Opinion
Case No. 8:19-bk-00392-CPM Case No. 8:21-cv-00091-MSS
2022-01-07
IN RE: James Ray MOFFITT, Debtor. Alfred Trujillo, Appellant, v. James Ray Moffitt and Jennifer Suzanne Moffitt, Appellees.
W. Bart Meacham, Tampa, FL, for Appellant. John A. Dwyer, John A. Dwyer, Attorney at Law, Plant City, FL, for Appellees.
W. Bart Meacham, Tampa, FL, for Appellant.
John A. Dwyer, John A. Dwyer, Attorney at Law, Plant City, FL, for Appellees.
ORDER
MARY S. SCRIVEN, UNITED STATES DISTRICT JUDGE
THIS CAUSE comes before the Court for consideration of Appellant Alfred Trujillo's appeal of the bankruptcy court's Order on Court's Own Motion for Judgment on the Pleadings ("Order"). (Dkt. 1) Upon consideration of all relevant filings, the entire bankruptcy record, the Parties’ briefs, and being otherwise fully advised, the Court AFFIRMS the bankruptcy court's Order.
I. BACKGROUND
In this appeal, Appellant Alfred Trujillo challenges the bankruptcy court's sua sponte Order entering judgment on the pleadings, ruling that Appellant's complaint to determine the dischargeability of a debt under 11 U.S.C. § 523(a)(6) was untimely. The following facts as set forth in the bankruptcy court's Order appear undisputed from the limited record provided by Appellant: On July 20, 2019, Appellant filed a "Statement of Corporate Ownership," which commenced the adversary proceeding from which Appellant appeals. (Dkt. 2-2) On July 23, 2019, Appellant filed a Complaint for a determination of the dischargeability of debt under Bankruptcy Code § 523(a)(6). (Id. ) The deadline within which Appellant had to file a complaint for a determination of non-dischargeability of a debt under § 523(a)(6) expired on July 22, 2019, and, thus, Appellant's Complaint was filed one day after the deadline had expired. (Id. ) In their answer, Appellees asserted, among other things, that the Complaint was not timely filed. (Id. ) After a hearing, the Court directed the parties to submit briefing on jurisdiction, Appellees’ statute of limitations affirmative defense, and the timeliness of the adversary Complaint. (Dkt. 2-4 at 4) In Appellant's briefing, counsel explained that the late filing of the Complaint resulted from his inadvertently uploading the Corporate Statement instead of the Complaint to commence the proceeding. (Dkt. 2-2) The bankruptcy court determined that it could not treat the Complaint as having been timely filed based on Appellant's filing of the Corporate Statement on July 20, 2019. (Id. ) The bankruptcy court analyzed whether the Corporate Statement could qualify as an original pleading to which the Complaint could relate back and determined that it could not. (Id. at 4–5) The bankruptcy court further determined that the deadline in Rule 4007(c) could not be extended under Rule 9006(b)(1) after its expiration upon a showing of "excusable neglect." (Id. at 5) As such, the Court determined that the Complaint was not timely filed and, on its own motion pursuant to Rule 7016, entered a judgment on the pleadings in favor of the Appellees. (Id. )
Appellant timely appealed the Order and final judgment to this Court. The appeal before this Court presents three issues, as articulated by Appellant:
1. Whether the Bankruptcy Court committed legal error in entering the Order on Court's Own Motion for Judgment on the Pleadings since Federal Rule of Civil Procedure 12(c), which provides that "a party may move for judgment on the pleadings," does not authorize a court to bring its "Own Motion for Judgment on the Pleadings."
2. Whether the Bankruptcy Court committed legal error in entering judgment on the pleadings since no issue as to the statutes of limitations, relation back of an amendment, or equitable tolling is framed by the pleadings.
3. Whether the Bankruptcy Court committed legal error in determining that the Complaint was untimely, on the basis that a complaint satisfying the requirements of Federal Rule of Civil Procedure 8 was not filed prior to the deadline, as the legal issue was whether the Debtors had "fair notice of what the claim is and the grounds upon which it rests" prior to the deadline.
