United States District Court, N.D. New York
LESIA C. ALFORD, Appellant,
CHRISTIAN H. DRIBUSCH, in his capacity as Chapter estate of Lesia C. Alford, Appellee.
LESIA C. ALFORD Guilderland, NY, Appellant, Pro Se.
THE DRIBUSCH LAW FIRM CHRISTIAN H. DRIBUSCH, ESQ., East Greenbush, NY, Attorneys for Appellee.
MEMORANDUM-DECISION AND ORDER
DAVID N. HURD, District Judge.
Pro se appellant Lesia C. Alford ("Alford" or "appellant") appeals from Chief United States Bankruptcy Judge Robert E. Littlefield, Jr.'s February 12, 2014 order approving Chapter 7 Trustee Christian H. Dribusch's (the "Trustee") proposed settlement of her personal injury claim. The motion was fully briefed and considered on the basis of the submissions without oral argument.
On July 27, 2012, Alford filed a voluntary petition under Chapter 7 of the Bankruptcy Code. See Notice of Appeal, ECF No. 1, 2. This petition included schedules listing appellant's real and personal property as well as her claimed exemptions. See Appellant's Designation, ECF No. 2, 21-24 ("Alford Record"). As relevant here, appellant's amended Schedule B included a personal injury claim arising from a September 9, 2009 rollover automobile accident. Id. at 22. Thereafter, the Trustee's counsel negotiated a settlement of this personal injury claim for $70, 000 and the mutual exchange of releases. Id. at 47. The Trustee then moved the bankruptcy court pursuant to Federal Rule of Bankruptcy Procedure ("Rule") 9019(a) for an order approving this settlement. ECF No. 3-1. No one other than appellant objected to the Trustee's proposal. Alford Record at 52-57.
On February 12, 2014, the bankruptcy court heard oral argument on the Trustee's motion. Appellee's Designation, ECF No. 3-4 ("Hearing Transcript"). The Trustee appeared in support of the motion. He noted that, after Chief Judge Littlefield had denied a prior Rule 9019 motion, he had secured an additional $5, 000 with "minimal additional expense" to the estate. Id. at 3. He also noted that because the $70, 000 proposal had been reached on an hourly basis, the one-third contingency fee customarily applicable to personal injury claims would not be subtracted from this recovery, resulting in a significant surplus to the estate. Id. at 4. Alford, appearing through counsel in opposition, objected primarily to the Trustee's decision not to appoint special counsel in settling the matter. Id. at 5.
After considering the pleadings as well as the parties' arguments, Chief Judge Littlefield concluded that the Trustee's proposal was "well within the range of reasonableness under the 2nd Circuit test." Hearing Transcript at 13. The Judge entered a written order memorializing his findings and approving the Trustee's motion that same day. ECF No. 2, 56. Alford appealed this order on February 26, 2014. Appellee's Designation, ECF No. 3-3.
III. LEGAL STANDARD
District courts have jurisdiction to hear appeals from final judgments, orders, and decrees issued by bankruptcy courts, reviewing the bankruptcy court's legal conclusions de novo and its factual findings for clear error. 28 U.S.C. § 158(a)(1); In re Bennett Funding Grp., Inc. , 146 F.3d 136, 138 (2d Cir. 1998). Importantly, "[a] bankruptcy court's decision to approve a settlement, ... is reviewed extremely deferentially and is not overturned unless its decision is manifestly erroneous and a clear abuse of discretion." In re Cousins, 2010 WL 5298172, at *3 (S.D.N.Y. Dec. 22, 2010) (citation and internal quotation marks omitted). "Such a deferential standard is appropriate because a bankruptcy court is in the best position, as the... ongoing supervisory court for the bankruptcy proceeding, to determine whether a compromise is in the best interest of the estate and [is] fair and equitable." Id . (citation omitted). Indeed, reversal is appropriate only "if no reasonable man could agree with the decision to approve a settlement." Id . (citation omitted).
Alford purports to raise six discrete issues in her appeal, but the first four issues presented-challenges to the propriety of the Trustee's actions or omissions in prior proceedings before the bankruptcy court in the underlying case-are not properly raised here. See Appellant's Brief, ECF No. 13, 10. However, appellant's remaining issues presented-whether the bankruptcy court "was partial in the law" and whether the Judge "made a mistake" by signing the [February 12, 2014] [o]rder-are construed as a challenge to the bankruptcy court's approval of the Trustee's proposed settlement under Rule 9019 and may be reviewed here. § 158(a)(1).
Rule 9019(a) states that "[o]n motion by the trustee and after notice and a hearing, the court may approve a compromise and settlement." FED. R. BANKR. P. 9019(a)(1). "In undertaking an examination of the settlement, ... th[e] responsibility of the bankruptcy judge... is not to decide the numerous questions of law and fact raised by appellants but rather to canvass the issues and see whether the settlement falls below the lowest point in the range of reasonableness." In re W.T. Grant Co. , 699 F.2d 599, 608 (2d Cir. 1983) (internal quotation marks and citation omitted); In re Hilsen , 404 B.R. 58, 70 (Bankr. E.D.N.Y. 2009) ("[T]he court must do neither more nor less than canvass the ...