In re Key
| Decision Date | 11 September 1986 |
| Docket Number | Bankruptcy No. 385-01752. |
| Citation | 64 BR 786 |
| Parties | In re Janice Terry KEY, Debtor. |
| Court | U.S. Bankruptcy Court — Middle District of Tennessee |
Kathryn F. Calhoon, Legal Services of Middle Tennessee, Nashville, Tenn., for debtor.
Keene W. Bartley, Barbara Perutelli, Nashville, Tenn., for Dellway Villa Apartments.
Dellway Villa Apartments ("Dellway") objects to the discharge of its claim in this Chapter 13 case. I find that the documents Dellway submitted prior to the claims bar date constitute a timely proof of claim which can be amended and must be paid before the debtor receives a discharge.
The following are findings of fact and conclusions of law. Bankr.R. 7052. This is a core proceeding. 28 U.S.C. §§ 157(b)(2)(A), (B) and (J) (Supp. II 1984).
Debtor has leased an apartment from Dellway since December, 1982.1 In March and April of 1985, Dellway issued termination notices for nonpayment of rent. On June 14, 1985, the General Sessions Court for Davidson County, Tennessee, awarded Dellway possession and damages in the amount of $94. On June 17, 1985, debtor appealed that judgment and filed a Chapter 13 petition. Dellway was scheduled as a creditor. The ORDER AND NOTICE FOR MEETING OF CREDITORS fixed October 28, 1985 as the deadline for filing proofs of claim. The debtor's plan proposed to assume the lease with Dellway, to pay the arrearages "in full prior to unsecureds" and to "maintain future payments" during the life of the plan.
On July 22, 1985, Dellway filed a motion for relief from the automatic stay. 11 U.S.C. § 362 (1982 ed. & Supp. II 1984). The motion states "A judgment was received in General Sessions Court for Davidson County, Tennessee, for possession and sums due and owing."
On August 12, 1985, Dellway and debtor filed a joint pretrial statement as required by this court's pretrial order. Dellway's portion of the pretrial statement exhibited a copy of the lease and an affidavit stating the amounts due from the debtor. The joint statement recited: The parties attached copies of the state court detainer warrant and judgment. At the preliminary hearing on Dellway's motion for relief, the court found a reasonable likelihood debtor would prevail and set the matter for a final hearing. 11 U.S.C. § 362(e).
In preparation for the final hearing, on September 27, 1985 the parties filed a stipulation that debtor was due an $83 rebate from the Department of Housing and Urban Development. The debtor agreed to contribute the rebate to the Chapter 13 plan and the parties stipulated that "Dellway Villa Apartments' claim in this case does not take this rebate into account." Stipulations at 2 (emphasis added). Also on September 27, Dellway filed a BRIEF IN SUPPORT OF MOTION FOR RELIEF OF STAY which restated the factual basis of its claim.
At the final hearing held October 1, 1985, this court denied Dellway's motion for relief from the stay and rescheduled for further hearing the question whether debtor's Chapter 13 plan provided prompt cure of the rent arrearages and adequate assurance of future rent payments as required by 11 U.S.C. §§ 1322(b)(7) and 365.
Proof was taken on October 29, 1985. By stipulation, exhibits and testimony of witnesses, the nature and amount of Dellway's claim was developed and the debtor's proposal for curing defaults and assuming the lease was reviewed. After hearing the proof, Dellway's objections to assumption of the lease and to confirmation of the Chapter 13 plan were denied. The order prepared by debtor's counsel included these findings of fact:
The amount Ms. Key is to pay Dellway Villa Apartments is $162.00. After payment of the filing fee and Trustee\'s fee, with her monthly payments of $20.00 under the Plan, her default would be cured in twelve months. However, she is entitled to an $83.00 rebate from HUD as a result of prior overcharges on her rent. She has committed this rebate to her arrearage. . . . Therefore, it is likely that with the application of this money to the arrearage, the default will be cured within eight to nine months.
The Chapter 13 trustee was not party to the litigation between the debtor and Dellway. On February 13, 1986, the trustee filed a routine motion and order allowing claims. The motion listed Dellway with a claim of $125, the amount scheduled by the debtor. Dellway's claim was classified as "not filed" because Dellway did not file a proof of claim on the usual claim form prior to the October 28, 1985 claims bar date.
Of 19 creditors scheduled by the debtor, only one filed an allowable unsecured claim. As a result, the trustee quickly received sufficient funds from the debtor to complete payments required by the plan. On May 8, 1986, the trustee filed a final report showing the only allowed unsecured claim had been paid in full. A discharge hearing was set for June 30, 1986 and notice of the hearing was sent to all creditors.
