When one party in an adversary proceeding submits objections in district court to the bankruptcy court’s proposed findings of fact and conclusion of law, but the other party is silent, the district court is at liberty to adopt the findings and conclusions to the extent it deems proper, the Fifth Circuit said in a June 14 opinion.
One party in an adversary proceeding filed objections in district court to the bankruptcy court’s proposed findings and conclusions. The other party filed no opposition to the objections.
The district judge nonetheless overruled all the objections while adopting the proposed findings in part. The party that submitted the overruled objections appealed to the Fifth Circuit.
Unlike an appeal from an order that emanated from the bankruptcy court, Circuit Judge Jerry E. Smith said that the appeals court reviews the district court’s findings of fact for clear error and the conclusions of law de novo.
The appellant argued that the district court should have sustained its objections to the proposed findings because they were unopposed. Judge Smith disagreed, in substance holding that the district court is not a rubber stamp.
He said that Bankruptcy Rule 9033(d) explicitly requires the district court to “make a de novo review” either on the record or after taking additional evidence. The rule also allows the district court to “accept, reject, or modify” the proposed findings and conclusions.
Judge Smith said, “No statute or rule prohibits the district court from considering or ruling on the merits of an unopposed objection just because it is unopposed.” He noted, however, that the parties who remained silent “waived their right to appeal the proposed findings and to present any legal issues in opposition to them.”
The waiver, he said, “has no impact on the district court’s authority to consider the merits of the objections.”