Lead Opinion
KENNEDY, J., delivered the opinion of the court, in which NORRIS, J., joined.
CONTIE, J. (pp.---), delivered a separate dissenting opinion.
OPINION
This appeal presents an issue of first impression in this Circuit: Does a bankruptcy court’s failure to rule on a timely filed Fed. R. BankrP. 4003(b) motion for an extension of time to file objections to a claimed exemption of property from the bankrupt estate divest the bankruptcy court of jurisdiction to grant an extension after the Rule’s prescribed thirty-day period expires? The bankruptcy court held that it lost jurisdiction to rule on a timely-filed request for an extension when it failed to rule within the thirty-day period. The District Court reversed. Because we agree with the bankruptcy court, we REVERSE.
I. Facts
The facts of this case are undisputed. Victoria Johnston Laurain (debtor) filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on May 16, 1995. Pursuant to a Schedule C filed with the bankruptcy court on June 16, 1995, the debtor claimed various items of personal property exempt. Included among the items was an interest in a contingent and unliquidated claim for personal injuries sustained by the debtor as the result of an “ACTD category” breast implant.
On June 19, 1995, the meeting of creditors took place.
On August 11, 1995, the trustee filed an objection to the debtor’s exemption of the ACTD breast implant claim. On September 12, 1995, the bankruptcy court conducted a hearing on the trustee’s objection. At this hearing, the trustee orally requested addi
By an order entered October 3, 1995, the bankruptcy court set aside the July 26 order purporting to extend the objection period, because it found that it had lost jurisdiction to grant an extension on July 19, thirty days after the meeting of creditors was concluded. It therefore denied the trustee’s objection and the oral motion for an additional extension of time as untimely.
The trustee appealed. The District Court reversed the bankruptcy court. The court agreed that the literal language of Rule 4003(b) requires that the court grant an extension of time for the filing of objections within thirty days after the conclusion of the meeting of creditors. However, it concluded that such a strict application of the rule was inappropriate and that the drafters really intended only that the filing of a request for an extension of time be made within the prescribed thirty days, but that the court could grant the request after the thirty days had expired.
This timely appeal followed.
II. Discussion
A. Standard of Review
The proper interpretation of Rule 4003(b) is a question of law which we review de novo. See Baker & Getty Fin. Servs., Inc. v. Rafoth, (In re Baker & Getty Fin. Servs., Inc.),
B. Trustee’s First Request for Additional Time
When a debtor files a bankruptcy petition, all of the debtor’s property becomes property of the bankruptcy estate. See 11 U.S.C. § 541. However, the debtor is entitled to exempt certain eligible property from the bankruptcy estate. See id. § 522(i). Section 522(i) states the procedure for claiming exemptions and objecting to claimed exemptions as follows: “The debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this section____ Unless a party in interest objects, the property claimed as exempt on such list is exempt.” Although § 522(Z) itself does not specify the time for objecting to a claimed exemption, Rule 4003(b) provides in pertinent part:
The trustee or any creditor may file objections to the list of property claimed as exempt within 30 days after the conclusion of the meeting of creditors held pursuant to Rule 2003(a) ... unless, within such period, further time is granted by the court.
Fed. R. Bankr.P. 4003(b).
Statutes, regulations, and rules of the court must be read in a “straightforward” and “commonsense” manner. See Bartlik v. United States Dep’t of Labor,
Two circuits have addressed the exact issue presented in this case, and both have held that the bankruptcy court must act within the thirty-day time period. In Stoulig v. Traina (In re Stoulig),
One court has approached Rule 4003(b) differently. In In re Williams,
The Southwest Aircraft and Williams courts also relied on cases dealing with the former version of Fed.R.CrimP. 35, which
TMs Circuit never ruled on the question whether the time limit in Rule 35 was jurisdictional, although we suggested, in United States v. Blanton,
Rule 4003(b) arguably raises due process concerns. See Logan v. Zimmerman Brush Co.,
We realize that a literal reading of Rule 4003(b) may be impractical and unfair. A judge may be on vacation, ill, or overworked and consequently unable to rule on the motion for an extension within the thirty-day period. But as the Seventh Circuit explained with regard to Fed.R.Crim.P. 35, “if there should be no limit on the time within which the judge can act ... the rule ought to be rewritten by those who have the authority to do so; the court of appeals do not.” United States v. Kajevic,
C. Second Request for Additional Time
In view of our holding that the bankruptcy court lost jurisdiction to grant the trustee’s first request for an extension of time once the original thirty-day period prescribed in Rule 4003(b) expired, we do not decide whether the court may grant an additional extension during an extension period.