On June 23, 1986, apparently after receipt of notice of the debtor's impending discharge, Dellway filed a formal proof of claim for $155.80 plus $67.25 attorney's fees and court costs. On June 26, 1986, Dellway filed a MOTION FOR ENFORCEMENT OF PRIOR ORDER OF THE COURT. The motion confesses that a "Proof of Claim was not in fact filed" before the claims bar date, but Dellway asserts that the documents submitted and the orders entered in the relief stay litigation satisfy the requirements for proof of its claim.
After confirmation of a Chapter 13 plan, "distribution shall be made to creditors whose claims have been allowed." Bankr.R. 3021. "A claim . . . proof of which is filed under § 501 . . . is deemed allowed, unless a party in interest . . . objects." 11 U.S.C. § 502 (1982 ed. & Supp. II 1984). "A creditor . . . may file a proof of claim." 11 U.S.C. § 501 (1982 ed. & Supp. II 1984). Although filing a proof of claim is permissive in a Chapter 13 case, filing is a prerequisite for allowance and allowance is a prerequisite for participation in distributions. 11 U.S.C. §§ 501, 502, 507 (1982 ed. & Supp. II 1984).
The proof of claim must be filed in accordance with Bankruptcy Rule 3002. With exceptions not here relevant, the rules require filing in a Chapter 13 case "within 90 days after the first date set for the meeting of creditors." Bankr.R. 3002(c). "A proof of claim is a written statement setting forth a creditor's claim" that conforms substantially to Official Form No. 19. Bankr.R. 3001(a).
Rule 3002(c) is peremptory. In re Pigott, 684 F.2d 239 (3d Cir.1982); In re Brill, 52 F.2d 636 (S.D.N.Y.), aff'd per curium, 52 F.2d 639 (2d Cir.1931); In re W.T. Grant Co., 53 B.R. 417, 420 (Bankr.S. D.N.Y.1985); In re Cmehil, 43 B.R. 404, 407 (Bankr.N.D.Ohio 1984); In re Markey, 33 B.R. 332, 333 (Bankr.N.D.Ohio 1983); In re Sems Music Co., 24 B.R. 376, 378-79 (Bankr.M.D.Tenn.1982). The United States District Court for the Middle District of Tennessee has held that the deadline for filing proofs of claim fixed by the Bankruptcy Rules is absolute and cannot be enlarged or extended after it has expired through the exercise of "equitable authority." In re Good News Publishers, Inc., 33 B.R. 125 (M.D.Tenn.1983). See In re Sems Music Co., 24 B.R. 376 (Bankr.M.D.Tenn. 1982) (Act case). As discussed in Part III, infra, a timely proof of claim is amendable in the absence of "contrary equitable considerations or prejudice." W.T. Grant, 53 B.R. at 420. See also Sems Music, 24 B.R. at 380. However, as explained in Sems Music, 24 B.R. at 380, amendment is possible only if the requirement of a timely filing is satisfied:
It is to state the obvious, however, that before a court can allow an "amendment" to a claim, something must be present in the record to constitute an amendable claim. Without exception, courts allowing amendments have found an adequate assertion of claim made during the time period fixed by the Bankruptcy Rules. Sun Basin Lumber Co. v. United States, 432 F.2d 48, 50 (9th Cir.1970) (); Fyne v. Atlas Supply Co., 245 F.2d 107, 108 (4th Cir. 1957) (); Ebeling v. Bobeng, 123 F.2d 520, 521 (7th Cir.1941) (); In re Lipman, 65 F.2d 366, 368 (2d Cir.1933) (). Similarly, in Fausett v. Murner, 402 F.2d 961 (5th Cir.1968), the case principally relied on by Warner, the court specifically noted that the record before it "enabled the court to be informed by its own files of the existence, nature and amount of the claim which justified the allowance of an amended claim." Id. at 963.
The courts have found diverse documents and combinations of submissions by a creditor to satisfy the requirement that a proof of claim must "conform substantially" to Official Form No. 19. If a general rule can be drawn from the cases, it is that a document(s) constitutes a proof of claim — sometimes denominated as an "informal"2 proof of claim — which states the existence, nature and amount of the claim and contains "an explicit demand against the estate evidencing an intent to hold the estate liable". In re Sems Music, 24 B.R. at 380. See Liakas v. Creditors' Committee of Deja Vu, Inc., 780 F.2d 176, 178 (1st Cir.1986); In re Basche-Sage Hardware Co., 56 B.R. 3, 5 (Bankr.W.D.Or. 1985); In re W.T. Grant, 53 B.R. at 421; In re Nucorp, 52 B.R. 843, 845 (...
To continue reading
Request your trial