United States Bankruptcy Appellate Panel
FOR THE EIGHTH CIRCUIT
____________
01-6052MN
____________
In re: Deanna M. Perkins *
*
Debtor *
*
Landmark Community Bank, N.A. *
*
Plaintiff - Appellant *
* Appeal from the United States
v. * Bankruptcy Court for the
* District of Minnesota
Deanna M. Perkins *
*
Defendant - Appellee *
____________
Submitted: December 4, 2001
Filed: January 9, 2002
____________
Before KOGER, Chief Judge, WILLIAM A. HILL and SCHERMER, Bankruptcy
Judges.
____________
KOGER, Chief Judge.
Landmark Community Bank appeals from an order of the bankruptcy court
dismissing its 11 U.S.C. § 727 adversary complaint against Deanna M. Perkins on the
grounds that it had been untimely filed and equitable reasons did not exist to extend
the filing deadline. For the following reasons, we reverse.
Factual Background
Landmark Community Bank (“Landmark”) is a secured creditor of Deanna M.
Perkins. On August 18, 2000, Perkins filed a voluntary petition for relief under
Chapter 7 of the Bankruptcy Code. The First Meeting of Creditors was held on
September 28, 2000, after which the Chapter 7 Trustee, Thomas F. Miller, filed a
pleading entitled Trustee’s Notice to Defer Automatic Entry of Discharge, which
stated:
The undersigned Trustee for the estate of the Debtors [sic] named
above hereby reports that the §341 Meeting of Creditors scheduled for
September 28, 2000 has not been concluded and requests that the Court
defer entry of discharge under Local Rule 4004-3.
The Trustee hereby reports that on this date a copy of this
statement deferring entry of discharge has been served and filed under
Local Rule 2003-1.
On October 11, 2000, the bankruptcy court entered a form Order Deferring
Discharge and For Debtors to Appear at Creditors Meeting (“Order Deferring
Discharge”), which provided that:
1. The debtor(s) and the attorney for the debtor(s) shall appear in
person at the date, time, and place fixed for the adjourned meeting
of creditors as set by the trustee.
2. The time for serving and filing of objections to claims of
exemption is extended in accordance with Rule 4003(b)
F.R.Bkr.P.
3. Pursuant to Local Rule 4004-3, entry of an order granting a
discharge to the debtor(s) is deferred until 01/08/01.
4. The trustee shall file a report immediately after the conclusion of
the meeting of creditors.
5. The clerk shall forthwith mail copies of this order to the debtor(s),
the attorney for the debtor(s), the trustee, and the United States
Trustee.
2
After the bankruptcy court entered the Order Deferring Discharge, Trustee
Miller operated under the premise that the order extended the time in which to file
dischargeability complaints against Perkins until January 8, 2001. Miller shared this
belief with counsel for Landmark. Since 1983, Miller has served as a trustee in over
10,000 Chapter 7 cases in the District of Minnesota, and has used the automatic
deferral of entry of discharge procedure under Local Rule 4004-3 about fifteen times.
It is Miller’s opinion that the great majority of trustees and bankruptcy practitioners
in the District of Minnesota also construe the form Order Deferring Discharge to
extend the time in which to file a complaint objecting to discharge or dischargeability
of a debt against a debtor.1
After the entry of the Order Deferring Discharge, the electronic case file on the
website for the United States Bankruptcy Court for the District of Minnesota showed
two different deadlines for filing objections to discharge in Perkins’ bankruptcy case:
November 27, 2001, and January 8, 2001. According to an affidavit submitted by
Landmark’s attorney, Steven E. Ness,2 upon inquiry, a bankruptcy court clerk told an
attorney in his office that January 8, 2001, was the deadline by which to file a
1
In support of its defense against Perkins’ motion to dismiss, Landmark
submitted to the bankruptcy court an affidavit prepared by the Chapter 7 Trustee. The
affidavit in the record on appeal is unsigned. During oral argument, Landmark’s
counsel informed us that the Trustee did sign the original affidavit, and further
explained that the signature was missing because the affidavit had been filed
electronically with the bankruptcy court.
