*1 suspend application that inference would judicata.” principles
of this circuit’s of res BEEZLEY, In re Gilbert G. Debtor. May, at 1011. 899 F.2d BEEZLEY, Appellant, Gilbert G.
IV. LAND CALIFORNIA TITLE ATTORNEYS’ FEES COMPANY, Appellee. attorneys’ Karr seeks fees for this No. 91-55809. § appeal 1132(g)(1). under 29 U.S.C.
1132(g)(1) provides, pertinent Appeals, United States Court of part: “In Ninth subchapter ... Circuit. action under this participant, beneficiary, fiduciary, Submitted Oct. 1992.* court in its discretion allow reasonable attorney’s fee and costs of action to either Decided June party.” 1132(g)(1). 29 U.S.C. In exercis
ing attorneys’ our discretion to award fees 1132(g)(1),
under section we consider:
(1) degree opposing parties’ [T]he faith; (2)
culpability ability or bad opposing parties satisfy an award of (3)
fees; whether an award of fees party opposing would deter others circumstances; acting under similar
(4) parties requesting whether the fees
sought participants to benefit all and bene- plan
ficiaries of an ERISA or to resolve
significant regarding
ERISA; and the relative merits of the
parties’ positions. Blade, Inc.,
Sapper v. Lenco 704 F.2d (9th Cir.1983) (quoting Hummell v. S.E. Co.,
Rykoff & 634 F.2d 452-53
Cir.1980)). Karr has failed to make a show-
ing attorneys’ that it is entitled to fees under Accordingly, request
this statute. Karr’s attorneys’ appeal
recover fees for this is DE- granting
NIED. The district court’s order
summary judgment in favor of Karr on the
ground that the Trusts’ action is un- barred judicata
der the doctrine of res
AFFIRMED. Beezley, pro
Gilbert G. se. * 34(a), panel unanimously argument. Fed.R.App.P. finds this case suitable for oral Ninth Cir- submission on the record and briefs and without cuit Rule 34-4.
1434 Frank, grant Beezley’s request Rohatiner, ing here in order to L. E. Ellen
Mark Yuen, relief to” Beez- Schneider, “accord[ed] would not have Goldberg, Rohatiner & thus, CA, ley; was no abuse of discretion. Hills, there Beverly appellee. AFFIRMED.
O’SCANNLAIN, Judge, Circuit concurring: RYMER, Before O’SCANNLAIN simple question which we are ZILLY,** District Judges, and Circuit bankruptcy court presented —whether Judge. by denying the debtor’s its discretion abused view, my reopen requires, motion to PER CURIAM: — sepa- simple answer. I write more than a Beezley appeals the de- Gilbert G. Debtor rately to certain matters that address BAP, affirming of the Ninth Circuit cision discuss, opinion but which does not to bankruptcy court’s denial of his motion squarely presented on the record before 11 bankruptcy case under U.S.C. his implicate important principles of us and 350(b). jurisdiction pursuant § have We bankruptcy law. 158(d), § affirm. and we 28 U.S.C. bankruptcy Beezley argues that the by failing grant its discretion court abused Chap- Beezley bankruptcy filed for reopen his case. In re motion to 10, ter 7 on June 1987. Because he had no 264, Herzig, 96 B.R. 266 Cir. assets available for distribution to his credi- reopen a (bankruptcy court’s refusal by bankruptcy, no bar date was tors 350(b) § 11 re case under U.S.C. closed establishing the court a deadline for creditors discretion). for an abuse of We dis viewed proofs to file of claim. assumption agree. Based on the earlier, years California Land Title Three discharge the amendment was (“Cal Land”) judg- obtained a default Co. had debt, Beezley sought to add an omitted debt against Beezley in state ment California Beezley’s, awas to his schedules. arising court out of 1979 transaction date 7 case. After no no bar Beezley the seller and Cal Land closed, dischargeability a ease has been such property. the title insurer of certain real by scheduling; amendment of is unaffected Beezley made no mention of Cal Land’s claim Beezley’s have been a schedules would thus judgment against him in or of its of his pointless exercise. See American Standard Consequently, Land did not Cal Bakehorn, 483
