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Shahrestani v. Alazzeh (In Re Alazzeh)
509 B.R. 689
9th Cir. BAP
2014
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Background

  • Alazzeh defaulted on a note owed to Shahrestani, who obtained a state-court judgment for the full amount due plus costs.
  • Alazzeh filed Chapter 7 bankruptcy in 2011; Shahrestani sought to deny discharge under §727(a).
  • Deadline to file discharge-objection complaint was February 6, 2012, per Rule 4004(a).
  • Parties discussed extending the Deadline; emails show an intended extension after the February 21, 2012 meeting, with a stipulation to extend.
  • Complaint was filed February 24, 2012, then mediation failed, discovery proceeded, and a summary-judgment motion was later filed and granted.
  • The bankruptcy court granted Shahrestani’s appeal and dismissed the Complaint as untimely; the panel affirmed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether extension to the Deadline was effective to make the Complaint timely Shahrestani relied on Alazzeh’s agreement to extend. Extension required a court-approved motion before the Deadline; agreement alone is insufficient. No, extension ineffective; deadlines are strict.
Whether Alazzeh waived the time-bar defense by raising it in his Answer Waived by reliance on agreement and later proceedings. Rule 8(c) requires timely assertion; defense was timely raised in the Answer. Defense not waived; timely raised and enforceable.
Whether the court abused its discretion by applying the time bar despite the extension discussion Discretion should account for prolonged mediation and discovery. Court correctly enforced the time bar and denied extension. No abuse of discretion; time bar properly applied.

Key Cases Cited

  • Kontrick v. Ryan, 540 U.S. 443 (U.S. 2004) (outer limit to raise time-bar defenses before merits ruling)
  • Wilms v. Sanderson, 723 F.3d 1094 (9th Cir. 2013) (deadlines implicating discharge are strict and not extendable absent proper motion before deadline)
  • In re Neff (DeNoce v. Neff), 505 B.R. 255 (9th Cir. BAP 2014) (statutes of repose govern time bars in bankruptcy context)
Read the full case

Case Details

Case Name: Shahrestani v. Alazzeh (In Re Alazzeh)
Court Name: United States Bankruptcy Appellate Panel for the Ninth Circuit
Date Published: Apr 11, 2014
Citation: 509 B.R. 689
Docket Number: BAP CC-13-1350-DKiTa; Bankruptcy SA 11-24735-CB; Adversary SA 12-01058-CB
Court Abbreviation: 9th Cir. BAP