2
During the hearing on Perkins’ motion to dismiss, the bankruptcy court
rejected this affidavit on the grounds that it was lacking foundation, incompetent and
based on hearsay. However, Landmark’s counsel is an officer of the court, and we
accept as true his statement made to us during oral argument that an attorney in his
office contacted the bankruptcy court clerk’s office in an attempt to resolve the
ambiguity surrounding the existence of the two bar dates contained in the electronic
case file, and that a bankruptcy court clerk stated that the bar date for filing a section
727 complaint was January 8, 2001.
3
complaint objecting to discharge. Perkins’ counsel also admitted being confused by
the presence of two bar dates in the electronic case file. It is undisputed that no party
in interest filed a motion to extend the period of time in which to file a complaint
objecting to Perkins’ discharge.
On January 5, 2001, Landmark filed a complaint under 11 U.S.C. § 727
objecting to Perkins’ discharge, and filed an amended section 727 complaint on
January 8, 2001. Perkins filed an answer to the complaint, and the matter was set for
trial. The parties engaged in discovery. Landmark filed a motion for summary
judgment to which Perkins filed a response. Following a hearing, the bankruptcy
court denied Landmark’s motion for summary judgment. Thereafter, in anticipation
of the trial in this matter, the parties filed witness lists, exhibit lists and trial briefs.
On the date of trial, the bankruptcy court questioned whether the complaint had been
timely filed under Federal Rule of Bankruptcy Procedure 4004, continued the trial
and encouraged Perkins to file a motion to dismiss the complaint, which she did.
Prior to the bankruptcy court’s inquiry, the attorney for Landmark, the attorney for
Perkins and the Chapter 7 Trustee were all operating under the premise that January
8, 2001, was the section 727 bar date.
At the hearing on Perkins’ motion to dismiss, Landmark contended that the
bankruptcy court’s October 11, 2000 Order Deferring Discharge operated to extend
the deadline to January 8, 2001. Alternatively, Landmark asserted that the Chapter 7
Trustee’s advice that January 8, 2001, was the deadline, combined with the
information contained in the electronic case file on the court’s website and the
bankruptcy court clerk’s assurance that the bar date was January 8, 2001, provided
equitable grounds upon which to extend the bar date to January 8, 2001. The
bankruptcy court rejected all of Landmark’s arguments, and dismissed the complaint
finding that the order of October 11, 2000, did not operate to extend the original
filing deadline of November 27, 2001, and that no equitable reasons existed to extend
the bar date.
4
On July 18, 2001, the bankruptcy court filed a summary order memorializing
its dismissal of Landmark’s complaint. Landmark timely appealed, challenging the
bankruptcy court’s decision that no equitable grounds existed upon which to extend
the section 727 filing deadline to January 8, 2001. Landmark does not contest the
bankruptcy court’s ruling that the Order Deferring Discharge did not operate to
extend the bar date, and conceded at oral argument that this order on its face did not
extend the deadline to file either a section 523 or section 727 complaint.
Standard of Review
In Nicholson v. Isaacman (In re Isaacman), 26 F.3d 629, 631, 633 (6th Cir.
1994)(citations omitted), the Sixth Circuit Court of Appeals enunciated the
appropriate standard of review of a bankruptcy court’s failure to exercise its equitable
powers to extend the deadline by which to file a nondischargeability complaint:
In a bankruptcy proceeding, the bankruptcy court is the finder of
fact. . . . On appeal from the judgment of the bankruptcy court, a district
court reviews the bankruptcy court’s findings of fact under the clearly
erroneous standard but reviews de novo the bankruptcy court’s
conclusions of law. . . . On appeal to this court, we consider the
judgment of the bankruptcy court directly, using the same standards of
review as the district court. . . .
....
We now consider whether the United States Bankruptcy Court for
the Western District of Tennessee abused its discretion in failing to
exercise its equitable powers and accept plaintiff’s complaint. Because
a second bar date was erroneously set in this case and because plaintiff
filed a complaint within the time frame of that deadline, whether the
bankruptcy court in this case abused its discretion turns upon whether
plaintiff reasonably relied on the second bar date. . . . If plaintiff
reasonably relied on that date, then the bankruptcy court abused its
discretion in failing to exercise its equitable powers and permit the
complaint to proceed. . . . Whether plaintiff reasonably relied on the
5
second bar date is a question of law, and thus our review of the
bankruptcy court’s decision in that respect is de novo.
