In re Weinstein

245 B.R. 188, 2000 Bankr. LEXIS 154, 35 Bankr. Ct. Dec. (CRR) 196, 2000 WL 222193
CourtUnited States Bankruptcy Court, E.D. New York
DecidedFebruary 14, 2000
DocketBankruptcy No. 898-90841-478
StatusPublished

This text of 245 B.R. 188 (In re Weinstein) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Weinstein, 245 B.R. 188, 2000 Bankr. LEXIS 154, 35 Bankr. Ct. Dec. (CRR) 196, 2000 WL 222193 (N.Y. 2000).

Opinion

DECISION DENYING APPLICATION BY DEBTOR FOR AN ORDER DEEMING MOTIONS ABANDONED

DOROTHY EISENBERG, Bankruptcy Judge.

This matter is before the Court pursuant to an application by Howard I. Wein-stein (the “Debtor”) for an order declaring motions made by James W. Keen and United Sheet Metal (the “Creditors”) (1) to extend the Creditors’ time to file a complaint objecting to dischargeability, and (2) to vacate the automatic stay abandoned for failure to comply with Local Rule 9072-1 of the Bankruptcy Court for the Eastern District of New York. Based on the facts of this case as set forth herein and pursuant to Local Rule 100-1 (c), which specifically authorizes the Court to modify or suspend any of the Local Rules “in the interest of justice or for cause,” the Court denies the application.

FACTS

On October 27, 1998, the Debtor filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code. The Creditors are listed as Creditors on Schedule “F” of the Debtor’s petition. The Creditors’ claim arose in connection with an arbitration action which was commenced prior to the commencement of this Chapter 7 case and was pending before the National Association of Securities Deals (“NASD”) in Fort Lauderdale, Florida (the “Arbitration Action”). The Creditors retained counsel located in Florida to represent them in the Debtor’s case, and subsequently retained local counsel to represent them as well. Local New York counsel is not familiar with this Court’s practice.

By application dated January 6, 1999, the Creditors sought the entry of an order pursuant to Section 362 of the Bankruptcy [190]*190Code granting the Creditors relief from the automatic stay (the “Lift Stay Motion”) to enable the Creditors to continue with the prosecution of the Arbitration Action. On January 22, 1999, the Creditors timely served and filed a motion pursuant to Bankruptcy Rule 4004 for an Order extending the Creditors’ time to object to the discharge of the Debtor until the completion of the Arbitration Action. On March 5, 1999, the Creditors served an amended motion (the “Amended Dischargeability Motion”) which did not change the facts alleged, but clarified their requested relief to indicate that the Creditors were not seeking to extend their time to object to the discharge of the Debtor, but were seeking to extend their time to object to the dischargeability of the debt which might arise in connection with the Arbitration Action. The Debtor opposed the Amended Dischargeability Motion and a hearing was held on March 30, 1999. At ■ the March 30, 1999 hearing, the Court reserved decision on the Amended Dis-chargeability Motion and directed the parties to file supplemental pleadings.

On June 16, 1999, this Court entered a decision (the “June Decision”) which granted the relief requested by the Creditors in the Amended Dischargeability Motion. In addition, this Court granted the Creditors’ Lift Stay Motion to enable the Creditors to continue with the Arbitration Action. At the end of the June Decision, the Court directed the Creditors to settle an order consistent with the June Decision. No order was settled pursuant to the Order of the Court and no order has been entered thereon. According to an affirmation filed by counsel to the Creditors dated January 24, 2000, counsel to the Creditors did not timely submit an order to the Court as it was counsel’s understanding that the Court would undertake to prepare a separate order. Counsel to the Creditors avers that it is customary in his practice in Florida for the Court to enter a separate order upon a memorandum decision or for the Court to direct a party to submit an order. Counsel did not understand the language in the June Decision to constitute a directive by the Court to settle an order.

On or about October 23, 1999, the Court Clerk contacted local counsel to the Creditors and advised the Creditors to settle an order in accordance with the June Decision. On October 25, 1999, a proposed order was settled on the Debtor’s counsel who did not submit a counter order or separate order. On October 30, 1999, counsel to the Creditors filed the proposed order with the Court and on November 10, 1999, the order was signed by the Court (the “November Order”).

On November 18, 1999, the Debtor filed a motion under Bankruptcy Rule 9023 to amend the November Order for the purpose of seeking a full hearing on the issue of the relief from the automatic stay (the “Motion to Amend”). Although the Debt- or did acknowledge in his papers in support of the Motion to Amend that the Order was not submitted in a timely fashion in compliance with Local Rule 9072-1, he did not seek dismissal of the Amended Dischargeability Motion under this Rule. In fact, his papers are completely devoid of any argument regarding such request.

At the hearing on January 20, 2000, the Debtor orally raised to this Court for the first time the argument that the failure of the Creditors to submit a timely order memorializing the June Decision should result in the dismissal of the Amended Dischargeability Motion. The Court reserved on this issue and directed that additional papers be filed by both parties.

DISCUSSION

At the outset, the Court notes that the issue of whether the failure of the Creditors to submit a timely order mandates dismissal of the Amended Dischargeability Motion was not addressed in Debtor’s Motion to Amend the Court’s November, 1999 Order. In fact, counsel to the Debtor unfairly castigated local counsel to the Creditors for failing to address this issue, [191]*191despite the fact that it was raised for the first time at the hearing.

Local Bankruptcy Rules for the Eastern District of New York 9072-1 provides:

If, following a trial, hearing or decision in an adversary proceeding or a contested matter, the Judge directs a party to settle an order, judgment or decree, the parties shall, within fifteen (15) days of the judge’s direction, file a proposed order, judgment or decree with the clerk upon not less than five (5) days’ notice to all parties to the adversary proceeding or contested matter ... if the Order is not timely submitted or settled, the matter shall be deemed abandoned.

Local Bankruptcy Rule 9072-1.

Rule 1001 — (c) provides that:

In the interest of justice or for cause, a judge may modify or suspend requirements set forth in these rules.

Local Bankruptcy Rule 1001 — 1(c).

The scope of Local Rule 1001-l(c) is all encompassing and covers every provision contained in the Local Rules. Therefore, under the Local Rules themselves, the Court is permitted to suspend the fifteen (15) day requirement set forth in Local Rule 9072-1. The Court finds that in the interest of justice, such suspension is warranted.

In this case, counsel for the Creditors does not practice regularly before this Court and in fact practices in Florida. Counsel for the Creditors claims that he did not interpret the language at the end of the June Decision as a directive that he settle an appropriate order, and that he expected the Court to prepare the order. Given that counsel is not familiar with this Court’s practice or with the bankruptcy practice of the Eastern District of New York in general, the Court finds that cause exists for suspension of the deadlines set forth in Local Rule 9072-1.

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Bluebook (online)
245 B.R. 188, 2000 Bankr. LEXIS 154, 35 Bankr. Ct. Dec. (CRR) 196, 2000 WL 222193, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-weinstein-nyeb-2000.