In re Pannell

• Decision Date: 05 February 1992
• Docket Number: Civ. A. No. 4-91-746-A.
• Citation: 136 BR 430
• Parties: In re Ming Yu PANNELL d/b/a Rockport Inn and d/b/a South Campus Apartments, Debtor. Russell DOUCETTE, Appellant, v. Ming Yu PANNELL, Appellee.
• Court: U.S. District Court — Northern District of Texas

136 B.R. 430 (1992)

In re Ming Yu PANNELL d/b/a Rockport Inn and d/b/a South Campus Apartments, Debtor Russell DOUCETTE, Appellant, v. Ming Yu PANNELL, Appellee.

Civ. A. No. 4-91-746-A.

United States District Court, N.D. Texas, Fort Worth Division.

February 5, 1992.

Jeff Philipp Prostok, Cantey & Hanger, Fort Worth, Tex., for debtor.

Thomas Franklin Harkins, Jr., Gandy Michener Swindle Whitaker & Pratt, Fort Worth, Tex., for appellant.

MEMORANDUM OPINION AND ORDER

McBRYDE, District Judge.

This action comes before the court as an appeal from an order entered by the United States Bankruptcy Court, Northern District of Texas, Fort Worth Division, the Honorable Massie Tillman presiding. The court, having reviewed the briefs of appellant, Russell Doucette ("Doucette"), and appellee, Ming Yu Pannell ("debtor"), the record on appeal and applicable authorities, has determined that the order from which appeal is taken must be reversed and judgment rendered in favor of Doucette.

Jurisdiction

This is an appeal from an order granting debtor's motion to dismiss Doucette's complaint for exception to discharge in Adversary No. 491-4154 under Case No. 487-40576-MT-7 in the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division. This court's jurisdiction exists pursuant to 28 U.S.C. § 158(a).

Underlying Facts and Proceedings

On March 2, 1987, debtor filed a voluntary petition under Chapter 11 in the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division. Debtor did not list Doucette as a creditor on her bankruptcy schedules.¹ The bankruptcy court's docket sheet reflects the filing of a "CERTIFICATE of Service on Firt sic Meeting Notice" on March 25, 1987, and a "TRUSTEE'S REPORT at 341 Meeting" on June 17, 1987. Hence, it appears that the first meeting of creditors took place on or before June 17, 1987. Therefore, the deadline for filing a complaint to determine dischargeability under 11 U.S.C. § 523(c) would have been August 16, 1987, at the latest. See Bankr.R. 4007(c).

Doucette made his first appearance in the Chapter 11 bankruptcy case on November 4, 1987, when he filed a motion to require the trustee to abandon assets. The motion was set for hearing on January 26, 1988, and on February 11, 1988, an agreed order was entered regarding the requested abandonment.

On March 7, 1988, Doucette filed a motion to lift stay, which was granted by default order entered March 31, 1988. The motion reflected Doucette's contentions that he was the son and heir at law of Johnny Edward Pannell ("decedent") who died November 12, 1984; that debtor had attempted to hide from the bankruptcy court and probate court Doucette's existence and outstanding interest in the estate of decedent; and that most, if not all, of the assets listed by debtor on her various bankruptcy schedules represented community property of debtor and the deceased. The motion requested that the stay be lifted so that Doucette could pursue his fraud claims against debtor in probate court. Neither the motion to lift stay nor the default order addressed the issue of determining the dischargeability of debt, assuming Doucette prevailed in his probate court action. The motion for relief did provide, however, that Doucette would not execute on any judgment obtained, except as against the bond posted by debtor as administratrix of the probate estate, without leave of the bankruptcy court.

Doucette pursued his action against debtor in probate court, where he filed a second amended complaint on or about July 21, 1988.² By order signed September 20, 1988, the probate court declared that: (1) Doucette was an heir at law of decedent and (2) debtor knew Doucette was decedent's heir at the time she represented to the court that her daughter was decedent's only child. The court ordered that, because of her fraud, debtor be removed as independent administratrix and that Doucette be appointed successor administrator upon his furnishing an appropriate bond. In subsequent findings of fact and conclusions of law, the probate court specifically determined that debtor had committed fraud by swearing under oath that the decedent had been married only once, was never divorced, had only one child, Kim Pannell, and that all heirs of decedent had requested independent administration of decedent's estate. The probate court rendered its final judgment on May 25, 1989, granting Doucette judgment against debtor in the amount of $250,000.00.³

While the probate court proceeding was pending, on September 29, 1988, the Chapter 11 trustee filed a motion to convert debtor's case to a Chapter 7 bankruptcy. The case was converted by order entered November 23, 1988. A notice of first creditors' meeting was entered December 29, 1988, setting January 20, 1989, as the meeting date for the first creditors' meeting, April 20, 1989, as the bar date for filing claims, and March 21, 1989, as the filing deadline for dischargeability complaints. There is no evidence that Doucette was notified by debtor or anyone else of the conversion or the new deadlines.