Discussion
Federal Rule of Bankruptcy Procedure 4004 provides in relevant part:
(a) TIME FOR FILING COMPLAINT OBJECTING TO
DISCHARGE; NOTICE OF TIME FIXED. In a chapter 7
liquidation case a complaint objecting to the debtor’s discharge under
§ 727(a) of the Code shall be filed no later than 60 days after the first
date set for the meeting of creditors under § 341(a). . . . At least 25 days’
notice of the time so fixed shall be given to the United States trustee and
all creditors as provided in Rule 2002(f) and (k) and to the trustee and
the trustee’s attorney.
(b) EXTENSION OF TIME. On motion of any party in interest, after
hearing on notice, the court may for cause extend the time to file a
complaint objecting to discharge. The motion shall be filed before the
time has expired.
(c) GRANT OF DISCHARGE.
....
(2) Notwithstanding Rule 4004(c)(1), on motion of the debtor, the
court may defer the entry of an order granting a discharge for 30 days
and, on motion within, the court may defer entry of the order to a date
certain.
Fed. R. Bankr. P. 4004.
Pursuant to Federal Rule of Bankruptcy Procedure 9006(b)(3), a bankruptcy
court may enlarge the time for taking action under Bankruptcy Rule 4004(a) “only to
the extent and under the conditions stated in [the] rule.” Fed. R. Bankr. P.
9006(b)(3). The language in Rules 4004(b) and 9006(b)(3) is clear, the bankruptcy
6
court may extend the section 727 deadline only upon a motion made by a party in
interest prior to the expiration of the deadline and after a hearing on the matter. There
is no question that the foregoing procedure was not followed in this case, and,
accordingly, the section 727 bar date was not extended as provided by Rule 4004(b).
According to Minnesota Local Rule of Bankruptcy Procedure 4004-3:
If the trustee in a chapter 7 case serves and files a verified statement
under Local Rule 4003-1 that the meeting of creditors has not been
concluded, the court may defer entry of discharge until the case is closed
or the trustee files a report stating that the meeting has been concluded,
whichever occurs first.
We believe that Local Rule 4004-3 merely does what it purports to do, and that is
defer the entry of the discharge order upon the filing of a verified statement by the
Chapter 7 case trustee. Because the procedure for extending the section 727 deadline
is not followed in Minnesota Local Rule 4004-3, the local rule cannot operate to
extend same. Accordingly, the bankruptcy court’s October 11, 2000 Order Deferring
Discharge did not operate to extend the section 727 bar date, and clearly on its face,
as Landmark’s counsel concedes, the Order Deferring Discharge did not extend the
filing deadline. However, there appears to be confusion among bankruptcy
practitioners and Chapter 7 case trustees, in addition to bankruptcy court clerk’s
office personnel, regarding the operating effect of an order issued pursuant to
Minnesota Local Rule 4004-3. In this case alone, Landmark’s counsel, Perkins’
counsel, the Chapter 7 Trustee, the clerk’s office employee who input the new section
727 deadline into the electronic case file after the bankruptcy court entered the
October 11, 2000 Order Deferring Discharge and the clerk’s office employee who
verified that the new section 727 deadline was January 8, 2001, when contacted by
Landmark’s counsel were all confused by the effect of the Order Deferring Discharge
7
entered by the bankruptcy court.3 After the entry of the October 11, 2000 Order
Deferring Discharge, the foregoing individuals were operating under the presumption
that January 8, 2001, was the section 727 deadline.
This court has previously examined whether a bankruptcy court may apply
equitable principles to extend the bar date by which a complaint objecting to
discharge or dischargeability of a debt must be filed. In KBHS Broadcasting Co., Inc.
v. Sanders (In re Bozeman), 226 B.R. 627, 630 (B.A.P. 8th Cir. 1998)(citations
omitted), this court stated that: “Rules 4004 and 4007 of the Federal Rules of
Bankruptcy Procedure establish time limits for filing complaints objecting to
discharge of a debtor or to dischargeability of a debt. These rules are analogous to
statutes of limitations and are strictly construed.” In Block v. Moss (In re Moss), 266
B.R. 408, 414 (B.A.P. 8th Cir. 2001)(citation omitted), this court expanded upon the
principles enunciated in Bozeman and opined that Rule 4004 “is not jurisdictional
but, rather, subject to the defenses of waiver, estoppel and equitable tolling.” See
also Moss v. Block (In re Moss), 266 B.R. 697, 700 n.4 (B.A.P. 8th Cir. 2001)(Rules
4004 and 4007 “are not jurisdictional in nature, but instead are subject to the defenses
of waiver, estoppel and equitable tolling.”).
