*1 (1995). Generally, “it is L.Ed.2d 458 neces
sary
paper
each case whether a
to examine
FADEN;
In the Matter of Alan J.
appropriate to
hearing is
the resolution of
Faden,
Harriet B.
Debtors.
disputes underlying
petition
the factual
FADEN;
Alan J.
Harriet B.
Collins,
299,
May v.
955 F.2d
er’s claim.”
Faden, Appellants,
(5th
denied,
901,
Cir.), cert.
U.S.
(1992).
1925, 118L.Ed.2d 533
In Neth
S.Ct.
v.
Collins,
1154,
(5th
ery v.
1157 n. 8
INSURANCE COMPANY OF NORTH
-
denied,
Cir.1993),
-,
cert.
U.S.
AMERICA, Appellee.
(1994),
refused
95-20020,
Nos.
95-20622.
finding, despite
ness to a state
Appeals,
United States Court of
conflicting affidavits on
submission of
Fifth Circuit.
issue,
proceeding
the habeas
when
was not
by
judge
pre
the same
who had
considered
9,Oct.
petitioner’s
sided over the
trial. See also
Rehearing Denied Nov.
(5th
Johnson,
Cir.1996)
v.
when state habeas was not the trial).
at the state paper
It is unclear whether the hear
ing in adequate the instant case was to re
solve Salazar’s ineffective assistance of coun judge state presided
sel claim. The who plea
over no contest did not Salazar’s conduct proceeding. Arguably,
the habeas Salazar presented competing
and Vela versions as to appeal wished to Salazar his convic Furthermore,
tion. Salazar admits that he availability
knew of the theoretical ap of an
peal but contends that his counsel failed to appellate rights. inform him of his Vela, disputed by
This assertion was never simply
instead Vela stated that he could not
remember whether he had informed Salazar Nevertheless, appeal rights.
of his the dis
trict court states that the “implic state court
itly found” that Salazar was informed of his
appellate rights. implicit
The district court’s on reliance
finding by state unsupported court was Likewise, attaching pre- the record.
sumption supposed of correctness to this im-
plicit finding Accordingly, was erroneous. required
REMAND is to determine whether right
Salazar was informed of his appeal thus,
his conviction and whether Vela ren-
dered ineffective assistance of counsel.
Carolyn Taylor, Hughes, A. Watters & As- kanase, Houston, TX, appellants. for Lutkewitte, Joseph Favret, Thomas De- marest, Lutkewitte, Orleans, Russo & New LA, appellee. for POLITZ, Judge, Before Chief DUHÉ, Judges. GOODWIN1 and Circuit DUHÉ, Judge: Circuit Alan appeal J. and Harriet B. Faden rul- ings by court, the bankruptcy affirmed court, declaring the district non-disehargea- ble debt owed to Company Insurance of (“INA”) North America because of a failure notice, 523(a)(3), 11 granting attorney’s an award of fees and costs to INA We affirm.
BACKGROUND In 1984 Alan Faden in a invested Texas partnership limited known as Kentex Thor- oughbred Ltd. 1.No. He financed most of investment, executing surety an INA bond, an Investor Bond Indemnification and Pledge Agreement, and related investment Following documents. payment, default in INA secured a judgment against state Mr. Faden. Circuit, Judge sitting by designation. Circuit for the Ninth timely appealed. Alan and Harriet Faden and the Fadens August We consol- bankruptcy. appeals Chapter petition disposition. idated the two for our
filed a Appellants’ counsel asked them address, others, among
INA’s correct
DISCUSSION
mailing
petition.
appropriate
The
ad-
A Standard
Review
throughout
in-
appeared
Alan Faden’s
dress
findings
vestment documents with INA as Waite
“c/o
fact “will not be set aside unless
Services, Inc.,
Virginia
Hill
Center
Towers, Ltd.,
erroneous.” Matter
Delta
Richmond,
Parkway,
Virginia 28295.”
(5th Cir.1991).
However,
debtors, however,
failed to
finding
premised
“when a
of fact is
on
Thus,
this information to counsel.
the bur-
standard,
improper legal
finding
loses
*4
obtaining
den of
the correct address fell on
clearly
the insulation of the
erroneous rule.”
secretary,
resorted to the tele-
counsel’s
who
Fabricators,
Inc.,
1458,
Matter
926 F.2d
of
phone
The address
book for INA’s address.
