THAKKAR

v.

GREENSPOON MARDER, P.A.

In the context of a Chapter 7 bankruptcy proceeding, the Appellant Chittranjan Thakkar (Thakkar) appeals the Bankruptcy Court’s Orders Denying Motion to Reconsider Order Overruling Objection to Proof of Claim Number 2 filed by Greenspoon Marder, P.A. and the Order Overruling Objection to Proof of Claim Number 2 filed by Greenspoon Marder P.A. On December 20, 2019, Thakkar filed his initial brief (Doc. # 14), and on January 30, 2020, Appellee Greenspoon Marder P.A. (Greenspoon) filed its answer brief (Doc. # 17). Because Thakkar lacks standing, the appeal is due to be dismissed for lack of jurisdiction.

I. Background

Nilhan Financial, LLC (Debtor) is a limited liability company whose corporate representative, at all relevant times, was Appellant Thakkar. (Doc. # 7 at 210). In proceedings below, Thakkar identifies himself as appearing pro se “on behalf of equity in” the Debtor. See (Doc. # 9 at 4). It is undisputed that Thakkar is a member of the Debtor

LLC. (Doc. # 6-43 at 3–4).1 Beginning in February 2013, the law firm Greenspoon represented Thakkar, the Debtor, and several related entities (collectively Thakkar Defendants) in two state court complex commercial lawsuits in which the Thakkar Defendants faced the possibility of multi-million-dollar judgments.2 See, e.g., (Doc. ## 6-13, 6-14, 6-15, 6-16). Greenspoon filed its notice

Facing judgments against it, the Debtor was placed into an involuntary Chapter 7 bankruptcy on March 20, 2017. (Doc. 6-5 at 3). On July 26, 2017, the case was converted to a Chapter 11, see (Id. at 13), and on December 15, 2017, the case was reconverted to a Chapter 7. (Id. at 33). On September 26, 2017, Appellee Greenspoon filed a proof of claim number 2 in the Debtor’s bankruptcy case reflecting an unsecured claim in the amount of $166,200.47, representing pre-petition unpaid attorneys’ fees and costs due and owing

Epstein, testified, and Thakkar cross examined him. (Id. at 21–200). In addition to the testimony of Epstein, the Bankruptcy Court considered correspondence, emails, invoices, and pleadings submitted into evidence by Greenspoon. (Id.). In closing, Greenspoon’s counsel argued that Greenspoon was engaged on February 9, 2013, on behalf of the Thakkar Defendants in extraordinarily complicated litigation in which multiple attorneys had previously withdrawn. (Id. at 202). Greenspoon immediately began working on the state court cases, seeking a continuance of the impending trial, dealing with a sanction order against Thakkar, resolving a lis pendens, and defeating a temporary restraining order. (Id.).

Thakkar received his February bill in March and requested Greenspoon to stop working. Emails went back and forth and ultimately Thakkar allowed and consented to Greenspoon continuing its representation, including preparing for and defending Thakkar’s deposition. (Id. at 203). Greenspoon contends that although the engagement letter sent to Thakkar was not signed by Thakkar, the agreement of representation was never repudiated. (Id. at 202). Greenspoon performed under the agreement, but other than a ten-thousand-dollar retainer and another payment, the bulk of the billed attorneys’ fees were not paid. Given the short time frame

Greenspoon had to get up to speed on the complex business litigation and prepare a defense, Greenspoon submits that it was not unreasonable or out of the ordinary for the firm to actively work the case before the engagement letter had been signed. (Id. at 204). In response, Thakkar argues that there was no meeting of the minds because there was no signed agreement. (Id. at 205). His position is that the whole history of the relationship was a consulting agreement, and he submits he made clear from the outset that he could not afford a full-scope representation. (Id.). His understanding was the law firm would limit the scope to keep control of the fees and expenses. (Id.). Thakkar additionally argues the amount of fees billed was unreasonable with entries of 28 to 38 hours in a day, during a time period Thakkar contends little was happening. (Id. at 206). Next, Thakkar argued the claim was barred because the four-year statute of limitations governing oral contracts had expired. (Id. at 206–07). Finally, Thakkar argues that Greenspoon wrote off the debt because they knew it was not a valid debt, and therefore the Debtor should not have to pay a debt that was written off. (Id. at 208). At the end of the trial, the Bankruptcy Court overruled Thakkar’s objections and approved Greenspoon’s claim in full.