In the normal course, the procedural requirements of Rule 4004 must be
followed in order to extend the deadline for filing objections to a debtor’s discharge;
a bankruptcy court may not extend the time sua sponte. See Block v. Moss (In re
Moss), 266 B.R. at 413. However, in both of the foregoing Moss cases, this court
sanctioned the consideration of equitable grounds as a means for extending the
section 523 and 727 deadlines. Indeed, in Block v. Moss (In re Moss), this court
affirmed the bankruptcy court’s ruling allowing an untimely filed complaint objecting
to the debtor’s discharge to move forward because the chapter 7 trustee had relied
3
Perkins’ counsel admitted at the hearing on the motion to dismiss that he was
confused.
8
upon a previous order in which the bankruptcy court had improperly sua sponte
extended the deadline by which to file a complaint objecting to discharge or
dischargeability of a debt. Id. We likewise hold that a bankruptcy court may extend
the deadline by which to file a complaint objecting to a debtor’s discharge or
dischargeability of a debt, if equitable grounds exist for doing so.
We turn now to an examination of whether Landmark’s reliance on the January
8, 2001 deadline was reasonable, and, if so, whether the bankruptcy court abused its
discretion by failing to extend the bar date. We find instructive the Sixth Circuit
Court of Appeals opinion in Nicholson v. Isaacman (In re Isaacman), 26 F.3d 629 (6th
Cir. 1994). In that case, the debtor had filed a Chapter 7 bankruptcy petition in the
United States Bankruptcy Court for the Northern District of Georgia on March 19,
1992. The Georgia bankruptcy court clerk’s office notified creditors that the deadline
by which to file a complaint objecting to discharge or to determine the
dischargeability of certain debts was June 29, 1992. Subsequently, the case was
transferred to the Bankruptcy Court for the Western District of Tennessee.
Thereafter, but prior to the expiration of the original bar date, the Tennessee
bankruptcy court clerk’s office notified creditors that the bar date was September 21,
1992. An attorney for the plaintiff/creditor called the Tennessee bankruptcy court
clerk’s office and was advised that the new bar date was September 21, 1992. On that
date, the plaintiff filed a complaint in the Tennessee bankruptcy court seeking to have
a debt owed to him by the debtor declared nondischargeable based on fraud. The
debtor filed a motion to dismiss the adversary proceeding on the grounds that the
complaint was untimely filed asserting that the bar date was the June 29, 1992 date
set by the Georgia bankruptcy court, and not the September 21, 1992 date set by the
Tennessee bankruptcy court. The bankruptcy court granted the debtor’s motion to
dismiss. The court recognized that it was within its equitable powers to accept the
untimely filed complaint, however, it determined that the plaintiff’s reliance on the
September 21, 1992 bar date was unreasonable. The district court affirmed.
9
The Sixth Circuit reversed and remanded, ruling that the bankruptcy court and
the district court erred in concluding that the plaintiff’s reliance on the second bar
date issued by the Tennessee bankruptcy court clerk’s office was not reasonable. The
Court opined:
Bankruptcy Rule 4007(c) provides that where, as here, a creditor
files a complaint to determine the dischargeability of a debt pursuant to
11 U.S.C. § 523(c), the complaint “shall be filed not later than 60 days
following the first date set for the meeting of creditors.” Rule 4007(c)
further states:
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.
Rule 9006(b)(3) limits the ability of a court to enlarge the time for
taking action under Rule 4007(c) “only to the extent and under the
conditions stated in [that] rule[].” Taken together, these bankruptcy
rules “prohibit a court from sua sponte extending the time in which to
file dischargeability complaints.” In re Themy, 6 F.3d 688, 689 (10th
Cir. 1993). Thus, because there was no motion filed to extend the bar
date set by the United States Bankruptcy Court for the Northern District
of Georgia, under the bankruptcy rules, the bankruptcy court was not
empowered to extend the bar date established by its clerk’s office.
The inability of a bankruptcy court to sua sponte extend the time
in which to file dischargeability complaints, however, does not prevent
a bankruptcy court from exercising its equitable powers under 11 U.S.C.
