Case 2:22-cv-04983-BRM Document 12 Filed 03/24/23 Page 1 of 8 PageID: 582
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`NOT FOR PUBLICATION
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
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`In re:
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`RUDOLF H. HENDEL AND CATHERINE
`G. LIN-HENDEL,
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`Debtors.
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`RUDOLF HENDEL, et al.,
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`Appellants,
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`v.
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`FAY SERVICING, LLC,
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`Appellee.
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`MARTINOTTI, DISTRICT JUDGE
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`On Appeal From:
`Bankr. Case No. 21-18847 (JKS)
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`Case No. 2:22-cv-04983 (BRM)
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`OPINION
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`Before this Court is pro se Appellants Rudolf Hendel and Catherine Hendel’s
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`(“Appellants”) Notice of Intent to Seek Appellate Review (ECF No. 1) of Bankruptcy Judge John
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`K. Sherwood’s Order denying Appellants’ Motion for Reconsideration of the Court’s June 15,
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`2022 Order on Fair and Honest Payoff.1 Appellants filed their appeal with this Court on August 9,
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`2022. (Id.) On September 2, 2022, Appellants filed their Designation of Record. (ECF No. 2.)
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`Having reviewed the submissions filed in connection with this appeal and having declined to hold
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`1 Appellants’ Notice of Intent to Seek Appellate Review requested that the Court review four
`separate orders, which are addressed in companion opinions filed under Docket Numbers 2:22-cv-
`04982, 2:22-cv-04984, and 2:22-cv-04985.
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`1
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`Case 2:22-cv-04983-BRM Document 12 Filed 03/24/23 Page 2 of 8 PageID: 583
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`oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth below
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`and for good cause having been shown, Appellants’ appeal is DISMISSED.
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`I.
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`BACKGROUND
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`On November 15, 2021, Appellants2 filed for relief under Chapter 11 of the Bankruptcy
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`Code. (Bk. Dkt. No. 21-18847-JKS, ECF No. 1.) Appellants own a single-family residence, located
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`at 26 Ridge Road, Summit, New Jersey 07901 (the “Property”), which is encumbered by a
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`mortgage serviced by Fay Servicing, LLC (“Appellee” or “Fay Servicing”) for Wilmington Trust
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`National Association (“Wilmington Trust”), not in its individual capacity but as trustee for MFRA
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`Trust 2014-2, and a mortgage serviced by Select Portfolio Services (“SPS”) for MEB Loan Trust
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`IV (“MEB”). (Id. at ECF No. 15.)
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`On December 3, 2021, Wilmington Trust filed a Motion for In Rem Relief (“In Rem
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`Motion”) from the Automatic Stay with respect to the Property. (Id. at ECF No. 28). On April 6,
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`2022, Appellants filed a motion seeking honest and fair payoff quotes from Wilmington Trust and
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`SPS/MEB (“Payoff Motion”). (Id. at ECF No. 52.) The Bankruptcy Court held a hearing on both
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`motions on May 3, 2022. The Bankruptcy Court granted Appellants’ Payoff Motion, in part, on
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`the record.3 On June 15, 2022, Judge Sherwood entered an order, in relevant part, determining: (1)
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`Wilmington Trust was owed between $1,559,989.01 and $1,626,979.65 less certain credits for
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`adequate protection payments; (2) MEB was owed $537,512.21 less certain credits for adequate
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`protection payments; and (3) Appellants were authorized to borrow $2,165,491.86 from Advisors
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`2 Appellants proceeded pro se during the bankruptcy litigation and continue to procced pro se on
`appeal.
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`3 This Court has not been provided with any transcripts.
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`2
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`Mortgage Group, LLC to refinance their obligations to Wilmington Trust and MEB by a reverse
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`mortgage transaction. (Id. at ECF No. 77.)