(Id. at 218). In reaching this conclusion, the Bankruptcy Court first found that a written signed letter of engagement was not required for a client to have liability for attorneys’ fees under a quantum meruit theory or oral contract law. (Id. at 211). The Bankruptcy Court found that Greenspoon provided its clients with the hourly rates and the way the work would be billed. (Id. at 212). The Bankruptcy Judge further noted the massive undertaking of the law firm to jump into the middle of the complex litigation with upcoming deadlines and sanction motions that required immediate attention. (Id. at 212–13). He also found the fact that Greenspoon wrote off the debt did not absolve the liability of the Debtor for the fees owed. (Id. at 217). The Bankruptcy Judge rejected Thakkar’s statute of limitations argument, explaining that a creditor has two years from the date of the petition in which to file a claim, and thus the claim was well within the statute of limitations. Lastly, the Bankruptcy Court observed that Thakkar introduced no expert testimony or other competent substantial evidence challenging the reasonableness of the fees. (Id. at 217–18). On June 25, 2019, the Bankruptcy Court issued an Order overruling the objections to Greenspoon’s claim and allowing Greenspoon an unsecured claim in the amount of $166,200.47. (Doc. # 6-2). Thakkar filed a motion for reconsideration (Doc. # 6-78). A hearing on the motion was held on August 22, 2019. (Doc. # 9). After hearing argument, the Bankruptcy Court denied the motion for reconsideration. (Doc. ## 6-3; 9 at 14). This appeal followed.

II. Legal Standard

A. Standard of Review

Upon entry of a final order by the Bankruptcy Court, a party may appeal to the United States District Court pursuant to 28 U.S.C. § 158(a). The District Court functions as an appellate court in reviewing decisions of the Bankruptcy Court. Varsity Carpet Servs., Inc. v. Richardson (In re

Colortex Indus., Inc.), 19 F. 3d 1371, 1374 (11th Cir. 1994). This Court reviews the Bankruptcy Court’s legal conclusions de novo but must accept the Bankruptcy Court’s factual findings unless they are clearly erroneous. Rush v. JLJ Inc. (In re JLJ Inc.), 988 F. 2d 1112, 1116 (11th Cir. 1993).

B. Standing to Appeal

The Eleventh Circuit has adopted the “person aggrieved” doctrine, which “holds that only a person aggrieved has standing to appeal a bankruptcy court’s order.” In re Westwood Cmty. Two Ass’n Inc., 293 F. 3d 1332, 1335 (11th Cir. 2002). The Eleventh Circuit’s “precedent has limited persons aggrieved to those with ‘a financial stake in the order being appealed,’ that is, those who are ‘directly, adversely, and pecuniarily affect[ed]’ by the order.” Tucker v. Mukamal, 616 F. App’x 969, 972 (11th Cir. 2015) (quoting In re Westwood, 293 F. 3d at 1335, 1337-38).