§ 105(a) in accepting an untimely filed complaint. In a substantially
similar case, the Ninth Circuit in In re Anwiler, 958 F.2d 925 (9th Cir.),
cert. denied, 506 U.S. 882, 113 S. Ct. 236, 121 L. Ed. 2d 171 (1992),
stated as much. . . .
....
Under the circumstances of this case, we agree with the Ninth and
Tenth Circuits that if the bankruptcy court erroneously sets a second bar
date for the filing of complaints to determine the dischargeability of a
debt and if a creditor, reasonably relying on that second date, files a
complaint before the expiration of the second bar date, the bankruptcy
10
court should exercise its equitable powers and permit the complaint to
proceed. To hold otherwise, we believe, would create an unjust result
because parties are entitled to rely on information issued by bankruptcy
courts. . . .
....
Defendant argues that it was unreasonable for plaintiff to rely on
the statements made by the bankruptcy court clerk regarding the
applicable bar date. Defendant suggests that had the conveyance of the
deadline been made by the bankruptcy judge himself or had it been
issued in a notice signed or stamped by the bankruptcy judge, it arguably
would have been reasonable for plaintiff to rely on such a deadline.
Defendant argues, however, that because plaintiff merely relied on the
statements of a bankruptcy court clerk, such reliance is unreasonable
because the statements lacked the indicia of a court order.
It is irrelevant that the second bar date was orally communicated
by a clerk of the bankruptcy court rather than by a purported order of the
court. In In re Kearney, 105 B.R. 260, 265 (Bankr. E.D. Pa. 1989), a
case on which the bankruptcy court heavily relied, the court concluded
that because the second bar date was communicated by way of a
document under the name of the clerk of the bankruptcy court, it was
unreasonable for a creditor to rely upon the information of a court clerk
when such information contradicted a rule of procedure. We, however,
are unwilling to condone such an outright disregard for the statements
issued by a clerk’s office. The clerk of the bankruptcy court and those
who are under his or her direction are officials of the bankruptcy court
itself. See In re Anwiler, 115 B.R. 661, 664 (9th Cir. BAP 1990), aff’d,
958 F.2d 925 (9th Cir.), cert. denied, 506 U.S. 882, 113 S. Ct. 236, 121
L. Ed. 2d 171 (1992); see also In re Cortes, 125 B.R. 418, 421 (E.D. Pa.
1991). Moreover, the clerk of the bankruptcy court, not the bankruptcy
judge, is obligated under the bankruptcy rules to notify creditors of the
time fixed for filing a complaint to determine the dischargeability of a
debt. See Bankruptcy Rule 2002(f)(5) and Bankruptcy Rule 4007(c).
If we were to agree with defendant’s arguments, the effect would be that
no individual would be allowed to reasonably rely on the
communications of a clerk’s office for the simple reason that those
communications were issued by the clerk of the court or those under his
or her direction. . . .
11
....
In sum, we conclude that where a bankruptcy court erroneously
sets a second bar date for the filing of complaints to determine the
dischargeability of a debt before the first bar date has expired and where
a creditor, reasonably relying on that second date, files a complaint
before the expiration of the second bar date, the bankruptcy court abuses
its discretion if it fails to exercise its equitable powers and permit the
complaint to proceed. We further conclude that under the circumstances
of this case, plaintiff was reasonable in relying on the second bar date
issued by the clerk’s office of the bankruptcy court for filing the
complaint, and both the bankruptcy court and the district court erred in
holding otherwise. Accordingly, we conclude that the bankruptcy court
in this case abused its discretion in failing to exercise its equitable
powers and permit plaintiff’s complaint to proceed.
Isaacman, 26 F.3d at 631-36 (footnotes omitted). See also European American Bank
v. Benedict (In re Benedict), 90 F.3d 50, 54 (2d Cir. 1996)(The Second Circuit
recognized that the bar date for filing complaints objecting to discharge and the
dischargeability of debts may be extended when the creditor was affirmatively misled
by the bankruptcy court as to the filing deadline.); Themy v. Yu (In re Themy), 6 F.3d
688, 690 (10th Cir. 1993)(“Although the provisions of Rules 4004 and 4007 are
strictly enforced, courts have almost uniformly allowed an out-of-time filing when
the creditor relies upon a bankruptcy court notice setting an incorrect deadline.”);
Allied Fidelity Ins. Co. v. Reichmeier (In re Reichmeier), 130 B.R. 539, 540 (Bankr.
