Third Circuit disposition — 062565np-pdf

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 06-2565
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IN RE: FRANCES SCARBOROUGH,
Appellant
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On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. Civ. No. 05-cv-04548)
District Judge: Honorable Ronald L. Buckwalter
_______________________________________
Submitted Under Third Circuit LAR 34.1(a)
November 17, 2006
Before: SLOVITER, MCKEE AND AMBRO, CIRCUIT JUDGES.
(Filed: December 19, 2006)
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OPINION
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PER CURIAM
Frances Scarborough filed for protection under Chapter 13 of the Bankruptcy Code
on October 31, 2001. In July 2002, she instituted an adversary proceeding to bifurcate the
claim of Chase Manhattan Mortgage Corporation (“Chase Manhattan”), the mortgagee of
her duplex residence, into a secured claim and unsecured claim pursuant to 11 U.S.C.
§ 506(a) and to determine the correct amount of the mortgage arrearage. She later filed

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an amended complaint to revise the alleged amounts of the secured and unsecured
portions of Chase Manhattan’s claim. She wished to define the secured claim as equal to
the then-current market value of the property, with the remainder of her mortgage debt
becoming unsecured. After a trial, the Bankruptcy Court held that the anti-modification
provision of 11 U.S.C. § 1322(b)(2) barred the bifurcation of Chase Manhattan’s claim.
Scarborough appealed to the District Court, which affirmed the Bankruptcy Court’s order.
Scarborough filed an appeal of that decision with us.
While that appeal was pending, the Bankruptcy Court granted Scarborough a final
continuation of her Chapter 13 confirmation plan and later held a hearing on her sixth
proposed Chapter 13 plan. At the hearing, Scarborough testified and provided documents
about her income and expenses; the bankruptcy trustee moved to dismiss Scarborough’s
case; and Chase Manhattan moved for relief from the automatic stay or, in the alternative,
to dismiss Scarborough’s case. On July 21, 2005, the Bankruptcy Court denied
confirmation of Scarborough’s plan. The Bankruptcy Court also dismissed
Scarborough’s bankruptcy case and barred Scarborough from filing a Chapter 13 petition
within 180 days of its order.
Scarborough appealed the Bankruptcy Court’s order to the District Court. She
argued that the Bankruptcy Court should not have ruled on whether her plan was feasible
or confirmable because her appeal of the order denying bifurcation was pending, but that,
in any event, she had presented a feasible plan appropriate for confirmation to the
Bankruptcy Court. Reviewing the evidence related to Scarborough’s income and

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In our opinion, we noted that Scarborough testified at the trial on the bifurcation of
her claim that the value of the mortgaged property was $13,000.00, while Chase
Manhattan submitted the City of Philadelphia’s Board of Revision of Taxes Property
Record, which listed the value as $26,500.00. See In re Scarborough, 461 F.3d at 409.
We also noted that Scarborough had appealed the City’s valuation, but that her appeal had
not been decided at the time of trial. See id.
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expenses (including a sum of $36,053.00 for the Chase Manhattan mortgage), the District
Court affirmed the Bankruptcy Court’s order denying confirmation of Scarborough’s
amended Chapter 13 plan. The District Court expressed its disagreement with
Scarborough’s argument that the feasibility of her plan should not be evaluated before the
resolution of her appeal of the bifurcation issue. However, the District Court stated that
“[i]f the Third Circuit overturns the Bankruptcy Court’s denial of the Debtor’s request for
bifurcation, the Court will take the appropriate action.” We have since overturned the
order denying bifurcation of Scarborough’s claim.1 See In re Scarborough, 461 F.3d 406
(3d Cir. 2006). The District Court has not yet taken further action.
In light of the District Court’s statement that the outcome of Scarborough’s case
was contingent on our decision in Scarborough’s other appeal, we conclude that we lack
appellate jurisdiction over this appeal. Appellate jurisdiction attaches over an appeal
from a final order under 28 U.S.C. § 1291, from a collateral order under the doctrine of
Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949), from an appropriate
order relating to the grant or denial of injunctive relief under 28 U.S.C. § 1292(a), and
questions certified pursuant to 28 U.S.C. § 1292(b) or Federal Rule of Civil Procedure
54(b). See In re Briscoe, 448 F.3d 201, 211 (3d Cir. 2006). The only potential source of

