526 B.R. 101
Bankr. E.D.N.Y.2015Background
- Debtor Jeffrey Greenberg filed Chapter 7 on July 24, 2013; Schedule F listed a contingent, liquidated, disputed claim by creditor Anthony Germano for causes including fraud.
- Debtor’s counsel amended Schedule F on September 24, 2013 to add Germano’s and his then-counsel Richard Altman’s addresses and filed an affidavit of service stating the amended schedule was mailed that day.
- Trustee filed a no-asset report; Debtor received a discharge on November 6, 2013 and BNC mailed discharge notices to the addresses on November 8, 2013.
- Germano and Altman admit they received the discharge order but each declared they did not receive the September 24 amended schedule and assert their first notice of the bankruptcy was the discharge.
- Altman filed a summary judgment motion in the state-court fraud action after receiving the discharge notice; Debtor moved to reopen the bankruptcy to enforce the discharge injunction and hold Germano and Altman in contempt.
- The bankruptcy court held the Amended Schedule F mailing invoked the presumption of receipt, notice was timely (43 days before the adversary deadline), § 523(a)(3)(B) did not apply, and Germano’s claim was discharged under § 727.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Germano had "notice or actual knowledge" of the bankruptcy in time to file a dischargeability adversary | Amended Schedule F mailed to Germano/Altman did not reach them; first notice was discharge mailing | Amended Schedule F was properly mailed to Germano and Altman; mailing invokes presumption of receipt and provided timely notice | Mailing affidavit and lack of objective evidence of non-receipt invoked strong presumption of receipt; Germano had timely notice |
| Whether the presumption of receipt from a certificate of mailing can be rebutted by affidavits of non-receipt | Germano/Altman: their sworn denials defeat presumption; cite cases endorsing weaker presumption for regular mail | Debtor: mere denials insufficient; must present objective, specific evidence to rebut presumption | Court applied full presumption; conclusory denials insufficient to rebut |
| Whether Bankruptcy Rule 4007(c) or a different period governs timeliness under §523(a)(3)(B) | Germano: weaker standards might apply; earlier cases (e.g., Sam) allow shorter periods | Debtor: apply Rule 4007(c) 30-day standard as guide; mailing gave >30 days | Court used 30-day Rule 4007(c) guide; 43 days here was timely |
| Whether Germano’s claim (alleging fraud) is excepted from discharge under §523(a)(3)(B) | Germano: claim could be nondischargeable if he lacked timely notice to challenge dischargeability | Debtor: Germano had notice in time, so §523(a)(3)(B) does not save the claim | Court ruled §523(a)(3)(B) inapplicable because creditor had timely notice; claim discharged under §727 |
Key Cases Cited
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (notice must be reasonably calculated to inform interested parties)
- Weigner v. City of New York, 852 F.2d 646 (2d Cir. 1988) (mailing suffices even if not every letter is actually received)
- Hagner v. United States, 285 U.S. 427 (1932) (proper mailing gives presumption of receipt)
- In re Herman, 737 F.3d 449 (7th Cir. 2013) (service on creditor’s attorney may constitute notice when sufficient nexus exists)
- Lupyan v. Corinthian Colleges Inc., 761 F.3d 314 (3d Cir. 2014) (discusses stronger/weaker presumptions of receipt for certified vs. regular mail)
- Meckel v. Continental Res. Co., 758 F.2d 811 (2d Cir. 1985) (multiple denials of receipt require more substantial proof to rebut presumption)
- Neeley v. Murchison, 815 F.2d 345 (5th Cir. 1987) (Bankruptcy Rule 4007(c) reflects strong intent to fix short period for dischargeability challenges)