Matter of Heyward, Bankruptcy No. 181-10834-16.
| Decision Date | 05 December 1981 |
| Docket Number | Bankruptcy No. 181-10834-16. |
| Parties | In the Matter of Eugene HEYWARD and Jacqueline Heyward a/k/a Jacqueline Williams, Debtors. |
| Court | U.S. Bankruptcy Court — Eastern District of New York |
Allen G. Schwartz, Corp. Counsel of the City of New York, for the Motion; Wilma Grinker, New York City, of counsel.
Gerald A. Kagan, New York City, for debtors, in opposition.
This is a motion, made by the Corporation Counsel of the City of New York (The CORPORATION COUNSEL), on behalf of the Department of Social Services of the City of New York (The DEPARTMENT), pursuant to Rules 409(a)(2) and 906(b)(2) of the Rules of Bankruptcy Procedure (The RULES) for an extension of time in which to file an objection to the dischargeability of its debt against the debtor, Jacqueline Heyward, under Sections 523(a)(2) and (4) of the Bankruptcy Reform Act of 1978 (The BANKRUPTCY CODE or The CODE), 11 U.S.C. § 523(a)(2) and (4).
A short resumé of the facts follows:
Jacqueline Heyward and her husband, Eugene, filed a joint voluntary petition for relief under Chapter 7 of the Code, 11 U.S.C. § 701 et seq., on March 3, 1981. Mrs. Heyward, in the Schedule A-3 attached to the petition, listed the Department of Social Services of the City of New York as one of her creditors having an unsecured claim without priority. She correctly indicated that its mailing address was 250 Church Street, New York, New York.
On March 30, 1981, I signed an order scheduling the meeting of creditors to be held in compliance with Section 341 of the Code, 11 U.S.C. § 341. This notice also fixed the times for filing objections to discharge and for filing complaints to determine the dischargeability of debts. The order designated April 22, 1981 as the date for the Section 341 meeting of creditors, and fixed June 5, 1981 as the last day for filing objections to the debtors' discharge or complaints objecting to the dischargeability of specific debts.
Pursuant to this order, Darlene Brown, a deputy clerk in the office of the Clerk of this court at Brooklyn, executed a certificate of mailing in which she certified that on April 3, 1981 she personally deposited in the United States Mail notices of the Section 341 meeting and of the filing deadlines. According to the certificate, she mailed copies of this notice to "all" of the creditors listed in the schedules submitted with Mrs. Heyward's petition.
On June 9, 1981, four days after the deadline for filing objections to discharge and complaints to determine dischargeability had passed, I signed an order directing the debtors to appear at a hearing on their discharge pursuant to Section 524(d) of the Code, 11 U.S.C. § 524(d). The discharge hearing was scheduled for July 22, 1981.
On July 20, 1981, a proof of claim for $6,000 was filed by the Department with the Clerk of this court. By reason of the fact that no complaint objecting to the dischargeability of the Department's debt had been filed within the time prescribed, the Corporation Counsel, on the same day, submitted an order to show cause why an order should not be granted extending its time to file such a complaint. It also contained an order staying all proceedings in the bankruptcy matter pending the disposition of the motion. The order to show cause was signed by Judge Conrad B. Duberstein acting on my behalf on July 21, 1981. As a result of the stay contained in the order to show cause, the clerk's office communicated with the debtors' attorney on that day to notify him that the discharge hearing would not be held on July 22, 1981.
The explanation proffered by the Corporation Counsel for the Department's failure to file in time consists basically of the contention that improper notice was provided to the Department. Specifically, the Corporation Counsel first claims that neither the Department nor his office ever received notice of the Section 341 meeting and, consequently, of the filing deadlines. Second, he contends that the notice, assuming it was mailed, was addressed to the wrong entity. His representative argues that the notice should have been mailed to the Corporation Counsel's office instead of to the Department, based on the alleged import of Section 311 of the New York Civil Practice Law and Rules, N.Y.C.P.L.R. § 311 (McKinney 1981) which provides:
In view of these claims, the Corporation Counsel states that the Department's failure to act within the specified time for filing its objection resulted from "excusable neglect," as provided under Rule 906(b) of the Rules of Bankruptcy Procedure which provides that:
"
I shall first consider the Corporation Counsel's contention that neither he nor the Department received the notice of the Section 341 meeting which contained the filing deadlines.
