Perle v. Fiero (In re Perle), 11–60000.

Decision Date02 August 2013
Docket NumberNo. 11–60000.,11–60000.
Citation725 F.3d 1023
PartiesIn re Cery Bradley PERLE, Debtor, Cery Bradley Perle, Appellant, v. Alfonso Fiero, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

OPINION TEXT STARTS HERE

Janine R. Menhennet (argued), Solana Beach, CA; Joseph Darrell Palmer, Law Offices of Darrell Palmer, Solana Beach, CA, for DefendantAppellant.

Leslie Schwaebe Akins, Leslie Schwaebe Akins, A Law Corporation, Carlsbad, CA, for PlaintiffAppellee.

Appeal from the Ninth Circuit Bankruptcy Appellate Panel, Pappas, Kirscher, and Lynch, Bankruptcy Judges, Presiding. BAP No. 10–1048.

Before: SANDRA S. IKUTA and JACQUELINE H. NGUYEN, Circuit Judges, and LARRY A. BURNS,* District Judge.

OPINION

BURNS, District Judge:

Under the bankruptcy rules, a creditor has a limited window of time in which to challenge the dischargeability of certain kinds of debts. That window stays open, though, if the creditor doesn't receive adequate notice of the bankruptcy from the debtor. The question in this case is whether the creditor's lawyer's knowledge of the bankruptcy constitutes notice to the creditor. In the abstract, it well might. But here there's a wrinkle: The lawyer learned of the debtor's bankruptcy during his representation of another client, and although the lawyer continued to represent the creditor on other matters, he no longer represented the creditor in relation to the debt at issue. On these facts, we hold that it stretches the agency principle too far to impute the lawyer's knowledge of the debtor's bankruptcy to the creditor.

I. Factual Background

Cery Bradley Perle filed for bankruptcy under Chapter 7 of the Bankruptcy Code in 2001. Among Perle's outstanding debts was a $350,000 arbitration award to Fiero Brothers, a New York securities dealer. The award was made in 1998 by a National Association of Securities Dealers (NASD) arbitration panel, which found that Perle had committed securities fraud. Fiero Brothers was represented in the arbitration by a New York-based lawyer named Martin Russo, but Russo did not continue to represent Fiero Brothers in the matter after the arbitration. Instead, Fiero Brothers retained California counsel to confirm the award in the California Superior Court and to obtain an enforceable judgment against Perle. Russo did, however, continue to represent Fiero Brothers in other unrelated matters after the arbitration.

In his bankruptcy filing, Perle didn't list Fiero Brothers or the $350,000 arbitration award as such on his Schedule E, a form on which a Chapter 7 debtor is required to list creditors with unsecured priority claims. Instead, he listed “NASD/NASD Regulation” as the creditor on the arbitration debt, and said that the amount of the debt was “unknown.” He also reported that the debt was incurred in 1999 (rather than 1998), and that the consideration for it was “Arbitration.” At the top of the Schedule E, there was a space to identify the type of priority claims listed below. Perle wrote “Taxes, Governmental Debts.” Finally, although Perle listed specific creditors to whom he owed other NASD arbitration awards on his Schedule F, a form for non priority claims, he did not name Fiero Brothers on that form either.

Two months after Perle filed for bankruptcy, Corsair Capital Partners, a private equity firm, filed a nondischargeability complaint against Perle relating to a default judgment that it had obtained against him. Corsair was represented in the bankruptcy matter by Russo, the same lawyer who had previously represented Fiero Brothers in the arbitration. Although Russo was obviously aware of Perle's bankruptcy, and was still representing Fiero Brothers in other matters, he never informed Fiero Brothers of the pending Perle bankruptcy.

In March 2002, Perle received a general discharge of his debts and his bankruptcy was closed. Over four years later, in September 2006, Fiero Brothers 1 filed a motion to reopen Perle's bankruptcy in order to challenge the dischargeability of the arbitration award. The bankruptcy court granted the motion, and subsequently declared the arbitration debt nondischargeable. That determination was upheld by the Bankruptcy Appellate Panel. Perle appeals.

