UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 95-1376
CATHERINE DUFFY PETIT,
Plaintiff, Appellant,
v.
PETER C. FESSENDEN, TRUSTEE, ET AL.,
Defendants, Appellees.
No. 95-1377
CATHERINE DUFFY PETIT,
Plaintiff, Appellant,
v.
PETER C. FESSENDEN, TRUSTEE, ET AL.,
Defendants, Appellees.
No. 95-1378
CATHERINE DUFFY PETIT,
Plaintiff, Appellant,
v.
PETER C. FESSENDEN, TRUSTEE, ET AL.,
Defendants, Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
Cyr, Circuit Judge,
Bownes, Senior Circuit Judge,
and Stahl, Circuit Judge.
Stephen F. Gordon, with whom Gordon & Wise was on brief for
appellant.
Peter C. Fessenden, with whom John G. Connor, Law Office of John
G. Connor, James F. Molleur, Woodman & Edmands, P.A., U. Charles
Remmel, II, Kelly, Remmel & Zimmerman and Mark S. O'Brien, Special
Assistant United States Attorney, were on brief for appellees.
April 3, 1996
2
CYR, Circuit Judge. Plaintiff Catherine Duffy Petit,
CYR, Circuit Judge.
a chapter 11 debtor, appeals from a district court judgment
affirming a bankruptcy court order allowing the chapter 11
trustee to reconvene a meeting of creditors several months after
its indefinite adjournment, see Bankruptcy Code 341, 11 U.S.C.
341; Fed. R. Bankr. P. 2003, thereby purportedly recommencing
the 30-day limitation period within which a trustee may interpose
objections to an exemption claim made by the debtor. See Fed. R.
Bankr. P. 4003(b). We affirm.
I
I
BACKGROUND
BACKGROUND
In June 1993, creditors initiated an involuntary
chapter 7 proceeding against Petit in the United States Bankrupt-
cy Court for the District of Maine. The bankruptcy court entered
the order for relief under chapter 7 on December 10, 1993,
following its denial of Petit's motion to dismiss the involuntary
petition. See 11 U.S.C. 305(a). One week later, Petit filed a
motion to convert to chapter 11. See id. 348. At a hearing on
February 2, 1994, and over the objection of the petitioning
creditors, the bankruptcy court directed entry of an order for
relief under chapter 11, and took under advisement the appoint-
ment of a chapter 11 trustee.
Petit filed her statement of financial affairs
(Official Form 7) and schedules (Official Form 6), including
Schedule C (Property Claimed as Exempt), see id. 521(1), on
February 25, 1994, asserting a claim to certain exemptions
3
prescribed under federal law, see id. 522(d)(11)(A) ("an award
under a crime victim's reparation law"); 522(d)(11)(D) ("pay-
ment[s], not to exceed $7500, on account of personal bodily
injury"). In Schedule B, Petit listed as an exempt asset, inter
alia, the entire anticipated proceeds from a pending state-court
action against Key Bank, having an estimated value in excess of
$25 million. On March 28, 1994, the order for relief under
chapter 11 was entered on the bankruptcy court docket.
The United States Trustee convened a meeting of credi-
tors on May 17, 1994. See id. 341; Fed. R. Bankr. P. 2003.
Before it ended, the meeting of creditors was "continued without
date" by the Assistant United States Trustee. On June 17, the
bankruptcy court approved the appointment of defendant-appellee
Peter Fessenden, Esquire, as the chapter 11 trustee. Two months
later, on August 22, Fessenden filed objections to the list of
property claimed as exempt by Petit, particularly her claim to
the anticipated proceeds from the pending legal action against
Key Bank. Petit responded that the objection was time-barred by
Fed. R. Bankr. P. 4003(b), because it was not filed until more
than 30 days after the "conclusion" of the meeting of creditors.
See Taylor v. Freeland & Kronz, 112 S. Ct. 1644, 1648-49 (1992).
Fessenden meanwhile sent a notice to creditors that the continued
meeting of creditors would be reconvened on October 20, thus
purportedly extending until at least 30 days after October 20
the time for filing any objection to the list of property
claimed exempt and rendering timely the objection filed by
4
Fessenden on August 22.