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jurisdiction for this appeal is 28 U.S.C. § 1291.
For jurisdiction to attach under 28 U.S.C. § 1291, there must be a District Court
decision that “‘ends the litigation on the merits and leaves nothing for the court to do but
execute the judgment.’” See Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978)
(quoting Catlin v. United States, 324 U.S. 299, 233 (1945)). A judgment must be final as
to all parties, all causes of action, and the whole subject-matter. See Andrew v. United
States, 373 U.S. 334, 340 (1963) (citing Collins v. Miller, 252 U.S. 364 (1920)); Mellon
Bank, N.A. v. Metro Communications, Inc., 945 F.2d 635, 640 (3d Cir. 1991).
Granted, in bankruptcy cases, we do “apply a broader concept of finality,”
considering such factors as “‘the impact of the matter on the assets of the bankruptcy
estate, the preclusive effect of a decision on the merits, and whether the interest of
judicial economy will be furthered.’” In re Marvel Entm’t Group, 140 F.3d 463, 470 (3d
Cir. 1998). For this reason, we have permitted review of discrete portions of an action
before the approval of a bankruptcy plan. See In re Amatex Corp., 755 F.2d 1034, 1039
(3d Cir. 1985).
However, in this case, there is no discrete issue that begs for resolution. It is not a
case of an appeal on “‘issues central to the progress of the bankruptcy petition, those
‘likely to affect the distribution of the debtor’s assets or the relationship among the
creditors.’” See In re Owens Corning, 419 F.3d 195, 203 (3d Cir. 2005) (quoting In re
White Beauty View, Inc., 841 F.2d 524, 526 (3d Cir. 1988)). The order relates to the
dismissal of the petition itself – but a dismissal contingent on our decision in a related

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appeal of a then-unresolved issue.
The jurisdictional issue is not unlike that presented in cases of consent judgments
produced by contingent settlements. As in Verzilli v. Flexon, Inc., 295 F.3d 421 (3d Cir.
2002), and Fed. Home Loan Mortgage Corp. v. Scottsdale Ins. Co., 316 F.3d 431 (3d Cir.
2003), the District Court’s order was “not an appealable final order because the
termination of the litigation was contingent on [us] reaching a particular result” in an
appeal. Fed. Home Loan Mortgage Corp., 316 F.3d at 438 (describing the Verzilli rule).
In Verzilli, the parties had stipulated that the litigation would end only if we
affirmed an interlocutory order of the district court. 295 F.3d at 422. In that case, we
concluded that we lacked jurisdiction, as only one of our possible rulings would end the
district court’s work. See id. at 425. If we had reversed the district court’s order or
dismissed the appeal for lack of jurisdiction, the district court would have been obligated
to further adjudicate the matter. See id. Accordingly, we held that there was no final
order. See id.
In Fed. Home Loan Mortgage Corp., the parties had entered into a consent
judgment, which provided that judgment in favor of the plaintiffs was entered on count
one of the plaintiffs’ complaint in accordance with an earlier order, and that counts two
and three of the plaintiffs’ complaint were dismissed, without prejudice, subject to
plaintiffs’ right to reinstate their claims if we vacated the earlier order in an appeal that
the defendant was planning to pursue. See 316 F.3d at 437-38. Because the plaintiffs
still could have brought two of their claims if we had reversed the order and remanded the

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case, we concluded that we lacked jurisdiction over the appeal that the defendant brought.
See id. at 440. We held that the appealed-from order was the product of contingent
settlement that lacked the requisite finality. See id.
In this case, the District Court’s order would have ended the litigation on the
whole subject-matter only if we had affirmed the order denying the bifurcation of Chase
Manhattan’s claim. A ruling reversing the order denying bifurcation would not have the
same effect. The District Court stated, in definite terms, that it would take action in the
event of a reversal. The District Court may take the action it deems appropriate, as it
retains jurisdiction over this matter. See Venen v. Sweet, 758 F.2d 117, 121 (3d Cir.
1985). Because we, on the other hand, lack jurisdiction, we will dismiss this appeal.

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