(5th Cir.1991).
law,
1464
of
“Conclusions
on
in
Bell Busi-
for INA listed
the Southwestern
hand,
subject
plenary
the other
are
to
review
Pages
ness
for the Greater Houston
White
appeal.”
on
Id.
during
through
Area
March 1991
March 1992
Companies-CIG-
was:
... see CIGNA
“INA
B. Section
Casualty
Property
Companies....
&
NA
523(a)(3)(A)
Section
of the Bank
Companies ...
CIGNA
1360 Post Oak Boule-
ruptcy
penalizes
failing
Code
a
for
debtor
to
secretary sent the notice to
vard.” Counsel’s
applicable
list all of his creditors and debt on
address,
but made an error in transcrib-
provides:
schedules. The statute
ing
suite number.
CIGNA’s
discharge
discharge
A
... does not
an
INA never received notice. The Fadens
any
from
...
individual debtor
debt
nei-
discharge in
bankruptcy
received a
Decem-
ther
listed nor scheduled under section
learning of
dis-
ber 1991. After
521(1)
title,
name,
of this
with the
if known
charge,
adversary proceedings
filed
al-
INA
debtor,
to the
of the creditor to whom siich
leging that because the Fadens failed to
owed,
permit
timely
...
debt is
time to
INA,
properly notify
the debts
to
owed
INA
claim,
filing
proof
of a
of
unless such credi-
non-dischargeable pursuant
11
were
to
knowledge
or actual
tor had notice
of
523(a)(3).
§
timely filing.
such
case in time for
agreed
bankruptcy
with INA
added).
523(a)(3)(A) (emphasis
11 U.S.C.
and found that “Alan Faden was not forth-
complete
“The burden is on the
debtors
coming
with his counsel as
his creditors’
accurately.” Matter
schedules
addresses,”
“testimony
that
his
(Bankr.M.D.Fla.
702,
Springer, 127 B.R.
707
why
vague and not credible as to
he did not
1991).
addition,
In
the burden of
rests
good
provide
make a
faith
a correct
effort
that a creditor had
with the debtor to show
addition,
for this creditor.” In
address
knowledge” under section
“notice or actual
joint
court found that as a
debtor Harriet
523(a)(3). U.S.,
Business Admin. v.
Small
obligated
provide
Faden was also
INA
(5th Cir.1990).
108,
Bridges,
894 F.2d
proper notice. The Fadens then moved for
Ap
court held that
reconsideration, arguing for the first
time
constitutional
pellants’ notice fell short
the court should allow an out-of-time
requirement
notice
process
due
amendment to include INA The
reasonably
circum
calculated under
judge denied the motion.
adjudication
purports
An
stances.
parties
rights of adverse
will
The district court affirmed. The Fadens
determine the
finality
all affected
appealed
not be accorded
unless
to this Court. The
reasonably
Judgment
given notice
calcu
court then entered an Amended
individuals are
apprise
pendency
of the
of the
awarding
attorney’s
INA
fees and costs in-
lated to
them
scope
rights,
adversary pro-
proceeding
and the
of their
curred
connection with the
pro-
information sufficient to
ceedings.
again
together
The district court
affirmed
with
285,
quire[
opportunity
prepare
Matter
10 F.3d
].”
them with
vide
(5th Cir.1994).
response.
Appellants
argue
Mullane v. Central
therefore
present
Co.,
306,
Trust
339 U.S.
&
that the
court erred
not allow-
Hanover Bank
(1950).
652, 657,
314,
When debtors fail to schedule The Court finds that Alan Faden’s testimo- properly, may ny vague creditors why was and not credible as to permit amendments, only good out-of-time “but if he did not make a faith effort to exceptional equity circumstances and so re- a correct address for this creditor. Therefore, providing proper it is irrelevant deficient not his counsel with the infor- may subsequent notice have resulted from a sec- place. mation in the first Appellant's retarial error since true error was in
797
Stone,
fraud,
design,
improper
Indeed,
dem-
or
motive.”
