In Re Leach

102 B.R. 805, 1989 Bankr. LEXIS 1150, 1989 WL 80584
CourtUnited States Bankruptcy Court, D. Kansas
DecidedJuly 21, 1989
Docket19-20276
StatusPublished
Cited by14 cases

This text of 102 B.R. 805 (In Re Leach) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Leach, 102 B.R. 805, 1989 Bankr. LEXIS 1150, 1989 WL 80584 (Kan. 1989).

Opinion

MEMORANDUM OPINION AND ORDER

BENJAMIN E. FRANKLIN, Chief Judge.

On January 13, 1989, this matter came for hearing on the alleged debtor’s, Robin Leach, motion to amend judgment pursuant to F.R.C.P. 59(e) to allow costs and attorney’s fees against the petitioning creditor, Lawrence National Bank. The debtor appeared by and through counsel, F. Stan-nard Lentz. Lawrence National Bank appeared by and through its counsel, Donald E. Bucher.

FINDINGS OF FACT

Based on the pleadings and the record, this Court finds as follows:

1. On February 23, 1988, petitioning creditor, Lawrence National Bank, filed an involuntary chapter 7 petition against Robin Leach.

2. On March 14, 1988, the alleged debt- or answered the petition.

3. After several continuances, on July 25, 1988, this Court conducted a hearing on whether an order for relief should be entered. The hearing revolved around whether there was a bonafide dispute between the Bank and Leach. At the hearing, Mr. Lentz, attorney for the alleged debtor, reserved the right to request attorney’s fees under 11 U.S.C. section 303. This Court took the bonafide dispute issue under advisement.

4. On October 24, 1988, this Court issued a Memorandum Opinion and Order dismissing the involuntary petition on the grounds that a bonafide dispute existed between the parties. 92 B.R. 483. This Court did not make a finding as to attorney’s fees.

5. On November 7, 1988, the alleged debtor filed a motion to amend judgment pursuant to F.R.C.P. 59(e) to allow costs of $520.15 and attorney’s fees of $11,215.00 against the petitioning creditor. On December 6, 1988, the clerk noticed a hearing on the motion for January 13, 1989.

6. On January 12, 1989, just one day prior to the hearing, the Bank filed a memorandum in opposition to the motion to amend judgment to include costs and attorney’s fees.

7. On January 13, 1989, this Court conducted the hearing on awarding of costs and attorney’s fees. However, as a preliminary matter, Mr. Lentz, counsel for the debtor asked this Court to strike the Bank’s memorandum as untimely under Kansas District Court Local Rule 206 and to consider his motion to be uncontested. After hearing arguments from Mr. Lentz and Mr. Bucher, counsel for the Bank, this Court requested that the parties file briefs on the issue of the timeliness of the Bank’s response and took that issue plus the underlying issue of attorney’s fees under advisement.

CONCLUSIONS OF LAW

There are two issues this Court must consider: (1) Whether the Bank’s response to the alleged debtor’s motion to amend judgment to allow costs and attorney’s fees was untimely under D.Kan. Rule 206 and therefore should not be considered by the Court; and (2) Whether this Court should award costs and attorney’s fees to the alleged debtor and against the Bank under Bankr. Section 303(i).

1. Bank’s Written Response is Out of Time Under D.Kan. Rule 206 and Will Not Be Considered By The Court.

D.Kan. Rule 206(b) provides that a party opposing a motion shall, within 10 days after service of the motion on him, file a written response to the motion containing a short, concise statement of his opposition to the motion, and if appropriate, a brief or memorandum in support thereof. D.Kan. *807 Rule 206(g) goes on to state that the failure to file a response within the time specified shall constitute a waiver of the right to file such a response, except upon a showing of excusable neglect, and that the motion will be considered uncontested.

This Court finds that the Bank’s response was nearly two months out of time. On November 7, 1988, the alleged debtor filed a motion to amend judgment pursuant to P.R.C.P. 59(e) (Bankruptcy Rule 9023) to allow costs of $520.15 and attorney’s fees of $11,215.00 against the petitioning creditor; and attached was a certification that a copy had been mailed to Mr. Bucher. On December 6, 1988, the clerk noticed a hearing on the motion for January 13, 1989. On January 12, 1989, just one day prior to the hearing, the Bank filed a memorandum in opposition to the motion to amend judgement to include costs and attorney’s fees.

The Bank presents two arguments against the enforcement of Rule 206. First, the Bank asserts that a conflict exists between Bankruptcy Rule 9014 and D.Kan. Rule 206 such that Rule 206 does not apply in bankruptcy court. Second, the Bank asserts that if D.Kan. Rule 206 does apply in the bankruptcy forum, then the Bank’s reliance on Bankruptcy Rule 9014 constitutes “excusable neglect” such that this Court may still consider its untimely response.

This Court finds both of the Bank’s arguments unpersuasive. It is, clear that the Local Rules of the District Court apply to proceedings in the United States Bankruptcy Court. D.Kan. Rule 802 states: “These Local District Court Rules govern practice and procedure in this district of all cases under Title 11 United States Code and of all civil proceedings arising under, in or related to title 11.” Moreover, the Local Rules of the Bankruptcy Court for the District of Kansas also state: “The Rules of Practice of the United States District Court for the District of Kansas, insofar as they are not inconsistent with the Bankruptcy Code, Rules and Forms or these Local Rules, are applicable to the United States Bankruptcy Court for the District of Kansas.” L.B.R. 1(B).

The Bank further argues that Bankruptcy Rule 9014 conflicts with D.Kan. Rule 206 and therefore supersedes the rule. Bankr.Rule 9014 reads in part: “No response [to a motion filed in a contested matter] is required under this rule unless the Court orders an answer to a motion.” (emphasis added)

However, contrary to the Bank’s assertions, such an order requiring a response on the part of the Bank does exist. Bankruptcy Rule 9029 allows the district court and the bankruptcy court to promulgate local rules governing practice and procedure. The District Court and the Bankruptcy Court in this district have done this. L.B.R. 1(B) implements the Local District Court Rules, including D.Kan.Rule 206(g). Viewed in this context, it is clear that Bankr.Rule 9014 does not conflict with D.Kan. Rule 206(g).

The Bank further argues that if Kansas U.S. District Court Rule 206 does apply, its reliance on Bankr.Rule 9014 constitutes “excusable neglect”. Subsection (g) of rule 206 provides that: “Failure to file a brief or response within the time specified within this rule shall constitute a waiver of the right thereafter to file such a brief or response except upon a showing of excusable neglect.”

This Court, however, does not agree that this was the result of excusable neglect. Even if the Bank was not aware of the existence of D.Kan.Rule 206, this does not constitute excusable neglect. Courts have held that neither “lack of knowledge of the law nor misinterpretation of bankruptcy law is excusable neglect.” In re Young, 1 B.R. 387 (Bankr.M.D.Tenn.1979); and In re Heyward, 15 B.R. 629 (Bankr.E.D.N.Y.1981).

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Cite This Page — Counsel Stack

Bluebook (online)
102 B.R. 805, 1989 Bankr. LEXIS 1150, 1989 WL 80584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-leach-ksb-1989.