In re Mowers
| Decision Date | 03 September 1993 |
| Docket Number | Bankruptcy No. 92-63296. |
| Citation | 160 BR 720 |
| Parties | In re Howard T. MOWERS, d/b/a Mohawk Valley Chiropractic, Debtor. |
| Court | U.S. Bankruptcy Court — Northern District of New York |
Leon J. De Bernardis, Utica, NY, Menter, Rudin & Trivelpiece, P.C., Syracuse, NY (Kevin Newman, of counsel), for debtor.
Thomas F. O'Brien, Clinton, NY, for Judith Mowers.
Mark Swimelar, Syracuse, NY, Chapter 13 Trustee.
MEMORANDUM-DECISION, FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
Presently before the Court is the motion of Howard T. Mowers ("Debtor") for leave to file an untimely notice of appeal from an Order of this Court denying confirmation of his proposed Chapter 13 Plan and determining certain debts to be non-dischargeable.
The Court heard oral arguments at a hearing commenced on August 13, 1993, and then adjourned to August 20, 1993. Reserving its determination, the matter was submitted for decision on August 20, 1993.
The Court has continuing jurisdiction over the parties and subject matter of this core proceeding pursuant to 28 U.S.C. §§ 1334, 157(a) and 157(b)(1).
On October 22, 1992, the Debtor filed a voluntary petition under Chapter 13 of the United States Bankruptcy Code (11 U.S.C. §§ 101-1330) ("Code"). The Debtor's proposed Chapter 13 plan, filed on November 4, 1992, was denied confirmation by Memorandum-Decision, Findings of Fact, Conclusions of Law and Order signed on July 9, 1993 and entered by the Clerk of the Court ("Clerk") on July 12, 1993 ("Order"). Also pursuant to the Order, certain debts owed to his ex-wife, Judith Mowers ("Mrs. Mowers"), were determined to be non-dischargeable.
On July 12, 1993, the Clerk sent notice of entry of the Order, and a copy of the Order to: the Debtor's bankruptcy counsel, Leon J. DeBernardis, Esq. ("DeBernardis"); counsel to Mrs. Mowers, Thomas F. O'Brien; and the Chapter 13 Trustee, Mark W. Swimelar, Esq. Neither a copy of the Order, nor a copy of the notice of entry of the Order were sent directly to the Debtor by the Clerk.
Central to Debtor's motion is the undisputed fact that DeBernardis mailed a copy of the Order only to Debtor's general counsel John P. Speer, Esq. ("Speer"), and not to the Debtor personally. The Debtor alleges that Speer was on vacation at the time DeBernardis mailed him the Order. It appears, however, that there may be a question of fact, which need not be decided in the context of the instant motion, as to whether Speer was made aware of the entry of the Order prior to his leaving for vacation in light of DeBernardis' statement on the record at the hearing on the adjourned date that he had informed Speer of this fact by telephone on the same day that he received his copy of the Order.1
Debtor asserts that he left for vacation on July 16, 1993 and did not return until August 1, 1993. Nonetheless, it is the Debtor's contention that he was not made aware of the entry of the Order by DeBernardis, or by Speer for that matter, until July 23, 1993, when a telephone message left by Speer, allegedly on the same date, was relayed to him. By then, however, the time to file a notice of appeal under Federal Rule of Bankruptcy Procedure ("Fed.R.Bankr.P.") 8002(a) had already passed.
After allegedly being advised by DeBernardis that he would not seek leave to file a late notice of appeal, Debtor asserts that he contacted several other law firms for the same purpose without success. On or about August 6, 1993, the Debtor retained the services of the Syracuse law firm of Menter, Rudin, and Trivelpiece, P.C. ("Menter") to handle the appeal. Thereafter, Debtor moved by Order to Show Cause dated August 9, 1993, for an extension of time within which to file a notice of appeal based upon "excusable neglect" pursuant to Rule 8002(c) of the Fed.R.Bankr.P.
The Debtor takes the position that he should be permitted to file a late notice of appeal under Fed.R.Bankr.P. 8002(c) for "excusable neglect" because he was not made aware of the entry of the Order by counsel prior to the expiration of the period within which to timely file such notice as prescribed by Fed.R.Bankr.P. 8002(a). With respect to the foregoing, the Debtor posits that the liberal "excusable neglect" standard set forth in Pioneer Investment Services v. Brunswick Assocs., supra, ___ U.S. ___, 113 S.Ct. 1489, should be applied to determinations under Fed.R.Bankr.P. 8002(c), and that his diligence in pursuing the within motion after learning of the entry of the Order tips the balance in favor of granting his motion. Debtor also contends that no prejudice will result if he is allowed to file a late notice of appeal.
