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Viola v. Kirsch

United States District Court, N.D. California

July 27, 2016

JOSEPH JOHN VIOLA, Appellant,
v.
MORTON D. KIRSCH, et al., Appellees.

          ORDER DISCHARGING ORDER TO SHOW CAUSE; GRANTING APPELLANT’S APPLICATION TO PROCEED IN FORMA PAUPERIS; DISMISSING APPEAL; AND DENYING APPELLANT’S MOTION FOR JOINDER Docket Nos. 11, 13, 16

          EDWARD M. CHEN UNITED STATES DISTRICT JUDGE

         This appeal arises from a Chapter 7 involuntary bankruptcy petition (BR Case No. 10-30904), initiated by Morton D. Kirsch and subsequently joined by Frank Racioppo, Janice Racioppo, and Mark Racioppo (collectively, “Appellees”). In essence, Appellees claim they are unsecured creditors of Appellant Joseph John Viola because they were falsely induced to invest significant sums of money with Mr. Viola based on his misrepresentations that he was a successful and qualified investment advisor.

         As this Court has previously noted, it has construed the pending appeal to be an appeal with respect to only those orders issued by the bankruptcy court in December 2015. See, e.g., Docket No. 9 (Order at 4). Those orders concern applications for compensation filed by the Chapter 7 Trustee, the Trustee's attorneys, and the Trustee's accountants. See BR Docket Nos. 453-55 (orders).

         Previously, the Court ordered Mr. Viola to show cause as to why his appeal should not be dismissed for failure to properly designate the record on appeal. See Docket No. 11 (order); see also Docket No. 18 (order). Mr. Viola has now filed his response to the order to show cause. See Docket No. 20 (“clarification of essential record on appeal”). He has also filed supplemental information in support of his application to proceed in forma pauperis (“IFP”). See Docket No. 21 (supplement). Based on these filings, the Court now issues the rulings herein.

         I. DISCUSSION

         A. Order to Show Cause As indicated above, Mr. Viola has filed a response to the order to show cause. See Docket No. 20 (“clarification”). In his response, Mr. Viola now designates with specificity what he believes is the proper record on appeal - namely, BR Docket Nos. 439-55 (filings in bankruptcy case).[1] Based on that filing, the Court hereby DISCHARGES its order to show cause.

         Mr. Viola's designation of the record on appeal would, ordinarily, trigger or require the setting of certain deadlines - e.g., when Appellees and/or the Chapter 7 Trustee would have to designate additional items for the record on appeal, see Fed. R. Bankr. P. 8009(a)(2), and when the parties would file their appellate briefs.[2] See Fed. R. Bankr. P. 8018. However, because Mr. Viola has sought IFP status, the Court first turns to that issue, as resolution of that issue will inform what the scope of the appeal should be, which may then affect deadlines in this case.

         B. IFP Application

         The Court concludes that, based on the financial information previously and recently submitted, see, e.g., Docket Nos. 16, 21 (filings by Mr. Viola), Mr. Viola qualifies for IFP status. This status, however, requires the Court to evaluate Mr. Viola's appeal under 28 U.S.C. § 1915(e)(2) before it may proceed. See, e.g, In re TWA, 363 Fed.Appx. 213, 215 (3d Cir. 2010) (in case where district court denied bankruptcy appeal, noting that “[t]he District Court granted McMillan in forma pauperis status, denied his motion for a grand jury, and denied his [bankruptcy] appeal as frivolous under § 1915(e)(2)(B)because it lacked an arguable basis in law and in fact”; upholding district court's decision on appeal). The Court's § 1915(e)(2) analysis is provided below.

         C. Section 1915(e) Review

         Under § 1915(e)(2), a “court shall dismiss the case at any time if the court determines that . . . the action or appeal - (i) is frivolous or malicious.” 28 U.S.C. § 1915(e)(2). The Court finds that Mr. Viola's appeal is frivolous and therefore dismisses this case.

         1. Subject Matter Jurisdiction

         Mr. Viola contends that the bankruptcy court was without authority to issue any orders because it lacked subject matter jurisdiction over the case. The problem for Mr. Viola is that he previously raised this argument before the bankruptcy court in December 2010, see BR Docket No. 241 (motion), and the bankruptcy court denied his motion in January 2011. See BR Docket No. 250 (order). Mr. Viola never appealed the denial of this motion. To the extent he appeals that order now, the appeal is not timely. See 28 U.S.C. § 158 (providing that an appeal of a bankruptcy court order shall be taken “in the time provided by Rule 8002 of the Bankruptcy Rules”); Fed.R.Bankr.P. 8002(a)(2) (providing that “a notice of appeal must be filed with the bankruptcy clerk within 14 days after entry of the judgment, order, or decree being appealed”).

         Furthermore, even if the appeal were timely, Mr. Viola's position is weak on the merits. Mr. Viola's contention that the bankruptcy court lacked subject matter jurisdiction is based on 11 U.S.C. ...


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