Petit then sought to quash the notice reconvening the
meeting of creditors, contending in the alternative that (1)
Bankruptcy Code 341 permits only the United States Trustee or
an express "designee" and not an undesignated chapter 11
trustee to convene a meeting of creditors and that the United
States Trustee had objected to reconvening the meeting of credi-
tors scheduled by Fessenden; or (2) the 30-day deadline pre-
scribed in Bankruptcy Rule 4003(b) for objecting to an exemption
claim cannot be enlarged, citing the Supreme Court decision in
Taylor, 112 S. Ct. at 1648 ("[Rule 4003(b)] [d]eadlines may lead
to unwelcome results, but they prompt parties to act and produce
finality."). But cf. Mercer v. Monzack, 53 F.3d 1 (1st Cir.)
(distinguishing Taylor), petition for cert. filed, 64 U.S.L.W.
3439 (U.S. Dec. 12, 1995) (No. 95-970). Petit argued that
allowing trustees to circumvent Taylor, through the simple
expedient of routine, indefinite adjournments of meetings of
creditors, would deprive chapter 11 debtors of the benefit of the
very policies of repose and finality acknowledged by the Supreme
Court in Taylor. Petit urged, at the very least, that a meeting
of creditors adjourned without day be deemed "concluded" for
purposes of the Rule 4003(b) time-bar if, as here, the United
States Trustee (or chapter 11 trustee) fails to announce, within
30 days of the adjournment, a firm date for reconvening the
meeting of creditors. See In re Levitt, 137 B.R. 881 (Bankr. D.
Mass. 1992); infra note 2.
5
The bankruptcy court first denied the motion to quash
the notice reconvening the continued meeting of creditors, then,
after it had been reconvened, ruled that the Fessenden objection
to Petit's exemption claim was not time-barred, In re Petit, 172
B.R. 706 (Bankr. D. Me. 1994) (Votolato, B.J.);1 Petit, 174 B.R.
868 (Bankr. D. Me. 1994) (Votolato, B.J.).2 The district court
1The bankruptcy court ruled that Fessenden possessed
unilateral authority to reconvene the meeting of creditors
because Bankruptcy Code 102(9) defines the term "United States
trustee" to include a "designee," the term "designee" is synony-
mous with the term "appointee," and the United States Trustee had
appointed Fessenden as the chapter 11 trustee. In light of our
holding, we need not resolve this question.
2The bankruptcy court sustained the objections on the
following grounds. First, it found In re Levitt inapposite
because the indefinite adjournment of the meeting of creditors by
the chapter 7 trustee in that case had been followed by an
unreasonable 15-month delay in reconvening the meeting. Treating
the "reasonableness" of any delay in reconvening a meeting of
creditors as a matter requiring case-by-case determination, the
bankruptcy court noted several factors which indicated that the
delay in this case was not unreasonable: (1) Fessenden did not
become the chapter 11 trustee until after the initial meeting of
creditors, in part because Petit, a "particularly litigious and
obstructionist" debtor, had opposed the appointment of a chapter
11 trustee; (2) the Fessenden appointment, which occurred the
same day the 30-day period prescribed in Bankruptcy Rule 4003(b)
expired, followed the unexpected withdrawal or disqualification
of other potential chapter 11 trustee candidates; (3) thus
Fessenden was relegated to the role of a mere "spectator" at the
initial May 17 meeting of creditors, and did not participate in
questioning Petit regarding her schedules; (4) the Assistant
United States Trustee had informed Petit at the initial meeting
of creditors that although it was unlikely the meeting of
creditors would be reconvened, "some special reason" might
require it; and (5) Fessenden filed objections to the Petit
exemption claims 66 days after his appointment.
On the merits, the bankruptcy court found the Petit exemp-
tion claims here at issue frivolous, for two reasons. First,
Maine law does not permit residents to elect the federal slate of
property exemptions, and Petit's contention that she was not a
Maine resident was found to be "farcical." Her real and personal
property was all located in Maine, where she also voted, received
her mail, and secured her driver's license. She adduced no
6
affirmed. Petit v. Fessenden (In re Petit), 182 B.R. 59 (D. Me.