Ins. Co. Beezley’s bankruptcy. notice of receive Stecklow, (N.D.Ind.1992); B.R. In re 144 Beezley received his on November Tucker, (Bankr.D.Md.1992); In re 143 317 6, 1987, case was thereafter closed. and his (Bankr.W.D.N.Y.1992); B.R. re (Bankr.E.D.Mich. January moved to 1992); Thibodeau, purpose for the 10 his case Hunter, (Bankr.D.Mass.1992); amending the omitted his schedules to add (Bankr.D.D.C.1990); Land. Cal Land filed a memo- In re Mendio Cal (Bankr.N.D.Ill.1989). la, opposi- If randum with the reopen, advising Beezley’s motion to type of a covered tion the omitted debt is 523(a)(3)(A), already Land would seek to estab- § it has been the court Cal U.S.C. nondischargeable. § If its claim was discharged pursuant to 11 lish U.S.C. hearing, at the court held type is of a covered 11 U.S.C. the debt Beezley’s 523(a)(3)(B), mo- discharged, conclusion of which denied it has not been Stark, tion, sum, reopen- citing the case of In re F.2d non-dischargeable.1 In and is opinion Zilly, express as to whether the omit- S. United States 1. We **Thc Honorable Thomas Judge discharged. of Wash- District for the Western District was not ted debt was or ington, sitting by designation. (7th Cir.1983) curiam). (A) (per The Bank- speci- such debt is not of a kind (“BAP”) (2), subsequent- (4), ruptcy Appellate paragraph Panel fied in of this memorandum, subsection, citing ly timely filing affirmed the same of' a claim, authority. unless such creditor had notice or
actual knowledge of the time for *3 timely filing; such or II n (B) if such debt of a specified kind pow- The source of the court’s (6) (2), (4), in paragraph or of this sub- 350(b)'.1 reopen er to a closed case is section section, timely filing proof of a of claim gives the This section court discretion to timely request and for a determination assets, “to administer to accord a case of of such debt under debtor, relief to the or for other cause.” The paragraphs, one of such unless such appeal question posed this whether the .is creditor had notice or actual knowledge bankruptcy court abused that discretion in in timely time such filing for denying Beezley’s reopen. motion to See request[.] and Herzig, re Cir. Unscheduled debts are thus divided into two (decision on motion to reviewed groups: specified those that are “of a kind in discretion). Answering for abuse this (6) (2), (4), paragraph subsection,” of this affair, question complicated requires is a Loosely and those that are speaking, not. language close attention to the difficult o'f. paragraphs in describe debts Bankruptcy sections 523 and 727 of the Code. arising wrongdoing from intentional of vari- fraud, (respectively, fiduciary ous sorts mis- A conduct, and the commission of malicious 727(b) Bankruptcy Section Code torts). distinguishes What these from all part: “Except provided in in states as section 523(c) other debts is under section title, discharge 523 of this under subsection 4007(c), rule complaint a creditor must file a (a) discharges of this section from debtor in days court within 60 after all debts arose before the date of the the date established for the meeting first [i.e., chapter order for relief under this creditors in order to assert their nondis- ” bankruptcy filing].... date of the “The chargeability. litigate Failure to the dis- operative nothing word is ‘all’. There is in chargeability of these sorts of debts 727 about whether the Section debt is or is away doing disables the creditor from ever not scheduled. So far as that section is so; an intentional tort debt will be dis- concerned, pre-bankruptcy debt' is dis charged just any like other. charged, whether or not it is scheduled.” In 523(a)(3) nondischarge- Section threatens (Bankr.N.D.Ill. re ability in safeguard rights order to’ 1989). Stecklow, bankruptcy process. creditors in the (Bankr.D.Md.1992) (“breadth of the dis (A) subparagraphs difference between charge” “comprehensive”); under 727 is (B) rights enjoyed by reflects different Thibodeau, (Bankr.D.Mass. requirements imposed upon different 1992) (“§ 727(b) exception itself makes no for creditors, kinds of creditors. For most debts”). Thus, unlisted unless section 523 right enjoyed fundamental