In re Champion

600 B.R. 459
CourtUnited States Bankruptcy Court, S.D. Georgia
DecidedMarch 28, 2019
DocketCase Number 17-30330
StatusPublished
Cited by1 cases

This text of 600 B.R. 459 (In re Champion) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Champion, 600 B.R. 459 (Ga. 2019).

Opinion

Susan D. Barrett, United States Bankruptcy Judge

This order addresses two matters. First, the order considers Debtor's Request for Entry of Discharge Forthwith Pursuant to *462Federal Rule of Bankruptcy Procedure 4004(c) filed by Archie Joel Champion, III ("Debtor"). Second, the order addresses the timeliness of the United States Trustee's ("UST's") Motion to Dismiss, or in the Alternative to Convert the Case to Chapter 11. These are core proceedings pursuant to 28 U.S.C. § 157(b)(2)(A). The Court has jurisdiction to address these matters under 28 U.S.C. § 1334. For the following reasons, both Debtor's Motion to Grant Discharge and the UST's Motion to Dismiss or Convert are DENIED.

FINDINGS OF FACT

Debtor's § 341(a)1 meeting of creditors was first set for November 13, 2017. Dckt. No. 5. Pursuant to Rules2 1017(e) and 4004(a), the last day to file a § 707(b) or (c) motion to dismiss the bankruptcy case, or to object to Debtor's discharge, was January 12, 2018.

The UST and Debtor entered into three consent orders extending the time for the UST to object to Debtor's discharge or to file a motion to dismiss under § 707. Dckt. Nos. 22, 40, and 44. The final consent order ("Consent Order") prepared by the UST extended "[t]he time for the [UST] to file a complaint objecting to the entry of a discharge or to file a motion to dismiss under § 707 ... to June 11, 2018." Dckt. No. 44. Notwithstanding the language in the Consent Order noting the deadline as June 11, 2018, the Clerk's Office incorrectly summarized the order on the docket as:

Order Granting Motion to Extend Time to File Objection to Discharge Under 727 and a Motion to Dismiss Under Section 707 (Related Doc 42) Filed on 5/31/2018. Last day to oppose discharge or dischargeability is 7/11/2018 . [ ]

Dckt. No. 44, Docket Entry Text (emphasis added). In turn, the electronic filing system automatically generated a Notice of Electronic Filing ("NEF") e-mailed to all parties registered to receive e-mail notifications with the text showing the incorrect deadline of July 11, 2018 , and providing recipients with a hyperlink to the actual Consent Order which contained the correct deadline. Id. Unfortunately, the UST calendared the incorrect date set forth in the NEF notice, rather than the date in the actual Consent Order.

On June 14, 2018, prior to Debtor receiving his discharge, Morris Bank and Merchants and Citizens Bank (collectively, the "Banks") filed separate motions to dismiss pursuant to § 707(a) . Dckt. Nos. 46 and 47. On June 18, 2018, Debtor filed a Request for Entry of Discharge Forthwith Pursuant to Federal Rule of Bankruptcy Procedure 4004(c) arguing the Banks' § 707(a) motions are untimely and discharge should be entered. Dckt. No. 51.

On June 21, 2018, ten (10) days after the deadline in the Consent Order expired, but prior to the incorrect NEF noted deadline, the Clerk's Office modified the summary adding the following highlighted language:

Order Granting Motion to Extend Time to File Objection to Discharge Under 727 and a Motion to Dismiss Under Section 707 (Related Doc 42) Filed on 5/31/2018. Last day to oppose discharge or dischargeability is 6/11/2018. [ ] Modified on 6/21/2 018 [ ]. Modified docket entry and docket report to reflect the correct deadline for objections to discharge or dischargeablility and for motions to dismiss under Section 707, changing the deadline from 7/11/2018 to 6/11/2018 (Entered: 05/31/2018).

*463Dckt. No. 44, Docket Entry Text (emphasis added). Following this modification, a NEF was automatically e-mailed to registered parties with this revised text.

On June 28, 2018, seven (7) days after the deadline set forth in the Consent Order, but prior to the expiration of the incorrect date initially provided in the NEF, the UST filed an Objection to Debtor's Request for Entry of Discharge and a § 707(a) Motion to Dismiss, or in the Alternative, to Convert Case to a Chapter ll. Dckt. Nos. 61 and 62.

CONCLUSIONS OF LAW

Debtor contends the language of Rule 4004(c)3 mandates the "immediate" entry of discharge; and that, while there is no express deadline to file § 707(a)4 motions to dismiss, the Bankruptcy Code's statutory scheme moots the filing of such motions after the expiration of the deadlines set forth in Rule 4004(c).

Conversely, the Banks and the UST argue, unlike § 707(b) and (c) motions, there is no specific deadline to file a § 707(a) motion to dismiss. The Rules provide the Court shall enter a debtor's discharge "forthwith" unless an applicable Rule 4004(c)(1) exception applies. See Fed. R. Bankr. P. 4004(c)(1). The UST and the Banks argue "forthwith" does not mean "immediately," rather it means "reasonable under the circumstances." Since the *464Banks' and the UST's § 707(a) motions to dismiss were pending before the discharge was entered, they contend the motions delay entry of the discharge. If necessary, the UST also requests the Court use its equitable powers under § 105 and Rule 9006(b)(1) to toll the deadline set forth in the Consent Order or otherwise deem the UST's motion as timely.

Debtor's Request for Entry of Discharge Forthwith.

Rule 4004(c)(1) mandates: "[i]n a chapter 7 case, on expiration of the times fixed for objecting to discharge and for filing a motion to dismiss the case under Rule 1017(e), the court shall forthwith grant the discharge, except that the court shall not grant the discharge if ... a motion to dismiss the case under § 707 is pending." Fed. R. Bankr. P. 4004(c)(1)(D). Subsection (c)(1)(D) was amended in 2002 to expressly provide that a pending § 707 motion to dismiss postpones the entry of a discharge, and the Advisory Committee notes explain the amendment was added:

to provide that the filing of a motion to dismiss under § 707 of the Bankruptcy Code postpones the entry of the discharge. Under the [pre-2002] version of the rule, only motions to dismiss brought under § 707(b) cause[d] the postponement of the discharge. This amendment would change the result in cases such as In re Tanenbaum

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Cite This Page — Counsel Stack

Bluebook (online)
600 B.R. 459, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-champion-gasb-2019.