In Re Moses Hill, Debtor. Phelix Jones, Creditors v. Moses Hill, Debtor

811 F.2d 484
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 22, 1987
Docket85-2701
StatusPublished
Cited by98 cases

This text of 811 F.2d 484 (In Re Moses Hill, Debtor. Phelix Jones, Creditors v. Moses Hill, Debtor) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Moses Hill, Debtor. Phelix Jones, Creditors v. Moses Hill, Debtor, 811 F.2d 484 (9th Cir. 1987).

Opinion

POOLE, Circuit Judge:

The judgment creditor Jones Family (the Family) appeals the district court’s judgment affirming the bankruptcy court’s order denying the Family’s motion for leave to file a late complaint against the debtor Moses Hill. The bankruptcy court found excusable neglect but held that it could not enlarge the filing period under the bankruptcy procedure rules. We affirm.

Moses Hill (Hill) brutally assaulted members of the Family, shooting Mr. Jones in the head. The Family sued Hill in state court for assault and battery, and on November 7, 1979 was awarded $79,487 in damages, accumulated interest on which has brought the total to $100,425.

On August 15, 1983, Hill voluntarily filed for bankruptcy. Counsel for the Family attended the first creditors’ meeting held on October 6, 1983. The Family sought a determination that the judgment was a nondischargeable debt under 11 U.S.C. § 523(a)(6) (1982). Under Bankruptcy Rule 4007(c), the Family had 60 days from the date of the first creditors’ meeting on October 6 within which to file a complaint, which meant that the last day was December 6, 1983. The bankruptcy court erroneously determined the deadline to be January 5, 1984. Counsel for the Family then mistakenly entered the date on his calendar as February 5,1984. No timely complaint was filed.

On November 21, 1984, counsel moved in the bankruptcy court for leave to file a late complaint. The bankruptcy court found excusable neglect on the part of counsel but that it had no discretion to permit late filing, and therefore denied the motion. On September 18, 1985, the district court affirmed the bankruptcy court’s ruling. On October 17, 1985, the present appeal was filed.

The sole issue before us is whether the bankruptcy rules relied on by the bankruptcy court and the district court (rules 4007(c) and 9006(b)) are invalid because they contravene 11 U.S.C. § 523 and 28 U.S.C. § 2075 (1982).

Statutory interpretation is a question of law which we review de novo. Trustees of Amalgamated Insurance Fund v. Geltman Industries, 784 F.2d 926, 929 (9th Cir.1986). Determining the validity of a court rule is a conclusion of law which we also review de novo. United *486 States v. McConney, 728 F.2d 1195, 1201 (9th Cir.1984) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).

11 U.S.C. § 523(a)(6) (1982) provides for the nondischargeability from any debt “for willful and malicious injury by the debtor to another entity.” 11 U.S.C. § 523(c) states that this debt will be discharged “unless, on request of the creditor to whom the debt is owed, and after notice and a hearing, the court determines such debt to be excepted from discharge under [subsection (a)(6) ].”

The bankruptcy rules, enacted by the Supreme Court and reviewed by the Congress under 28 U.S.C. § 2075, set the deadlines for filing complaints under 11 U.S.C. § 523(c):

A complaint to determine the discharge-ability 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).... 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.

Bankr.R. 4007(c). (Emphasis added). Rule 9006 confers discretion upon the bankruptcy court to permit acts to be performed after the expiration of the time limit if the offending party’s motion demonstrates the lateness was the result of “excusable neglect”. Bankr.R. 9006(b)(1). However, the Rule specifically states that “[t]he court may enlarge the time for taking action under Rule[ ] ... 4007(c) ... only to the extent and under the conditions stated in [that] rule[].” Bankr.R. 9006(b)(3).

The Family is thus time barred from filing its complaint because counsel’s motion was made after the 60 day time period had expired.

The Family argues that our interpretation of rules 4007(c) and 9006(b) conflicts with 11 U.S.C. § 523 and abridges substantive rights in violation of 28 U.S.C. § 2075.

28 U.S.C. § 2075 empowers the Supreme Court to promulgate procedural rules in the bankruptcy court as long as they do “not abridge, enlarge, or modify any substantive right.”

The Family’s argument, at its core, depends on the proposition that section 523 not only grants the right to challenge the discharge of certain debts, but also encompasses specific procedures for implementing that right. The Family relies on the legislative history of section 523 which declares that, after enactment, the provision would “not change current law.” H.R.Rep. No. 595, 95th Cong., 2d Sess. 365, reprinted in 1978 U.S.Code Cong. & Admin.News 5963, 6321. Such reliance is misplaced. That section 523 restates prior substantive law does not mean that it retains the procedures used to implement prior law. Indeed, one cannot infer that any of the substantive provisions in the Bankruptcy Code incorporate a particular set of preexisting procedural rules. Moreover, the very purpose of the Bankruptcy Rules was not merely to restate prior procedural law, but in some instances to alter it. We conclude, therefore, that section 523 does not incorporate preexisting procedures.

The Family also argues that rule 4007(c) is in effect a statute of limitations because it firmly and finally cuts off substantive rights. The Family then suggests that because statutes of limitations were deemed to affect substantive rights for Erie purposes, see Guaranty Trust Co. v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 1469, 89 L.Ed. 2079 (1945), rule 4007(c) must also modify substantive rather than procedural law. Although rule 4007(c) in some respects resembles a statute of limitations, its effects are quite different. Statutes of limitations effect primary conduct—behavior apart from any litigation—by providing repose to potential defendants. Such statutes are not designed to manage ongoing litigation. In contrast, rule 4007(c) is triggered only by certain events within bankruptcy litigation. The rule does not grant repose to the debtor or anyone else.

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Bluebook (online)
811 F.2d 484, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-moses-hill-debtor-phelix-jones-creditors-v-moses-hill-debtor-ca9-1987.