otherwise, every prepetition dictates debt be claim, qua to file a since this is the sine non discharged comes under section 727. participating any distribution of the 523(a) provides part: 523(a)(3)(A) estate’s assets. Section safe- (a) discharge A 727 ... section of guards right by excepting this from dis- this title does not an individual charge owed to who debts did not debtor from debt— know about the case time to file a claim. contrast, By neither ... listed nor scheduled for creditors intentional permit— time rights tort claims salient are not Code, 1. All references Title States Code. United proofs of claim to be requiring rule adjudication the basic to secure an also file a claim but days after the date established Thus, within 90 filed section nondischargeability. meeting of creditors. Under the first 523(a)(3)(B) excepts tort debts intentional proof not file a exception, creditors need this notwithstanding the credi- the clerk sends until of claim unless and timely complaint under file a failure to tor’s non-exempt have been lo assets notice 523(e) did not know creditor a dividend be permit cated file a com- in time to such the case about 3002(c)(5). practice, paid. Bankr.Rule (even to file a if it was able plaint rule, exception now subsumed “[t]he has claim). time limit there is no that in most so cases mind, language the convoluted With (bar date) office for credi the Clerk’s paraphrased as can *4 claim.” In re file their proofs tors to follows: (Bankr.E.D.Cal Corgiat, B.R. 389 123 (a) not cover— A does .1991). Tucker, 143 B.R. In re 332 See if— an unscheduled debt W.D.N.Y.1992). (Bankr. (A) covered respect to a debt not with that in most cases point here is The critical 523(c), to schedule de- by § the failure (i.e., asset, no no 7 bar filed opportunity to of the prives the creditor cases), claims is “the to file never date date claim, timely file a 523(a)(3)(A) triggered.” is not thus (B) respect to an intentional tort with (Bankr. Walendy, B.R. 775 In re 118 523(c), §by the failure to debt covered C.D.Cal.1990). asset, is, in a no no bar That of the deprives the creditor schedule 523(a)(3)(A) case, implicat is not section date a claim or a opportunity to file a time there can never be when ed “because complaint. nondischargeability timely filing proof of a permit late ‘to it is too ” Mendiola, B.R. at 867. claim.’ 99 See (D.Colo.1992);
B
735
Tyler,
In re
139 B.R.
(Bankr.
Peacock,
B.R.
424
applying
section
E.D.Mich.1992);
B.R. at
Walendy, 118
776.
us,
begin
with sub-
preferable
it is
before
(A).
“Thus,
Chapter 7
no asset
typical
case,
dividend statement
where
no
noted,
subpara-
the entire thrust
As
2002(e)
by the clerk and no
is utilized
[rule]
(A)
the creditor’s
protect
is to
graph
set,
prepetition
dis-
claims bar date
claim,
participate in
so to
file
creditor,
chargeable claim of an omitted
be
assets of the estate.
any
of the
distribution
by §
remains
ing otherwise unaffected
“[ijn
However,
to dis-
a case without assets
words,
typical
discharged.
other
proof of claim is
right to file a
tribute
case,
failure to
Chapter 7
the debtor’s
list
Mendiola, 99
meaningless and worthless.”
itself,
not,
and of
make the
creditor does
bankruptcy rules therefore
at 867. The
B.R.
nondisehargeable.” Corgiat,
creditor’s claim
filing
dispense
the court
permit
differently,
B.R. at 391.
where
Stated
case.
claim in a no-asset
proofs of
except
prepetition
523 does not
ap-
if it
chapter
liquidation
In a
remains
discharge,
the debt
within
that there are no
pears from the schedules
scope
discharge afforded
of the
sec
paid,
can
a dividend
be
assets from which
se,
Scheduling, per
is irrelevant.
tion
meeting
the notice
(“since
Mendiola,
at 867
99 B.R.
See
effect; that it
to that
include a statement
523(a)(3)(A)
apply, the debts
not
does
claims;
that if
unnecessary to file
the schedules
Debtor seeks
add
available for the
assets
sufficient
become
though they
already discharged, even
were
dividend,
notice will
further
payment of a
scheduled”); accord American
not listed or
filing
given
of claims.
Bakehorn,
147 B.R.
Ins. Co. v.
Standard
2002(e).
