In re Schoofs

• Decision Date: 26 February 1990
• Docket Number: Bankruptcy No. 89-00698,Adv. No. 89-0109.
• Citation: 115 BR 1
• Parties: In re Jean Paul SCHOOFS and Basma Schoofs Sakkejha, Debtors. AMERICAN EXPRESS CENTURION BANK, Plaintiff, v. Jean Paul SCHOOFS, Defendant.
• Court: United States Bankruptcy Courts – District of Columbia Circuit

115 B.R. 1 (1990)

In re Jean Paul SCHOOFS and Basma Schoofs Sakkejha, Debtors.

AMERICAN EXPRESS CENTURION BANK, Plaintiff, v. Jean Paul SCHOOFS, Defendant.

Bankruptcy No. 89-00698, Adv. No. 89-0109.

United States Bankruptcy Court, District of Columbia.

February 26, 1990.

Janet M. Nesse, Washington, D.C., for plaintiff.

Madeline A. Trainor, Joiner, Green & Trainor, Alexandria, Va., for defendant.

OPINION REGARDING MOTION TO DISMISS

S. MARTIN TEEL, Jr., Bankruptcy Judge.

On November 14, 1989, the plaintiff American Express Centurion Bank filed the dischargeability complaint commencing this adversary proceeding. The defendant Jean Paul Schoofs moves to dismiss the adversary proceeding as untimely. Bankruptcy Rule 4007(c) provides a deadline for filing a dischargeability complaint but significantly provides that notice must be given of the time so fixed. The defendant urges that an amended notice issued before expiration of the bar date and setting forth the wrong date is inconsequential. The Court disagrees.

FACTS

The defendant and his wife filed a petition under Chapter 7 of the Bankruptcy Code on August 7, 1989. On August 11, 1989, pursuant to 11 U.S.C. § 341(a), the Clerk of the Bankruptcy Court caused to be served on all creditors and parties in interest a notice styled:

CHAPTER 7 NO ASSET

ORDER FOR MEETING OF CREDITORS, COMBINED WITH NOTICE THEREOF AND OF AUTOMATIC STAY

The notice gave the date of the § 341(a) meeting as September 7, 1989, identified the interim trustee as David B. Tatge, and further correctly stated:

NOVEMBER 6, 1989 IS FIXED AS THE LAST DAY FOR FILING COMPLAINTS OBJECTING TO THE DISCHARGE OF THE DEBTOR(S) AND COMPLAINTS TO DETERMINE THE DISCHARGEABILITY OF DEBTS PURSUANT TO 11 U.S.C. § 523(C).

On August 11, 1989, Mr. Tatge filed a praecipe rejecting his appointment as trustee "on the basis of conflict of interest." On August 16, 1989, the United States trustee appointed Nelson J. Kline successor interim trustee. Apparently because Mr. Kline's next date for holding meetings of creditors as a Chapter 7 trustee was September 14, 1989, the clerk issued a new notice on August 18, 1989, to give notice of September 14 as the new meeting date. The new notice had the caption:

* * * AMENDED NOTICE — PLEASE NOTE NEW TRUSTEE AND NEW HEARING DATE * * *

CHAPTER 7 NO ASSET

ORDER FOR MEETING OF CREDITORS, COMBINED WITH NOTICE THEREOF AND OF AUTOMATIC STAY

This new notice stated that a meeting of creditors pursuant to 11 U.S.C. § 341(a) was set for September 14, 1989, identified Mr. Kline as the interim trustee, and erroneously stated:

NOVEMBER 14, 1989 IS FIXED AS THE LAST DAY FOR FILING COMPLAINTS OBJECTING TO THE DISCHARGE OF THE DEBTOR(S) AND COMPLAINTS TO DETERMINE THE DISCHARGEABILITY OF DEBTS PURSUANT TO 11 U.S.C. § 523(C).

On November 14, 1989 (the erroneous deadline for filing dischargeability complaints provided in the clerk's amended notice), 68 days after the date first set for the § 341(a) meeting of creditors, the plaintiff filed its "Complaint to Determine Dischargeability of Debt," pursuant to 11 U.S.C. § 523(a)(2)(A) and (B). The plaintiff received the amended notice of August 18, 1989, prior to November 6, 1989. Subject to the defendant's right to present evidence to the contrary after discovery is completed, the parties agree that the plaintiff was unaware of the actual bar date rule when it received the amended notice and filed the complaint on November 14, 1989, in reliance thereon.

DISCUSSION

The time for filing dischargeability complaints is governed by Bankruptcy Rule 4007(c) which provides:

(c) A complaint to determine the dischargeability of any debt pursuant to § 523(c) of the Code shall be filed not later than 60 days following the first date set for the meeting of creditors held pursuant to § 341(a). The court shall give all creditors not less than 30 days notice of the time so fixed in the manner provided by Rule 2002. On motion of any party in interest, after hearing on notice, the court may for cause extend the time fixed under this subdivision. The motion shall be made before the time has expired.