III. Analysis

In this appeal, Thakkar seeks reversal of the Bankruptcy Court’s order overruling his objections to the Greenspoon claim. In its answer brief, Greenspoon first challenges Thakkar’s standing to pursue the appeal and then raises multiple arguments on the merits. “Standing ‘is the threshold question in every federal case, determining the power of the court to entertain the suit.’” Maverick Media Grp., Inc. v. Hillsborough Cty., Fla., 528 F. 3d 817, 819 (11th Cir. 2008) (quoting Warth v. Seldin, 422 U.S. 490, 499 (1975)). “‘In the absence of standing, a court is not free to opine in an advisory capacity about the merits of a plaintiff’s claims,’ . . . and ‘the court is powerless to continue.’” CAMP Legal Def. Fund, Inc. v. City of Atlanta, 451 F. 3d 1257, 1269 (11th Cir. 2006) (citations omitted). As the party invoking the court’s jurisdiction, Thakkar bears the burden of demonstrating he has standing to pursue this appeal. “Standing . . . is a doctrine rooted in the traditional understanding of a case or controversy .... [It] limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (citations omitted). To demonstrate standing, a plaintiff (or, as in this case, an appellant) bears the burden of showing “(1) an injury in fact, meaning that an injury is concrete and particularized, and actual or imminent, (2) a causal connection between the injury and the causal conduct, and (3) a likelihood that the injury will be redressed by a favorable decision.” Granite State Outdoor Advert., Inc. v. City of Clearwater, Fla., 351 F. 3d 1112, 1116 (11th Cir. 2003) (citations and emphasis omitted). Many courts have endorsed practical limitations on standing in bankruptcy cases. The Eleventh Circuit, for example, has held that a person has standing to appeal an order of a bankruptcy court only if he is a “person aggrieved” by the order. In re Westwood, 293 F. 3d at 1335. In the context of bankruptcy appeals, the “person aggrieved doctrine restricts standing more than Article III standing, as it allows a person to appeal only when they are ‘directly and adversely affected pecuniarily by the order.’” Id. (quoting In re Troutman Enter., Inc., 286 F. 3d 359, 364 (6th Cir. 2002)). In other words, “the person aggrieved doctrine limits standing to appeal a bankruptcy court order to those individuals who have a financial stake in the order being appealed.” In re Westwood, 293 F. 3d at 1335 (citations omitted). A party has a financial stake in the bankruptcy court’s order when that order “diminishes their property, increases their burdens or impairs their rights.” Id. (quoting Troutman, 286 F. 3d at 364). Thakkar fails to demonstrate how the Bankruptcy Court’s order here approving the Greenspoon claim has diminished Thakkar’s property, increased his burdens, or impaired his rights. Thakkar has filed no reply to Greenspoon’s standing challenge,⁴ nor has he proffered any evidence to demonstrate

Thakkar’s benefit. As a member of the LLC, he has no ownership interest in the property of the LLC under Florida law.6 See SE Prop. Holdings, LLC v. McElheney, No. 5:12CV164-MW/EMT, 2016 WL 7494300, at *2 (N.D. Fla. May 7, 2016) (citing Section 605.0110, Fla. Stat. (2015)) (“An LLC is a separate legal entity from its members, and the money in an LLC’s bank account, like all property held by an LLC, is its own property—its members ‘ha[ve] no interest in any specific

S. Scriven similarly found Thakkar was not a person aggrieved, and thus had no standing to appeal where, as a member of the LLC Debtor, he failed to show that he was directly, adversely and pecuniarily affected by the bankruptcy court’s order on appeal. See Thakkar v. Good Gateway, LLC, 8:18-cv-2996-T-30, Doc. # 29. 6 Other courts addressing the issue in a shareholder context have similarly concluded that shareholders, even of closely held corporations, lack standing to pursue appeals of bankruptcy orders. See, e.g., In re Dein Host, Inc. (Pignato v. Dean Host, Inc.), 835 F. 2d 402, 405–06 (1st Cir. 1987) (holding that “even a sole shareholder acquires no personal cause of action because of an injury-real or threatened-to the corporation”). limited liability company property’”). Thus, even if a surplus existed, the surplus would belong to the Debtor limited liability company, not Thakkar, and there is no evidence before the Court by way of by-laws or member agreements to demonstrate otherwise.

IV. Conclusion

The Court finds that Thakkar does not have standing to pursue this appeal. Specifically, the Court finds that Thakkar is not a person aggrieved, in that he has not shown that he is directly, adversely, and pecuniarily affected by the Bankruptcy Court’s order from which this appeal is taken. The Court therefore does not reach the merits of the case. See Bochese v. Town of Ponce Inlet, 405 F. 3d 964, 974 (11th Cir. 2005) (“In the absence of standing, a court is not free to opine in an advisory capacity about the merits of a plaintiff’s claims.”). Accordingly, the Court ORDERS that this appeal is DISMISSED for lack of standing by Appellant Thakkar. The Clerk is directed to CLOSE this case. DONE and ORDERED in Chambers in Tampa, Florida, this 3rd day of March, 2020.

Lone 9. Masnepbey Cree VIR IA M. HERNANDEZ’*COVINGTON

UNITED STATES DISTRICT JUDGE