(Dkt. 5 at 8) Appellant did not designate any items for the record in this appeal pursuant to Rule 8009(a) of the Federal Rules of Bankruptcy Procedure. Thus, the limited record before this Court contains only the Notice of Appeal, the Order on Appeal, the Judgment, and a copy of the public docket sheet. (Dkt. 2)
II. STANDARD OF REVIEW
In reviewing bankruptcy court judgments, a district court functions as an appellate court. See In re Coady, 588 F.3d 1312, 1315 (11th Cir. 2009). It reviews the bankruptcy court's legal conclusions de novo but must accept the bankruptcy court's factual findings unless they are clearly erroneous. In re Chira, 567 F.3d 1307, 1310-11 (11th Cir. 2009). "[A] finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). "Judgment on the pleadings is appropriate when material facts are not in dispute and judgment can be rendered by looking at the substance of the pleadings and any judicially noticed facts." In re Gaddy, 977 F.3d 1051, 1055 (11th Cir. 2020).
Under the Federal Rules of Bankruptcy Procedure, the appellant bears the burden of creating the record on appeal. See Fed. R. Bankr. P. 8009 ; see also In re Bagwell, 741 F. App'x 755, 758 (11th Cir. 2018) ("The person bringing the appeal has the burden of ensuring the record provides all the evidence he relies on in his claims."); In re CPDC Inc., 221 F.3d 693, 698 (5th Cir. 2000) ("The burden of creating an adequate record [in a bankruptcy appeal] rests with the appellant, who may not urge an issue on appeal if he has failed to provide the appellate court with the requisite record excerpts."). Where an appellant's failure to provide an adequate record prevents the appellate court from reviewing the lower court's decision, the appellate court will ordinarily affirm the judgment. Selman v. Cobb Cty. Sch. Dist., 449 F.3d 1320, 1333 (11th Cir. 2006) (referring to this as the "absence-equals-affirmance-rule"); see also In re Kunsman, 752 F. App'x 938, 940 (11th Cir. 2018) ; Pensacola Motor Sales Inc. v. E. Shore Toyota, LLC, 684 F.3d 1211, 1224 (11th Cir. 2012) ; 3 Bankruptcy Practice Handbook § 19:11 (2d ed., 2021) ("A failure to include a pleading or document in the designation means that, absent the item's inclusion through Bankruptcy Rule 8009(a)(4), local rule or practice otherwise, the pleading or document will not be considered, and any issue depending on it will be either ignored, denied or dismissed.").
The Court notes that "[a]lthough an unpublished opinion is not binding on this court, it is persuasive authority. See 11th Cir. R. 36-2." United States v. Futrell, 209 F.3d 1286, 1289 (11th Cir. 2000).
III. DISCUSSION
Appellant first contends that the bankruptcy court erred in entering a judgment on its own motion for judgment on the pleadings. (Dkt. 5 at 33–34) Appellant argues that the plain language of Federal Rule of Civil Procedure 12(c), which states that "a party may move for judgment on the pleadings," does not contemplate the court granting judgment on the pleadings on its own motion and "Appellant is unable to find, and is otherwise unaware of, any authority" to support a court proceeding in such a manner. (Id. ) However, at least two circuit courts have held that is not error for a court to enter judgment on the pleadings sua sponte . See Bryson v. Brand Insulations, Inc., 621 F.2d 556, 559 (3d Cir. 1980) ("[F]or a court to grant judgment on the pleadings, sua sponte , is not error. The district court may on its own initiative enter an order dismissing the action provided that the complaint affords a sufficient basis for the court's action."); Flora v. Home Fed. Sav. & Loan Ass'n, 685 F.2d 209, 211-12 (7th Cir. 1982) (affirming district court's sua sponte grant of judgment on the pleadings). To properly do so, a court must give notice and afford the parties an opportunity to respond and be heard. See Flora, 685 F.2d at 212. The Eleventh Circuit has also held that a district court may sua sponte dismiss a complaint for failure to state a claim so long as it provides notice of its intent to dismiss and an opportunity to respond. Surtain v. Hamlin Terrace Found., 789 F.3d 1239, 1248–49 (11th Cir. 2015) ("Prior to dismissing an action on its own motion, a court must provide the plaintiff with notice of its intent to dismiss and an opportunity to respond."); see also Jefferson Fourteenth Assocs. v. Wometco de P.R., Inc., 695 F.2d 524, 527 (11th Cir. 1983) ("The rule that emerges from these cases is that courts exercise their inherent power to dismiss a suit that lacks merit only when the party who brought the case has been given notice and an opportunity to respond.").
