In Re Daniel R. Bucknum, Dba Bucknum, Levine & Smith, Debtor. Joe W. Moody, Bernice H. Moody v. Daniel R. Bucknum, Dba Bucknum, Levine & Smith

951 F.2d 204, 91 Daily Journal DAR 15041, 1991 U.S. App. LEXIS 28646, 22 Bankr. Ct. Dec. (CRR) 640, 1991 WL 256184

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 9, 1991
• Docket: 90-55178
• Status: Published

Opinions

PER CURIAM:

The question before us is whether the Moodys, who are a properly scheduled judicial lienholder in this Chapter 7 bankruptcy proceeding, received notice of the filing deadline for a nondischargeability complaint sufficient to put them at risk for failing to meet that deadline. The Bankruptcy Appellate Panel (“BAP”) affirmed the bankruptcy court’s dismissal of the Moodys’ complaint on grounds that it was not timely filed. See In re Bucknum, 105 B.R. 25 (Bankr. 9th Cir.1989). The Moodys now appeal, and we affirm.

I

The relevant facts are not in dispute. The Moodys obtained a state court judgment for malicious prosecution against Bucknum, who is an attorney, in the amount of $746,802.52. On March 13, 1988, Bucknum voluntarily filed a Chapter 7 petition and properly listed the Moodys as a judgment creditor. Shortly thereafter, in early April 1988, the Moodys and their counsel obtained a copy of the bankruptcy court’s file in order “to ensure that the MOODY’S [sic] debt was properly scheduled, and that their name and address were properly scheduled ..., so that the MOODY’S [sic] could be assured of receiving proper notice of the bankruptcy proceedings.” Declaration of M. Bradford, Plaintiffs’ Attorney of Record, at 5, In re Bucknum, No. 88-01954 (Bankr.C.D.Cal. Nov. 8,1988). On April 12,1988, the bankruptcy court entered an order setting the statutory meeting of creditors for May 10, 1988, and setting the deadline for filing a section 523(c) nondischargeability complaint for July 11, 1988. See 11 U.S.C. §§ 341(a), 523(c) (1988).

It was at this point that the Moodys’ troubles began. Bankruptcy Rule 4007(c) provides:

A complaint to determine the dis-chargeability of any debt pursuant to § 523(c) of the Code shall be filed not later than 60 days following the first date set for the meeting of creditors held pursuant to § 341(a). The court shall give all creditors not less than 30 days notice of the time so fixed in the manner provided in Rule 2002. 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.

Fed.R.Bankr.P. 4007(c) (emphasis added). Pursuant to this directive, Bankruptcy Rule 2002(f) provides that:

the clerk, or some other person as the court may direct, shall give the debtor, all creditors, and indenture trustees notice by mail of ... the time fixed for filing a complaint to determine the dis-chargeability of a debt pursuant to § 523 of the Code as provided in Rule 4007.

Id. 2002(f)(6).

On July 11, 1988, the Moodys contacted the bankruptcy court’s clerk and learned that it was the last day on which to file a section 523(c) nondischargeability complaint. On the following day, the Moodys dispatched by express mail a motion for an extension of time and a proposed complaint. The bankruptcy clerk filed these two documents on July 13, two days after the deadline. Citing Rule 4007(c) and other laws, the bankruptcy court denied the Moodys’ motion as untimely on July 19. Bucknum then moved to dismiss the complaint itself as untimely. In opposition, the Moodys asserted that they had not received actual notice of the deadline as required by the Rules. The only evidence in support of their contention, however, was their own declaration; the bankruptcy court’s file contained a certificate of mailing indicating that notice of the bar date had indeed been sent to the Moodys.

The bankruptcy court dismissed the complaint. The court reasoned that even if the Moodys had not received proper notice — a contention that the court found unproven— they did have actual knowledge of the bankruptcy proceedings, which constituted sufficient inquiry notice of the filing deadline under In re Price, 79 B.R. 888 (Bankr. 9th Cir.1987) (Price I), aff'd, 871 F.2d 97 (9th Cir.1989) (Price II). The BAP agreed and affirmed.