Bankr.Rule
735;
(N.D.Ind.1992); Tyler, 139 B.R. at
Tucker,
Stecklow,
315;
at
under Rule
notice
When
no-dividend
424; Thibodeau,
Peacock,
334;
B.R. at
2002(e)
out,
at
exception made to
is sent
itself,
dischargeability
is unaf-
possibly
at 8. Since
and of
could not
have had
by scheduling in a no
no bar
obligation
fected
effect on the status of his
to Cal
case, “reopening
merely
the case
date
Land. Either
long ago
the debt was
dis-
practical purposes
the debt is for all
charged by
schedule
operation
of sections 523.and
Hunter,
gesture.”
a useless
727 or it was not.
(Bankr.D.D.C.1990);
accord American
Beezley’s request for leave to amend his
(of
Standard, 147
B.R. at 483
“no
ef-
schedules
request
was therefore a
for that
Stecklow,
fect”);
(“futile”);
Ill your existence the lawsuit and reference to Beezley moved to bankruptcy your the lawsuit [in letter] evidences case in order knowledge money to add the omitted debt to Cal [Cal Land] that want[ed] schedules, apparently you. Land to his you they the mis- from that It’s clear knew had by amending against, you.” taken belief that per- his schedules a claim It was this that Land, he would the debt. Cal suaded the court that the case should not be upon receiving motion, Beezley’s reopened. notice of authority “There is other from it, also, vigorously opposed apparently, amending— that that other circuits states impression listing reopening reopening the mistaken that the the case to case— previously accomplish omitted debt would amend the to add schedules omitted creditors discharge. analysis appropriate its As the set forth where there is no evidence of shows, however, Beezley’s design above because was fraud or intentional behind the omis- no-asset, 7 proceeding, no-bar-date sion. And In Re: Stark out of the 7th that’s schedules, Beezley’s the amendment of in Circuit. It’s a circuit level case.” that said, hospital. The Circuit ruled it incontro- Seventh might else be Whatever they permitted to do so. bankruptcy not should court did vertible reasoning that underlies the rely on-the above, explained was no need As there Beezley’s concluding that opinion in “permit” the Starks to amend whatsoever Rather, both the be denied. motion should no-asset, theirs was a their schedules. Since motion, denying court debt no-bar-date the Stark’s denial, affirming the treated the BAP in discharged by operation of hospital was Why did the rule in as authoritative. prepeti- along with all their other section 727 reject Beezley’s simply tion debts in November 1980. Seventh pointless of hand as waste motion out panel that decided the case failed to Circuit Why court feel the need to time? did the Indeed, recognize panel believed this. authority from another circuit to rely upon literally applied, that if section 523 were Beezley’s motion? decide excepted have been from Starks’ debt would respect, panel discharge. In this stated believe, answer, the bank- agreed court that it with the district thought adjudicating ruptcy court 523(a) mechanically should not be “section Beezley’s when it dischargeability of deprive discharge in applied to a debtor of a reopen and amend his denied his motion to case....” Id. at 323. no asset court, That Land, just Beezley proceeded like and Cal panel that it Thus the Stark believed had assump- the basis of the erroneous here on equitable powers” in to “exercise its order to (and suffi- tion that it would be allow the their omitted debtors cient) the case and add panel Further the believed that debt. Id. dis- Land to his schedules order to Cal exercising powers permit the debt- those charge the omitted debt. ors to amend their schedules would achieve explains the desired end. This apparent examining This is *6 case; the “In a no-asset where 1980, in- In the Starks Stark itself. June given [that notice has been no bar date will hospital August In curred certain bills. set], may reopen a debtor the estate to 1980, they bankruptcy petition. filed a No add an omitted creditor where there is no set, date was and no assets distributed. bar design.” evidence of fraud or intentional Id. hospital Because the Starks believed that the at 324. paid by compa- bills would be their insurance they hospital clearly ny, analysis presented did not include the their dem- The above received schedule of creditors. The Starks that the law. onstrates Stark misstates. discharge in November 1980. As it question their Stark treats the whether to