Opinion
Civil Action No. DKC 2003-2560
April 9, 2004
MEMORANDUM OPINION
This case is before the court on appeal from the order of Bankruptcy Judge Duncan W. Keir, granting Defendant Andre Walliman's Motion to Dismiss Plaintiff Dragovich's Complaint to Determine the Dischargeability of a Debt. Oral argument is deemed unnecessary because the facts and legal arguments are adequately presented in the briefs and record, and the decisional process would not be significantly aided by oral argument. See Bankr. Rule 8012. For the reasons that follow, the bankruptcy court's order granting Defendant's motion to dismiss will be affirmed.
I. Background
Appellee Walliman filed a petition under Chapter 7 of the Bankruptcy Code on November 21, 2002. Appellant Nick Dragovich was listed as a creditor. On December 17, 2002, the first meeting of creditors was held pursuant to 11 U.S.C. § 341(a). Under Bankruptcy Rules 4004(a) and 4007(c), all complaints objecting to the discharge of a debtor or to determine dischargeability of a debt are to be filed "not later than 60 days following the first date set for the meeting of creditors held pursuant to § 341(a)."
On February 11, 2003, the Trustee moved for an extension of time for filing an objection to discharge pursuant to § 727 of the Bankruptcy Code and Rule 4004. The Bankruptcy court granted the extension on February 20th, thereby extending the deadline for filing objections to a debtor's discharge until May 5, 2003. See Bankr. papers no. 13. On February 14, 2003, Appellant filed a motion for an extension of time to object to discharge or to determine dischargeability of a debt. See Bankr. paper no. 12. The court denied the motion for an extension to object to the discharge under § 727, but granted Dragovich an extension to file a complaint objecting to the dischargeability of the debt pursuant to § 523 and Rule 4007(c). See Bankr. papers no. 17 18. The deadline for dischargeability complaints was extended to May 5, 2003 and all parties were served notice by the court on March 19, 2003. See Bankr. papers no. 19 20. Thereafter, the Trustee filed two subsequent motions for extensions to object to the discharge under Rule 4004(c), both of which were granted by the court. The deadline for filing a complaint objecting to entry of a discharge order under Rule 4004(a) was extended first to May 19, 2003 and then to July 17, 2003. See Bankr. papers no. 28 (granting, on June 9, an extension until May 5, 2003) no. 34 (granting, on July 7, an extension until July 19, 2003).
The Bankruptcy papers referenced herein are those appearing on the docket for bankruptcy case number 02-23548.
Despite the explicit deadline imposed by the court, Appellant filed his "Complaint to Determine the Dischargeability of a Debt, 11 U.S.C. § 523" on May 19, 2003. In response, Appellee/Defendant filed a motion to dismiss, arguing that Appellant's complaint was untimely filed and without merit. On August 13, 2003, the Bankruptcy court dismissed the complaint for being untimely as filed outside of the May 5th deadline. The court explained that while an extension had been granted beyond the May 5th date for a complaint filed under § 727 and Rule 4004(a), no such extension had been requested, or granted, for a complaint objecting to dischargeability of a debt under Rule 4007(c). Appellant now appeals the Bankruptcy court's ruling, arguing that he was under the belief, and was informed by the court, that the March 19th extension for filing objections under Rule 4004 applied to him.
II. Standard of Review
The district court reviews the bankruptcy court's findings of fact for clear error and conclusions of law de novo. In re Kielisch, 258 F.3d 315, 319 (4th Cir. 2001). Because the bankruptcy court's order granting Appellee's motion to dismiss was a conclusion of law and not based upon any factual findings, the court will review its order de novo.
III. Analysis
Discharge from indebtedness may be limited or denied in a Chapter 7 proceeding according to two sections of the Bankruptcy Code: 11 U.S.C. § 523 and 727. Under § 727, the trustee or a creditor may object to the discharge of a debtor as to all debts. Section 727 is supplemented by Bankruptcy Rule 4004, which sets forth the time limits during which the statute may be invoked. See Matter of Farmer, 786 F.2d 618, 620 (4th Cir. 1986). Section 523 lists the conditions under which specific debts may be excepted from a general discharge granted under § 727. Only a creditor may object to the dischargeability of a specific debt under § 523 and the time in which to do so is governed by Rule 4007(c). Id.In this case, Appellant filed a complaint to determine the dischargeability of a debt pursuant to 11 U.S.C. § 523 (c). Pursuant to Rule 4007(c), such a complaint "shall be filed not later than 60 days following the first date set for the meeting of creditors held pursuant to §§ 341(a)." Rule 4007(c) further states:
Rule 4004, which governs objections to entry of a discharge order, states an identical time limit to that of Rule 4007(c). See Rule 4004(a) — (b).