finds that Debtors
this Court
Soult,
(citing
coun-
very little effort
discretion chargeable. course, acknowledge, We 523(a)(3) must “section be construed with Smith, In In re Matter of eye equitable principles toward the which (5th Cir.1994), equitable similarly denied we underlie law.” 10 F.3d at There, they claimed that debtors first relief. fact, the enactment of section “find” the creditor order could not Then, legislatively half it. two and one overruled an earlier schedule creditor, later, years scheduled the Supreme requiring debtors decision strict con Court wrong address. but listed the ground of the no-notice for non struction However, dischargeability. Id. there are bankruptcy court found that the debt- *6 523(a)(3)’s elasticity. limits to section When cor- creditor’s] have learned [the ors could bankruptcy judge, listening after to all of a by picking up telephone rect address the testimony, a the finds that debtor shirked that it could not condone and concluded diligence part responsibility on the of the notice to his credi such ‘a lack of Coupled tors, with the fact that the usurp debtor.’ the role of this Court cannot then properly to apparently failed debtors bankruptcy judge the and mandate its own for a number of other creditors schedule must defer to equitable relief. We instead years, regard to several their error with findings bankruptcy the relevant hardly can be termed mere creditor] [this only factors and review for the Robinson negligence or inadvertence.” abuses of discretion. Smith, bankruptcy at As in the Id. Appellants court this case believed D. Harriet Faden negligent in the failure to
were more than joint Chapter Harriet Faden filed a Moreover, like properly schedule INA husband, Smith, characterizing petition the with her the court found that joint irresponsibility Fadens’ extended to other to INA as debt. Howev the debt owed er, creditors as well. sign did not the INA because Mrs. Faden documents and was not named investment Although went on to also find Smith husband, against she ar the INA suit her resulted, prejudice had we have held against gues that INA failed to state a claim deficiency fac that a under Robinson’s first unconvincing. By argument her. This is permits tor a court the exercise of alone joint protection as a filing for under the Code deny its sound discretion to relief. “As our debtor, obligation comply she assumed the Sixth, distinguished colleagues in Sev the requirements the Code determined, enth, and Eleventh Circuits have Therefore, court cor the discharge a court should not a debt under rectly INA debt was non-dis- held that the if the debtor’s failure to Fa- Harriet and Alan chargeable as to both schedule that debt was due to intentional credibility determinations of the den.3 justify
judge implication cannot an of a find- CONCLUSION ing of fraud from this record. reasons, foregoing judgments For the particularly troubling majority’s I find court, affirming judgments
of the district
deficiency
assertion that a
under Robinson’s
court,
are AFFIRMED.
of the
permits
deny
factor
first
alone
court
equitable
reopening
relief of
the case. Rob
POLITZ,
Judge, dissenting:
Chief
progeny
inson and its
teach that all of
majority’s
from the
respectfully
I
dissent
the factors outlined therein are to be consid
bankruptcy court did not
that the
conclusion
ered,
just
not
one of them to the exclusion of
reopen
it refused to
its discretion when
abuse
majority
subtlety
the others. The
would
ac
bankruptcy so that INA’s ad-
knowledge
by noting
this
that in Smith when
interpreting
In
could be corrected.
dress
faced with this same issue we
on to
went
dischargeable
a debt is
under sec-
prejudice
consider the amount of
that had
523(a)(3),
have held that when a
tion
we
resulted to the creditor as a result of the
has not been
sched-
creditor’s claim
properly, despite
finding
failure to schedule
uled,
may
equitable power
use its
negligence
than
more
mere
or inadver
the case to allow a creditor to file a
tence under the first factor.3 Neither Smith
decision,
making
late
of claim.1
suggest
finding
nor Stone
that a
of more
out,
majority correctly points
typi-
we
as the
negligence
than
or
“mere
inadvertence”
cally
the factors outlined in
have considered
preclude equitable
would
relief when there
v. Mann.
Robinson
absolutely
prejudice
was
no
to the creditors
majority
heavily upon
The
relies
the bank-
Indeed,
caused
the failure to list.
while
ruptcy judge’s
that Faden was
determination
agreed
we have
with other circuits that a
why
as to
he did not make a
“not credible
fraud,
specific finding
design,
of intentional
good
faith effort
correct ad-
improper
preclude
or
motive would
disc
court found that
dress.”
harge,4 we have never held that the other
forthcoming
Faden was not
and that his tes- Robinson factors
would not be considered
timony
vague
why
appropriate
as
analysis.
majority
provided.
address was not
findings” by
reviewing
concludes that these “fact
the With this in mind and
the record
*7
bankruptcy
“suggest”
factors,
in- weighing
court
that Faden
all three Robinson
the re-
inexorable,
tentionally
recklessly
supplying
avoided
I
or
sult
reach is
and it is diametri-
proper
cally
I simply
opposed
INA’s
address.
