United Community Bank v. Harper (In re Harper)

497 B.R. 155
United States Bankruptcy Court, N.D. Georgia·Decided March 19, 2013·No. Bankruptcy No. 11-14105-WHD; Adversary No. 12-1080·Published·Cited by 2 cases

Opinion

ORDER

W. HOMER DRAKE, Bankruptcy Judge.

Before the Court is the Motion to Reconsider (hereinafter the “Motion”), filed by United Community Bank (hereinafter the “Plaintiff’). The Motion seeks reconsideration of an order entered by the Court on January 29, 2013, in which the Court granted a Motion to Dismiss filed by Timothy P. Harper (hereinafter the “Debt- or”) of the Plaintiffs Complaint to Determine Dischargeability of a Debt. The Debtor opposes the Motion. This matter arises in a core proceeding, over which this Court has subject matter jurisdiction. See 28 U.S.C. §§ 157(b)(2)(A), (I), & (J); 1334.

Procedural History And Findings of Fact

On December 13, 2011, the Debtor filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq. (hereinafter the “Code”), in the Northern District of Georgia, Newnan Division. The meeting of creditors was scheduled for January 19, 2012 and the time set for objecting to discharge (hereinafter the “Deadline”) was established as 60 days therefrom, March 19, 2012. The Plaintiff acknowledged having notice of this Deadline.

The Deadline was extended twice by consent order, and the Deadline was ulti[157]*157mately enlarged to November 19, 2012. After failing to obtain consent from the Debtor for a third extension of the Deadline, the Plaintiff proceeded with its intention of commencing an adversary proceeding.

At 11:45 P.M. on the night of the Deadline, the Plaintiff initiated the process of electronically filing its complaint and exhibits onto the Court’s CWECF system. Upon commencing the uploading of the complaint, the Plaintiff began to experience technical difficulties. The Plaintiffs computers failed to attach the complaint and continuously became unresponsive,1 or as the Court characterized in its original opinion, the computers “froze.” These technical difficulties caused the Plaintiff to undergo the uploading process three separate times before the Complaint successfully uploaded to the system. The delay resulted in the complaint’s time stamp being recorded at 12:02:44 on November 20, 2012.2 Court administrative policies for the Northern District of Georgia only create procedures for rectifying late filings due to technical failures of the Court’s CM/ECF system. There are no available procedures when the error occurs due to the failure of a party’s own technology. The Plaintiff was informed that nothing was wrong with the CM/ECF system on the night that the Plaintiff commenced its upload and, therefore, consciously took no action seeking to excuse its untimeliness under these policies.

On January 29, 2013, the Court entered an order in which it found that:

(1) complaints seeking to deny the dis-chargeability of a particular debt under 11 U.S.C. § 523(a)(2) are subject to the timing requirements established in Federal Rule of Bankruptcy Procedure (hereinafter the “Rule (s)”) 4007(c),3 that the text of Rule 4007(c) does not permit extension of the Deadline if filed post-expiration, and that the Rules only authorize the Court to extend the Deadline as prescribed therein, see Fed. R. BankrP. 4007(c) & 9006(b)(3);

(2) under Byrd v. Alton, 837 F.2d 457 (11th Cir.1988), the Bankruptcy Court is “without discretion to grant a late filed motion to extend time to file a discharge-ability complaint,” and that Byrd was not abrogated by Kontrick v. Ryan, 540 U.S. 443, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004), remains good law, and is binding on this Court, see United Community Bank v. Harper, 489 B.R. 251 (Bankr.N.D.Ga.2013);

(3) even if Byrd was not good law, equitable relief has only been afforded in limited circumstances in this Circuit, none of which were present in this case: (A) extraordinary circumstances beyond the creditors control, (B) a debtor’s conscious effort discouraging filing, (C) affirmative and misleading clerk error, and (D) no actual knowledge of the bankruptcy proceedings until there was not sufficient time to act within the 60 day time frame. See United Community Bank v. Harper, 489 B.R. 251 (Bankr.N.D.Ga.2013).

On February 12, 2013, the Plaintiff filed the instant motion for reconsideration. [158]*158The Plaintiff lays out a two-pronged reason for why the Court should reconsider its order dismissing the adversary complaint. First, the Plaintiff asserts that the Court committed manifest error by applying Byrd as an absolute bar after the Supreme Court’s decision in Kontrick v. Ryan, 540 U.S. 443, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) and by failing to account for what it terms “the controlling opinion” of U.S. District Judge Batten in Choi v. Promax Investments, LLC, 486 B.R. 541 (N.D.Ga.2012). Secondly, the Plaintiff also contends that the Court erred by not finding “extraordinary circumstances” in this case. Relief in this instance is predicated on both prongs being accepted by this Court, for without the first prong’s being met, the Court has no discretion to use equitable principles, and without the second prong’s being met, the facts do not avail themselves of equitable relief.

Conclusions of Law

Rule 59(e) of the Federal Rules of Civil Procedure grants bankruptcy courts license to alter or amend an order or a judgment after its entry. See Fed. R.Civ.P. 59(e) (made applicable to bankruptcy proceedings by Rule 9023 of the Federal Rules of Bankruptcy Procedure); see also In re International Fibercom, Inc., 503 F.3d 933, 946 (9th Cir.2007) (“Under Rule 59(a), made applicable to bankruptcy proceedings by Federal Rule of Bankruptcy Procedure 9023, a court has the discretion to reopen a judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law, or make new findings and conclusions.”). “The rule permits a court to correct its own errors, ‘sparing the parties and the appellate courts the burden of unnecessary appellate proceedings.’ ” In re E-Z Serve Convenience Stores, Inc., 2004 WL 3095842 (Bankr.M.D.N.C.2004) (citing Russell v. Delco Remy Div. of Gen. Motors Corp.,

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United Community Bank v. Harper (In re Harper), 497 B.R. 155 (Ga. 2013).

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