In re Greenberg
DECISION
This matter comes before the Court on the motion of the debtor, Jeffrey Green-berg (the “Debtor”), to reopen his bankruptcy ease to enforce his discharge and to hold creditor Anthony Germano (“Germano”) and his counsel, Richard A. Altman, Esq. (“Altman”), in contempt for violating the discharge injunction. Because Germano had notice of this case in time to file an adversary proceeding to determine the dischargeability of his claim, § 523(a)(3)(B) of the Bankruptcy Code is inapplicable. It follows that Germano’s claim was discharged under § 727 of the Bankruptcy Code and, therefore, the Debtor’s motion is granted.
JURISDICTION
This Court has jurisdiction of this core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I) and (0), 28 U.S.C. § 1334, and the Eastern District of New York standing order of reference dated August 28, 1986, as amended by order dated December 5, 2012. This decision constitutes the Court’s findings of fact and conclusions of law to the extent required by Federal Rule of Bankruptcy Procedure 7052.
BACKGROUND
The following facts are not in dispute, except as otherwise indicated.
The Debtor filed this case on July 24, 2013.
On September 3, 2013, the Debtor visited his counsel’s office and notified his counsel that Mr. Nicol was no longer Germano’s counsel and that Altman now represented Germano. (Affirmation, 13-44533-CEC, ECF No. 21 at ¶ 3.) On September 24, 2013, an amended schedule F was filed in this ease (the “Amended Schedule F”). (Amended Schedule F, 13-44533-CEC, ECF No. 13.) The Amended Schedule F added the following names and addresses:
Anthony Germano
120 York Road
Thorofare, NJ 08086
Law Office of Richard Altman
285 W Fourth Street
New York, N.Y. 10014
Seaman & Wainwright LLP
160 E 38th Street
Ste 12B
New York, N.Y. 10016
Id. The Debtor’s counsel filed an affidavit of service on September 24, 2013 which stated that an amended schedule B was
Germano and Altman admit that they each received a copy of the order granting the Debtor a discharge. (Decl. in Opp’n, 13-44533-CEC, ECF No. 20 at ¶ 4 of Germano Affidavit and ¶¶ 1, 6 of Altman Affidavit.) Both assert that this was the first notice of the bankruptcy filing they received. Id. Altman states that, after receiving notice of the discharge, he “reviewed the docket, the petition and applicable law, and determined that the lack of any timely notice or knowledge of the second petition did not bar me from continuing to litigate the debt in the New York Court County Supreme Court.” Id. at ¶ 10. Altman proceeded to file a motion for summary judgment in the State Court Action. (Mot. to Reopen Chapter 7 Case to Enforce Discharge and Discharge Inj., Ex. D, 13-44533-CEC, ECF No. 18 at 36 — 42.) Upon receiving the summary judgment motion, the Debtor’s counsel contacted Altman and informed him that the continuing prosecution of the state court action violated the automatic stay and demanded that Altman withdraw the motion. (Decl. in Opp’n, 13-44533-CEC, ECF No. 20 at ¶ 11 of Altman Affidavit.) Altman refused to do so. Id.
On March 12, 2014, the Debtor filed a pro se motion to re-open his bankruptcy case to enforce the discharge injunction and hold Germano and Altman in contempt. (Mot. to Reopen Chapter 7 Case to Enforce Discharge and Discharge Injunction, 13-44533-CEC, ECF No. 18.) On April 15, 2014, Altman filed a Declaration in Opposition to the Motion (the “Opposition”). Following an evidentiary hearing on July 1, 2014, at which the Debtor and his counsel testified, Altman submitted a memorandum of law (the “Memorandum”) and the Debtor submitted a response to the Memorandum (the “Response”). (Mem. of Law, 13-44533-CEC, ECF No. 29; Debtor’s Resp. to the Creditor Anthony Germano’s Mem. of Law, 13-44533-CEC, ECF No. 30.)
DISCUSSION
The Debtor received his discharge on November 6, 2013. Section 727 of the Bankruptcy Code defines the extent of the Debtor’s discharge: “Except as provided in section 523 of this title, a discharge under ■ subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief under this chapter....” 11 U.S.C. § 727(b). Section 523 of the Bankruptcy Code, which governs exceptions to discharge, provides that,
“A discharge under section 727 ... of this title does not discharge an individual debtor from any debt—
(3) neither listed nor scheduled under section 521(a)(1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit—
(A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing; or
(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request.”
