In re Wechsler
| Decision Date | 31 March 2000 |
| Docket Number | No. 99 CIV. 4841(WCC).,99 CIV. 4841(WCC). |
| Citation | 246 BR 490 |
| Parties | In re Stephen B. WECHSLER, Debtor. Dennis Joslin, Plaintiff-Appellant, v. Stephen B. Wechsler, Defendant-Appellee, v. The Equitable Life Assurance Society of the United States, Intervenor-Defendant-Appellee. |
| Court | U.S. District Court — Southern District of New York |
Sankel, Skurman & McCartin, LLP, Attorneys for Plaintiff-Appellant, New York, Claudio Dessberg, of Counsel.
Robinson, Brog, Leinwand, Greene, Genovese & Gluck, P.C., Attorneys for Defendant-Appellee, New York, Fred B. Ringel, Robert R. Leinwand, of Counsel.
Plaintiff Dennis Joslin appeals from a judgment of the United States Bankruptcy Court for the Southern District of New York, John J. Connelly, Judge, denying plaintiff's motion for an extension of time in which to file a notice of appeal. Plaintiff contends that his late filing was justified by "excusable neglect." On appeal, plaintiff claims the Bankruptcy Court erred by failing to apply the Pioneer guidelines for determining what forms of neglect may be considered excusable. Because we find no merit in plaintiff's contention, we affirm the judgment of the Bankruptcy Court.
On October 10, 1991, defendant Stephen B. Wechsler filed a Chapter 7 petition to discharge more than $5 million of indebtedness. Among the debts defendant scheduled was a $400,000 debt for a loan from First New York Bank for Business (the "Bank"). In May 1992, defendant was granted the discharge. In July 1995, plaintiff purchased the discharged obligation from the FDIC, which had taken over the Bank when it failed.
In May 1997, plaintiff filed a complaint seeking to have defendant's discharge revoked as to all creditors on grounds of fraud. On January 6, 1999, plaintiff moved for summary judgment and defendant cross-moved for summary judgment. On March 12, 1999, Judge Connelly held a hearing on the motions. Judge Connelly, ruling from the bench, denied plaintiff's motion and granted defendant's cross-motion to dismiss the complaint. At the conclusion of the hearing, the judge ordered defendant's counsel to settle an order in accordance with his decision.
On March 17, 1999, defendant served plaintiff with a Notice of Settlement and Proposed Order by first class mail. The notice stated that the proposed order would be presented to the court for signature at 10 a.m. on March 26. Plaintiff's counsel admits to having received this notice.
The Bankruptcy Court signed the order on March 30, 1999 and the order was entered on the docket by the Clerk of the Bankruptcy Court on March 31, 1999. Pursuant to Bankruptcy Rule 8002(a), plaintiff's time to appeal expired on April 10, 1999.
Plaintiff alleges that "neither Joslin nor his attorneys were aware of the signed order because they never received a copy of it with notice of entry from Wechsler's attorney, nor did they receive a copy from Judge Connelly's Chambers or the Bankruptcy Court, even though it was the regular practice of the Bankruptcy Court in the Southern District of New York to forward a copy of such orders to counsel for the parties." (Pl. Mem. at 6.)
Plaintiff's counsel states that "after several weeks passed — and Joslin's attorneys had still not received any copy of a signed order either from Wechsler's attorney or from the Bankruptcy Court — they checked the court filings by computer on April 23, 1999, and then learned, for the first time, that the order had been signed on March 30, 1999, and entered the next day." (Id.) Thereafter, plaintiff filed a request for an extension of time to appeal within the twenty-day limit for such filings prescribed by Bankruptcy Rule 8002(c)(2).
On May 14, 1999, following oral argument on plaintiff's motion for an extension of time to file a notice of appeal, Judge Connelly denied the motion. The order denying plaintiff's motion was entered on June 21, 1999.
Rule 8002(a) of the Bankruptcy Rules states that a "notice of appeal shall be filed with the clerk within 10 days of the date of the entry of the judgment, order or decree appealed from." Fed. R. Bankr.P. 8002(a). However, Rule 8002(c)(2) provides that a Bankruptcy Court may grant a request for an extension of time to file a notice of appeal of up to twenty days "upon a showing of excusable neglect" if the request is filed within the twenty-day period. See Fed. R. Bankr.P. 8002(c)(2). The district courts do not have jurisdiction to review an order of the Bankruptcy Court if the notice of appeal is not timely filed. Minhlong Enters., Inc. v. New York Int'l Hostel, Inc. (In re New York Int'l Hostel, Inc.), 194 B.R. 313, 316 (S.D.N.Y.1996).
