptcy Court and to reestablish the true value of his property in that forum; or provide the petitioner with such other relief as is fair and just in the circumstances of this case.
Most actions taken by the parties' legal representative in the course of litigation are rightly and understandably imputed to those parties themselves since those who decides to retain a lawyer should be able to rely on that lawyer to tend to the legal business at hand in a manner consistent with their interests. The presumption is that the client has notice of all facts known to his lawyer-agent; and even the negligence of the parties' attorney will be imputed to those parties.
In Link v. Wabash Railroad Co., 370 U.S. 626, 633-634(1962), for example, Justice Harlan, writing for the Court's plurality, stated that plaintiff's counsel's unexcused failure to appear at a pre-trial conference in an auto tort case because of a scheduling conflict was reason enough to dismiss the
Id . quoting Smith v. Ayer, 101 U.S. 320, 326(1879). Accord, Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380, 396-397(1993).
However, different considerations apply when the negligence or oversight is committed by third parties over which the litigant has no control or for whom he is not responsible. Pioneer involved a late filing by respondents in bankruptcy court beyond the bar date. Id. at 384. The Bankruptcy Rule 9006(b)(1) allowed such late filing if it were the result of “excusable neglect.” Id. at 385. In rejecting the notion that the late filing by counsel could not be attributed to the clients, Justice White distinguished those cases of ordinary negligence by a party or his attorney under Rule 60(b)(1) from those cases under Rule 60(b)(6) demonstrating “extraordinary circumstances” beyond the parties' control. Id. at 393-394.
That is, as Justice White observed, “[b]ecause of the language and structure of Rule 60(b), a party's failure to file on time for reasons beyond his or her control is not considered to constitute “negligence.” Id. citing Klapprott, 335 U.S. at 613-614. In this latter situation under Rule 60(b)(6), relief would be warranted if “the party is faultless in the delay.” Id. at 393-394 citing Ackermann v. United States, 340 U.S. 193, 197-200(1950).
Such is the case here. At the time the petitioner filed his response together with his appellate Brief, the filing Clerk told him that it was the District Court's policy not to file his Brief until the court ruled on his Motion to Supplement the Record. The petitioner informed the filing Clerk that his brief as appellant was being filed in response to an Order to Show Cause. The Clerk file-stamped the Brief on the back page as “Received” as of June 23, 2004 at 1:10 P.M. and informed the petitioner that the action (and stamp) would show that he had complied with the Court's Order to Show Cause and that the Brief would be filed by the Clerk once the District Court had acted on his Motion to Supplement the Record.
Petitioner specifically asked the Clerk if any other action on his or his attorney's part would be required to perfect the filing of his appellate Brief and the Clerk specifically told him that the Clerk's Office would “take care of it”without any further action by him or his attorney once the Court had ruled on his Motion to Supplement the Record of the Appeal. None of theses circumstances bespeak fault, negligence or oversight on the part of the petitioner. On this record, the petitioner was faultless in causing the delay relied upon by both the District Court and the court of appeals in order to justify the dismissal of his appeal.
Klapprott 's language is instructive in this regard.. There the petitioner, a naturalized citizen of the United States but an alleged German national, had been defaulted from having a denaturalization hearing because he had been incarcerated for four years by the government and was unable to obtain representation to defend against this denaturalization proceeding. 335 U.S. at 603; 614-615. In reversing the default judgment which had entered against him, this Court wrote:
Id . at 615(emphasis supplied). See United States v. Karahalias, 205 F.2d 331, 335(2nd Cir.1953)(Hand L., J.). Thus a party will not be held responsible—or sanctioned--- for events beyond their control and for which they cannot justifiably be held responsible, especially when the sanction will deprive that party of a full and fair hearing on his legitimate claims.