11 U.S.C. § 523(a)(3). Because one of the asserted bases of Germano’s claim is fraud (in addition to breach of contract, breach of warranty, and unjust enrichment), Germano’s claim could potentially constitute a debt of the kind specified . under § 523(a)(2) of the Bankruptcy Code (for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition), making § 523(a)(3)(B) of the Bankruptcy Code applicable. To the extent that Germano’s claim falls within the ambit of § 523(a)(2), the claim was not discharged if Germano did not have notice or actual knowledge of this bankruptcy case in time for him to file a timely request for a determination of dischargeability of the debt.
A. Germano and Altman had Notice of The Case
The parties dispute whether Germano, or Altman on behalf of Germano, had notice of the Debtor’s bankruptcy. The Debtor claims that service of the Amended Schedule F on Germano and Altman put Germano on notice of the bankruptcy ease. Germano and Altman assert that they had no notice or actual knowledge of the Debt- or’s bankruptcy case until they received notice of the Debtor’s discharge.
A debtor is not required to provide actual notice to every creditor; rather, a debtor is only required to provide “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to [respond].” Mullane v. Central Hanover Bank & Trust Co.,
Service of notice upon an attorney that represents a creditor may constitute notice to that creditor. In re Herman, 737 F.3d 449, 454 (7th Cir.2013). For notice to a claimant’s attorney in lieu of the claimant to be reasonable, there must be “a sufficient nexus between the creditor’s retention of an attorney and the creditor’s claim against the debtor.” Id. (quoting In re Najjar, No. 06-10895(AJG),
It is well settled that “proof that a letter properly directed was placed in a post office creates a presumption that it reached its destination in usual time and was actually received by the person to whom it was addressed.” Hagner v. United States,
Here, the presumption of receipt applies. The Debtor’s counsel, Robert Nadel, filed an affirmation of service dated September 24, 2013, stating that on that date he “forwarded the within amended schedule B with attached 1009 affidavit by first class mail upon the persons listed in the attached mailing list.” (Aff./Certificate of Service, 13-44533-CEC, ECF No. 14). At the July 1, 2014 hearing, Mr. Nadel testified that the reference in the affidavit to schedule B'was a typographical error; that schedule F was the only schedule amended in this case, and that he personally filed the Amended Schedule F listing Germano and Altman and mailed it to them. (Hr’g Tr. 8:9-10, 9:10-18, July 1, 2014, 13-44533-CEC, ECF No. 31). The addresses shown on the contemporaneous affidavit of service, to which the Amended Schedule F was mailed, are correct with respect to Germano and Altman. The Debtor’s counsel testified that he did not receive any returned mail. (Hr’g Tr.
Germano and Altman have failed to overcome the presumption of receipt. Though each submitted a declaration denying receipt of the Amended Schedule F, these denials of receipt are insufficient to rebut the presumption. (Resp. and Decís, in Opp’n, 13-44533-CEC, ECF No. 20); In re AMR Corp.,
Altman argues the presumption of receipt is “slight”, and that once there is evidence of non-receipt, the presumption disappears, and the issue becomes one of fact. (Mem. of Law, 13-44533-CEC, ECF No. 29 at 3.) The Second Circuit cases Altman cited for this proposition are inapplicable, as they address the presumption of receipt with respect to Notices to Appear in immigrant removal proceedings pursuant to 8 U.S.C. § 1229. Caguana v. Holder,
The Second Circuit has not applied the weakened presumption of receipt adopted in Lopes outside the context of applications seeking to reopen immigration proceedings to vacate a removal order entered in absentia. Indeed, in the year after Lopes was decided, the Second Circuit applied a full presumption of receipt to a notice mailed by an employer to an employee containing a packet of information concerning a newly adopted mandatory arbitration program, including an election form explaining how the employee could opt out. Manigault v. Macy’s E., LLC,
The weaker presumption of receipt adopted in Lopes has not been applied in a single bankruptcy case, and for good reason. Applying a weaker presumption of receipt to notices sent by mail in bankruptcy cases would be at odds with the fundamental purpose of bankruptcy deadlines and bar dates. As one court has noted, “[i]f a party were permitted to defeat the presumption of receipt of notice resulting from the certifícate of mailing by a simple affidavit to the contrary, the scheme of deadlines and bar dates under the Bankruptcy Code would come unraveled.” Trump Taj Mahal Assocs. v. Alibraham,
The bar date does not function merely as a procedural gauntlet, but as an integral component of the court’s equitable power to restructure debtor-creditor relationships. Adherence to the bar date furthers the policy of promptly reconciling claims against the estate, because it allows parties in interest to determine the identity of those making claims against the estate and the general amount of the claims.