1995); Petit, 182 B.R. 57 (D. Me. 1995).
II
II
DISCUSSION
DISCUSSION
A. Standard of Review
A. Standard of Review
In a bankruptcy appeal, the conclusions of law made by
the district court are subject to plenary review; whereas the
facts found by the bankruptcy court are reviewed only for clear
error. See Indian Motocycle Assocs. III Ltd. Partnership v.
Massachusetts Hous. Fin. Agency (In re Indian Motocycle Assocs.
III Ltd. Partnership), 66 F.3d 1246, 1249 (1st Cir. 1995).
B. The Claim of Exemptions
B. The Claim of Exemptions
Although Petit renews on appeal most of the arguments
made below, we do not reach them, see Juniper Dev. Group v. Kahn
(In re Hemingway Transp.), 993 F.2d 915, 935 (1st Cir.) (court of
appeals may affirm on any ground established by the record,
whether or not raised or addressed in the bankruptcy court),
cert. denied, 114 S. Ct. 303 (1993), since she has not met the
first indispensable precondition to a valid claim of exemptions:
a timely claim of exemptions. See Fed. R. App. P. 11(a); Byrd
concrete evidence that she had resided in Massachusetts for 180
days prior to the involuntary chapter 7 petition. Second, even
if Petit had been permitted by Maine law to claim the federal
exemptions, she had not established that the pending lawsuit
against Key Bank involved a claim arising "under a crime victim's
reparation law," see 11 U.S.C. 522(d)(11)(A), or for "pay-
ment[s] . . . on account of personal bodily injury," see id.
522(d)(11)(D). Further, Petit had not claimed these exemptions
under 522(d) (11)(E) (compensation for "loss of future earn-
ings") because Schedule C did not cite to 522(d)(11)(E).
7
v. Ronayne, 61 F.3d 1026, 1029 n.4 (1st Cir. 1995) (appellant
must include in appellate record all materials essential to
appellate claim).
A debtor must list the property claimed as exempt under
Bankruptcy Code 522 within the applicable time limit prescribed
in Bankruptcy Rule 1007. See Fed. R. Bankr. P. 4003(a). An
alleged debtor in an involuntary case must file schedules,
including any Schedule C Property Claimed as Exempt, "within
15 days after the entry of the order of relief." Fed. R. Bankr.
P. 1007(c). Schedules duly filed in a chapter 7 case are "deemed
filed in a superseding case unless the court directs otherwise."
Id. Any extension of the filing deadlines prescribed by Bank-
ruptcy Rule 1007(c) "may be granted only on motion for cause
shown and on notice to the United States trustee and to any
committee elected pursuant to 705 or appointed pursuant to
1102 of the Code, trustee, examiner, or other party as the court
may direct." Id.; see also Fed. R. Bankr. P. 9006(b)(1)
(imposing a heightened showing of "excusable neglect" where the
motion to extend the time for filing is made after the expiration
of the original 15-day filing period).
Petit filed no schedules until February 25, 1994,
despite the fact that the order for relief under chapter 7 had
been entered on December 10, 1993, which meant that her schedules
were due not later than December 26, 1993, absent a timely motion
to extend the filing period for cause shown or excusable neglect.
Nonetheless, no request to extend the filing time was ever made
8
pursuant to Bankruptcy Rule 1007(c). See, e.g., Bryant v. Smith,
165 B.R. 176, 181-82 (W.D. Va. 1994) ("The court finds that
untimely filed schedules waive a debtor's exemption unless the
untimely filing is permitted by the bankruptcy judge in his
discretion for cause shown or excusable neglect.").
During the 15-day window allowed under Bankruptcy Rule
1007(c), Petit did file a motion to convert the chapter 7 case to
chapter 11, but this motion neither excused the failure to comply
with Bankruptcy Rule 1007(c), nor tolled the 15-day filing
period. Finally, the automatic "deeming" provision in Bankruptcy
Rule 1007(c), see supra p. 8, can afford no refuge since no
chapter 7 schedules were ever filed. Nor did the chapter 11
schedules eventually filed by Petit cure her procedural default.
