Lyon v. Aguilar (In Re Aguilar)
470 B.R. 606
Bankr. D.N.M.2012Background
- Debtors filed Chapter 11 on Oct 29, 2008 and moved to convert to Chapter 7 on Nov 21, 2008; dischargeability deadline was Mar 10, 2009.
- Debtor law firm Aguilar Law Offices, P.C., filed a Chapter 11 and was later converted to Chapter 7; U.S. Trustee moved to convert/dismiss.
- Plaintiffs filed an initial complaint in 2008 with districts court related to Debtor, and later an adversary proceeding in 2009; plaintiffs sought nondischargeability under 523(a)(2), (a)(4) and (a)(6).
- Plaintiffs dismissed the adversary without prejudice in 2009; the district court later ruled that all non-insured claims were discharged; plaintiffs filed a new adversary in Dec 2011 (No. 11-1212) challenging dischargeability.
- Judge granted motion to dismiss the 2011 adversary as barred by res judicata/collateral estoppel and as time-barred by Rule 4007(c) (statute of repose); reconsideration denied for other grounds.
- Court warned plaintiffs about potential sanctions for further related filings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the dismissal of the adversary proceeding was proper | Lyon argued reconsideration should toll or avoid dismissal | Aguilar contends dismissal proper; prior rulings enforce discharge | Dismissal proper; reconsideration denied |
| Whether fraudulent concealment tolls the 60-day filing deadline | Fraudulent concealment tolls limitations governing 523(c) claims | No tolling; district disposition and discovery rules apply | Not equitably tolled; Rule 4007(c) is a statute of repose; tolling not recognized |
| Whether there was fraud on the court | Alleges fraud on court related to prior dismissal | No demonstrated fraud; allegations insufficient | Nothing new; fraud-on-court claim rejected |
| Effect of dismissal without prejudice on statute of limitations | Dismissal without prejudice resets or preserves rights | Dismissal without prejudice does not extend the statute; claims untimely if SOL expired | Dismissal without prejudice does not revive time-barred claims |
| Res judicata/collateral estoppel bar to new adversary | Continued claims nondischargeable despite prior discharge ruling | District Court ruled all claims discharged; precludes relitigation | District court ruling affirmed; cannot relitigate nondischargeability in a new adversary |
Key Cases Cited
- Airlines Reporting Corp. v. Mascoll (In re Mascoll), 246 B.R. 697 (Bankr. D.C. 2000) (equitable tolling described as basis for tolling limitations)
- Ma v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84 (2d Cir. 2010) (distinguishes statutes of repose vs. limitations)
- In re Williams, 276 B.R. 394 (Bankr.E.D. Pa. 2002) (statute of limitations vs. repose; discovery rule context)
- Goad v. Celotex Corp., 831 F.2d 508 (4th Cir. 1987) (statutory repose timing; equitable tolling limitations)
- Dupree v. Jefferson, 666 F.2d 606 (D.C.Cir. 1981) (general rule on statute of limitations tolling; effect of abatement/dismissal)
- Elmore v. Henderson, 227 F.3d 1009 (7th Cir. 2000) (dismissal without prejudice treated as if never filed for SOL purposes)
- Willard v. Wood, 164 U.S. 502 (1896) (classic statement on abatement and statutes after dismissal)