In re R.H. Macy & Co.,
To apply a weaker presumption of receipt to notices sent by mail in bankruptcy cases would, moreover, be at odds with the Bankruptcy Rules, which prescribe service of notices by mail, and define mail as “first class, postage prepaid.” Fed. R. Bankr.P. 2002; 9001(8). It would mean that, where a bar order or other notice is served in accordance with the Bankruptcy Rules, any party could potentially avoid the effect of failure to meet the deadline by claiming non-receipt. This would defeat, or at least substantially undermine, the purpose of
Germano also relies upon Lupyan v. Corinthian Colleges Inc.,
Federal courts in New York, at least outside the context of immigrant removal proceedings, do not follow this approach where a presumption of receipt has been invoked, but rather have held “quite uniformly that an affidavit of non-receipt is insufficient to rebut the presumption of receipt.” In re Malandra,
Lupyan involved a dispute concerning whether an employee had received notice of her rights under the Family Medical Leave Act. Lupyan,
Moreover, while the Lupyan court expressed concern for the plight of the individual, who has no ability to point to an incoming mail log or other business practice to substantiate a denial of receipt, here, Germano and Altman provide no more than conclusory affidavits of non-receipt. See Bickerstaff v. Vassar Coll.,
Germano and Altman also point out that both of them deny receipt of the mailing of the Amended Schedule F, and argue that this fact substantiates their claim of non-receipt. (Mem. of Law, 13-44533-CEC, ECF No. 29 at 1.) The Second Circuit has held that more substantial proof than multiple denials of receipt is required to create an issue of fact regarding the presumption
B. Notice to Germano and Altman was Timely
Notice to a creditor, under § 523(a)(3)(B), must be in time to permit a creditor to file a timely request for a determination of dischargeability of the creditor’s debt. 11 U.S.C. § 523(a)(3)(B). The Bankruptcy Code is silent with respect to the time frame courts should apply under this section. Under Bankruptcy Rule 4007(c), creditors, are afforded at least 30 days’ notice to file a complaint under § 523(c) to determine the dischargeability of a debt. Fed. R. Bankr.P. 4007(c). Courts that have addressed the timeliness of notice under § 523(a)(3) have generally applied the 30 day notice period provided under Bankruptcy Rule 4007(c). In re Dewalt,
In this case, the Amended Schedule F was served on September 24, 2013, and the deadline for creditors to file an adversary proceeding to determine the dischargeability of their debts was November 6, 2013; a 43 day time period. Because the notice given to Germano and Altman was greater than the 30 day notice period established by Bankruptcy Rule 4007(c), notice to Germano and Altman was timely for purposes of § 523(a)(3)(B).
CONCLUSION
The “presumption of receipt” arises in this matter and has not been rebutted by Germano. Because Germano had notice of this case in time to file an adversary proceeding to determine the dischargeability of his claim, § 523(a)(3)(B) of the. Bankruptcy Code is inapplicable. It follows, therefore, that Germano’s claim was discharged under § 727 of the Bankruptcy Code. For the foregoing reasons, the Debt- or’s motion to enforce the discharge injunction is granted and Germano and Altman are directed to discontinue any action against the Debtor with respect to that claim. A separate order will issue.
Notes
. The Debtor was represented by counsel when this case was filed, but made this motion pro se.
. As discussed infra p. 7, the Debtor’s counsel testified that the Amended Schedule F, not schedule B, was served on September 24, 2013, and that the reference in the affidavit to schedule B was a typographical error.
. Because this was a no-asset case, no proofs of claim were required to be filed. See Fed. R. Bankr.P.2002(e).
. In Alvarez v. Coca-Cola Refreshments, USA, Inc.,