Jenkins v. Simpson (In re Jenkins), 14–1385.

• Decision Date: 27 April 2015
• Docket Number: No. 14–1385.,14–1385.
• Citation: 784 F.3d 230
• Parties: In re Matthew Alan JENKINS, Debtor. Matthew Alan Jenkins, formerly doing business as Shephard Service Company, Plaintiff–Appellant, v. Linda Wright Simpson, Appellee, James T. Ward, Sr., Trustee–Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

784 F.3d 230

In re Matthew Alan JENKINS, Debtor.

Matthew Alan Jenkins, formerly doing business as Shephard Service Company, Plaintiff–Appellant

v.Linda Wright Simpson, Appellee

James T. Ward, Sr., Trustee–Appellee.

No. 14–1385.

United States Court of Appeals, Fourth Circuit.

Argued: March 24, 2015.

Decided: April 27, 2015.

Beth Richardson, Sowell, Gray, Stepp, & Laffitte, LLC, Columbia, South Carolina, for Appellant. Linda Wright Simpson, United States Bankruptcy Court, Charlotte, North Carolina; A. Cotten Wright, Grier Furr & Crisp, PA, Charlotte, North Carolina, for Appellees.

Before MOTZ, KEENAN, and THACKER, Circuit Judges.

Opinion

Reversed and remanded by published opinion. Judge MOTZ wrote the opinion, in which Judge KEENAN and Judge THACKER joined.

DIANA GRIBBON MOTZ, Circuit Judge:

After Matthew Alan Jenkins filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, the Trustee and the Bankruptcy Administrator (collectively, “the Trustee”) filed a complaint objecting to Jenkins's discharge and then moved for summary judgment. The bankruptcy court granted the motion and entered an order denying the discharge. The district court affirmed. Jenkins appeals, arguing that the Trustee's complaint should have been dismissed as untimely. For the reasons that follow, we agree and so reverse and remand for further proceedings consistent with this opinion.

I.

On April 11, 2012, acting pro se, Jenkins filed a petition for Chapter 7 bankruptcy relief. In his Statement of Financial Affairs, filed with the bankruptcy court on April 24, Jenkins disclosed receipt of more than $235,000 in lawsuit proceeds in the two years preceding the filing of his petition, but offered no information as to the current status of those funds. On May 14, the Trustee convened a meeting of the creditors at which Jenkins testified that the proceeds from the lawsuits had been deposited into his wife's bank account, an account to which he admitted he had access, but of which he claimed not to be an owner.

Citing Jenkins's failure to provide necessary information, as well as his general lack of cooperation, counsel for the Trustee requested an extension of the deadline to file a complaint objecting to Jenkins's discharge. The Bankruptcy Code permits a trustee to file such a complaint, 11 U.S.C. § 727(c)(1), but absent judicial permission, the Bankruptcy Rules require that it be filed within 60 days after the first date set for the creditors' meeting. Fed. R. Bankr. P. 4004(a). The bankruptcy court here granted the Trustee's request and extended the deadline to “sixty days beyond ... whenever the 341 [creditors'] meeting is concluded.” J.A. 91.¹

The creditors' meeting was then scheduled to reconvene on July 11. Jenkins, however, neither responded to the Trustee's emails regarding the continuation date, nor attended the July 11 meeting. As a result, the bankruptcy court found Jenkins in contempt. At the rescheduled creditors' meeting on July 19, Jenkins appeared by telephone and thus purged the contempt. But he had still failed to provide the Trustee with some necessary information by that date, and so, before ending the telephonic meeting, counsel for the Trustee announced that she was “not going to conclude the meeting today.” J.A. 471. Counsel explained, “I am going to talk with the trustee and, if he determines that we can adjourn the meeting, we will file a notice of that, but officially the meeting is continued.” J.A. 471. No notice of a continued meeting was ever filed, nor did the meeting ever reconvene.

On September 26, 2012, sixty-nine days after the July 19 creditors' meeting, the Trustee filed a complaint, objecting to Jenkins's discharge in bankruptcy. Jenkins responded, asserting that the Trustee's complaint was “barred by the applicable statute of limitations.” J.A. 161. The Trustee moved for summary judgment, which the bankruptcy court granted. The court found the Trustee's complaint timely and denied Jenkins a discharge.

Jenkins appealed to the district court, contending there, as he does before us, that the bankruptcy court erred in finding the Trustee's complaint timely filed. The district court disagreed and affirmed the judgment of the bankruptcy court. Jenkins timely noted this appeal, and we have jurisdiction pursuant to 28 U.S.C. § 158(d)(1). When considering “an appeal from a bankruptcy proceeding, we apply the same standard of review that the district court applied when it reviewed the bankruptcy court's decision.” In re Nieves, 648 F.3d 232, 237 (4th Cir.2011) (per curiam). Thus, “[t]he legal conclusions of both the district court and the bankruptcy court are reviewed de novo and the factual findings of the bankruptcy court are reviewed for clear error.” Id.²

II.