II. Timeliness of Fiero Brothers' Challenge

Perle's first argument is that Fiero Brothers' challenge to the dischargeability of the arbitration debt was untimely. Under Federal Rule of Bankruptcy Procedure 4007(c), a creditor generally has 60 days from the first date set for the creditors meeting to file a nondischargeability complaint for certain kinds of debts. Fiero Brothers' nondischargeability complaint was obviously late, and by years. But there is an exception to the 60–day rule. Under 11 U.S.C. § 523(a)(3) and (a)(6), debts that result from a debtor's willful and malicious acts that injure others remain nondischargeable if they are not listed in the debtor's schedules “in time to permit ... timely filing of a proof of claim and timely request for a determination of dischargeability of such debt ..., unless such creditor had notice or actual knowledge of the case in time for such timely filing and request.” The bankruptcy court relied on this exception to find that Perle's debt to Fiero Brothers was nondischargeable.

Perle doesn't quibble that his debt to Fiero Brothers is of the type that is nondischargeable under 11 U.S.C. §§ 523(a)(3) and (a)(6). To get around the exception, he must therefore establish either that he adequately identified the debt on his Schedule E, or if not, that Fiero Brothers nonetheless had notice or actual knowledge of his bankruptcy. He maintains he has established both.

A. Perle's Schedule E

The information about the arbitration award debt that Perle listed on his Schedule E was patently inaccurate. Although Perle tries to downplay it, the description he provided was so nebulous that it was impossible to tell that it was Fiero Brothers to whom he was actually indebted. For example, although the arbitration panel ruled unambiguously that Perle was liable to Fiero Brothers in the amount of $350,000.00, Perle didn't name Fiero Brothers on the Schedule E nor did he list the amount. Instead, he incorrectly reported the debt was owed to “NASD/NASD Regulation,” and he stated the amount was “unknown.” He also misstatedthe date the debt had been incurred, listing it as 1999 even though the arbitration panel made the award in 1998. On top of all of that, the award was neither a “tax” nor a “governmental debt,” as Perle represented on the top of the Schedule E.

Perle argues that because the arbitration panel's ruling was titled “NASD Regulation, Inc.,” he reasonably believed that the debt was owed to the NASD and not to Fiero Brothers. We doubt it. The arbitration panel's ruling was actually titled “Award,” and “NASD Regulation, Inc., Office of Dispute Resolution was a mere subheading on the panel's written judgment. Regardless, Perle had testified in the 1998 arbitration and knew that it was Fiero Brothers, not the NASD, who had obtained the award against him. Moreover, Perle listed other creditors to whom he owed NASD arbitration awards by their names on his Schedule F, which suggests that he knew exactly how to list Fiero Brothers on his bankruptcy schedules but chose not to.

Ellett v. Stanislaus, 506 F.3d 774 (9th Cir.2007), is instructive. In that case, a Chapter 13 debtor notified the California Franchise Tax Board of his bankruptcy but misstated the final digit of his social security number so that the board couldn't conveniently locate his records and file a timely proof of claim. Id. at 776–77. Although the board could have identified the debtor with only a...

To continue reading

Request your trial
21 cases
  • In re Leeds, Case No.: 11-19593-MKN
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — District of Nevada
    • 1 d3 Agosto d3 2018
    ...of a different client, the attorney's knowledge will not be imputed to the former client. See, e.g., Perle v. Fiero (In re Perle), 725 F.3d 1023 (9th Cir. 2013). In this case, Rosenberg was both the trustee in the Leeds case and also counsel to an entity that was acquiring property that was......
  • Doe v. Boy Scouts of Am., Case No. 1:13-cv-00275-BLW
    • United States
    • United States District Courts. 9th Circuit. District of Idaho
    • 31 d5 Agosto d5 2018
    ...obtained by Chasan & Walton to Doe XII in 2009, when Doe XII was not represented by them at that time. See id. (citing In re Perle , 725 F.3d 1023 (9th Cir. 2013). The Court further declines to find, as a matter of law, that Doe XII could have discovered prior abuse in scouting merely becau......
  • United States v. Stargell
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 2 d5 Agosto d5 2013
  • In re GGW Brands, LLC, CV14-6108-FMO
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Central District of California
    • 4 d1 Agosto d1 2014
    ...46. The 4/28/14 Letter was addressed to PSL and the Landlord. PSL and Francis are represented by the same attorney. In re Perle, 725 F.3d 1023, 1027 (9th Cir. 2013) ("Ordinarily, a lawyer is a client's agent and, consistent with agency law, clients 'are considered to have notice of facts kn......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT