When ruling on a motion to file a late appeal under Bankruptcy Rule 8002(d)(1)(B), the bankruptcy court must focus on the reason why the appellant missed the original deadline, not how long it took the appellant to file the motion after the deadline, according to the Sixth Circuit Bankruptcy Appellate Panel.
The bankruptcy court issued an order on February 12 declaring that a particular debt would not be discharged. The 14-day deadline for filing an appeal ended on February 26. The debtor did not file an appeal within the deadline.
The debtor retained new counsel and filed a motion on March 18 under Rule 8002(d)(1)(B), seeking an extension of time to file the notice of appeal. The rule allows filing an extension motion before the appeal deadline lapses or “within 21 days after that time, if the party shows excusable neglect.”
Denying the debtor’s motion for an extension, the bankruptcy court rested the decision entirely on the three weeks the debtor allowed to pass before filing the motion. The bankruptcy court found that waiting three weeks to file the Rule 8002 motion was not excusable. The bankruptcy court did not examine whether the debtor had shown “excusable neglect” in missing the original deadline for an appeal.
Writing for the BAP on January 21, Bankruptcy Judge Jessica E. Price Smith of Cleveland reversed in a five-page opinion.
Regarding the standard for excusable neglect, the bankruptcy judge had referred to the controlling law set down by the Supreme Court in Pioneer Investment Services Co. v. Brunswick Associates LP, 507 U.S. 380 (1993).
Quoting Pioneer, Judge Smith said “that the determination of whether a party’s neglect in missing a deadline is excusable ‘is at bottom an equitable one, taking account of all relevant circumstances surrounding the party’s omission.’” The factors to consider do not have equal weight. The excuse for the late filing has greatest importance, she said.
Judge Smith said that the bankruptcy court “rested its decision entirely on the number of days [the debtor] waited before filing the motion to extend time to appeal without weighing [the debtor’s] reason for missing the original appeal deadline.”
Although the delay in filing the Rule 8002 motion was “a potential factor in determining excusable neglect,” Judge Smith said it was “but one relevant circumstance in the fact-dependent inquiry and cannot be examined to the exclusion of the other factors, especially the movant’s reason for missing the original deadline to appeal.”
Evidently, the debtor had argued in bankruptcy court that missing the deadline resulted from his former counsel’s negligence or malpractice. Judge Smith declined to apply the Pioneer factors and decide whether the debtor had shown excusable neglect for missing the original appeal deadline.
For failing to apply the Pioneer factors, the BAP vacated and remanded for further proceedings.
When ruling on a motion to file a late appeal under Bankruptcy Rule 8002(d)(1)(B), the bankruptcy court must focus on the reason why the appellant missed the original deadline, not how long it took the appellant to file the motion after the deadline, according to the Sixth Circuit Bankruptcy Appellate Panel.
The bankruptcy court issued an order on February 12 declaring that a particular debt would not be discharged. The 14-day deadline for filing an appeal ended on February 26. The debtor did not file an appeal within the deadline.
The debtor retained new counsel and filed a motion on March 18 under Rule 8002(d)(1)(B), seeking an extension of time to file the notice of appeal. The rule allows filing an extension motion before the appeal deadline lapses or “within 21 days after that time, if the party shows excusable neglect.”
Denying the debtor’s motion for an extension, the bankruptcy court rested the decision entirely on the three weeks the debtor allowed to pass before filing the motion. The bankruptcy court found that waiting three weeks to file the Rule 8002 motion was not excusable. The bankruptcy court did not examine whether the debtor had shown “excusable neglect” in missing the original deadline for an appeal.