In re Kirkland
| Decision Date | 26 April 1995 |
| Docket Number | Bankruptcy No. 94B-20757. No. 95-C-49W. |
| Citation | 181 BR 563 |
| Parties | In re Scott Frank KIRKLAND and Christy Bates Kirkland, Debtors. Evelyne BROITMAN, Appellant, v. Scott Frank KIRKLAND, Appellee. |
| Court | U.S. District Court — District of Utah |
Scott C. Pierce, McKay, Burton & Thurman, Salt Lake City, UT, for appellant.
George W. Pratt, Jerome Romero, Daniel A. Kaplan, Jones, Waldo & McDonough, Salt Lake City, UT, for appellee.
This matter is before the court on appellant Evelyne Broitman's ("Ms. Broitman" or "Appellant") appeal of an order entered by the Honorable Judith A. Boulden, United States Bankruptcy Court Judge, on November 30, 1994, granting appellee Scott Frank Kirkland's ("Mr. Kirkland" or "Appellee") motion to dismiss for failure to timely serve the summons and complaint as required by Federal Rule of Civil Procedure 4(j).1 The court conducted a hearing on Ms. Broitman's appeal on April 18, 1995. At the hearing, Appellant was represented by Scott C. Pierce. George W. Pratt appeared on behalf of Appellee.
Before the hearing, the court considered carefully the memoranda and other materials submitted by the parties. The court had also read the record on appeal, as well as certain of the authorities cited by the parties. Since taking the matter under advisement, the court has further considered the law and facts relating to this appeal. Now being fully advised, the court enters the following memorandum decision and order.
The operative facts in this case are straightforward and undisputed. On May 20, 1994, Ms. Broitman, acting pro se, timely filed an adversary proceeding in the bankruptcy court. Pursuant to Rule 4(j), the 120-day deadline for serving Mr. Kirkland with the summons and complaint was September 17, 1994. Because that date fell on a Saturday, time for service was extended until Monday, September 19, 1994. See 11 U.S.C. § 9006(a). Ms. Broitman failed to meet that deadline and instead served the summons and complaint on Tuesday, September 20, 1994. Mr. Kirkland subsequently moved for dismissal pursuant to Rule 4(j).
On November 16, 1994, a hearing was conducted before Judge Boulden on Mr. Kirkland's motion to dismiss. The sole evidence as to "good cause" adduced at the hearing appears to have been Ms. Broitman's approximately twelve-line affidavit.2 Apparently, Ms. Broitman purposely delayed serving the summons and complaint because she was involved in California legal proceedings with Mr. Kirkland's "partnership and/or related entities," which she thought might make the bankruptcy action unnecessary. See Affidavit of Evelyne Broitman at ¶ 3 (Nov. 10, 1994). After this purposeful delay, Ms. Broitman then failed to timely serve the summons and complaint because of a mistake: "I understood, under the law, that I had until September 20, 1994 in which to serve the Debtor...." Id. at ¶ 2. Judge Boulden also took into consideration that, even though Ms. Broitman was acting pro se, she had "some familiarity with the bankruptcy process and with the legal process," and also "had some access to legal counsel." See Court's Ruling, Bankruptcy Case No. 94B-20757 (Nov. 16, 1994).
On November 30, 1994, Judge Boulden entered an order dismissing Ms. Broitman's claim. See Order of Dismissal, Bankruptcy Case No. 94B-20757 (Nov. 30, 1994). Specifically, Judge Boulden found that "for reasons stated on the record following the hearing arguments of counsel, the Court is of the opinion that the plaintiff has failed to meet her burden to establish `good cause' for her failure to serve the summons and complaint within the 120-day deadline imposed by Rule 4(j), F.R.Civ.P. (1990)." Id. at p. 2.
The issues on appeal are interrelated: (1) Did Appellant show "good cause" pursuant to 11 U.S.C. § 7004 to extend the time for service? (2) What is the meaning of "good cause" as stated in the 1990 version of Rule 4(j) of the Federal Rules of Civil Procedure as incorporated by Bankruptcy Rule 7004(f)? Appellant's argument is generally this: Based on the Supreme Court's opinion in Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, ___ U.S. ___, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), the meaning of "good cause" in Bankruptcy Rule 7004 as it incorporates Rule 4(j), "is in effect the same standard as excusable neglect." See Brief of Appellant at p. 3, case No. 95-C-49W (Feb. 3, 1995). Therefore, applying the factors for determining excusable neglect as outlined in Pioneer, Appellant contends that the bankruptcy court abused its discretion in dismissing her claim.
Appellee rejects any proposed "excusable neglect" analysis, and argues that the bankruptcy court correctly found that Appellant failed to meet her burden of establishing good cause pursuant to Rule 4(j). See Appellee's Brief at p. 3.