The Bankruptcy Code provides that a bankruptcy court “shall grant [a qualifying] debtor a discharge” of his debts, thereby extinguishing creditors' claims. 11 U.S.C. § 727(a) (emphasis added). By “free[ing] the debtor from all debts existing at the commencement of the bankruptcy proceedings” except those exempted by statute, Kontrick v. Ryan, 540 U.S. 443, 447, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004), discharge provides the fresh start that is the hallmark of our bankruptcy system.

Not all debtors qualify for such relief, however. Indeed, the Code supplies “ample authority to deny the dishonest debtor a discharge.” Law v. Siegel, ––– U.S. ––––, 134 S.Ct. 1188, 1198, 188 L.Ed.2d 146 (2014) (citing 11 U.S.C. §§ 727(a)(2)-(6) ). Thus, “[t]he trustee, a creditor, or the United States trustee may object to the granting of a discharge” by filing a complaint with the bankruptcy court. 11 U.S.C. § 727(c)(1) ; see also Fed. R. Bankr. P. 4004 (outlining procedure for objecting to discharge). Ordinarily, such a complaint must “be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a).” Id. at 4004(a). But “the court may,” as it did here, “for cause extend the time to object” on motion of “any party in interest.” Id. at 4004(b).

The consequence of missing the deadline to object is severe. With respect to a Chapter 7 debtor, “on expiration of the time[ ] fixed for objecting to discharge ... the court shall forthwith grant the discharge,” subject only to limited exceptions not applicable here. Id. at 4004(c)(1). Accordingly, because Jenkins challenges the denial of his discharge on timeliness grounds only, a great deal hinges on the resolution of that issue.³ We must decide whether the Trustee filed a timely objection; in doing so, we necessarily determine whether the claims of Jenkins's creditors survive or are extinguished.

But first, because the bankruptcy court established a deadline of sixty days beyond the conclusion of the creditors' meeting, we must determine when the creditors' meeting concluded. Unfortunately, neither the Bankruptcy Code nor the Bankruptcy Rules expressly address this question. The Code, 11 U.S.C. § 341, mandates a creditors' meeting and directs both its content and its attendees. And Rule 2003 supplies the procedures by which such a meeting must progress. But neither instructs a trustee as to how to conclude a meeting, nor points to any circumstances under which a meeting must be deemed concluded. The parties offer competing contentions as to these questions—and thus as to the date when the sixty-day clock began to run in this case.

On the one hand, the Trustee argues that “[t]he key date” is not the date of the meeting's conclusion at all, but rather “the date that all parties to whom the Extension Order applied received notice that the creditors' meeting had concluded.” Appellee's Br. 18 (emphasis added). “Only then,” he argues, “would the clock start ticking on the 60–day extended deadline for discharge complaints.” Id. The Trustee waffles in pinpointing this date, suggesting it might be either August 7, 2012, when the bankruptcy court entered a text order indicating Jenkins had purged his contempt charge, or May 9, 2013, when the Trustee himself filed a Notice of Conclusion. Id. at 19–20. Either way, the Trustee maintains, he filed a complaint prior to expiration of the 60–day period.

On the other hand, Jenkins maintains that the creditors' meeting concluded on July 19, 2012, when the Trustee failed to adjourn the meeting to a stated later date and time. Appellant's Br. 18. He contends that a meeting not properly adjourned to a stated date and time, as specified in Rule 2003(e), must “[l]ogically” be concluded. Id. Accordingly, Jenkins argues, the Trustee's complaint should have been dismissed as untimely.

III.

We agree with Jenkins and hold that the creditors' meeting concluded on July 19, 2012, and thus that the Trustee's objection to discharge was not timely.

We recognize of course that the Trustee did not intend to conclude the meeting on July 19. To be sure, the Trustee's counsel could not have been more clear on that point. See J.A. 471 (“I am not going to conclude the meeting today.... [O]fficially the meeting is continued.”). Moreover, the Trustee was entitled to adjourn the meeting to a later date and time. See Fed. R. Bankr. P. 2003(e) (providing that a creditors' meeting may be “adjourned,” meaning continued). But the Bankruptcy Rules supply clear procedures on how to do so, none of which were followed here.

Rule 2003(e) provides, in its entirety: “The meeting may be adjourned from time to time by announcement at the meeting of the adjourned date and time. The presiding official shall promptly file a statement specifying the date and time to which the meeting is adjourned.” The presiding official in this case neither announced an adjourned date and time, nor filed a statement specifying as much. And the Trustee never sought to rectify this omission and never attempted to reconvene the creditors' meeting after July 19. The meeting therefore concluded on that date.

Arguing to the contrary, the Trustee asks us to consider only whether “the trustee's actions in continuing [the] creditors' meeting...