cannot
to the decision announced to-
agree.
finding by
day by
majority.
no
There was
the bank-
the
The notice was sent to
ruptcy judge that
telephone
Faden was reckless or
INA at an address
in
located
intentionally
giving
directory.
avoided
the correct ad-
While the suite
was in
number
fact,
error,
to
counsel.
actually
dress
there is noth-
the notice was
sent to a build-
ing
bankruptcy judge’s opinion
CIGNA,
in
ing
entirely occupied by
to im-
almost
ply
finding
negligence
parent
than a
corporation
much more
of
of INA. All floors were
and,
by
previously
occupied by
the Fadens
as we have
CIGNA save one. There is no
ruled,
solely
the failure is attributable
“[i]f
evidence
this record that this notice was
inadvertence,
negligence
equity points
or
...
not delivered.
It
not
was
returned to the
discharge.”2
bankruptcy
The deference we
owe
court.
I
no
entertain
doubt
(In
Stone),
Appellants
Caplan
3.
It is unclear whether
seek to make
v.
Stone
re
independent challenge
bankruptcy
(5th Cir.1994).
an
to the
attorney’s
court's award of
fees to INA. Howev-
er, given
bankruptcy
our affirmance of the
(In Smith),
Mfg.,
3. Omni
Inc. v. Smith
re
F.3d
merits,
court’s decision on the
we can find no
(5th Cir.1994).
(and
none)
Appellants
basis
versing
have offered
for re-
judgment
on this
whatever fact, non-discharge- and, qualifies meeting a debt for the notice of the of notice that ability. creditors instructed creditors not to file a by claim until instructed the court to do so. Moreover, remaining weight of the two 523(a)(3)(A) only applies Section where a in favor of reversal. tip the scales factors required, of claim would have been and disruption to the would have been no There cases, in no-asset where the creditors not are disposition of this matter bankruptcy court in claim, proofs instructed file section by allowing the Fadens to amend their 523(a)(3)(A) by very ap- its terms does not “correct” address for with the schedules Further, ply.5 absolutely prej- there was no INA. filing by INA. The 1989 was udice suffered uppermost For and mindful these reasons liquidation. were of a no-asset Creditors general law filing told that it informed of that and were particular should be construed necessary not to submit claims because
was eye equity, equity toward notions of posture asset of the case. Creditors of the compel me to the conclusion the bank- that should assets be dis- were also advised ruptcy judge abused his discretion refus- dividend, provide a covered which would ing so that subsequent issue and creditors notice would the schedule could be amended. protect then act interests. could exactly That is what occurred. When assets
developed, given to INA and oth- notice timely creditors. INA claim.
er filed these circumstances the
Under should have allowed the Fadens the the “incorrect” ad-
opportunity to correct technicality if such a should
dress for INA even been entertained. The court
have bankruptcy to readily reopened the deal with America, UNITED STATES of Any developed. technical the assets which Plaintiff-Appellee, necessary should address correction deemed v. complete light allowed. In of the have been Stepp, Carl JENNINGS John any prejudice whatsoever to this cred- lack of Defendants-Appellants. itor, I am at a total loss to see how the equity and fairness accorded commands 95-3317, Nos. 95-3318. proceedings prevailed have here- is, deny discharge in. To to this debtor Appeals, United States Court me, miscarriage justice very and is the Sixth Circuit. bankrupt-
antithesis of the intendment of the *8 Sept. act, very cy one of out- oldest federal laws. jurispru-
I must also note that there is suggesting that in a within our circuit
dence
528(a)(3)(A)
ease,
Chapter 7
no-asset
ORDER
inapplicable.
is
For INA’s claim be ex-
MOORE,
and
Circuit
Before: KENNEDY
cepted
discharge by 11
from
WELLS,*
Judge.
Judges;
District
523(a)(3)(A),
§
the failure to schedule must
rehearing
Jennings
petition for
ability
timely
Carl
filed a
deprived
have
INA of an
to file
Here,
rehearing
any
Stepp
petition
filed a
proof
of claim.
there was never
John
*
Wells,
Smith,
663-64,
2;
Lesley
United States District
at
n.
see also
Hon.
Brooks
Ohio,
(stating
sitting
Judge