Federal Rule of Civil Procedure 12(c) provides: "After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Federal Rule of Bankruptcy Procedure 7012(b) incorporates Rule 12(c) in adversary proceedings.
Here, it appears that Appellant was afforded ample notice and opportunity to respond to the timeliness issue, which was raised in Appellees’ answer and briefed as directed by the Court by both parties prior to a hearing on the matter. As such, the Court finds that it was not error for the bankruptcy court to sua sponte raise the issue and then, after full consideration, enter judgment on the pleadings.
The second issue raised by Appellant is that the bankruptcy court erred in entering judgment on the pleadings when no issue as to the statute of limitations, relation back of an amendment, or equitable tolling was framed by the pleadings. The Court is unable to properly evaluate this argument in light of the insufficient record on appeal. As stated above, Appellant did not properly designate any items for the record pursuant to Rule 8009(a) of the Federal Rules of Bankruptcy Procedure. Thus, the limited record contains only the items transmitted by the Clerk—the Notice of Appeal, the Order on Appeal, the Judgment, and a copy of the public docket report. (Dkt. 2) Significantly, the record does not contain the Complaint or the Answer, and such omission of the pleadings prevents this Court from evaluating de novo whether issues related to a statute of limitations affirmative defense, relation back, and equitable tolling are framed by the pleadings. Likewise, the Court is unable to evaluate Appellant's contention that he was deprived of his right to reply to any statute of limitations defense by arguing equitable tolling or relation back. The record does not contain Appellant's briefing to the bankruptcy court or a transcript of the hearings at which the issue was raised. Under the absence-equals-affirmance-rule, the burden is on the appellant to ensure the record on appeal is complete, and where a failure to discharge that burden prevents the appellate court from reviewing the lower court's decision, the judgment should be affirmed. Pensacola Motor Sales Inc., 684 F.3d at 1224. Absent these critical items from the record, the Court is unable to assign any error to the bankruptcy court's evaluation of the pleadings and decision to grant judgment in favor of Appellees. See Abood v. Block, 752 F.2d 548, 550 (11th Cir. 1985) (dismissing appeal for "violation of the rule requiring the appellant to provide this Court with an appropriate record whereby the actions of the district court can be reviewed"); In re Long, 255 B.R. 241, 242 (B.A.P. 10th Cir. 2000) (affirming bankruptcy court's sua sponte dismissal of a complaint to determine dischargeability of a debt based on an inadequate record on appeal).
The Court would note that it appears uncontested that, while Appellees did not raise the statute of limitations in their Answer as a separate affirmative defense, they denied Appellant's allegation that the Complaint was timely filed. (Dkt. 5 at 14–15) "While a limitations defense must be asserted in a responsive pleading, it need not be articulated with any rigorous degree of specificity and is sufficiently raised for purposes of rule 8 by its bare assertion. " In re Lett, 416 B.R. 780, 786 (S.D. Ala. 2009), aff'd sub nom. Alabama Dep't of Econ. & Cmty. Affs. v. Lett, 368 F. App'x 975 (11th Cir. 2010) ; see also Roy v. Amoco Oil Co., 747 F. Supp. 661, 666 (S.D. Fla. 1990) (holding that limitations defense was sufficiently raised in answer by denial of allegation that plaintiff performed all conditions precedent to bringing action), aff'd, 925 F.2d 1475 (11th Cir. 1991) (table).
