600 B.R. 459
Bankr. S.D. Ga.2019Background
- Debtor filed Chapter 7; initial § 341 meeting date set Nov. 13, 2017, triggering deadlines under Rules 1017(e) and 4004(a).
- U.S. Trustee (UST) and Debtor executed three consent orders extending the UST's time to object to discharge or file a § 707 motion; final Consent Order set that deadline at June 11, 2018.
- Clerk’s docket text mistakenly summarized the Consent Order with an incorrect deadline (July 11, 2018), generating an NEF that contained the incorrect date; the actual Consent Order (and later corrected docket entry) showed June 11.
- Banks filed § 707(a) motions on June 14, 2018 (after the Consent Order deadline but before any discharge entered). Debtor moved for immediate discharge under Rule 4004(c).
- UST filed its § 707(a) motion on June 28, 2018, after the June 11 deadline; UST relied on the erroneous NEF calendaring and sought relief arguing (1) Consent Order should not limit § 707(a), (2) excusable neglect under Rule 9006(b)(1), and (3) equitable relief under § 105.
- Court held Debtor’s request for immediate discharge and UST’s motion to dismiss (as untimely) both denied; scheduled hearing on Banks’ § 707(a) motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 4004(c) required immediate entry of discharge when the Consent Order deadline expired | Debtor: “forthwith” means immediately; once consent deadline expired and no other exception applied, court must enter discharge | Banks/UST: “forthwith” means reasonable promptness; a pending § 707(a) motion filed before discharge delays entry | Court: “forthwith” means as soon as practicable/reasonable under circumstances; 3-day gap (6/11–6/14) complied, Banks’ § 707(a) motions timely and delay discharge |
| Whether the Consent Order’s June 11 deadline bound the UST for all § 707 motions including § 707(a) | Debtor: Consent Order unambiguously set June 11 as UST’s deadline for any § 707 motion | UST: Consent Order should apply only to § 707(b)/(c); enforcing it creates a de facto § 707(a) deadline not in the Code | Court: Consent Order unambiguous; construed as contract; it bound the UST to the June 11 deadline for § 707 motions |
| Whether the UST’s late filing (June 28) is excusable neglect under Rule 9006(b)(1) | UST: Clerical/NEF error led to miscalendaring; Pioneer factors support relief | Debtor: UST drafted the Consent Order and is bound by its terms; reliance on NEF was unreasonable; debtor prejudiced | Court: Pioneer factors not met—delay in UST’s control, significant prejudice to debtor; excusable neglect denied |
| Whether equitable relief (tolling) under § 105 is appropriate to salvage UST’s motion | UST: Court should equitably toll/enlarge time because clerk’s NEF error caused the miss | Debtor: No equitable basis; UST had actual/constructive knowledge of deadline in Consent Order | Court: Equitable tolling not warranted; UST had knowledge of the true deadline and cannot reasonably rely on the NEF summary |
Key Cases Cited
- Bond v. United States, 572 U.S. 844 (discussing ordinary meaning of statutory terms)
- Libby v. United States, 840 F.2d 818 (defining “forthwith” as requiring reasonable promptness)
- In re Coggin, 30 F.3d 1443 (interpreting “forthwith” as "as soon as practicable" under bankruptcy rules)
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380 (establishing excusable neglect test for filing deadlines)
- In re Piazza, 719 F.3d 1253 (distinguishing § 707(a) from § 707(b) and noting limits on using § 707(a) to circumvent other deadlines)
- Two–Way Media LLC v. AT & T, Inc., 782 F.3d 1311 (attorneys must read full text of court orders; cannot rely solely on ECF email summaries)