(Emphasis added.) Bankruptcy Rule 4004 provides essentially identical requirements regarding complaints objecting to a debtor's discharge.¹

The Bankruptcy Rules thus establish "the first date set" for the meeting of creditors pursuant to 11 U.S.C. § 341(a) as the cornerstone for determining the bar date for filing discharge and dischargeability complaints, regardless of whether the meeting is actually held then or whether the debtor or his representative fails to appear. See, e.g., In re Rhodes, 61 B.R. 626, 628-29 (9th Cir. BAP 1986); In re Bartlett, 87 B.R. 445 (Bankr.W.D.Ky.1988). Rules 4004 and 4007(c), in conjunction with Bankruptcy Rule 9006(b)(3), plainly contemplate that the filing deadline irrevocably falls 60 days after "the first date set" unless enlargement of the filing period is sought by a party in interest before the deadline arrives.

Courts are divided on whether discharge or dischargeability complaints filed after the bar date set by Bankruptcy Rules 4004(a) and 4007(c) are nevertheless timely when the filing after the deadline is due to reliance upon erroneous information or silence about the bar date in a notice supplied by the clerk. Compare Neeley v. Murchison, 815 F.2d 345 (5th Cir.1987) (complaint dismissed even though notice left space for bar date blank and attorneys relied upon verbal assurance by employees of clerk's office that no bar date set); In re Kearney, 105 B.R. 260 (Bankr.E.D.Pa.1989) (complaint dismissed even though untimely filing was due to reliance upon erroneous notice of bar date by clerk of court); and In re Anwiler, 99 B.R. 41 (Bankr.S.D.Cal. 1989) (change of venue prior to first creditors' meeting does not extend bar date set by transferor court; untimely complaint dismissed even though filed in reliance upon erroneous notice of new bar date provided by clerk of transfer court); with In re Riso, 57 B.R. 789, 792 (D.N.H.1986) (complaint allowed: within court's equitable power to allow filing of objection to discharge by erroneous date set forth in a second notice by clerk's office); Matter of Hershkovitz, 101 B.R. 816 (Bankr.N.D.Ga. 1989) (same); In re Sibley, 71 B.R. 147 (Bankr.D.Mass.1987) (complaint timely when filed by erroneous date set forth in notice of meeting of creditors); In re Schwartz & Meyers, 64 B.R. 948 (Bankr.S. D.N.Y.1986) (complaint allowed: bar date not triggered due to absence of bar date in first notice; not a question of extending time); Matter of Hickey, 58 B.R. 106 (Bankr.S.D.Ohio 1986) (complaint timely when filed by erroneous date set forth in notice of meeting of creditors). See also South Dakota Cement Plant v. Jimco Ready Mix Co., 57 B.R. 396 (D.S.D.1986) (absent issuance of notice, bar date ineffective); In re Cintron, 101 B.R. 785, 786 (Bankr.M.D.Fla.1989) (untimely complaint dismissed "absent clerical errors or mistakes in previous court orders") (dicta); In re Klein, 64 B.R. 372 (Bankr.E.D.N.Y.1986) (concluding the judicial prerogative to extend filing deadline precluded but, in dicta, recognizing exceptions).

The courts holding that they are powerless to excuse untimely filings made in reliance upon clerical error have given little or no weight to the clear mandate of Rules 4004 and 4007 that notice of the filing deadlines shall be given by the clerk of court.² In the process those courts interpret the rules as stating: "The clerk shall give notice of the bar deadlines, but, if he does not or makes an error in doing so, the lack of correct notice leaves the filing deadlines unaffected." The drafters could easily have included such a provision, as was partially done in Rule 77(d) of the Federal Rules of Civil Procedure.³ They did not. The rules simply place a burden of giving notice of the bar dates for filing discharge and dischargeability complaints upon the clerk. The rules do not provide that the clerk's failure to do so places the burden upon the creditors to interpret the rules and ascertain the actual bar date for themselves. As stated in Schwartz & Meyers, 64 B.R. at 953, the notice requirement "negates any presumption that creditors are familiar with the time limits provided by Rule 4007(c)." The notice requirement guards against the severity of the short deadlines with which most creditors would be unfamiliar.

In other words, the rules unequivocally require that notice of the deadline for filing discharge and dischargeability complaints "shall" be given. That means notice of the correct bar date. To hold that the notice requirement is satisfied if creditors receive notice of conflicting bar dates, the erroneous one following the first, would render the notice requirement meaningless.

The Court holds the actual bar date inapplicable if the plaintiff innocently relied on the amended notice in filing late. Support for this holding is found in West v. United States, 222 F.2d 774 (D.C.Cir.1954). In West the clerk of the district court sent West a notice dated October 20, 1952, apprising him of the denial of a motion, but not of the actual October 13 date of denial. West relied upon October 20 as the date of denial and filed for appeal within 60 days of that date but not within the deadline under the rules of 60 days after entry of the order. The Court of Appeals reasoned that West "could reasonably assume that information furnished him by an official of the District Court was correct." Id. at 779. To avoid an "extremely harsh" result, the Court of Appeals ruled that the notice of appeal was timely, even though filed more than 60 days after entry of the order. Id. The Court of Appeals reached this result despite the seemingly ironclad provisions of Rule 77(d) of the Federal Rules of Civil Procedure that lack of notice of the entry by the Clerk does not affect the time to appeal, stating:

Whatever may be the effect under Rule 77(d) of a notice merely late rather than

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