III. Conclusion
For the foregoing reasons, we REVERSE.
Notes
. Section 341(a) of the Bankruptcy Code provides: "Within a reasonable time after the order for relief in a case under this tide, the United States trustee shall convene and preside at a meeting of creditors.” 11U.S.C. § 341(a).
. Collier on Bankruptcy advises: "The tíme period for filing objections to exemptions may be extended only by the court and only if the extension is granted within the original time period.” 9 Collier on Bankruptcy ¶ 4003.03[1], at 4003-9 (15th ed.1996).
. Rule 403(c), the predecessor of Rule 4003(b), provided:
Any creditor or the bankrupt may file objections to the report within 15 days after its filing, unless further time is granted by the court within such 15-day period.
[Transfer Binder] Bankr.L. Rep. (CCH) ¶ 20,123, at 20,150 (emphasis added). The Bankruptcy Code changed the thrust of Rule 403 by making it the burden of the debtor to list his or her exemptions and the burden of the parties in interest to raise objections. See Fed R. Bankr.P. 4003 advisory committee's note.
. The former version of Rule 35 provided in pertinent part:
The Court may reduce a sentence within 120 days after the sentence is imposed or probation is revoked, or within 120 days after receipt by the court of a mandate issued upon affirmance of the judgment or dismissal of the appeal, or within 120 days after entry of any order or judgment of the Supreme Court denying review of, or having the effect of upholding, a judgment of conviction or probation revocation.
Fed.R.Crim.P. 35(b).
Dissenting Opinion
dissenting.
The bankruptcy court held that it lacked jurisdiction to rule on a timely-filed motion for an extension of time because it failed to rule within the 30-day period provided by Bankruptcy Rule 4003(b). The district court reversed. Because the district court’s decision should be affirmed, I respectfully dissent.
I.
When filing a bankruptcy petition, a debtor may exempt certain property from the bankruptcy estate pursuant to 11 U.S.C. § 522. Thereafter, pursuant to Bankruptcy Rule 4003(b), “[t]he trustee or any creditor may file objections to the list of property claimed as exempt within 30 days after the conclusion of the meeting of creditors held pursuant to Rule 2003(a) or the filing of any amendment to the list or supplemental schedules unless, within such period, further time is granted by the court.” Though Trustee Rogers moved for additional time to object to the Debtor’s claimed exemptions less than thirty days after the meeting of creditors concluded, the bankruptcy court failed to sign and enter the order granting additional time within the 30-day period.
Unfortunately, it isn’t clear whether an order granting an extension of time must be signed and entered prior to the end of the 30-day period, or whether the filing of the motion before the expiration of the 30-day period satisfies Rule 4003(b)’s mandate. Though at least two circuits have construed Rule 4003(b) narrowly to require that an extension be granted within thirty days following the conclusion of the meeting of creditors,
Unfortunately, little case law exists with respect to Bankruptcy Rule 4003(b) and its 30-day requirement. However, numerous courts have addressed this same issue as it pertains to other statutes and rules. For example, prior to its amendment in 1985, Federal Rule of Criminal Procedure 35(b) provided: “The court may reduce a sentence within 120 days after the sentence is imposed, or within 120 days after receipt by the court of a mandate issued upon affirmance of the judgment or dismissal of the appeal, or within 120 days after entry of any order or judgment of the Supreme Court denying review of, or having the effect of upholding, a judgment of conviction.” After numerous courts narrowly construed Rule 35(b) to
This amendment to Rule 35(b) conforms its language to the nonliteral interpretation which most courts have already placed upon the rule, namely, that it suffices that the defendant’s motion was made within the 120 days and that the court determines the motion within a reasonable time thereafter. Despite these decisions, a change in the language is deemed desirable to remove any doubt which might arise from dictum in some cases that Rule 35 only “authorizes District Courts to reduce a sentence within 120 days” and that this time period “is jurisdictional, and may not be extended.”
As for the “reasonable time” limitation, reasonableness in this context “must be evaluated in light of the policies supporting the time limitations and the reasons for the delay in each case.” The time runs “at least for so long as the judge reasonably needs time to consider and act upon the motion.”
Fed.R.Crim.P. 35 (Advisory Committee Note to 1985 amendment) (citations omitted).
The Ninth Circuit adopted this same philosophy when it held that a bankruptcy court may grant a debtor’s timely-filed motion for an extension of time (under 11 U.S.C. § 365(d)(4)) even after the relevant time period has expired:
We are asked here to resolve a question of first impression in the circuit courts regarding the interpretation of section 365(d)(4) of the Bankruptcy Code.... Under section 365(d)(4), a nonresidential lease is deemed rejected by a debtor-lessee unless that party assumes the lease within 60 days after filing for Chapter 11 protection or within such additional period as is fixed by the bankruptcy court. In the case before us, the debtor-lessee moved, before the initial 60-day period had expired, for an extension of time within which to assume or reject a commercial lease, but the bankruptcy court did not hear the motion until after that period had ended. The court held that the lease was deemed rejected immediately upon the expiration of the sixtieth day, and that it was without*602 authority to grant the timely filed motion for extension. The bankruptcy appellate panel affirmed; we reverse.
While the bankruptcy judge declared that he would be inclined to grant the extension motion, he concluded that he no longer had authority to do so, ruling that the lease was deemed rejected pursuant to section 365(d)(4) of the Bankruptcy Code____ Under the bankruptcy judge’s view, rejection was automatic since the 60-day deadline passed before he had held any hearing or issued any ruling on the motion. The Bankruptcy Appellate Panel affirmed, holding that the language of section 365(d)(4) “is precise and leaves no room for arguing that an extension may be granted or confirmed after 60 days have elapsed.”
Long Beach’s interpretation of section 365(d)(4) would produce fortuitous and inequitable results. It would also require us to assume that Congress intended to take the most unusual and highly questionable step of interfering with the normal operation of the judicial branch by ordering the termination of jurisdiction over a particular issue whenever a court failed to make a ruling within a brief period. In light of those circumstances, we cannot conclude that the more restrictive interpretation of the section accurately reflects the intent of Congress.
Rather, the interpretation we believe best comports with congressional intent is the one that preserves the authority of the bankruptcy court to rule on timely filed motions. It strikes the balance between creditor protection and debtor relief that Congress intended, and is eminently reasonable, fair and sensible. We fully agree with the bankruptcy courts that have previously adopted that view.
For all the above reasons, we hold that if cause for an extension arises within the 60-day period and a motion for an extension is made within that period, a bankruptcy court may, even after the 60-day period has expired, consider the debtor’s motion and, if it finds there was sufficient cause at the time the motion was filed, grant the requested extension.
In re Southwest Aircraft Servs., Inc.,
Simply stated, though “[t]he plain meaning of legislation should be conclusive,” United States v. Ron Pair Enterprises, Inc.,
More importantly, perhaps, I am concerned that the judiciary’s independence is threatened by Rule 4003(b), as it is interpret
Accordingly, I would AFFIRM.
. In Matter of Stoulig,
. See, e.g., United States v. Inendino,
. Federal Rule of Criminal Procedure 35(b), as amended in 1985, provided:
A motion to reduce a sentence may be made ... within 120 days after the sentence is imposed or probation is revoked, or within 120 days after receipt by the court of a mandate issued upon affirmance of the judgment or dismissal of the appeal, or within 120 days after entry of any order or judgment of the Supreme Court denying review of, or having the effect of upholding, a judgment of conviction or probation revocation. The court shall determine the motion within a reasonable time.
Fed.R.Crim.P. 35(b).
. Though Advisory Committee notes are not binding on courts, see, e.g., United States v. Abdul-Hamid,
. Questions of statutory interpretation are subject to de novo review. United States v. Hans,
. The Bankruptcy Rules are enacted by the Supreme Court and reviewed by Congress. See 28 U.S.C. § 2075 (Congress’ delegation of power to the Supreme Court to prescribe bankruptcy procedural rules).