On June 29, 1989, the probate court signed its second findings of fact and conclusions of law. After a delay due to further post-trial motions, the probate court signed an amended final judgment on April 17, 1990, re-incorporating, affirming and making final the May 25, 1989, judgment. Debtor then appealed from the probate court's judgment.

During the pendency of the probate appeal, debtor's counsel notified Doucette's counsel by telephone that debtor intended to proceed to obtain a discharge in bankruptcy. Upon receiving that notice, Doucette determined to proceed with his complaint for exception to discharge, which was filed July 3, 1991, and a proof of claim, which was filed July 11, 1991. Debtor responded by filing a motion to dismiss Doucette's complaint on July 19, 1991. Doucette filed his response to the motion to dismiss on July 25, 1991. Thereafter, on August 9, 1991, Doucette filed a motion for summary judgment. Debtor received her discharge from the bankruptcy court on August 22, 1991. Debtor filed a response to Doucette's motion for summary judgment on August 29, 1991.

The motion to dismiss and motion for summary judgment were set for hearing on September 4, 1991. On that date, the bankruptcy judge announced that he would grant debtor's motion to dismiss. Because that motion was granted, the court did not proceed to hear arguments or to consider the motion for summary judgment. The bankruptcy court's findings of fact and conclusions of law and the order granting debtor's motion to dismiss Doucette's complaint for exception to discharge were entered September 30, 1991.

The Bankruptcy Court's Findings of Fact and Conclusions of Law

The bankruptcy court's findings of fact and conclusions of law are fairly succinct and are here set forth in full.

Findings of Fact

1. On or about March 2, 1987 debtor filed a Voluntary Petition under Chapter 11 of the United States Bankruptcy Code. Doucette was not listed as a creditor on the debtor\'s bankruptcy schedules.

2. On or about November 4, 1987, Doucette filed a Motion to Require the Trustee to Abandon Assets in the debtor\'s bankruptcy. An Agreed Order for relief was entered on or about February 12, 1988.

3. On or about March 7, 1988, Doucette filed a Motion for Relief from Stay in debtor\'s bankruptcy in order to proceed with various claims against debtor in Tarrant County Probate Court. A Default Order Granting Motion for Relief from Stay was entered on March 31, 1988.

4. On or about November 23, 1988, the bankruptcy was converted to a Chapter 7 and pursuant to Bankruptcy Rule 4007(c), the last date for filing a proof of claim was set for April 20, 1989, and the deadline for filing dischargeability and discharge complaints was set for March 21, 1989.

5. No notice of appearance was filed by Doucette in accordance with Bankruptcy Rules 2002 and 9010.

6. Doucette failed to timely request an extension from the Court to file either a proof of claim or complaint concerning debtor\'s discharge. On or about July 3, 1991, Doucette filed his Complaint for Exception to Discharge. In the Complaint, filed pursuant to 11 U.S.C. § 523(a)(2)(A) and (C) Doucette stated that he did not file the Complaint previously "because he did not want to unnecessarily complicate and exacerbate the various legal proceedings, and, therefore, was awaiting the full completion of that judicial determination of the validity, nature and amount of his claim, as to which he had sought and obtained relief from this Honorable Court to have adjudicated in the aforementioned probate proceeding." Thereafter, on or about July 11, 1991, Doucette filed his Proof of Claim.

7. On or about July 19, 1991, debtor filed her Response and Motion to Dismiss Doucette\'s Complaint for Exception to Discharge.

8. Debtor received her discharge from this Court on August 22, 1991.

9. The findings of fact, as appropriate, shall also constitute conclusions of law.

Conclusions of Law

I.

A creditor has sufficient notice of bankruptcy proceedings even if there is no formal notice given of the filing deadlines, if he receives notice in time to act prior to the filing deadlines. This is true even in cases alleging fraud. In re Compton, 891 F.2d 1180, 1184 (5th Cir. 1990). If a complaint is not timely filed, a debt is discharged. Matter of Bercier, 934 F.2d 689 (5th Cir.1991). The Bankruptcy Court cannot extend the time for filing a dischargeability complaint unless the creditor files a motion for extension of time prior to the deadline. Neeley v. Murchison, 815 F.2d 345, 346 (5th Cir. 1987).

II.

Bankruptcy Rule of Procedure 4007(c) requires that nondischargeability complaints be filed within 60 days from the first date set for the meeting of creditors. In re Sam, 894 F.2d 778 (5th Cir. 1990).

III.

There was no discretion involved in setting the bar dates in this case. This Court concludes that

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