The Eleventh Circuit previously held that the bankruptcy court may not extend the deadline for objecting to the dischargeability of a debt if the motion for an enlargement of time was not filed until after the deadline expired.
Nonetheless, the Atlanta-based appeals court held that a complaint objecting to discharge, although filed after the deadline, relates back to the date before the deadline when the creditor mistakenly filed a motion rather than a complaint.
The creditor had obtained a $318,000 judgment in state court for abuse of process. Before the deadline, the creditor’s counsel filed a motion objecting to the dischargeability of the debt as a willful and malicious injury under Section 523(a)(6). Recognizing the mistake five days after the deadline, the creditor’s counsel filed a nearly identical pleading, this time denominated as a complaint.
The debtor filed a motion to dismiss, contending that the complaint was untimely. The creditor cross-moved for summary judgment based on collateral estoppel. The bankruptcy court denied the motion to dismiss and granted judgment to the creditor. The district court affirmed.
On the second appeal, the Eleventh Circuit wrote a non-precedential, per curiam opinion on February 6 upholding the lower courts.
Since there is no doubt that an objection to dischargeability must be litigated in a complaint, the circuit court analyzed Bankruptcy Rule 7015, which incorporates F.R.C.P. 15, prescribing when an amendment relates back to “the original pleading.” For Rule 15 to apply, the original motion had to qualify as a “pleading.”
If the only authority were Bankruptcy Rule 7007, the creditor would lose, because that rule means that a motion is not a “pleading.” Instead, the appeals court said that Bankruptcy Rule 7008 turned the tide in favor of the creditor.
F.R.C.P. 8, incorporated by Bankruptcy Rule 7008, prescribes the contents of a “pleading” that states a claim. The circuit court then proceeded to conclude that the motion “satisfied Rule 8 pleading requirements for a complaint,” even though not labeled as such. In the process, the appeals court said that the failure to include an adversary caption was not determinative of the nature of the action.
Having found that the complaint related back and was therefore timely, the appeals court proceeded to rule that the bankruptcy court had properly applied collateral estoppel in concluding that the state court judgment had proven the debt to be nondischargeable.