In re Wade
926 F.3d 447
| 7th Cir. | 2019Background
- Harold and Lorraine Wade filed a Chapter 13 petition in Jan. 2015; it followed a voluntarily dismissed petition within the prior year, invoking 11 U.S.C. § 362(c)(3).
- § 362(c)(3) provides that the automatic stay "shall terminate" as to the debtor 30 days after filing a later case when a prior case was dismissed within the preceding year.
- In April 2015 Kreisler Law recorded a lien on Lorraine Wade's home; the Wades moved for sanctions for an alleged stay violation.
- The bankruptcy judge concluded § 362(c)(3) lifted the entire stay after 30 days and denied sanctions; the judge certified the order for direct appeal to the Seventh Circuit under 28 U.S.C. § 158(d)(2)(A).
- The Wades filed a notice of appeal but did not file the required petition for permission to appeal under Fed. R. Bankr. P. 8006(g) and Fed. R. App. P. 5; Kreisler moved to dismiss the appeal for that omission.
- The Seventh Circuit dismissed the appeal, holding Rule 8006(g) is a mandatory claim-processing rule that must be enforced when properly invoked.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to file a petition under Bankr. R. 8006(g) requires dismissal of a direct appeal | Wades: the bankruptcy-court certification and transmitted record are the functional equivalent of a petition; any failure was harmless | Kreisler: Rule 8006(g) and App. R. 5 require a timely petition; failure warrants dismissal when properly objected to | The court held Rule 8006(g) is a mandatory claim-processing rule and, having been properly invoked by Kreisler, required dismissal |
| Whether Turner/Marshall allow equitable or harmless exceptions to Rule 8006(g) | Wades relied on Turner and Marshall to excuse noncompliance | Kreisler urged adherence to Supreme Court precedent enforcing mandatory claim-processing rules | The court overruled Turner and Marshall to the extent they permitted exceptions, rejecting functional-equivalence and harmless-error approaches |
Key Cases Cited
- Hamer v. Neighborhood Hous. Servs. of Chi., 138 S. Ct. 13 (2017) (mandatory claim-processing rules must be enforced)
- Nutraceutical Corp. v. Lambert, 139 S. Ct. 710 (2019) (Appellate Rule singled out for inflexible treatment bars extension of filing time)
- Manrique v. United States, 137 S. Ct. 1266 (2017) (failure to comply with mandatory claim-processing rule requires dismissal)
- Torres v. Oakland Scavenger Co., 487 U.S. 312 (1988) (functional-equivalence principle discussed but limited)
- In re Turner, 574 F.3d 349 (7th Cir. 2009) (lead opinion had excused failure to file petition based on functional equivalence)
- Marshall v. Blake, 885 F.3d 1065 (7th Cir. 2018) (approached omission with harmlessness analysis)