FANTASIA V. DIODATO, ET AL.
- Summarized by Laura Coordes , Arizona State University, Sandra Day O'Connor College of Law
- 5 months 1 week ago
- Case Type:
- Consumer
- Case Status:
- Reversed and Remanded
- Citation:
- 23-3742 (9th Circuit, Sep 15,2025) Published
- Tag(s):
-
- Ruling:
- Per Ritzen Group v. Jackson Masonry, the bankruptcy court's order vacating its prior stay relief and abstention order and reimposing the automatic stay was a final order subject to immediate appeal because it definitively disposed of a discrete dispute within the overarching bankruptcy case.
- Procedural context:
- Appeal from the U.S. District Court for the District of Arizona; vacated and remanded with instructions.
- Facts:
- In 2011, Plaintiff executed an irrevocable trust and named Defendant as trustee. In 2017, Plaintiff sued Defendant in Massachusetts state court, alleging Defendant's misuse of the trust property. In August 2019, Defendant filed for bankruptcy under Chapter 13 (the case was later converted to Chapter 7). Plaintiff objected to the bankruptcy filing, moved to dismiss it, and filed a proof of claim raising the same claims as in the Massachusetts litigation. Defendant objected to Plaintiff's proof of claim.
In November 2019, Plaintiff moved for relief from the automatic stay to allow her to proceed with the Massachusetts state court litigation. Plaintiff also asked the bankruptcy court to permissibly abstain from adjudicating her claims. In February of 2020, the bankruptcy court granted Plaintiff's motion for stay relief and abstention.
In March 2021, Defendant moved for relief from the stay relief and abstention order, arguing that relief was warranted under Rule 60(b)(6). The bankruptcy court granted Defendant's motion, vacated its stay relief and abstention order, and reimposed the automatic stay.
Plaintiff filed adversary proceedings against Defendant, and the bankruptcy court found in favor of Defendant on all of the state-law claims. The bankruptcy court entered a final judgment in July 2022. Plaintiff, believing that the March 2021 order was interlocutory, did not file an appeal challenging the March 2021 order until August 2022. Defendant argued that the district court lacked jurisdiction to hear the appeal because the March 2021 order was immediately appealable under the collateral order doctrine, and Plaintiff had not timely appealed.
The district court concluded that Plaintiff had properly waited for a final judgment to appeal it and that it had jurisdiction to consider the appeal. After the district court rendered an unfavorable decision for Plaintiff and affirmed the bankruptcy court's March 2021 order, Plaintiff appealed to the Ninth Circuit.
- Judge(s):
- Smith, Bade, and Forrest
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