Netsch v. Sherman (In Re Prism Graphics, Inc.)
666 F. App'x 355
| 5th Cir. | 2016Background
- Appellants Bryan Netsch and Intense Printing, Inc. received a final judgment in a Chapter 7 adversary proceeding on October 27, 2014; the court amended the judgment on November 20, 2014 to fix a clerical error.
- Federal Rule of Bankruptcy Procedure 8002(a) required a notice of appeal within 14 days; the deadline here was December 4, 2014.
- Appellants’ counsel mistakenly calendared 28 days (December 18) based on the federal civil rules and thus missed the 14-day deadline.
- On December 16, 2014 (12 days late), Appellants filed an untimely notice of appeal and moved for an extension under Rule 8002 (excusable neglect).
- The bankruptcy court denied the extension, concluding the mistake—confusing bankruptcy and civil procedure—did not amount to excusable neglect; the district court affirmed.
- Appellants appealed to the Fifth Circuit, which affirmed the lower courts’ denial of the extension.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether counsel’s calendaring error constituted "excusable neglect" under Rule 8002 | Late filing was due to counsel’s honest mistake and should be excused; lower courts overemphasized one Pioneer factor | Mistake was counsel’s negligence/misconstruction of rules and does not qualify as excusable neglect | Affirmed: mistake of law/ignorance of clear rules is not excusable neglect; district court did not abuse discretion |
| Whether courts may consider the merits of the underlying appeal when assessing excusable neglect | Merits should inform the equitable excusable-neglect analysis | Merits are irrelevant to whether failure to meet filing deadline was negligent | Held: Merits are not relevant to the excusable-neglect determination |
| Whether the lower courts improperly weighted Pioneer factors (made one factor dispositive) | Lower courts treated the reason-for-delay factor as dispositive, converting balancing test into all-or-nothing | Lower courts considered all Pioneer factors and reasonably gave greater weight to the reason for delay | Held: No abuse of discretion; courts permissibly emphasized reason for delay given precedent |
| Whether confusing Federal Rules of Bankruptcy Procedure with Federal Rules of Civil Procedure can be excusable neglect | Confusion is excusable under equitable considerations | Confusion is ignorance of clear rules and generally not excusable | Held: Confusing bankruptcy and civil rules generally does not constitute excusable neglect |
Key Cases Cited
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (describes multi-factor test for "excusable neglect")
- Halicki v. La. Casino Cruises, Inc., 151 F.3d 465 (5th Cir. 1998) (misconstruction of plain rules rarely satisfies excusable neglect)
- Stotter v. Univ. of Tex. at San Antonio, 508 F.3d 812 (5th Cir. 2007) (standard of review: abuse of discretion for excusable-neglect determinations)
- Latham v. Wells Fargo Bank, 987 F.2d 1199 (5th Cir. 1993) (per curiam) (abuse-of-discretion review)
- United States v. Nix, 250 F.3d 738 (5th Cir. 2001) (refusing to consider merits to establish excusable neglect)