In the wake of the Court's holdings in Klapprott , Link and Pioneer, five federal circuit courts of appeals as well as two federal circuits have agreed that the grossly negligent conduct by even a party's own attorney is the kind of “extraordinary circumstance” for which a faultless and unknowing litigant should not be held responsible and that relief from a judgment or dismissal entered for this reason should be allowed in order to give a party his day in court consonant with due process and fundamental fairness. Greenspun v. Bogan, 492 F.2d 375, 382(1st Cir. 1974). Carter v. Albert Einstein Med. Ctr., 804 F.2d 805, 806-808(3rd Cir. 1986). In re Virginia Info. Sys. Corp., 932 F.2d 338, 342 (4th Cir.1991). Shepard Claims Serv., Inc. v. William Darrah & Assocs.,796 F.2d 190,195(6th Cir.1986). Community Dental Services v. Tani, 282 F.3d 1164, 1168-1171 (9th Cir. 2002). L.P. Stewart, Inc. v. Matthews, 329 F.2d 234, 235(D.C. Cir. 1964). Primbs v. United States, 4 Ct. Cl. 366,370(1984). See also King v. Mordowanec , 46 F.R.D. 474, 477-478(D. R.I. 1969); United States v.Cirami, 563 F.2d 26, 34-35(2nd Cir.1977).
A fortiori , where the negligent or inexcusable conduct is committed not by a party's attorney but rather by personnel in the Clerk's Office, conduct which causes a litigant's filed appellate Brief to be disregarded by the District Court because it was not filed in the proper form, it is the kind of “extraordinary circumstance” for which a faultless and unknowing litigant should not be held responsible and for which he should not be sanctioned with a default or the dismissal of his appeal.
The due process deprivation caused by sanctioning the petitioner with dismissal of his appeal in the circumstances here is severe. The petitioner's cause of action and his right to have his real estate valued properly both in the Texas state courts and in Bankruptcy Court is a valuable property right entitled to due process protection. Board of Regents v. Roth, 408 U.S. 564, 571-572(1972). It cannot be taken away without notice and a hearing. Id. Mathews v. Eldridge, 424 U.S. 319, 333(1976). Armstrong v. Manzo, 380 U.S. 545, 552(1965).
Due to the drastic sanction of dismissal, there has never been a full and fair hearing on the petitioner's claims for back rent coupled with the true valuation of the real estate. He has already adduced documentary proof (in the form of the Constable's Deed and other materials) that the property valuation found by the original trial court is grievously incorrect, and that error cascaded throughout this case to the continuing harm of the petitioner's property rights and has been aggravated by the ongoing errors that affected the petitioner's procedural and substantive due process rights.
All of these facts turn on the issue of whether the tenant maintained any contractual rights to purchase the real estate after the petitioner's lawful foreclosure. The state probate trial court found – three times – that it did not. Its summary judgment provided succinctly that those rights had been extinguished in 1994. In its 1999 rendition, it refused to alter that proposition; and in its 2000 final judgment, it recognized the petitioner's property rights again. Yet its permanent injunction effectively transferred enjoyment, use and control of the property to the tenant in direct violation of the petitioner's clearly recognized property rights. This conflict has never been resolved and can only be resolved by this Court ordering a full and fair hearing on these competing claims consistent with due process.
To hold, as the courts below have held, that the inexcusable neglect of the Clerk's Office in communicating with the petitioner about his appellate Brief and then in failing to file same properly as it had promised to do, should now be visited on the petitioner in the form of a dismissal of his appeal is a denial of due process, is fundamentally unfair and runs counter to the sense of fairness underlying this Court's decisions in Link, Klapprott, and Pioneer. The result is also at odds with the emerging consensus among the lower courts that imposing this most severe sanction of dismissal upon an innocent and faultless litigant like the petitioner for the mistakes of others for whom he is not responsible is a violation of due process.
Justice Black's observations in his dissenting opinion in Link, 370 U.S. at 648-649, are apt:
Id. (emphasis in original). See Ackermann, 340 U.S. at 205(“It does no good to have liberalizing rules like 60(b) if, after they are written, their arteries are hardened by this Court's resort to ancient common-law concepts.”)(Black, J., dissenting).
For all of these reasons identified herein, a writ of certiorari should issue to review the judgment of the United States Court of Appeals for the Fifth Circuit and, ultimately, to vacate and reverse this judgment and remand the matter to the United States District Court for the Western District of Texas at Fort Worth, with instructions that the petitioner be given the opportunity to prosecute his claims against the Trustee in Bankruptcy Court and to reestablish the true value of his property in that forum; or provide the petitioner with such other relief as is fair and just in the circumstances of this case.