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.See Fed.R.Bankr. 4007(c). Under Rule 9006(b)(3), "[t]he court may enlarge the time for taking action under Rules 4004(a), 4007 (c)," however, the grant of an extension may only be made "to the extent and under the conditions stated in those rules." Although the time limits for filing nondischargeability complaints are generally recognized as not jurisdictional time limits, see Farouki v. Emirates Bank Int'l, Ltd., 14 F.3d 244, 248 (4th Cir. 1994), a court may exercise its discretion by allowing additional time to file a complaint only when a sufficient basis for doing so exists. In this case, no such basis exists.
Prior to filing his complaint, Appellant had moved for an extension of time in which to file both an objection to entry of a discharge order and an objection to dischargeability under Rule 4007(c). The court denied the extension request for filing an objection to discharge, stating that an extension had already been granted until May 5, 2003. The court then granted Appellant's motion for an extension for filing a complaint objecting to dischargeability under § 523 and Rule 4007(c), thereby setting a deadline of May 5, 2003. Without seeking an additional extension, Appellant Plaintiff, however, filed a complaint to determine dischargeability pursuant to § 523 and Rule 4007(c) on May 19, 2003 — two weeks after the deadline had passed. Appellant now argues that his untimely complaint is excusable because he was under the belief that a subsequent extension of time for objections under § 727 and Rule 4004 applied to his complaint. Plaintiff claims, without any supporting evidence, that a court employee represented to him that he had until May 19, 2003 to file a complaint and that he was entitled to rely on the representation when filing his § 523 complaint.
Most immediately puzzling is how Appellant was informed of the May 19th extension prior to filing his complaint on that date as that extension had not been granted until June 9, 2003. Moreover, Plaintiff fails to understand that the court's subsequent extension applied only to complaints objecting to the discharge of a debtor under Rule 4004, and not to those objecting to dischargeability under Rule 4007(c). Therefore, even had the court represented that Appellant was entitled to the May 19th deadline, such a statement would have been correct with respect to Appellant's desire to file a complaint objecting to the discharge of debtor under § 727 and Rule 4004. On its face, Appellant's complaint, alleging fraud and misconduct, was clearly brought pursuant to § 523 and Rule 4007(c), and not § 727 and Rule 4004. See In re Weinstein, 234 B.R. 862, 866 (Bankr.E.D.N.Y. 1999) (holding that motion referring to § 523 of Bankruptcy Code was in fact filed pursuant to Rule 4007(c)); In re Cummings, 221 B.R. 814, 827 n. 19 (Bankr. N.D.Ala. 1998) (refusing to recognize complaint as one brought under § 727 and Rule 4004 when complaint contained neither reference nor allegations or facts relative to § 727 and activity proscribed by that section). Therefore, Appellant's complaint objecting to dischargeability of the debt pursuant to § 523 and Rule 4007(c), was subject to a deadline date of May 5th by express court order.
Appellant's reliance on In re Maughan, 340 F.3d 337 (6th Cir. 2003) is equally misplaced. In Maughan, the court held that a creditor was entitled to an extension of time to file a complaint under § 523 despite having had filed a motion for an extension after the filing deadline had passed. The court's ruling relied upon the fact that the delay in filing was due to the debtor's delay in responding to a request for documents. In this case, Appellant has presented no evidence that his delay was attributable to the misconduct of Appellee Walliman. Moreover, this case does not involve an untimely request for an extension; rather, Plaintiff never filed a subsequent extension request but instead simply filed an untimely complaint.
Finally, regardless of the alleged representations by the unnamed court representative, even a quick reading of the docket makes it clear that the May 19th extension pertained to the filing of a complaint objecting to the discharge of a debtor under § 727 and not, as Appellant's complaint is framed, a complaint to determine dischargeability under § 523. Accordingly, the Bankruptcy court's grant of Appellee/Defendant's motion to dismiss will be affirmed.