The Court would further note that Appellant's summary of his briefing to the bankruptcy court belies his contention in this regard. (Dkt. 5 at 18–22)
The final issue raised by Appellant is that the bankruptcy court erred in determining that the Complaint was untimely on the basis that the Corporate Statement did not constitute a "pleading" under Federal Rule of Civil Procedure 8 to which the Complaint could relate back. Appellant contends that the appropriate inquiry was whether the Appellees had "fair notice of what the claim is and the grounds upon which it rests" prior to the deadline, and contends that the Corporate Statement, the Notice of Electronic Filing, and a complaint filed in state court and referenced in the Appellees’ Schedules and Statement of Financial Affairs, collectively could constitute a pleading sufficient to satisfy the notice pleading standard. (Dkt. 5 at 37–38) However, again, the items that Appellant would have the Court consider for purposes of this argument are missing from the record, which precludes proper review of this issue.
The bankruptcy court's Order describes the Corporate Statement as reading in its entirety:
Pursuant to Federal Rule of Bankruptcy Procedure 7007.1, and in order to enable the Judges to evaluate possible disqualification or recusal, the undersigned counsel for Plaintiff/Creditor, Alfred Trujillo, hereby certifies that no party to this adversary proceeding is a corporation.
(Dkt. 2-2 at 4) The bankruptcy court's Order also notes that the original docket entry text accompanying the Corporate Statement described the filing as a complaint seeking relief under 11 U.S.C. § 523(a)(6) for a determination of nondischargeability of a debt for willful and malicious injury. (Id. ) The bankruptcy court correctly looked to whether the Corporate Statement could qualify as a pleading under Rule 8 of the Federal Rules of Civil Procedure and determined that it did not. The Court finds no error in the bankruptcy court's determination that the Corporate Statement and original docket entry text as described were insufficient to qualify as a "pleading." The documents described do not constitute a short and plain statement of the claim that gives the defendant "fair notice of what the ... claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).
Appellant does not dispute that the bankruptcy court accurately described the Corporate Statement's contents and the contents of the original docket entry text. Rather, Appellant suggests that the bankruptcy court should have considered additional documents outside of the record collectively to determine that the Corporate Statement and corresponding docket entry text gave Appellees fair notice of what the claim is and the grounds upon which it rests. (Dkt. 5 at 37–39) Again, without a complete record of these items and the hearing transcript, the Court cannot properly review this issue. Moreover, Appellant's reliance on Wilkerson Fuel, Inc. v. Elliott, 415 B.R. 214, 220 (D.S.C. 2009), is misplaced. Appellant cites Wilkerson, contending that the bankruptcy court should have considered the Corporate Statement, Notice of Electronic Filing, a state court complaint, and Appellees’ Schedules and Statement of Financial Affairs together to allege a timely "complaint" to which the Complaint could relate back. (Dkt. 5 at 37–39). In Wilkerson, however, the district court considered whether a motion for relief from stay and the motion's attachments —which included a state court complaint—collectively were sufficient to constitute a pleading that put the debtor on notice of the movant's challenge to the dischargeability of the claim. Wilkerson, 415 B.R. at 220. The items considered by the district court in Wilkerson were all part of the same filing and were all filed in the bankruptcy court. Here, Appellant contends that the bankruptcy court should have considered documents that were not attached to the Corporate Statement as part of the "pleading" to satisfy the notice pleading standard. The bankruptcy court properly declined to consider this material.
Accordingly, on this record, the Court is unable to determine any error in the bankruptcy court's ruling.
IV. CONCLUSION
For the reasons set forth above, the bankruptcy court's Order on Court's Own Motion for Judgment on the Pleadings is AFFIRMED . The Clerk is directed to CLOSE this case.
DONE and ORDERED in Tampa, Florida, this 7th day of January 2022.