City of Chicago v. Wexler (In re Wexler)

477 B.R. 709
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedAugust 6, 2012
DocketBankruptcy No. 11 B 9227; Adversary No. 12 A 338
StatusPublished
Cited by2 cases

This text of 477 B.R. 709 (City of Chicago v. Wexler (In re Wexler)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Chicago v. Wexler (In re Wexler), 477 B.R. 709 (Ill. 2012).

Opinion

MEMORANDUM OPINION

A. BENJAMIN GOLDGAR, Bankruptcy Judge.

This matter is before the court for ruling on the amended motion of chapter 7 trustee David R. Herzog to intervene as a plaintiff in the City of Chicago’s adversary proceeding against debtor and defendant Norman Wexler. For the reasons that follow, the motion will be denied.

1. Background

The following facts, mostly procedural, are drawn from the parties’ papers, the court’s docket, and the docket of the United States Bankruptcy Court for the Southern District of Florida (of which the court can take judicial notice, see 520 S. Michigan Ave. Assocs., Ltd. v. Shannon, 549 F.3d 1119, 1137 n. 14 (7th Cir.2008)). No facts are in dispute.

On September 8, 2010, debtor Norman Wexler (‘Wexler”) filed a chapter 7 bankruptcy case in the Southern District of Florida. An interim trustee, Leslie Osborne, was appointed. The initial deadline for parties to object to Wexler’s discharge under section 727 of the Bankruptcy Code, 11 U.S.C. § 727, was December 20, 2010. The deadlines for particular parties changed, however, as those parties moved to extend them. Osborne’s deadline was extended to January 14, 2011. The deadline for the City of Chicago (“the City”), a creditor, was also extended to January 14, 2011, then to February 18, 2011, and then to March 21, 2011.

On February 11, 2011, the bankruptcy case was transferred to the Northern District of Illinois, and a new chapter 7 trustee, David R. Herzog (the “trustee”) was appointed. The City moved for several additional extensions of its deadline to file a complaint objecting to Wexler’s discharge and eventually filed a timely complaint on February 28, 2012. The deadline for the trustee, however, was never extended beyond the January 14, 2011 date, and the trustee filed no complaint objecting to Wexler’s discharge before the January 14 deadline passed.

The trustee now moves to intervene as a plaintiff in the City’s adversary proceeding against Wexler. The City supports the motion. Wexler opposes it. The motion is fully briefed and ready for ruling.

2. Discussion

The trustee will not be permitted to intervene. Rule 24 of the Federal Rules of .Civil Procedure authorizes two kinds of intervention, intervention “of right” and “permissive intervention.” Fed.R.Civ.P. 24 (made applicable by Fed. R. Bankr.P. 7024). The trustee asserts that he can intervene as a matter of right under Rule 24(a), and that at a minimum he should be permitted to intervene under Rule 24(b). [712]*712But intervention as a matter of right is not an option because no federal statute grants the trustee the unconditional right to intervene, and his request to intervene is untimely in any event. Because the request is untimely, permissive intervention also is not an option. The motion to intervene will therefore be denied.

a. Intervention of Right

i. No Unconditional Statutory Right

The trustee is not entitled to intervene as of right. Under Rule 24(a), a party may intervene as a matter “of [r]ight” provided the party either (1) is given “an unconditional right to intervene by a federal statute,” or (2) claims an interest that may be impaired by the disposition of the pending action and is not adequately represented by the parties. Fed.R.Civ.P. 24(a)(1), (2). The proposed intervenor bears the burden of showing that one of these requirements is met. Reid L. v. Illinois State Bd. of Educ., 289 F.3d 1009, 1017 (7th Cir.2002).

In this case, the trustee relies on Rule 24(a)(1), asserting that a federal statute gives him an unconditional right to intervene. The trustee contends that section 323 of the Bankruptcy Code confers such a right. That section, however, merely provides that a trustee in a bankruptcy case “is the representative of the estate” and “has capacity to sue and be sued.” 11 U.S.C. § 323(a), (b). It says nothing whatever about intervention, let alone intervention in an adversary proceeding to object to a debtor’s discharge under section 727(a). Nor does the Trustee’s role as the estate’s representative somehow imply an unconditional right to intervene, as the trustee urges. An unconditional right to intervene must be express, not implied. See 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1906 at 279-80 (3d ed. 2007) (noting that courts are hesitant to find an unconditional right of intervention when statutory language is less than clear).

When Congress wants to confer an unconditional right to intervene, it knows how to do so. Many federal statutes explicitly confer such a right. Fuel Oil Supply & Terminaling v. Gulf Oil Corp., 762 F.2d 1283, 1286 & n. 5 (5th Cir.1985); see, e.g., 29 U.S.C. § 1132(h) (entitling Secretaries of Labor and the Treasury to intervene in certain ERISA proceedings); 42 U.S.C. § 2000h-2 (entitling Attorney General to intervene in an action alleging a violation of the fourteenth amendment to the Constitution). Congress also knows how to confer on a bankruptcy trustee a statutory right to intervene. See, e.g., 26 U.S.C. § 7464 (“The trustee of the debtor’s estate in any case under [the Bankruptcy Code] may intervene, on behalf of the debtor’s estate, in any proceeding before the Tax Court to which the debtor is a party.”). It has not done so in section 323 of the Code.

Without an unconditional statutory right to intervene, the trustee’s motion to intervene as of right in the City’s adversary proceeding must be denied.

ii. Untimely Motion

Even if the trustee had met the requirements of Rule 24(a), his motion would have to be denied as untimely. The motion was brought long after the deadline for objections to discharge had passed.

Rule 24 states that intervention can only be granted “[o]n timely motion.” Fed. R. Civ. P. 24(a), (b). Timeliness in this context “is not a word of exactitude or of precisely measurable dimensions.” City of Bloomington, Ind. v. Westinghouse Elec. Corp., 824 F.2d 531, 534 (7th Cir. 1987) (internal quotation omitted). It depends on “all the circumstances” of a case, id. (internal quotation omitted), though several factors typically guide a court’s [713]

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Cite This Page — Counsel Stack

Bluebook (online)
477 B.R. 709, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-chicago-v-wexler-in-re-wexler-ilnb-2012.