By Ryan C. Wood
You cannot make real life up. I had to do a double take on this one. The moral of the story here is why wait until later to do what you can do now? Why put it off? This case represents a harsh result for missing a deadline due to alleged computer problems. Unfortunately the bankruptcy lawyer in this Ninth Circuit Court of Appeals case, Amina Anwar v. D. Johnson, Case No. 11-16612, waited until the last minute, allegedly had computer problems and then filed his documents with the bankruptcy court electronically about an hour late. The original bankruptcy case was filed in Arizona.
This case is really about the harsh effect of Federal Rule of Bankruptcy Procedure 4007(c), the timing for filing a complaint under Section 523(c) to object to the dischargeability of a debt. The Ninth Circuit Court of Appeals starts off with some quotes: Douglas Adams: “I love deadlines. I love the whooshing sound they make as they fly by;” Benjamin Franklin: “You may delay, but time will not.”
Once a person files for bankruptcy and creditors receive proper notice of the case even debts incurred by fraud are discharged unless the creditor timely files a lawsuit to determine whether the debt is dischargeable or not. FRBP 4007(c) provides for the time limit to object to discharge as 60 days from the first date set for the Section 341 meeting of the creditors. Like most Federal Bankruptcy Districts the Arizona bankruptcy court has established a mandatory electronic filing system. In the days before electronic filing a bankruptcy attorney did not have until midnight on the day set for a deadline. In this case the deadline to file an adversary complaint objecting to the discharge of a debt was April 13, 2010.
Anwar is the creditor and D. Johnson is the debtor that originally filed for bankruptcy protection. Anwar’s attorney did not start the process of opening an adversary case and file the adversary complaint until 9:00 p.m. on April 13, 2010. Allegedly due to technical problems with Anwar’s lawyers computer the lawyer did not file the adversary complaint until 12:24 a.m. and 12:38 a.m. on April 14, 2010. Oops. The debtor, D. Johnson, filed a motion to dismiss the complaint because it was not filed timely. The Federal Rules of Bankruptcy Procedure provide the deadline to file an adversary complaint can be extended after notice, a hearing and for cause, but the motion must be filed before the deadline. For Anwar’s complaint to be allowed the court would have to give Anwar a retroactive extension of the deadline to file the adversary complaint.
The bankruptcy court originally held that the Federal Rules of Bankruptcy Procedure do not provide the court with discretion to extend retroactively the deadline to file an adversary complaint. Fed. R. Bankr. P. 4007(c) is not like other deadlines that can be extended for excusable neglect pursuant to Fed. R. Bankr. P. 9006(b)(1). Fed. R. Bankr. P. 9006(b)(3) provides that bankruptcy courts may extend the deadline under FRBP 4007(c) only to the extend and under the conditions stated in FRBP 4007(c).
This is truly an unfortunate result for a delay in filing documents within an hour of the deadline. The Fed. R. Bankr. P. are clear regarding FRBP 4007(c). The court will make no exceptions if the deadline to file an adversary complaint to determine the dischargeability of a debt.