W.D. Mo. 1991)(The bankruptcy court relied upon its equitable powers to allow an
untimely filed nondischargeability complaint to move forward when the plaintiff had
relied upon an erroneous bar date supplied by the clerk’s office, stating that when “a
creditor who receives, by official form, an erroneous date from the clerk’s office and
relies thereon, may do so without being penalized.”).
Here, the bankruptcy court clerk’s office set a new deadline for filing section
523 and 727 complaints after the bankruptcy court entered the Order Deferring
Discharge. The bankruptcy court published the new bar date in the electronic case
12
file on its website, and orally confirmed that January 8, 2001, was the section 727
deadline upon inquiry by one of Landmark’s attorneys. The bankruptcy court clerk
was wrong to establish a new bar date, but after careful consideration, we determine
that Landmark reasonably relied on the January 8, 2001 deadline, and that under the
facts of this case, the bankruptcy court abused its discretion by failing to exercise its
equitable powers and permitting Landmark’s section 727 adversary complaint to
proceed. Influencing our decision is the fact that the federal court system is rapidly
converting to electronic case filing, that eventually all of the bankruptcy courts will
be conducting business predominately electronically and that parties need to be able
to rely on information contained in a bankruptcy court’s electronic case file, including
bar dates published by a bankruptcy court clerk. The parties to a bankruptcy case
must be able to have confidence in the electronic case filing system. Further, as
pointed out by the Isaacman court, parties need to be able to rely on communications
made by employees in the bankruptcy court clerk’s office. When, as in this case, the
information contained in the electronic case file on the bankruptcy court’s website is
confusing, the parties should be able to rely on the information given by a bankruptcy
court clerk to resolve the confusion.
Conclusion
We reverse the decision of the bankruptcy court dismissing the complaint filed
by Landmark Community Bank, and remand for further proceedings consistent with
this opinion.
SCHERMER, Bankruptcy Judge dissenting.
Because the Order of October 11, 2000, is unambiguous and was served upon
Landmark, I respectfully dissent.
13
Federal Rule of Bankruptcy Procedure 4004(a) states unequivocally that in a
Chapter 7 liquidation case a complaint objecting to the debtor’s discharge under
section 727 (a) of the Code shall be filed no later than 60 days after the first date set
for the meeting of creditors under section 341(a). Bankruptcy Rule 4004(b) provides
that on motion from any party in interest, after hearing and notice, the court may for
cause extend the time to file a complaint objecting to discharge. This rule requires
a motion to be filed before the original 60 days has expired. In Taylor v. Freeland
and Kronz, the Supreme Court made clear that deadlines in the Federal Rules of
Bankruptcy Procedure mean what they say and that violations of such deadlines
cannot be ignored or excused. See Taylor v. Freeland and Kronz, 503 U.S. 638, 644,
112 S. Ct. 1644, 1648 (1992)(“Deadlines may lead to unwelcome results, but they
prompt parties to act and they produce finality.”).
As the majority concedes, there is no question that the simple foregoing
procedure was not followed in this case and the Section 727 bar date was not
extended. Minnesota Local Rule of Bankruptcy Procedure 4004-3 simply allows the
court to defer entry of discharge in certain circumstances. There is no hint therein
that time for filing objection to discharge is extended relative to the deferral.
Landmark’s counsel concedes that the bankruptcy court’s Order Deferring Discharge
did not operate to extend the Section 727 bar date and did not extend the filing
deadline. Although Landmark contends in its brief that it relied upon the Order
Deferring Discharge, nowhere does it allege that the order is ambiguous. This is not
a case where the “aggrieved” party was not served with the order. Here, Landmark
timely had in its possession an unambiguous order from the court. Instead,
Landmark’s rationale is to seek interpretation of an unambiguous court order from the
trustee and a deputy clerk of the court. The Order did what it says on its face and
nothing more.