Plaintiff claims that the Bankruptcy Court erred in denying its motion for an extension of time to appeal pursuant to Fed. R. Bankr.P. 8002(c), and argues that the Bankruptcy Court failed to consider: (1) the factors the Supreme Court set forth in Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), for evaluating whether "excusable neglect" exists; and (2) decisions of lower courts, including Shareholders v. Sound Radio, Inc., 109 F.3d 873 (3d Cir.1997), which applied the Pioneer factors and found excusable neglect. We review the Bankruptcy Court's decision under an "abuse of discretion" standard. Hirsch v. London Steamship Owners' Mutual Life Insurance Association Limited (In re Seatrain Lines), 198 B.R. 45, 53 (S.D.N.Y.1996) (Sotomayor, J.); see also Hassett v. Far West Fed. Sav. and Loan Ass'n (In re O.P.M. Leasing Servs., Inc.), 769 F.2d 911, 915 (2d Cir.1985).
In addressing the issue of "excusable neglect" as it pertains to another section of the Bankruptcy Rules, the Supreme Court held that the decision whether a delay is justified by "excusable neglect" is "at bottom an equitable one." Pioneer, 507 U.S. at 395, 113 S.Ct. at 1498. There, a creditor's attorney failed to timely file a proof of claim after receiving a notice of the bar date incorporated in a document entitled "Notice for Meeting of Creditors," a form of notice that did not accord with standard practice. 507 U.S. at 386, 113 S.Ct. at 1494.
The Court held that determination of "excusable neglect" depends on "all relevant circumstances surrounding the party's omission," including the following factors:
the danger of prejudice to the debtor, the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith.
507 U.S. at 395, 113 S.Ct. at 1498.
The Supreme Court further observed that the concept of "excusable neglect" may justify "late filings caused by inadvertence, mistake, or carelessness, as well as by intervening circumstances beyond the party's control." 507 U.S. at 388, 113 S.Ct. at 1495. However, in making its determination, the Court stated it considered "significant that the notice of the bar date provided by the Bankruptcy Court in this case was outside the ordinary course in bankruptcy cases," 507 U.S. at 398, 113 S.Ct. at 1499, and that the unusual form of the notice left a "dramatic ambiguity" in the notification. 507 U.S. at 398, 113 S.Ct. at 1500. Although the Court adopted these factors in the context of a late filed claim pursuant to Fed. R. Bankr.P. 9006(b), the factors apply with equal force to Rule 8002(c)(2). See United States Lines, Inc. v. United States (In re McLean Industries, Inc.), 196 B.R. 670, 674 n. 1 (S.D.N.Y.1996); Hirsch, 198 B.R. at 54. But see In re Mowers, 160 B.R. 720, 725 (Bankr.N.D.N.Y.1993) ().
Here, plaintiff contends that the Bankruptcy Court failed to apply the Pioneer factors in determining whether plaintiff's delay in filing a notice of appeal constituted "excusable neglect." Upon a review of the transcript of the May 14, 1999 hearing as well as plaintiff's papers in support of its motion for an extension, we find this contention baseless. The Pioneer factors were fully briefed by plaintiff prior to the hearing. (See Dessberg Aff. ¶¶ 13-16.) Both parties acknowledged that the Pioneer guidelines applied, and Judge Connelly heard extensive argument regarding these factors from both plaintiff and defendant before issuing his ruling from the bench.
Plaintiff's claim that Judge Connelly "ignored the decisions of other courts which did apply the Pioneer standards, and which held that excusable neglect existed in factual scenarios virtually identical, if not wholly identical, to the one at bar," (Def. Mem. at 17-18), also is without merit. Plaintiff's counsel argues that the Bankruptcy Court should have followed dicta in Sound Radio. There, the Third Circuit denied a motion to extend the time to appeal because the motion was filed after the additional twenty-day period set forth in bankruptcy Rule 8002(c). See 109 F.3d at 879. However, the court stated in dictum that an attorney's failure to file within the ten-day period could be excusable neglect where "the finality (and hence appealability) of the . . . order is a handwritten addition, no copy of the order was sent to counsel, counsel himself contacted the Clerk's Office and obtained a copy, and, once the order was obtained by counsel, the Notice of Appeal was filed without undue delay." Id. Plaintiff made this argument in its supporting papers and during the hearing on its motion for an extension.
Sound Radio is distinguishable from the instant case. Here, Judge Connelly asked that debtor's counsel settle an order in accordance with the decision he rendered from the bench. Defendant claims, and plaintiff does not dispute, that defendant served plaintiff with a...
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