Carlos Mondriguez-Torres v. Franklin Castillo Lopez

CourtBankruptcy Appellate Panel of the First Circuit
DecidedJuly 21, 2021
DocketBAP No. PR 20-030
StatusPublished

This text of Carlos Mondriguez-Torres v. Franklin Castillo Lopez (Carlos Mondriguez-Torres v. Franklin Castillo Lopez) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carlos Mondriguez-Torres v. Franklin Castillo Lopez, (bap1 2021).

Opinion

FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL FOR THE FIRST CIRCUIT _______________________________

BAP NO. PR 20-030 _______________________________

Bankruptcy Case No. 19-01133-MCF _______________________________

FRANKLIN CASTILLO LOPEZ and MARIA DOMINGA LEBRON ARES, Debtors. _______________________________

CARLOS MONDRÍGUEZ-TORRES, Appellant,

v.

FRANKLIN CASTILLO LOPEZ and MARIA DOMINGA LEBRON ARES, Appellees. _______________________________

Appeal from the United States Bankruptcy Court for the District of Puerto Rico (Hon. Mildred Cabán Flores, U.S. Bankruptcy Judge) _______________________________

Before Bailey, Fagone, and Katz, United States Bankruptcy Appellate Panel Judges. _______________________________

Roberto O. Maldonado Nieves, Esq., on brief for Appellant. Juan M. Suárez Cobo, Esq., and Warilyn Sánchez Díaz, Esq., on brief for Appellees. _________________________________

July 21, 2021 _________________________________ Fagone, U.S. Bankruptcy Appellate Panel Judge.

Carlos Mondríguez-Torres (the “Appellant”) did not file a timely proof of claim in the

debtors’ chapter 13 case. After the bar date passed, he asked the bankruptcy court to allow his

claim nevertheless, arguing that the deadline had been missed on account of excusable neglect.

The bankruptcy court determined that Bankruptcy Rules 9006(b)(3) and 3002(c) precluded the

requested relief. 1 The Appellant tried again, this time with a request for reconsideration. The

bankruptcy court denied that request as well. In this appeal, the Appellant challenges both of the

court’s orders. We AFFIRM both.

BACKGROUND

I. The Bankruptcy Filing

Franklin Castillo Lopez and Maria Dominga Lebron Ares (the “Debtors”) started their

chapter 13 case on February 28, 2019. In due course, the clerk sent a Notice of Chapter 13

Bankruptcy Case to the Debtors’ creditors, including the Appellant, which indicated the § 341

meeting of creditors was scheduled for April 2, 2019, and the deadline for non-government

creditors to file proofs of claim was May 9, 2019. The § 341 meeting was rescheduled for May

9, 2019, and the Appellant attended the meeting accompanied by Attorney Cynthia Navarro.

While Attorney Roberto O. Maldonado Nieves represented the Appellant in the chapter 13 case,

he was ill on the day of the § 341 meeting and asked his wife, Attorney Navarro, to attend the

meeting in his stead. Although the claims bar date was that same day, no timely proof of claim

was filed by or on behalf of the Appellant.

1 All references to “Bankruptcy Rule” are to the Federal Rules of Bankruptcy Procedure, all references to “Rule” are to the Federal Rules of Civil Procedure, and all references to specific statutory sections are to the United States Bankruptcy Code, 11 U.S.C. §§ 101-1532.

2 II. The Appellant’s Motion to File Late Claim

More than six weeks after the bar date, the Appellant filed a proof of claim. He also filed

a Motion Requesting Allowance of Proof of Claim (the “Motion”), in which he acknowledged he

had missed the bar date and requested leave to file a late claim pursuant to Bankruptcy Rule

9006(b), Bankruptcy Rule 9024, and Rule 60(b) which, he contended, empower bankruptcy

courts to accept late-filed claims “where the failure to act was the result of excusable neglect.”

Citing Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380

(1993), the Appellant asserted that his failure to file the claim in a timely manner was due to his

attorney’s illness, which constituted excusable neglect.

The Debtors objected to the Motion, asserting that the bankruptcy court lacked authority

under the Bankruptcy Rules to grant it. They highlighted that, while Bankruptcy Rule

9006(b)(1) generally authorizes the bankruptcy court to extend certain expired deadlines for

excusable neglect, that authority is limited by Bankruptcy Rule 9006(b)(3), which bars the court

from extending the deadline for filing proofs of claim in chapter 13 cases except as provided in

Bankruptcy Rule 3002(c). As none of the enumerated exceptions in Bankruptcy Rule 3002(c)

were present, they argued, the bankruptcy court lacked authority to allow the late filing of the

Appellant’s proof of claim.

The Appellant countered that the Debtors had failed to consider Bankruptcy Rule 9024,

which makes Rule 60(b) applicable in bankruptcy proceedings. He pointed out that Rule 60(b)

authorizes the court to grant relief from a “final judgment, order, or proceeding” for “mistake,

inadvertence, surprise, or excusable neglect,” or for “any other reason that justifies relief.” See

Fed. R. Civ. P. 60(b)(1) & (6). Because Bankruptcy Rule 9024 does not limit Rule 60(b)’s

applicability in bankruptcy proceedings based on Bankruptcy Rules 9006(b)(3) and 3002(c), he

asserted, the bankruptcy court was not bound by Bankruptcy Rule 3002(c)’s constraints and it 3 had discretion to allow the late filing of his claim on the basis of excusable neglect under Rule

60(b)(1). Additionally, recognizing that relief under Rule 60(b)(6) is appropriate only where

there is a showing of “exceptional circumstances,” the Appellant stated, without elaborating, that

this was such a case.

On October 30, 2019, the bankruptcy court entered an order denying the Motion (the

“Order”), stating:

Federal Rule of Bankruptcy Procedure 3002(c) governs the filing of claims by creditors in chapter 13 cases. A creditor has 70 days after the filing of the petition to file a proof of claim if none of the statutory exceptions to late claims is applicable. Certain untimely filed proof[s] of claim[] are excepted from the bar date, but these are limited to the six exceptions listed in Fed. R. Bankr. P. 3002(c)(1)-(6). After reviewing the six exceptions, the court finds that the facts of the instant case do not fall within any of these six exceptions. In addition, Fed. R. Bankr. P. 9006(b)(3) limits the court’s jurisdiction to enlarge the time for taking action under Rule 3002(c) to the extent and only under the conditions stated by this particular rule. Consequently, the motion to file claim after bar date (Docket No. 49) is denied.

III. The Motion for Reconsideration

Citing Bankruptcy Rule 9023, the Appellant filed a motion seeking reconsideration of the

Order (the “Motion for Reconsideration”). The Appellant’s chief complaint was that the

bankruptcy court had failed to consider Rule 60(b). He reiterated that because Bankruptcy Rule

9024 does not limit Rule 60(b)’s applicability in bankruptcy proceedings based on Bankruptcy

Rules 9006(b)(3) and 3002(c), the bankruptcy court had discretion to allow the late filing of his

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Carlos Mondriguez-Torres v. Franklin Castillo Lopez, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carlos-mondriguez-torres-v-franklin-castillo-lopez-bap1-2021.