Although the source document (Order Deferring Discharge dated October 11,
2000) was clear and unambiguous, Landmark sought the advice of the Chapter 7
14
trustee. The trustee advised Landmark that the automatic deferral of entry of
discharge procedure under Local Rule 4004-3 extended the time in which complaints
to deny discharge may be filed, an interpretation held by many trustees and
bankruptcy practitioners according to the trustee. If so, this interpretation and
application would be in spite of and in conflict with Federal Rule of Bankruptcy
Procedure 9006(b)(3), which allows a bankruptcy court to enlarge the time for taking
action under Bankruptcy Rule 4004(a) “only to the extent and under the conditions
stated in [the] rule.” Fed. R. Bankr. P. 9006(b)(3). To extend the time to file a
complaint denying discharge requires a motion of any party in interest before the
original time bar expires. No such motion was ever filed; hence, the time bar date
was never extended. For the trustee to assert and have advised Landmark’s counsel
that he had also received an enlargement of the time within which to object to
discharge (which he never asked for) is unreasonable, and it is unreasonable to rely
on such advice in the face of a clear and explicit Order of October 11, 2000, and
applicable Rules. Congress could not have intended that clear, unambiguous,
statutory provisions and court orders be thwarted by errant interpretations and
practices of trustees and practitioners, nor should this court allow or encourage them
to be likewise thwarted.
Next, Landmark contends that it relied upon the court’s website.4 The page in
question listed two dates under the description “Objections to Discharge,” one
corresponding to the appropriate date pursuant to the applicable rule, and one that
was entered in error. Clearly this would cause confusion and lead a reasonable
practitioner to review the source document (the court’s Order of October 11, 2000)
underlying the unofficial listing on the website. A thorough and cautious practitioner
might also look to an official secondary source such as the actual court docket or
minute entry to eliminate the confusion. Landmark did neither, instead relying on a
4
Attached to this opinion is a copy of the web page which Landmark relies
upon.
15
third source, a computer compilation of dates, motions, and descriptions. The fact
that this reliance worked to their advantage in the end is more than fortuitous.
Landmark also cites reliance on discussions with the United States Bankruptcy
Court Clerk during which that clerk identified the latter date as the deadline for filing
the Plaintiff’s Complaint Objecting to Discharge. It is safe to assume that upon the
request by Landmark to identify the time bar date, the clerk simply reviewed the same
web page that Landmark had previously reviewed, and seeing the second entry for
“Objections to Discharge”, responded accordingly. There is nothing in the record to
indicate the clerk went to the source document or secondary source documents to
verify this assumption. Barring that, reliance upon discussions with the clerk who
based his opinion upon the same misinformed web page suffers from the same
maladies as those afflicting the web page, discussed above.
Finally, the majority relies almost entirely on Isaacman for support to invoke
equitable powers. However, in Isaacman (and the cases cited therein), the court
actually set a second bar date. In the case before us no such second bar date was ever
established by the court. The trustee never asked for a second bar date, hence one
was never granted by the court. If one was created by the inadvertence of a deputy
clerk (see attachment) and the misunderstanding of the trustee, such inadvertence and
misunderstanding do not equate to the formal establishment of a second bar date by
the court.
The incentive we create today should be one that encourages practitioners to
look at source documents, the Rules, the Code, and official docket entries rather than
an incentive that encourages short-circuiting this process in favor of reliance on
interpretations and practices of court officials or employees wrought with the
possibility of human error. To allow Landmark to prosecute a complaint, filed
approximately six weeks after the deadline, because of a mistaken and unreasonable
interpretation of the trustee, a mistake on the bankruptcy court web page, or an
16
opinion of the deputy clerk based upon that web page, will encourage future quests
for ambiguity where none exists. The majority would have a deputy clerk’s entry on
a web page or an unreasonable misinterpretation have the force of law, superceding
the clear Federal Rules of Bankruptcy Procedure promulgated by Congress. I do not
think this should be the case.5 Accordingly, I would affirm the Order of the
bankruptcy court.
A true copy.
Attest:
CLERK, U.S. BANKRUPTCY APPELLATE PANEL,
EIGHTH CIRCUIT
5
The majority appears concerned about the precedent of parties relying upon
court web pages ("the parties to the bankruptcy case must be able to have confidence
in the electronic case filing system"). Minnesota does not use an electronic case
filing system. Rather, the attached web page is a compilation derived by a deputy
clerk from either the court Order of October 11, 2000, or docket entries created by the
deputy clerk. The confidence which the majority refers should stem from a review
of the court Order itself. Electronic case filing systems avoid the situation created in
this case by allowing readers to view source documents (court orders) in PDF format.
17