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`On July 7, 2022, Appellants filed a Motion for Reconsideration of the Bankruptcy Court’s
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`June 15, 2022 Order (“Motion for Reconsideration”). (Id. at ECF No. 81.) On July 19, 2022, the
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`Bankruptcy Court held a hearing on the Motion for Reconsideration and the In Rem Motion. The
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`Court: (1) denied the Motion for Reconsideration; (2) granted the In Rem Motion; and (3)
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`dismissed the bankruptcy case. (See id. at ECF Nos. 85, 87, 88.) Judge Sherwood entered the
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`corresponding orders on the In Rem Motion on July 22, 2022 (id. at ECF No. 85), and on the
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`Motion for Reconsideration and Dismissing the Bankruptcy Case on July 27, 2022 (id. at ECF
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`Nos. 87, 88). On July 26, 2022, Appellants also filed a Motion to Disqualify Judge Sherwood and
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`Judge Arleo from cases involving Appellants and to expunge all past orders and decisions made
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`by the two judges (the “Disqualification Motion”). (Id. at ECF No. 89.) On August 2, 2022, Judge
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`Sherwood entered an order on the Disqualification Motion, finding the Bankruptcy Court lacked
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`jurisdiction to rule on the motion because the bankruptcy case was dismissed. (Id. at ECF No. 95.)
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`On August 8, 2022, Appellants filed a Notice of Intent to Seek Appellate Review of the
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`four separate orders entered by Judge Sherwood, including: (1) the July 22, 2022 order granting
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`in-rem relief on the real property located at 26 Ridge Road, Summit, New Jersey 07901, entered
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`under Dkt. No. 2:22-cv-04982; (2) the July 27, 2022 order denying Appellants’ Motion for
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`Reconsideration of the Court’s June 15, 2022 order on Fair and Honest Payoff, entered under Dkt.
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`No. 2:22-cv-04983; (3) the July 27, 2022 order dismissing bankruptcy case, Bk. Dkt. 21-18847,
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`entered under Dkt. No. 2:22-cv-04984; and (4) the August 2, 2022 order denying Appellants’
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`Motion to Disqualify Judge Sherwood and Judge Arleo from cases involving Appellants, and to
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`expunge all past orders and decisions rendered by both, entered under Dkt. No. 2:22-cv-04985.
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`3
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`(ECF No. 1.) On September 2, 2022, Appellants filed a single Designation of Record and
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`Statement of Issues on Appeal relating to all four appeals. (ECF No. 2.) The Clerk’s Office filed a
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`copy on each docket.
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`On November 3, 2022, this Court advised Appellants of several deficiencies with their
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`appeal and entered an Order to Show Cause on each docket, requiring that Appellants “show cause,
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`by November 23, 2022, via a letter posted to the docket, why [each] appeal should not be dismissed
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`[as untimely or] for failure to comply with the Bankruptcy Rules.” (ECF No. 4.) Specifically, the
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`Court explained that Appellants’ designation on appeal was filed out of time and was not filed
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`with a statement of facts specific to the appeal. (Id. (quoting Fed. R. Bankr. P. 8009(a)(1)).
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`Appellants’ Notice of Appeal was filed on August 8, 2022, and the Designation of Record was
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`filed, without a statement of the issues, on September 2, 2022, nearly a month after the appeal was
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`filed. (Id.) The Designation was also not compliant with the Bankruptcy Rules because Appellants
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`failed to designate specific items to be included in the record and failed to identify issues specific
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`to each appeal. (Id. (citing Fed. R. Bankr. P. 8009(a)(1)(B)). Lastly, Appellants’ brief was due
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`within thirty days of the designation, or before October 3, 2022, but again, was not timely filed.
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`(Id. (citing Fed. R. Bankr. P. 8018(a)(1)). Appellants were instructed to submit a designation of
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`record, a statement of issues specific to each appeal, and a brief consistent with the applicable
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`rules, or they risk dismissal. (Id.) The Court received Appellants’ response to the Order to Show
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`Cause on November 23, 2022, (ECF No. 6), and a Supplemental Reply Letter on November 30,
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`2022 (ECF No. 8).4 Appellants’ responses were, again, identical for each appeal.
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`4 The same submissions were entered in all four dockets.
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`4
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`II.
