567 B.R. 275
Bankr. S.D. Tex.2017Background
- Debtor Karina Guerra Rodriguez filed a Chapter 13 petition on April 4, 2016; the creditor bar date was August 24, 2016.
- Ovation Services, LLC failed to file a proof of claim by the bar date, then filed two "Motions to Allow Late Proof of Claim" and filed its proof of claim on September 12, 2016.
- Ovation also objected to confirmation, asserting it held an allowed secured claim; Debtor did not object to the proof of claim and later entered an agreed order treating Ovation as secured and providing for full payment in the Chapter 13 plan.
- The Court ordered briefing and consolidated argument with a similar dismissed case; Ovation attributed the late filing to internal miscommunication.
- The core legal question presented: whether a creditor must file a motion to allow a late proof of claim or whether the filed (but untimely) proof is simply "allowed" under 11 U.S.C. § 502(a) absent an objection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a creditor must obtain a court order to "allow" an untimely proof of claim | Ovation: creditors seek a comfort order and therefore moved for leave to file late and for allowance | Debtor (and statutory scheme): no motion required; parties in interest must object if they want disallowance | Court: motion is unnecessary; § 502(a) deems filed claims allowed unless objected to |
| Whether the court can extend the bar date for filing claims in Chapter 13 beyond Rule 3002(c) exceptions | Ovation: seeks enlargement under general rules due to excusable internal error | Court/Rule: enlargement limited to the six enumerated Rule 3002(c) exceptions; general excusable neglect not available via Rule 9006(b)(3) | Court: lacks discretion to extend time outside Rule 3002(c) exceptions; motions to enlarge denied |
| Whether Ovation's reliance on Rule 3003(c)(3) was proper in Chapter 13 | Ovation: cited Rule 3003(c)(3) to support extension | Court: Rule 3003 applies to Chapters 9 and 11, not Chapter 13 | Court: reliance misplaced; Rule 3003(c)(3) inapplicable |
| Whether the absence of an objection means the untimely claim is allowed and enforceable in plan treatment | Ovation: sought recognition of allowance to secure plan treatment | Debtor: did not object and treated the claim in plan/agreed order | Court: because no party in interest objected, the claim is allowed under § 502(a) despite untimeliness |
Key Cases Cited
- Stern v. Marshall, 564 U.S. 462 (2011) (jurisdictional limits of bankruptcy courts and need to consider constitutional authority)
- Wellness Int’l Network v. Sharif, 135 S. Ct. 1932 (2015) (parties may consent to bankruptcy adjudication of certain matters)
- In re Southmark Corp., 163 F.3d 925 (5th Cir. 1999) (definition of core bankruptcy matters)
- In re Hogan, 346 B.R. 715 (Bankr. N.D. Tex. 2006) (untimely claims are disallowable only if an objection on timeliness is raised)
- In re Kelley, 259 B.R. 580 (Bankr. E.D. Tex. 2001) (Rule 9006(b)(3) prohibits enlarging Rule 3002(c) deadlines)
- In re Profco, Inc., 339 B.R. 614 (Bankr. S.D. Tex. 2005) (same: bankruptcy rules restrict extension of claim bar dates)
Decision: Ovation's motions to allow late proof of claim were denied as unnecessary and the Court lacked discretion to extend the Chapter 13 bar date outside the Rule 3002(c) exceptions.