no-asset, happened, hospital were the bills closed no-bar-date case amend paid by company. equivalent the The insurance the of creditors as schedule judgment against hospital permit discharge the question obtained whether to of the But, again, scheduling, per November 1981. The Starks then Starks omitted debt.2 se, The articu- moved to their is irrelevant. standard incorrect, simply amend their schedule of creditors to include lated in Stark is and (Stark “erroneously proceeds assumed unless the case 2. That .the Stark case on this erroneous recognized premise bankruptcy repeatedly re-opened requested, has been in the were as the debtor the courts. See In re discharged”); claim would not be In re creditor's 421, (Bankr.E.D.Mich.1992) (warning &426 n. 9 (Bankr. Musgraves, 121 n. 6 against confusing "misplaced com reliance on Bulbin, W.D.Tex.1991) (same); In re 122 B.R. began run off “[T]he ments in Stark train (Bankr.D.D.C.1990) (refusing to follow lawyers misperceived track the when Stark purposes "dicta in [Stark] which assumed put Circuit failed the issue. Seventh listing and without that of an decision discussion prevent the train back on the track in time to creditor was to make the omit omitted ensued.”); analytical chaos which has In re Thi dischargeable”); creditor’s claim In re ted Hunt bodeau, (Bankr.D.Mass.1992) 136 B.R. er, (Bankr.D.D.C. 1990) (same); 116 B.R. (Stark upon assump the unexamined "is based Crull, (Bankr.W.D.Ark.1989) re 101 B.R. tion ... that in a no-asset case where no claim (Stark “incorrectly assume[d] that if a case is fixed, filing deadline been must be has ‘ reopened and an omitted creditor's claim is list Guzman, discharged”); in order to be In re listed amendment, discharge automatically by ed (Bankr.W.D.Tex.1991) 491 n. 4 disapprove would reliance on it in the bank- the Bankruptcy Code. Nowhere in section ruptcy courts of this circuit. is the why reason a debt was omit-
ted from the bankruptcy schedules made rel-
evant to
discharge
IV
of that debt.3 Courts
are not free to condition the relief Congress
damage
done
an incautious reliance
has made available in the Bankruptcy Code
on Stark is far
By
from trivial.
applying
on
Congress
factors
has deliberately exclud-
Stark,
the bankruptcy
both
court and the
ed from consideration.4
effectively
held
that
was not
litigate
entitled
whether his
It cannot be overemphasized that we deal
debt to Cal Land
had been discharged
here with matters that are absolutely funda-
operation of sections 523 and 727 unless his mental to
integrity
of the Bankruptcy
omission of Cal Land from his schedules was Code: the balance struck between the rights
good
faith.
Such a
interposes an
hand,
creditors on the one
and the policy
equitable barrier between the debtor and his
of affording the ctebtor a fresh start on the
Congress
simply did not enact
other. How to strike that balance is an
retroactively
applies”);
Birkett,
Supreme
Court construed the
(Bankr.N.D.Ill.1989) ("it
predecessor
is clear
523(a)(3),
of section
excepted
opinion
from the
the Court assumed
discharge any
duly
debt "not ...
scheduled
purpose
that the
that would be served
allowance,
in time for
... unless [the]
reopening and addition
omitted creditor
creditor had notice or
knowledge
actual
claim”);
was the
of that creditor's
proceedings in bankruptcy.” The Court stated
Anderson,
(Bankr.D.Minn.
that:
(Stark
premises regard
"based on false
knowledge
Actual
proceedings
contem-
ing the nature and
discharge”).
effect of a
plated by the
knowledge
section is a
in time to
avail a creditor of the benefits of the law—In
3. There need be
applying
no concern that
give
time to
equal
opportunity
him
523(a)(3) according
encourage
to its terms will
other
knowledge
creditors—not a
ignore
obligation
debtors to
their
to list all claims
deprive
come so late as to
participation
him of
in their schedules. A debtor must declare under
in the administration
the estate
affairs of
penalty
perjury
that the statements made in
deprive
or to
him of dividends....
That the
his schedules are
true
correct. A debtor
give
law should
creditor remedies
knowingly
who
fraudulently
omits a creditor
bankrupt,
estate of a
notwithstanding the ne-
global
thus risks
denial
revocation of his dis-
glect or
bankrupt,
default
would, indeed,
is natural.
charge
withholding
bankrupt-
of all
—that
The law
be defective without
cy relief—under
*7
them. It would
permitted
also be
it
defectiveif
727(a)(4)(A), 727(d)(1).