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`JURISDICTION AND LEGAL STANDARD
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`District Courts have subject matter jurisdiction over Bankruptcy Court appeals pursuant to
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`28 U.S.C. § 158(a). Because subject matter jurisdiction “involves a court’s power to hear a case,
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`[it] can never be forfeited or waived,” and the District Courts “have an independent obligation to
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`determine whether subject matter jurisdiction exists, even in the absence of a challenge from any
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`party.” In re Caterbone, 640 F.3d 108, 111 (3d Cir. 2011) (quoting Arbaugh v. Y & H Corp., 546
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`U.S. 500, 514 (2006)).
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`Where a District Court has jurisdiction over a bankruptcy appeal, “[t]he proper standard of
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`review to be applied by a district court . . . is determined by the nature of the issues presented on
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`appeal.” In re Beers, No. 09-1666, 2009 WL 4282270, *3 (D.N.J. Nov. 30, 2009) (quoting Baron
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`& Budd, P.C. v. Unsecured Asbestos Claimants Comm., 321 B.R. 147, 157 (D.N.J. 2005)). A
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`district court reviews “the bankruptcy court’s legal determinations de novo, its factual findings for
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`clear error and its exercise of discretion for abuse thereof.” In re United Healthcare Sys., Inc., 396
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`F.3d 247, 249 (3d Cir. 2005) (quoting Interface Group-Nevada v. TWA (In re TWA), 145 F.3d 124,
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`130-31 (3d Cir. 1998)); see In re Strong, No. 17-1271, 2018 U.S. Dist. LEXIS 24022, at *7 (D.
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`Del. Feb. 14, 2018) (quoting Am. Flint Glass Workers Union v. Anchor Resolution Corp., 197 F.3d
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`76, 80 (3d Cir. 1999)) (noting that the district court reviews the bankruptcy court’s “findings of
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`fact for clear error and exercises plenary review over questions of law”).
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`III. DECISION
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`In filing this appeal, Appellants failed to comply with the Federal Rules of Bankruptcy
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`Procedure. Notably, Appellants were required to file and serve a designation of record and
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`statement of the issues within fourteen days of filing the notice of appeal. Fed. R. Bankr. P.
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`8009(a)(1)(B). The record should have included:
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`5
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`• docket entries kept by the bankruptcy clerk;
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`items designated by the parties;
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`the notice of appeal;
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`the judgment, order, or decree being appealed;
`• any order granting leave to appeal;
`• any certification required for a direct appeal to the court of
`appeals;
`• any opinion, findings of fact, and conclusions of law relating
`to the issues on appeal, including transcripts of all oral
`rulings;
`• any transcript ordered under subdivision (b);
`• any statement required by subdivision (c); and
`• any additional items from the record that the court where the
`appeal is pending orders
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`Fed. R. Bankr. P. 8009(a)(4) (emphasis added). Most crucially, Appellants were required to “order
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`in writing from the reporter . . . a transcript of such parts of the proceedings . . . as the [Appellants]
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`consider[] necessary for the appeal, and file a copy of the order with the bankruptcy clerk,” or take
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`advantage of the alternatives provided under Rule 8009(b)–(d). Fed. R. Bankr. P. 8009. “While
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`the Rule does not require that the ‘record on appeal’ include all transcripts of the proceedings
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`below, its provisions make clear that those documents which include ‘findings of fact’ or
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`‘conclusions of law’ are deemed part of the record, including transcripts.” In re Newton, Case No.
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`17-8377, 2019 WL 1254560, at *4 (D.N.J. Mar. 19, 2019) (quoting In re Harris, 464 F.3d 263,
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`269 (2d Cir. 2006)).
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`Appellants initially failed to timely file a designation of record with a statement of the
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`issues specific to each appeal and a brief consistent with the applicable rules. (See ECF No. 4.)
