United States District Court, N.D. California
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
M. CHEN UNITED STATES DISTRICT JUDGE
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.
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).
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.
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). Based on that filing, the Court
hereby DISCHARGES its order to show cause.
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. 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.
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
Section 1915(e) Review
§ 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.
Subject Matter Jurisdiction
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
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. ...