In contrast, Mrs. Mowers contends that Pioneer Investment, supra, has no application under Fed.R.Bankr.P. 8002(c), and that "excusable neglect" is a strict standard requiring a showing of unique circumstances and "neglect that is excusable". Mrs. Mowers posits that the Debtor's lack of knowledge of the entry of the Order caused by the neglect of counsel is insufficient to support a finding of "excusable neglect" under prevailing case law. Mrs. Mowers also contends that since Menter was not formally substituted as counsel of record for the Debtor, it lacked authority to act on the Debtor's behalf in filing the Show Cause Order and in bringing the instant motion.
The question presented in the matter sub judice is whether the Debtor has made a sufficient showing of "excusable neglect" so as to permit his untimely notice of appeal to continue under Fed.R.Bankr.P. 8002(c). Before reaching the merits of this question, however, the Court must first address Mrs. Mower's procedural objection on the apparent lack of authority of Menter to act on behalf of the Debtor in these proceedings.
The essence of Mrs. Mowers objection is that Menter is not authorized to act on the Debtor's behalf since he is already represented by counsel in this bankruptcy proceeding, and there has been no formal substitution of counsel.
However, Menter has indicated that it has been retained solely as appellate counsel to the Debtor, and not for the purpose of substitution as the Debtor's bankruptcy counsel. See Affirmation in Support of Motion, filed on August 19, 1993. Generally, there is no prohibition on a debtor being represented by more than one legal counsel in a bankruptcy proceeding, nor is there any requirement that a Chapter 13 debtor seek appointment of additional counsel pursuant to Code § 327.
At a minimum, however, the Bankruptcy Rules require that "an attorney appearing for a party in a case under the Code shall file a notice of appearance with the attorney's name, office address . . . unless the attorney's appearance is otherwise noted in the record." Fed.R.Bankr.P. 9010(b). In the matter sub judice the required notice of appearance was not filed prior to bringing the within motion. However, at the time the Order to Show Cause was presented, Menter represented to the Court that its application to be appointed special counsel had been prepared and would be submitted to the United States Trustee ("UST") immediately upon leaving the Court's Chambers. However, Menter's application for appointment was subsequently returned by the UST with the explanation that appointment as special counsel was not required in Chapter 13. Accordingly, no papers formally noticing Menter's representation in this matter are presently on file.
While no formal notice of appearance is noted anywhere in the record in this case, the Court finds that in signing the Order to Show Cause on August 9, 1993, it tacitly approved Menter's representation of the Debtor, thereby "otherwise noting such representation in the record" for purposes of Fed.R.Bankr.P. 9010(b). Accordingly, Debtor's motion is not procedurally defective on the grounds asserted by Mrs. Mowers, and the Court proceeds to the merits.
At the outset, Fed.R.Bankr.P. 8001 requires that a notice of appeal be filed with the clerk of the court within the "time allowed by Fed.R.Bankr.P. 8002." Id. Fed. R.Bankr.P. 8002(a) provides that the "notice of appeal shall be filed within ten days of the date of entry of the . . . order . . . appealed from." Id. In the instant case, the ten-day period prescribed by Fed.R.Bankr.P. 8002(a) began to run on July 12, 1993, and ended on July 22, 1993. The Debtor's application to file a late notice of appeal, however, was not filed until August 9, 1993.
Fed.R.Bankr.P. 8002(c) provides that after the ten-day period provided in Fed. R.Bankr.P. 8002(a) has expired, the bankruptcy judge may extend the time for a period not to exceed twenty days, if: 1) the request is made within such twenty day period and 2) there is a showing of "excusable neglect". Id. Here, the twenty day period commenced on July 22, 1993, and expired on August 11, 1993. The Debtor's application to extend the time was filed on August 9, 1993, and was therefore made within the period allowed by the Rule. See Fed.R.Bankr.P. 8002(c). Thus, the question to be decided is whether the Debtor has established that the failure to timely file a notice of appeal or to make application for an extension of such time was the result of "excusable neglect". Id.
On the facts presented, however, the Debtor's application must be denied primarily because the asserted basis for the delay in timely filing — failure of counsel to notify him of entry of the Order in time to appeal — does not constitute "excusable neglect" under prevailing Second Circuit precedent, nor the more liberal standard applied in Pioneer Investment, supra, ___ U.S. ___, 113 S.Ct. 1489.
Relying on Pioneer Investment, the Debtor posits that "excusable neglect" exists here since he remained unaware of the entry of the adverse Order until after the time to appeal had run, principally because DeBernardis, whose prior practice the Debtor alleges was to send correspondence directly to him, mailed a copy of the Order only to his general...
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