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`This Court instructed Appellants to submit the documents in conformance with the rules, or risk
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`dismissal. (Id.) Instead, Appellants responded to the Order to Show Cause by submitting identical
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`responses and reply letters on each docket, contrary to the Court’s instruction. (See ECF Nos. 6,
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`8.) In their response, Appellants claim their “statement of issues specific and relevant to this
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`appeal” was presented in their reply letter (ECF No. 6 at 3), which, again, was singly submitted in
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`support of all appeals. Further, Appellants simply designate “at least the entire case record of 21-
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`18847-JKS” as the record of the case and fail to address the required documents under Rule
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`8009(a)(4). (ECF No. 8.) Most importantly, and contrary to the rules, Appellants argue the
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`“demand for transcripts [is] egregious” and suggest this Court should be responsible for accessing
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`the recordings. (ECF No. 6 at 4-5.) As a result, no hearing transcripts containing the oral decision
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`supporting Judge Sherwood’s Order has been made available to this Court.
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`Appellants’ failure to submit a fully compliant designation of record, appeal-specific
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`statement of the issues and corresponding, relevant transcript containing the Bankruptcy Court’s
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`findings, conclusions, and reasoning for denying Appellants’ Motion for Reconsideration has
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`prevented this Court from conducting an “informed, substantive appellate review,” and therefore
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`warrants dismissal of the appeal. Heine v. Wells Fargo Bank, Case No. 20-10343, 2020 WL
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`7417812, *4 (D.N.J. Dec. 18, 2020) (citing In re Olick, 466 B.R. 680, 695 (E.D. Pa. 2011), aff’d,
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`498 F. App’x 153 (3d Cir. 2012)); see also Zullo, 2020 WL 5425787, *1-2 (D.N.J. Sept. 10, 2020).
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`Appellants must provide the Court with all required documents, including transcripts, that are
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`“necessary to conduct substantive review.” In re Newtown, 2019 WL 1256580 at *4. Dismissal is
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`appropriate where the appeal fails to “disclose the factual or legal basis of the bankruptcy judge’s
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`decision” because the court is prevented from conducting a meaningful review of the issues. In re
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`Olick, 466 B.R. at 695 (quoting In re Corio, No. 07-5864, 2008 WL 4372781, *6 (D.N.J. Sept. 22,
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`2008)); see also Zullo, 2020 WL 5425787 at *2.
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`Here, the Court finds Appellants have failed to provide a complete record for review,
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`including a rule-compliant designation of record, appeal-specific statement of the issues, and
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`corresponding transcript containing the relevant rulings below, despite this Court’s explicit order.5
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`(See ECF No. 4) (explaining Appellants’ failure to address the deficiencies of the appeal will result
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`in dismissal). These submissions are necessary for the Court to conduct an informed, substantive
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`review of Appellants’ appeal. Accordingly, Appellants’ appeal is dismissed, pending submission
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`of a complete record.
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`IV. CONCLUSION
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`Accordingly, and for good cause appearing, Appellants’ appeal of the Bankruptcy Court’s
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`Order denying reconsideration, docketed as 2:22-cv-04983, is DISMISSED WITHOUT
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`PREJUDICE. The Clerk is directed to close this case, but Appellants may seek to reopen the case
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`and reinstate the appeal upon the submission of a complete record. By April 28, 2023, if Appellants
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`have not submitted a complete record in support of the appeal, Appellants’ appeal shall be
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`dismissed with prejudice. An appropriate order will follow.
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`Dated: March 24, 2023
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`/s/ Brian R. Martinotti
`HON. BRIAN R. MARTINOTTI
`UNITED STATES DISTRICT JUDGE
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`5 Appellants received notice of possible dismissal for failure to comply with the Federal Rules of
`Bankruptcy Procedure (see ECF No. 4), yet again, failed to file a designation of record and
`statement of facts specific to this appeal. Instead, Appellants submitted a singular objection to the
`several related proceedings, which was not limited to any specific appeal, or even exclusive to the
`bankruptcy matter. (See ECF No. 6.) Even with notice and an opportunity to respond, Appellants
`failed to meet the procedural requirements for a bankruptcy appeal. Comdyne I, Inc. v. Corbin, 908
`F.2d 1142, 1147 (3d Cir. 1990) (explaining, for discovery violations, notice of the sanction of
`dismissal is required prior to dismissal); In re Lawson, 774 F. App’x 58, 60 (3d Cir. 2019)
`(requiring that, before the sanction of dismissal is imposed, prior notice and an opportunity to
`respond is required).
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