In Re Tygart Industries, Inc.

139 B.R. 145, 1991 WL 330089
CourtDistrict Court, W.D. Pennsylvania
DecidedSeptember 3, 1991
DocketCiv. A. No. 90-813, Bankruptcy No. 83-2553
StatusPublished
Cited by3 cases

This text of 139 B.R. 145 (In Re Tygart Industries, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Tygart Industries, Inc., 139 B.R. 145, 1991 WL 330089 (W.D. Pa. 1991).

Opinion

MEMORANDUM OPINION

LEE, District Judge.

This is an appeal from an Order of the Bankruptcy Court denying Union National Bank’s Motion to Vacate Order of January 8, 1990, Reconsider Claim No. 137 and Affirm Rights of Movant as Reflected in Debtor’s Schedules. The Committee of Unsecured Creditors of Tygart Industries, Inc. (Committee) and Union National Bank (UNB) have filed briefs on the matter and argument was held in open court on March 1, 1991.

On November 30, 1983, Tygart Industries, Inc. (Tygart) filed a petition for relief pursuant to Chapter 11 of the United States Bankruptcy Code. Schedules were filed on January 24, 1984, acknowledging the existence of a secured claim by UNB in the amount of $5,100,000.00. On or about December 1, 1988, UNB filed a proof of claim to accurately reflect the amount owed by Tygart, which, as a result of various recoveries, was less than that set forth in Tygart’s Schedules, but the debt was still in excess of $2,000,000.00. Such claim was designated Claim No. 137.

The Committee filed Objections to Claim No. 137 on November 3, 1989, and served such upon UNB. The Bankruptcy Court then entered an order scheduling a hearing on the Committee’s objection for January 3, 1990 and requiring UNB to file an answer to the objection on or before December 27, 1989.

A copy of the scheduling order was received by the office of UNB’s counsel on November 22, 1989. At that time, counsel for UNB, M. Bruce McCullough, was on vacation. Due to an inadvertent misplace *146 ment of the order, the significant dates were never brought to Mr. McCullough’s attention. Consequently, no answer to the objection was filed on behalf of UNB, and UNB was not present at the hearing on the Committee’s objection to Claim No. 137. In UNB’s absence, the hearing on the Committee’s objection proceeded ex parte, and on January 8, 1990, the Bankruptcy Court entered an order which disallowed Claim No. 137.

On January 16, 1990, pursuant to Bankruptcy Rule 9024 1 and Bankruptcy Rule 3008 2 , UNB filed its Motion to Vacate. A hearing was held on UNB’s motion on March 22, 1990, and the Bankruptcy Court denied the motion stating “[t]he reasons advanced for [UNB’s] failure to prove its claim at the regularly scheduled hearing date does not amount to excusable neglect as defined in this circuit.”

UNB then filed this appeal, contending the reasons for its failure to comply with the scheduling order of the Bankruptcy Court constitute excusable neglect, and the Bankruptcy Court abused its discretion by failing to vacate and reconsider its order disallowing UNB’s Claim No. 137 because of UNB’s inadvertent failure to comply with the Bankruptcy Court’s scheduling order.

Based upon the applicable standards for analysis of excusable neglect as set forth by the Third Circuit in Consolidated, Freightways Corp. of Delaware v. Larson; 827 F.2d 916 (3d Cir.1987), cert. denied, 484 U.S. 1032, 108 S.Ct. 762, 98 L.Ed.2d 775 (1988), this Court finds that the circumstances surrounding UNB’s failure to comply with the scheduling order of the Bankruptcy Court constitutes excusable neglect.

Larson interpreted Rule 4(a)(5) of the Federal Rules of Appellate Procedure, which provides that a court may, upon a showing of “excusable neglect” or “good cause” extend the time for filing an appeal. In both In re Specialty Plastics, Inc., 85 B.R. 32, 33-34 (W.D.Pa.1988) and In re Wells, 87 B.R. 862, 864 n. 2. (Bankr.E.D.Pa.1988), Larson was cited as setting parameters for defining “excusable neglect” in a motion filed under Rule 60(b) of the Federal Rules of Civil Procedure. The standard of “excusable neglect” is more strict when reviewing requests to extend appeals periods. In re W & L Associates, Inc., 74 B.R. 681, 683 (Bankr.E.D.Pa.1987). Because courts are more indulgent in Rule 60(b) motions because of the concern that parties get their day in court, Id. at 684, the court in In re Wells, concluded a standard more liberal than that espoused in Larson could be justified when reviewing Rule 60(b) motions. See In re Wells, 87 B.R. at 864 n. 2. As in Wells, this Court does not find it necessary to stray from the Larson standards.

After Larson, courts in the Third Circuit must recognize the possibility of human error and decline to penalize counsel when these errors are explained. In re Wells, 87 B.R. at 865. The Larson court explained:

Although every case must be examined on an ad hoe basis and it is impossible to compose an exhaustive list of factors relevant to a determination of whether excusable neglect has occurred. A thoughtful analysis of this issue in a particular context will, at minimum, require a weighing and balancing of the following factors: (1) whether inadvertence reflects professional incompetence such as ignorance of the rules of procedure, Campbell v. Bowlin, 724 F.2d 484 (5th Cir.1984); (2) whether the asserted inadvertence reflects an easily manufactured excuse incapable of verification by the court, Airline Pilots v. Executive Airlines, Inc., 569 F.2d 1174 (1st Cir. 1978); (3) whether the tardiness results *147 from counsel’s failure to provide for a readily foreseeable consequence, United States v. Commonwealth of Virginia, 508 F.Supp. 187 (E.D.Va.1981); (4) whether the inadvertence reflects a complete lack of diligence, Reinsurance Co. of America, Inc. v. Administratia, 808 F.2d 1249 (7th Cir.1987); or (5) whether the court is satisfied that the inadvertence resulted despite counsel’s substantial good faith efforts toward compliance.

827 F.2d 916, 919 (3d Cir.1987).

Since the Bankruptcy Court failed to make the necessary findings, it is not clear whether the Larson factors were given their proper weight or whether they were addressed at all. Upon analysis of the circumstances resulting in the denial of UNB’s claim, we believe the situation cries out for the relief contemplated by Larson.

In Larson, a typist’s error which caused a notice of appeal to be filed in the wrong district, was held to be excusable neglect. Larson

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In Re Bancroft Cap Co.
182 B.R. 538 (E.D. Arkansas, 1995)
In re Tygart Industries, Inc.
139 B.R. 147 (W.D. Pennsylvania, 1991)

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Bluebook (online)
139 B.R. 145, 1991 WL 330089, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-tygart-industries-inc-pawd-1991.