Schmiegelow v. Virgil (In re Virgil)

110 B.R. 605, 1989 Bankr. LEXIS 2395
CourtDistrict Court, D. Georgia
DecidedNovember 9, 1989
DocketBankruptcy No. A88-10215-JB; Adv. No. 89-0216A
StatusPublished
Cited by1 cases

This text of 110 B.R. 605 (Schmiegelow v. Virgil (In re Virgil)) is published on Counsel Stack Legal Research, covering District Court, D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schmiegelow v. Virgil (In re Virgil), 110 B.R. 605, 1989 Bankr. LEXIS 2395 (gad 1989).

Opinion

ORDER

JOYCE BIHARY, Bankruptcy Judge.

This matter is before the Court on plaintiff’s motion to impose sanctions against the defendant-debtor (the “defendant”) under Bankruptcy Rule 9011. The Court held a hearing on the motion on October 10, 1989 and took the matter under advisement.

The pertinent facts are as follows. On April 24, 1989, plaintiff filed a timely complaint objecting to the dischargeability of her claim under 11 U.S.C. § 523(a)(6). On April 25, 1989, counsel for the plaintiff, Stephen A. Gura, had his office courier try to serve the summons and complaint on the defendant personally at the address listed in the bankruptcy case file as the defendant’s residence address. The courier discovered that the defendant no longer lived at this address and so advised Mr. Gura. Mr. Gura then requested that the postmaster provide him with defendant’s current mailing address, and the postmaster provided two possible new addresses for the defendant. On April 27, 1989, Mr. Gura’s office again attempted personal service on the defendant at both of the two addresses provided by the postmaster, but the defendant did not live at either of these addresses. On April 28, 1989, Mr. Gura called defendant's counsel of record, Emory L. Clark at Clark & Smith, P.C., and told Mr. Clark about the complaint he had filed and that he could not find the defendant at the address listed on the bankruptcy notices. Mr. Gura asked Mr. Clark to provide him with the defendant’s current residence address, but Mr. Clark refused to do so.

On June 15, 1989, Mr. Gura had the summons reissued and on June 19, 1989, Mr. Gura served defendant by regular, first-class United States mail at the defendant’s address listed in the bankruptcy file and served Mr. Clark, as counsel for defendant, also by mail, all pursuant to Bankruptcy Rule 7004(b)(9).

One month after proper service was effected, the defendant filed a motion to dismiss, alleging that the complaint should be dismissed based on a delay in service. The motion did not challenge the sufficiency of service, but contended that the service was too late. The plaintiff filed a brief in opposition to the motion to dismiss and a “cross-motion for Rule 11 sanctions”. On August 18, 1989, the Court denied the defendant’s motion to dismiss and set the plaintiff’s motion for sanctions down for a hearing.

Bankruptcy Rule 9011 entitled “Signing and Verification of Papers”, provides in pertinent part as follows:

(a) Signature. Every petition, pleading, motion and other paper served or filed in a case under the Code on behalf of a party represented by an attorney ... shall be signed by at least one attorney of record in the attorney’s individual name, whose office address and tele[607]*607phone number shall be stated.... The signature of an attorney or a party constitutes a certificate that the attorney or party has read the document; that to the best of the attorney’s or party’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass, to cause delay, or to increase the cost of litigation.... If a document is signed in violation of this rule, the court on motion or on its own initiative, shall impose on the person who signed it, the represented party, or both, an appropriate sanction which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the document, including a reasonable attorney’s fee.

Bankruptcy Rule 9011 (emphasis added).

The language of Bankruptcy Rule 9011 and Fed.R.Civ.P. 11 (“Rule 11”) are virtually identical and the courts generally look to authorities under Rule 11 for guidance in applying Bankruptcy Rule 9011. Local 11500, Communications Workers of America v. Abridge (In re Abridge), 89 B.R. 66 (9th Cir. BAP 1988). A pleading with no reasonable factual basis or a pleading advancing a legal argument with no reasonable chance of success under the state of the decisional and statutory law warrants the imposition of Rule 11 sanctions. See United States v. Milam, 855 F.2d 739, 742 (11th Cir.1988) (citing Donaldson v. Clark, 819 F.2d 1551 (11th Cir. 1987) (en banc)).

The Court has considered the pleadings, the evidence and argument presented by the parties, and the state of the relevant law, and concludes that the motion to dismiss filed by the defendant on July 18, 1989 was filed in violation of Bankruptcy Rule 9011, as it was without a reasonable factual basis and it had no reasonable chance of success under the existing law.

The defendant’s motion to dismiss does not cite to any statute, rule or case law. There was nothing improper with the issuance of a second summons. Bankruptcy Rule 7004(f) provides that if the original summons is not delivered or mailed within ten days following its issuance, another summons shall be reissued and served. The Court is aware of no law that would support the dismissal of a complaint when service is accomplished 56 days after the complaint was filed as was the case here. The operative rules on time limits for service do not call for dismissal unless the delay has been at least 120 days. Fed.R. Civ.P. 4(j) made specifically applicable to adversary proceedings by Bankruptcy Rule 7004(a) provides as follows:

Summons: Time Limit for Service. If a service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint and the party on whose behalf such service was required cannot show good cause why such service was not made within that period, the action shall be dismissed as to that defendant without prejudice upon the court’s own initiative with notice to such party or upon motion.

Fed.R.Civ.P. 4(j) (“Rule 4(j)”).

Local Rule 230-2, NDGa., also provides that the court may dismiss an action without prejudice as to any defendant not served within 120 days after the filing of the complaint where the party required to be served had notice. Rule 4(j) has been said to create a rebuttable presumption that service of a summons and complaint can be made and will be made within 120 days. 4A A. Miller & C. Wright, Federal Practice and Procedure § 1137 (2d ed. 1987). While the Court may enlarge the time period where good cause for the delay in service is shown, the Court is not aware of any authority allowing the Court to reduce the time limit for service set out in Rule 4(j). In fact, cases in which Rule 4(j) has been invoked involve periods longer than 120 days between the filing of the complaint and service. See Santos v. State Farm Fire and Casualty Company, No. 87 Civ. 7985 (JMW) (S.D.N.Y. August 7, 1989) (LEXIS, Genfed.

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Bluebook (online)
110 B.R. 605, 1989 Bankr. LEXIS 2395, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schmiegelow-v-virgil-in-re-virgil-gad-1989.