Code. See 11
§§
U.S.C.
bankrupt
experiment
the
to
with it—to so man-
addition,
knowing and fraudulent misstate-
age
provisions
and use its
as to conceal his
ments in connection
bankruptcy proceed-
with a
estate,
keep
deceiveor
his
ignorance
in
ing
penalized
up
years
five
to
in
proceeding
his
penalty
without
to him.
of
$5,000
prison and a
fine.
§
See 18 U.S.C.
152.
350,
added).
U.S. at
(emphasis
25 S.Ct. at legislative history
523(a)(3)
The
4.
of
That
section
congressional
this was a
de-
deliberate
choice
unambiguously
plain
clares
is
legislative
from the
Birkett was
history
intended
of the Bank
1978,
to be
ruptcy
Assuming
overruled.
95-598,
require
we
Reform Act
of
such
No.
Pub.L.
explicit
directive
Stat.
before we will
Report
2549. The
be moved to
Senate
notes that the
523(a)(3)
heed the
law,
new
clear
Bankruptcy
section
command of the
"follows
Code
current
but
itself,
way
I see no
clarifies some
to
generated
avoid
force
uncertainties
the
of this one.
the
17a(3)
Congress
expressly
construing
disapproved
case
has
law
importa-
[of
the
Bankrupt
the old
cy
95-989,
equitable
tion
S.Rep.
Act].”
of
good
notions of a
Cong.,
No.
debtor’s
faith
95th
2d
78-79, reprinted
Sess.
or a
in
creditor's
opportunity
participate
fair
to
U.S.C.C.A.N.
5864.
bankruptcy process
the
The formal
interpretation
statements of
into
both the
the
House
and
responsible
analysis
523(a)(3).
Senate
and
leaders
of section
for the
final
shape
("[T]he
Bankruptcy
of the new
commenced. Beezley because debt,
failed to schedule the Bankruptcy Rule 4007(b) affords Cal Land the to litigate
dischargeability outside the normal time lim- IDAHO, STATE OF its, again DEPARTMENT accordance with section OF 523(a)(3)(B). FINANCE, Plaintiff-Appellant, Standard, See American (“In effect, B.R. at 484 a debtor who fails to v. jurisdictional list creditor loses the CLARKE, Robert C. capacity as the protections 523(c) time limit of Section Comptroller Currency; U.S. Ban 4007(c).”). Lochrie, Rule See also In re corp, Oregon corporation; First Na 1987). 259-60 Cir. BAP Bank, tional aka Idaho, U.S. Bank of This is the right Cal Land can claim N.A., Defendants-Appellees. by virtue of its omission Beezley’s particular, IDAHO, STATE Cal Land cannot OF DEPARTMENT escape the prove need to nondischargeability FINANCE, Petitioner, OF merely Beezley’s because failure to list his debt to may Cal Land have been intentional SYSTEM, FEDERAL RESERVE prejudiced have ability its to show Respondent. committed fraud years ago, as suggest. Stark would Bancorp, U.S. Intervenor. place has no analysis of the matter at 92-35346, Nos. 92-70107. hand. United Appeals, States Court of
IV Ninth Circuit. Faced with Beezley’s motion on the one Argued and Submitted Oct. 1992. hand, and opposition other, Cal Land’s on the June Decided I believe the bankruptcy could have construed the matter request as a 4007(b) Bankruptcy Rule for a determination this, as the court it- —for *9 ). My point follow simply judgment by Laczko where- from a court after default ... plain as Robinson language contravenes the reopening permitting scheduling estate and reason, the Code for perhaps good what is listing styled, agree this debt.” So I must the Code contravenes reason what- that the denial motion soever. discretion, court did not constitute an abuse for the reasons opin- stated in the
6. The Beezley (acting, Memorandum filed (amend- let ion—that requested "relief” recall, sc) pro support us creditors) of his motion to ment of the schedule of was no relief reopen in requested "relief at all.