These appeals present a fairly straightforward legal question: Whether the former 11 U.S.C. § 546(a)’s two-year limitations period for avoidance actions begins to run anew following conversion to Chapter 7 proceedings and the appointment of a second trustee. Bankruptcy courts have reached contrary results. The two circuit courts that have addressed this issue have both held that § 546(a)’s language unambiguously provides for a single two-year time frame, beginning with the appointment of the first trustee, during which that trustee, or any subsequently appointed trustee, can pursue avoidance actions. For the reasons stated in this opinion, we elect to follow the lead of our sister circuits and reverse. Because there appear to be reasons which may warrant an equitable tolling of the statute of limitations, we remand for such a determination.
Defendants-appellants Eagle Trace Employee Pension Plan, its trustee Vincent Boryla,
Debtor M & L Business Machine Company filed for Chapter 7 bankruptcy relief on October 1,1990. