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Clark v. Almy

United States District Court, D. Maryland

October 9, 2019

PAUL C. CLARK, SR., et al., Appellants,
MONIQUE S. ALMY, Appellees.



         This appeal results from the reorganization of the Council of Unit Owners of The 100 Harborview Drive Condominium (“Reorganized Debtor” or “Council”) in Chapter 11 bankruptcy proceedings before the United States Bankruptcy Court for the District of Maryland (“Bankruptcy Court”). The Bankruptcy Court awarded damages to Paul C. Clark, Sr., Rebecca Delorme, and Paul C. Clark, Jr. (“Appellants” or “Creditors”) during the Chapter 11 reorganization process. Monique Almy (“Almy” or “Plan Officer”) and the Reorganized Debtor (together “Appellees”) sought a clarification that the Bankruptcy Court's damages award did not address Appellants' responsibility for paying assessment fees at the condominium. The Bankruptcy Court issued an Order, as requested by Appellees (“Clarification Order”). I have reviewed Appellees' Motion to Dismiss, [1] ECF 4, Appellants' brief, ECF 12, Appellees' brief, ECF 18, and Appellants' reply brief, ECF 20. No. hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons set forth below, Appellees' Motion to Dismiss is DENIED in part and GRANTED in part, and the Bankruptcy Court's decision is AFFIRMED.

         I. Factual Background[2]

         Reorganized Debtor 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. ECF 18 at 2. Reorganized Debtor filed a petition for Chapter 11 bankruptcy on March 9, 2016. Id. It sought Chapter 11 reorganization in part to resolve years of litigation involving two units in the building. See Id. Appellant Paul C. Clark is the owner of one of those units, a penthouse (“Unit PH4A”), located in the high rise. ECF 12 at 2. The Council and the Creditors have an extensive, decade-long litigation history concerning Unit PH4A. See ECF 3-1 at 2 n.3 (noting that the parties stipulated at trial to their extensive litigation history).

         Appellants filed several claims against the Council as part of the Chapter 11 process, collectively asserting more than $25 million in damages. ECF 3-1 at 10. The claims related to prepetition 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. The Council filed objections to these claims, and Appellants, correspondingly, filed an opposition to the objections. Id. at 3 n.4. After a multi-day trial, the Bankruptcy Court issued its Preliminary Order on April 10, 2018. Id. at 3. On the same day, the Bankruptcy Court issued its order (“Confirmation Order”) confirming the Council's Fifth Amended Plan of Reorganization (“Confirmed Plan”). Id. at 1.

         The Confirmed Plan established Reorganized Debtor's obligations with respect to several classes of creditors. For instance, the Plan identified Appellants as Class 7 creditors. In the Preliminary Damages Order, the Bankruptcy Court found that the Council had breached its contract with Appellants, and awarded Appellants $731, 000 as “set damages, ” plus $6, 000 per month in “ongoing damages.” ECF 3-1 at 2. However, the court held a further evidentiary hearing on the status of repair and remediation of the unit. Id. at 3. After this hearing, the Bankruptcy Court issued its Final Order regarding Appellants' damages claims on October 16, 2018. Id. 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. Id.

         In the Confirmed Plan, the court appointed Monique Almy as Plan Officer. Id. at 1. She was responsible for implementing the Plan with respect to Class 7 claims. Id. On April 5, 2019, Almy, in her capacity as Plan Officer, filed a Motion for Clarification with the Bankruptcy Court. ECF 4-1. Almy contended that Dr. Clark underpaid assessment fees from October, 2017 through August, 2018, and refused to pay assessment fees for June and October, 2018. ECF 4-1 at 2. According to Reorganized Debtor, Dr. Clark owed $13, 925.56 in total for unpaid assessments. Id. As his defense, Dr. Clark took the position that the Bankruptcy Court had explicitly rejected any arguments regarding amounts of unpaid assessments. See ECF 4-1 at 3 (summarizing letter from Dr. Clark's counsel regarding unpaid fees). Accordingly, the Plan Officer sought for the Bankruptcy Court to determine whether its prior orders had resolved Appellants' liability to pay assessments relating to Unit PH4A. See generally ECF 4-1. The Bankruptcy Court granted the motion for clarification on May 1, 2019, and confirmed that its prior orders did not address the Creditors' obligation to pay assessments. See Order Granting Plan Officer's Motion for Clarification, ECF 3-1.

         Appellants timely filed their notice of appeal, with respect to the Clarification Order (“Order”), on May 16, 2019. ECF 1. However, Appellants filed their supporting brief on July 11, 2019, ECF 12, which was six days after the deadline imposed by Bankruptcy Rule 8018.[3] The Plan Officer filed a Motion to Dismiss the appeal, claiming (1) the appeal is not ripe for judicial review and (2) the appeal brief was untimely under Rule 8018 and Local Rule 404.3. ECF 4.

         II. Threshold Issues

         A. Legal Standard

         This 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).

         B. Ripeness

         Appellees contend that this Court lacks subject matter jurisdiction because the Clarification Order is not ripe for review. ECF 4 at 3-4. Because ripeness concerns the Article III case or controversy requirement, I address it first. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006) (stating ripeness “originates” from Article III's case or controversy language). The doctrine of ripeness “prevents judicial consideration of issues until a controversy is presented in ‘clean-cut and concrete form.'” Miller v. Brown, 462 F.3d 312, 318-19 (4th Cir. 2006) (citation omitted). In determining whether a case is ripe for judicial review, courts “balance ‘the fitness of the issues for judicial decision with the hardship to the parties of withholding court consideration.'” Id. at 319 (quoting Franks v. Ross, 313 F.3d 184, 194 (4th Cir. 2002)).

         In this case, the ripeness issue is best understood by parsing the issues being appealed. First, Appellants argue that the Bankruptcy Court erroneously determined, in the Clarification Order, that its prior orders did not address payment of assessments. In other words, Appellants take the position that any claim for unpaid assessments is “claim precluded” by the Court's Preliminary Damages Order and Final Damages Order. Second, Appellants contend that Reorganized Debtor was required to bring any claim for underpaid assessments as a compulsory counterclaim in the Chapter 11 proceedings. Deciding the first question does not depend on any future uncertainty, rendering it reviewable by this Court. However, the issue ...

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