We have proper jurisdiction under 28 U.S.C. § 158(d), and we apply the same standards of review to the bankruptcy court’s decision as did the BAP. In re Ellsworth, 722 F.2d 1448, 1450 (9th Cir.1984). We presume the bankruptcy court’s findings of fact correct unless clearly erroneous, see Fed.R.Bankr.P. 8013, and we review its interpretation of the Bankruptcy Code and Rules de novo. See In re Hill, 811 F.2d 484, 485 (9th Cir.1987).

II

It is undisputed that the Moodys had actual knowledge of Bucknum’s filing for bankruptcy prior to the court’s entering of the scheduling order on April 12, 1988. The Moodys and their attorney had obtained copies of the bankruptcy court’s file and had communicated with Bucknum’s attorney about the proceedings both by telephone and by mail. The Moodys, however, insist that they never received actual notice of the meeting of the creditors or the bar date as required by the Bankruptcy Rules, and they contend that any alleged inquiry notice was insufficient — both as a matter of bankruptcy law and as a matter of constitutional due process.

A

The Moodys’ first argument is purely factual, and on factual matters we must defer to the bankruptcy court unless its findings are clearly erroneous. The bankruptcy court was not persuaded by the Moodys’ declaration that they never received the court’s notice, and we have no reason to disturb that judgment. As the BAP has explained in a similar case:

Where the bankruptcy court record shows a certificate of mailing and a complaining party submits an affidavit declaring notice was not received, the weight of the evidence favors the court’s certificate. If a party were permitted to defeat the presumption of receipt of notice resulting from the certificate of mailing by a simple affidavit to the contrary, the scheme of deadlines and bar dates under the Bankruptcy Code would come unraveled. For this reason, an allegation that no notice was received does not, by itself, rebut the presumption of proper notice. In re American Properties, 30 [B.R.] 247, 250 (Bankr.D.Kan.1983).

In re Ricketts, 80 B.R. 495, 497 (Bankr. 9th Cir.1987).

Mail that is properly addressed, stamped and deposited into the mails is presumed to be received by the addressee. American Properties, 30 [B.R.] at 250. A certificate of mailing stating that notice of the bar dates was sent to all creditors or proof of a custom of mailing, raises the presumption that notices were properly mailed and therefore received. Id. The presumption can only be overcome by clear and convincing evidence that the mailing was not, in fact, accomplished. [Cf. Grogan v. Garner, — U.S. —, 111 S.Ct. 654, 661, 112 L.Ed.2d 755 (1991) (“the standard of proof for the dischargeability exceptions [listed] in 11 U.S.C. § 523(a) is the ordinary preponderance-of-the-evidence standard”).]

... Appellant has not overcome the presumption.

Id. at 498-99 (Jones, J., concurring).¹ A certificate of mailing was present in the Bucknum bankruptcy file. In re Bucknum, 105 B.R. 25, 27 (Bankr. 9th Cir.1989). The BAP held that this created a presumption of receipt of notice that the Moodys failed to overcome. Id. We agree.

B

In light of the Moodys’ failure to overcome the presumption of receipt that arises from the certificate of mailing, we need not address their second argument that actual knowledge of the bankruptcy proceedings is insufficient to satisfy the notice requirement as a matter of law.

C

Appellee’s request for damages and extraordinary costs under Rule 38 is denied; ordinary costs shall be taxed against appellants pursuant to Rule 39. See Fed. R.App.P. 38, 39(a).

AFFIRMED.

1 . The Moodys appear to argue that dismissal of their complaint was so premature that it deprived them of the opportunity even to look for the “clear and convincing evidence” that the law now requires them to have in order to rebut the presumption of receipt. We reject this argument. It is well settled that the bankruptcy court has no discretion to grant an untimely motion for an extension of the filing deadline under section 523(c). See Fed.R.Bankr.P. 4007(c); Hill, 811 F.2d at 486-87; Price I, 79 B.R. at 890; In re Rhodes, 61 B.R. 626, 630 (Bankr. 9th Cir.1986). It follows a fortiori that the court has no discretion to grant additional time for discovery in order to support an untimely motion for an extension. The claimant should therefore attach to his motion (or to his opposition to the debtor’s motion to dismiss) whatever evidence he has in support. "Evidence might include testimony of a clerk’s office employee that notice was not sent or proof that none of the listed creditors received notice.” See Ricketts, 80 B.R. at 498-99 (Jones, J., concurring). The Moodys have offered no such evidence here.