Filing a complaint before the deadline is critically important and should be undertaken only by an expert — that is to say, by a paralegal who does it every day.
An amateur, like a lawyer, should not wait until the last minute to file a complaint electronically. Muffing the timely filing of a dischargeability complaint by a befuddled lawyer meant that the complaint was irredeemably late, for reasons explained in a nonprecedential Tenth Circuit opinion on December 14.
A Lawyer in a Panic
A creditor held a $240,000 judgment against a chapter 7 debtor. The creditor’s lawyer’s first mistake was in waiting to schedule the debtor’s deposition on the last day for filing a nondischargeability complaint.
The deposition ended nine hours before the midnight deadline for filing the dischargeability complaint. Thankfully, the lawyer had begun drafting the complaint before the deposition.
By the time the lawyer finished tweaking the complaint and logged onto the PACER system, only 20 minutes remained before the midnight deadline. Having filed a complaint only once before on PACER, the lawyer had problems immediately. Misunderstanding salient features of PACER and resorting to trial and error, it was 12:16 a.m. (16 minutes after the deadline) before PACER registered the complaint as having been filed.
The lawyer filed a motion for an extension of time to file the complaint, claiming that PACER malfunctioned. The trustee filed a cross motion to dismiss the complaint.
The Ruling by Bankruptcy Judge Mosier
Ordinarily, excusable neglect is grounds for extending a missed deadline under Bankruptcy Rule 9006(b)(1). However, excusable neglect does not apply to complaints regarding discharge and dischargeability. See Bankruptcy Rule 9006(b)(3).
To enlarge time regarding discharge and dischargeability, Rules 4004(b) and 4007(c) only permit extensions on motions filed before the deadline, with exceptions not applicable to the case at hand.
The lawyer therefore contended that the clerk’s office was “inaccessible,” thus giving him more time to file under Rule 9006(a)(3) and the companion local rule.
Bankruptcy Judge R. Kimball Mosier of Salt Lake City denied the extension motion and dismissed the complaint. State Bank of Southern Utah v. Beal (In re Beal), 616 B.R. 140 (Bankr. D. Utah March 31, 2020). To read ABI’s report, click here.
Following a hearing with witnesses from the clerk’s office, Judge Mosier found that PACER was functioning properly at the time. The district court upheld Judge Mosier’s denial of the extension motion and dismissal of the complaint.
The creditor appealed to the circuit, with no better luck.
The Circuit Opinion
In sum, the Tenth Circuit said that relief can be afforded for defective technology, not for untutored lawyers trying to manipulate baffling technology. The practice point in the circuit’s opinion is that novice PACER users should file papers during court business hours, when there is someone at the court help desk to guide the unskilled.
The appeals court scoured Bankruptcy Judge Mosier’s findings of fact and agreed there was no malfunction in PACER on the fateful night. The circuit panel said that the lawyer’s “problems with filing the complaint were caused by his errors rather than by any defects in the court’s ECF system.”
For example, the lawyer caused the most delay for himself because he assumed that he was required to pay the filing fee before filing the complaint. Were he familiar with PACER, he would have known that the filing fee is paid after filing. He wasted precious minutes trying to accomplish the impossible. In other words, never assume you know how a website works.
The findings of fact having been upheld, and the circuit panel said that the merits required “little discussion” — two pages, to be precise.
The circuit panel said that neither Bankruptcy Rule 9006(a)(3) nor the similar local rule “suggests that these rules would entitle it to relief from the filing deadline if — as the bankruptcy court reasonably found — [the PACER system] was properly functioning during [the lawyer’s] filing.”
To the creditor’s argument that it was entitled to “equitable relief” under Section 105,” the panel said, “This claim, too, rests on the view, which the court properly rejected, that something was amiss with the system.”
The creditor argued creatively that the dismissal of the complaint under Rule 12(b)(6) contravened the Supreme Court’s dictates in Iqbal and Twombly. The circuit responded by saying that “the sufficiency of the allegations in a complaint is irrelevant to whether a complaint is timely filed.”
The circuit affirmed the judgment below dismissing the complaint and denying the motion to enlarge time.
Filing a complaint before the deadline is critically important and should be undertaken only by an expert — that is to say, by a paralegal who does it every day.
An amateur, like a lawyer, should not wait until the last minute to file a complaint electronically. Muffing the timely filing of a dischargeability complaint by a befuddled lawyer meant that the complaint was irredeemably late, for reasons explained in a nonprecedential Tenth Circuit opinion on December 14.