The Supreme Court’s Bullard opinion from 2015 was applied by the Sixth Circuit to dismiss an appeal because an order denying a settlement is not a final order granting a right of appeal under 28 U.S.C. Section 158(d)(1). In Bullard, the high court held that an order denying confirmation of a chapter 13 plan was not a final order and therefore was not appealable.
In the bankruptcy of a husband and wife, the bankruptcy court had authorized a creditor to sue the debtor’s former lawyer for malpractice. The debtors, with support from the trustee, filed a motion to approve a settlement with the lawyer. The creditor opposed the settlement.
The bankruptcy judge rejected the settlement, saying that the creditor, which had claims representing 95% of the debt against the estate, was in the best position to judge the merits of the compromise. The debtors appealed, but the Sixth Circuit Bankruptcy Appellate Panel dismissed the appeal.
Writing for the Sixth Circuit in an opinion on June 7, Circuit Judge Raymond M. Kethledge dismissed the appeal for lack of jurisdiction.
Judge Kethledge cited Bullard for the proposition that an appeal is interlocutory and not appealable if it does not “alter[] the status quo” or “fix[] the rights and obligations of the parties.” He said that an order denying approval of a settlement “changed nothing” and thus was not appealable.
The debtors argued that the order was final because approving the settlement would have ended the malpractice suit. Judge Kethledge likened disapproval of a settlement to denial of a motion for summary judgment.
Although granting a motion for summary judgment is final and appealable, denying a summary judgment motion is not appealable, he said, citing Bullard.