First, although an order of conversion constitutes an
"order for relief" under the chapter to which the case is con-
verted, see 11 U.S.C. 348(a), it "does not effect a change in
the date of . . . the order for relief." That is to say, "[s]ec-
tion 348(a) provides that 'those provisions of the Code which are
keyed to the date of entry of the order for relief for their
operation are unaffected . . . by conversion.'" F & M Marquette
Nat'l Bank v. Richards, 780 F.2d 24, 25 (8th Cir. 1985) (quoting
2 Lawrence P. King, Collier on Bankruptcy 348.02 (15th ed.
1979)); see Schwartz v. Jetronic Indus., Inc. (In re Harry Levin,
Inc.), 175 B.R. 560, 570 (Bankr. E.D. Pa. 1994); Leydet v. Leydet
(In re Leydet), 150 B.R. 641, 642 (Bankr. E.D. Va. 1993). Since
9
the time limits prescribed in Bankruptcy Rules 1007(c) and
4003(a) are keyed to the date of the order for relief, which had
already been entered on December 10, 1993, the order of conver-
sion could not effect an automatic extension of the 15-day
deadline (December 26, 1993) for filing schedules.
Second, Petit inexplicably made matters more problemat-
ic by disregarding a ready opportunity, and her clear responsi-
bility, to cure the procedural default by complying with an
explicit bankruptcy court order directing her to file chapter 11
schedules not later than February 23, 1994. See Fed. R. Bankr.
P. 9006(b), (c). Instead, Petit failed to file the required
chapter 11 schedules until February 25, two days beyond the
deadline. Thus, Petit's chapter 11 schedules were time-barred
even viewed in the most favorable light, without regard to her
failure to notify the United States Trustee of her intention to
request an extension under Rule 4003(a) or to allege or demon-
strate either excusable neglect or good cause. See Fed. R.
Bankr. P. 1007(c), 9006(b)(1).
The Taylor Court recognized that a debtor should not be
indefinitely or unreasonably delayed in reacquiring property
while the trustee or creditors ponder whether or not to lodge
objections to a claim of exemptions. See Taylor, 112 S. Ct. at
1644; In re Young, 806 F.2d 1303, 1305 (5th Cir. 1987); Fed. R.
Bankr. P. 4003(b), 9006(b)(3) (trustee must move for filing
extension before end of 30-day period). Unless and until a
debtor files a timely claim of exemptions, however, as required
10
by the Bankruptcy Code and the Federal Rules of Bankruptcy
Procedure, there is no "list of property claimed exempt" for the
trustee or creditors to oppose. See, e.g., Redfield v. Peat,
Marwick and Co. (In re Robertson), 105 B.R. 440, 450 (Bankr. N.D.
Ill. 1989) ("The Debtor and other Defendants here who seek the
normal benefit that flows from a timely claim of exemption not
timely objected to, rest their contention on a late-filed claim
that the Court never allowed to be filed. . . . In this case, the
exemption claim late-filed without notice, motion, or leave of
Court, is not entitled to the automatic allowance that Bankr. R.
4003(a) gives to a timely filed exemption claim if it is not
timely objected to. He who seeks to benefit by the Bankruptcy
Rules must abide by them."). In these circumstances, the princi-
ple of repose relied upon in Taylor supports the rulings below.
Taylor, 112 S. Ct. at 1648 ("[Rule 4003(b)] deadlines may lead to
unwelcome results, but they prompt parties to act and produce
finality.").3
The district court judgment is affirmed and the case is
The district court judgment is affirmed and the case is
remanded to the bankruptcy court for further proceedings consis-
remanded to the bankruptcy court for further proceedings consis-
tent with this opinion. Costs are awarded to appellees.
tent with this opinion. Costs are awarded to appellees.
3In opposing Petit's claim of exemptions, the chapter 11
trustee agreed, in principle, not to oppose her claim of exemp-
tions insofar as it pertained to legitimate state-law exemptions,
if any. Consequently, we express no opinion on the preliminary
and related question whether, upon remand to the bankruptcy
court, Petit should prevail on any motion to extend the time in
which to file such a claim of exemptions for good cause or
excusable neglect.
11