This case involves an appeal from the bankruptcy court's dismissal of a complaint. In reviewing the propriety of the bankruptcy court's order in this case, this court must "apply the same standards of review as those governing appellate review in other cases." In re Perma Pac. Properties, 983 F.2d 964, 966 (10th Cir.1992). This court therefore must affirm the bankruptcy court's findings of fact unless those findings are clearly erroneous. In re Davidovich, 901 F.2d 1533, 1536 (10th Cir.1990).3 Where the bankruptcy court has made conclusions of law, however, this court is required to conduct a de novo review of the record and reach an independent legal conclusion. Id. at 1536.4 Finally, because certain other matters in bankruptcy are left entirely to the discretion of the bankruptcy judge,5 this court may reverse a decision on those issues only if the bankruptcy court abused its discretion. See, e.g., Deitchman v. E.R. Squibb & Sons, Inc., 740 F.2d 556, 563-64 (7th Cir. 1984).6 In particular, dismissal of a complaint for failure to comply with Rule 4(j)'s 120-day time limit "will be set aside only for an abuse of discretion." Putnam v. Morris, 833 F.2d 903, 904 (10th Cir.1987).
Bankruptcy Rule 7004(a) provides for the time and manner of service in adversary proceedings, and incorporates for that purpose the major portion of Rule 4, including Rule 4(j), which is at issue here. Rule 4(j) specifies that if a summons and complaint are not served on the defendant within 120 days after a complaint is filed, and if the plaintiff "cannot show good cause for failure to timely serve," "the action shall be dismissed as to that defendant without prejudice." See Fed. R.Civ.P. 4(j) (1990) (emphasis added). Although Rule 4 was amended in 1993, substantively altering Rule 4(j) and codifying it at 4(m),7 Bankruptcy Rule 7004(g) makes clear that the subdivisions of Rule 4 that were in effect on January 1, 1990 apply to Bankruptcy Rule 7004, "notwithstanding any amendment to Rule 4 F.R.Civ.P. subsequent thereto."8
The major thrust of Appellant's argument is that the good cause standard of Rule 4(j) has been altered by the Supreme Court's opinion in Pioneer. Specifically, Appellant maintains that Pioneer effectively decrees that the good cause standard of Rule 4(j) now equates to an excusable neglect standard.
The court finds nothing in Pioneer that compels such a result. Indeed, the issue in Pioneer was singular: What is the meaning of excusable neglect under Bankruptcy Rule 9006(b)(1)?9 See Pioneer, ___ U.S. at ___, 113 S.Ct. at 1494 ().10 In its reasoning, the Court neither stated nor intimated that its "excusable neglect" analysis spilled over into Rule 4(j) "good cause." Consequently, extension of Pioneer's analysis and holding in the manner that Appellant suggests is unwarranted, particularly since it would effectively read the term "good cause" out of Rule 4(j). Such a result is inconsistent with post-Pioneer and post-Rule 4(m) bankruptcy authority, which clearly specifies that good cause must be shown under Rule 4(j). See supra note 8 and accompanying text (discussing continued applicability of Rule 4(j) good cause standard).
Furthermore, this court's determination is in accord with In re Dufour, 153 B.R. 853 (Bankr.D.Minn.1993), which confronted this same issue. In rejecting Pioneer's application to Rule 4(j), that court succinctly stated:
I find nothing in the Pioneer opinion suggesting that the flexible view of "excusable neglect" applied to Bankruptcy Rule 9006(b) should also apply to "good cause" under Rule 4(j). The term good cause makes no reference to negligence or inadvertence. Furthermore, Rule 4(j) is concerned with compelling plaintiffs\' lawyers to act diligently, not with the equitable policies that underlie the Chapter 11 process and the Bankruptcy Rules. Finally, since the term excusable neglect is used in Rules 6(b), 13(f), 60(b)(1) and 60(b)(6), such term certainly would have been used in Rule 4(j) had the drafters intended the same standard to apply.
Finally, it is clear that Rule 4(j) and the rule on which Pioneer's analysis focused — Bankruptcy Rule 9006(b)(1) — are distinct rules. A party may employ Bankruptcy Rule 9006(b)(1) to petition the bankruptcy court for an enlargement of time after expiration of the specified period. By doing so, a party might potentially avoid Rule 4(j)'s harsh result. There is no evidence, however, that Appellant followed this course. Accordingly, the bankruptcy court was not obligated to apply the Pioneer excusable neglect factors.
The court also finds that the bankruptcy court did not abuse its discretion in finding that Appellant failed to meet her burden of proof in establishing good cause.11 Indeed, such result is consistent with relevant authority and the factual evidence before that...
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