The "fundamental purpose" of notice to creditors is to give them an equal opportunity to avail themselves of the protection of the bankruptcy laws. In re De-Soto Crude Oil Purchasing Corp., 35 F.Supp. 1, 7 (W.D.La.1940). To this end, Section 521(1) of the Code, 11 U.S.C. § 521(1), requires the debtor to provide a list of all creditors that must be filed together with the debtor's petition. Should the debtor fail to include a creditor or to set forth the creditor's correct address, such failure may cause the debt not to be discharged pursuant to Section 523(a)(3) of the Code, 11 U.S.C. § 523(a)(3). The reason for allocating this responsibility and its attendant penalties to the debtor is that it works to assure that the court will identify all creditors and thereby convey to them proper notice of the matter. See Weintraub and Resnick, Bankruptcy Law Manual ¶ 3.093, p. 3-32; 3 Collier on Bankruptcy, ¶ 521.03, pp. 521.9-11 (15th ed. 1981).
It should be noted, however, that the timely listing of creditors and their claims is all that is required of the debtor. As a matter of fact, Weintraub and Resnick, in their Bankruptcy Law Manual, go so far as to say, in this regard, that:
(¶ 3.093, p. 3-33)
In the instant case, Mrs. Heyward duly listed the Department as one of fourteen creditors included in the Schedule A-3 filed with her petition. She stated therein that the Department's mailing address was "250 Church Street, New York, New York." There is no question that this is the correct mailing address for the Department. See The City of New York Official Directory, 1981-82, p. 128.
According to the Certificate of Mailing completed by the Bankruptcy Clerk's Office, notices were sent to "all listed creditors," "14" in number, on April 3, 1981. The notice mailed to the Department was not returned for non-delivery.
It is well recognized that a proper mailing raises a rebuttable presumption that the article mailed was received by the addressee. Hagner v. U.S., 285 U.S. 427, 430, 52 S.Ct. 417, 76 L.Ed. 861 (1932); Avant v. U.S., 165 F.Supp. 802, 804 (E.D. Va.1958); In re Nimz Transportation, Inc., 505 F.2d 177, 179 (7th Cir. 1974). This presumption has been specifically applied to bankruptcy matters, even where the creditor claims to have no record of receiving the notice. See, e.g., In re Gumieny, 8 B.R. 602, 604 (Bkrtcy., E.D.Wis.1981).
Based on the Bankruptcy Clerk's Office documentation certifying the mailing of the notice to the Department and on the presumption of delivery and receipt, this court is entitled to presume that the Department received notice of the Section 341 meeting of creditors and filing deadlines. It is my belief that the Department received the notice and by some mischance it was either mislaid there and not sent to the Corporation Counsel's office for processing or, it was sent to the Corporation Counsel's office with the information about the Department's claim against Mrs. Heyward and was mislaid or misdirected there. In any event, I reject the Corporation Counsel's contention that the Department did not receive the notice.
The Corporation Counsel's second contention is that the notice that the Department received, presuming it was sent, is invalid because it was mailed to the incorrect addressee. He claims that the notice, to have been valid, should have been directed to his office. As authority for this proposition, he relies on Section 311 of the New York Civil Practice Law and Rules, C.P.L.R. § 311, supra, which requires that personal service of a summons upon a government subdivision of the City of New York be made on the Corporation Counsel of New York City.
It must be borne in mind that this section is applicable to personal service of a summons upon the City of New York. Rule 4003 of the Suggested Interim Bankruptcy Rules (August 15, 1979), which have...
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