United States District Court, D. Maryland
PAUL C. CLARK, SR., et al, Appellants,
COUNCIL OF UNIT OWNERS OF THE 100 HARBORVIEW DRTVE CONDOMINIUM, Appellee.
Stephanie A. Gallagher United States District Judge
appeal results from the reorganization of the Council of Unit
Owners of The 100 Harborview Drive Condominium
("Appellee") in Chapter 11 bankruptcy proceedings
before the United States Bankruptcy Court for the District of
Maryland ("Bankruptcy Court"). Dr. Paul C. Clark,
Sr., Rebecca Delorme, and Paul C. Clark, Jr.
("Appellants") appeal several orders of the
Bankruptcy Court. Now pending is Appellee's motion to
dismiss the appeal on the grounds of equitable mootness
("the Motion"). ECF 15.1 have reviewed the Motion,
Appellants' Opposition, ECF 18, and Appellees' reply,
ECF 20. No hearing is necessary. See Local Rule
105.6 (D. Md. 2018). For the reasons set forth below,
Appellee's motion to dismiss is GRANTED,
and the appeal is DISMISSED as equitably
is an unincorporated condominium association comprised of
"any person, firm, corporation, trust, or other legal
entity ... holding title to a condominium unit" located
at 100 Harborview Drive, a 29-story luxury residential high
rise at Baltimore's Inner Harbor. Order Confirming
Debtor's Fifth Amended Plan of Reorganization, ECF 6-34
at 2. Appellee filed a petition for Chapter 11 bankruptcy on
March 9, 2016. Id. Appellee sought Chapter 11
reorganization in part to resolve years of litigation
involving two units in the building. Id. Appellant
Paul C. Clark is the owner of one of those units, a penthouse
("Unit PH4A"), located in the high rise.
Id. Appellee and Appellants have an extensive,
decade-long litigation history concerning Unit PH4A. Indeed,
the Bankruptcy Court noted the extensive tension between the
two parties. See Preliminary Order Regarding
Creditors' Damages Claim, ECF 6-35 at 11 (explaining that
past lawsuits have concerned the parties'
"truthfulness, trustworthiness, and civility").
here, Appellants filed several claims against Appellee as
part of the Chapter 11 process, collectively asserting more
than $25 million in damages. ECF 6-34 at 4-5. The claims
related to pre-petition litigation between the parties,
alleging violations of the Fair Housing Act
("FHA"), property damage to Unit PH4A, and
consequential and other damages allegedly resulting from
these claims. Id. Appellee filed objections to these
claims, id. at 5, and Appellants, correspondingly,
filed an opposition to the objections. ECF 6-35 at 3. The
Bankruptcy Court granted Appellee's motion for partial
summary judgment with respect to the FHA Claims. Id.
at 4. After a multi-day trial on the remaining
issues, the Bankruptcy Court issued its Preliminary Order on
April 10, 2018. ECF 6-35. On the same day, the Bankruptcy
Court issued its order ("Confirmation Order")
confirming Appellee's Fifth Amended Plan of
Reorganization ("Confirmed Plan"). ECF 6-34. The
Bankruptcy Court promptly issued a notice setting May 1, 2018
as the "Effective Date" for the Confirmed Plan. ECF
Confirmed Plan established Appellee's obligations with
respect to several classes of creditors. Since the Effective
Date, Appellee has engaged in numerous transactions with
these parties, totaling more than $2.8 million. ECF 15 at 7.
For instance, Appellee was required to make several lump-sum
payments to creditors in Class 1, including an interest only
payment in the amount of $27, 595.23, on or before May 1,
2018. Affidavit of Michael A. Feltenberger, ECF 15-1 at 2.
Appellee made this payment on April 19, 2018. Id.
Additionally, the Confirmed Plan established payment
schedules with respect to several groups of creditors,
including: three equal monthly installments to Class 3
creditors on May 31, 2018, June 29, 2018, and July 30, 2018,
respectively. Id. at 3-4. Appellee completed all of
these payments, in an amount totaling approximately $448,
345.77. Id. at 4. The Confirmed Plan also codified
the settlement of claims with Class 4 creditors involving a
second unit in the building: Unit PH4C. Appellee paid
approximately $1.1 million to the Class 4 creditors,
including a lump-sum payment and several escrowed monthly
payments in 2017 and 2018. Id. at 4. In accordance
with the agreement, the Class 4 creditors transferred title
for Unit PH4C to Appellee's designee. Id.
Confirmed Plan identified Appellants as Class 7 creditors,
and it expressly stated that damages relating to
Appellants' FHA claims had been denied and were excluded
from the Plan. ECF 6-31 at 30 n.4 ("Class 7 claims
exclude damages denied by the Court pursuant to the Order and
Memorandum Granting Debtor's Second Motion for Partial
Summary Judgment... and Order and Memorandum Granting in
Part, and Denying in Part, Debtor's Third Motion for
Partial Summary Judgment and Creditor's Motion for
Partial Summary Judgment"). Since Appellants' claims
involved ongoing damage caused by leakage in Unit PH4A, the
Confirmation Order explained that the amount of
Appellants' claims "are governed by the Preliminary
Damages Order and any further order of the Court finalizing
the matters addressed by the Preliminary Damages Order."
ECF 6-34 at 36 n.33. In the Preliminary Damages Order, the
Bankruptcy Court found that Appellee had breached its
contract with Appellants, and awarded Appellants $731, 000 as
"set damages" plus $6, 000 per month in
"ongoing damages." ECF 6-35 at 33. This amount was
significantly below Appellants' request, because the
court found that Appellants had failed to mitigate damages,
and it decreased their award accordingly. See Id .
at 22-25. However, "[b]ecause of the potential
adjustments to the future damages award, the Court issue[d]
this Order as a preliminary ruling, subject to a final Order
once all damages are ascertained." Id. at 33.
After an evidentiary hearing to assess "substantial
remediation" of damage in Unit PH4A, the Bankruptcy
Court issued its Final Order regarding Appellants'
damages claim on October 16, 2018. ECF 6-51. The Court
maintained the set damages amount at $731, 000, and finalized
the ongoing damages at $19, 552, for a total aggregate amount
of $750, 552.00. Id. at 12-13. Appellants filed
their notice of appeal to this Court on October 30, 2018. ECF
1. Appellee moved to dismiss the appeal on the grounds of
equitable mootness. See Fed. R. Bankr. P. 8013.
Appellee's Motion to Dismiss
court has jurisdiction to hear appeals from final orders of
the bankruptcy court. 28 U.S.C. § 158. On appeal from
the bankruptcy court, the district court acts as an appellate
court and reviews the bankruptcy court's findings of fact
for clear error and conclusions of law de novo. In re
Johnson, 960 F.2d 396, 399 (4th Cir. 1992).
mootness "is a pragmatic doctrine 'grounded in the
notion that, with the passage of time after a judgment in
equity and implementation of that judgment, effective relief
on appeal becomes impractical, imprudent, and therefore
inequitable.'" In re Bate Land & Timber
LLC, 877 F.3d 188, 195 (4th Cir. 2017) (quotingMac
Panel Co. v. Va. Panel Corp., 283 F.3d 622, 625 (4th
Cir. 2002)). The Fourth Circuit has identified four factors
that courts should evaluate to determine whether an appeal
should be dismissed as equitably moot:
(1) whether the appellant sought and obtained a stay; (2)
whether the reorganization plan or other equitable relief
ordered has been substantially consummated; (3) the extent to
which the relief requested on appeal would affect the success
of the reorganization plan or other equitable relief granted;
and (4) the extent to ...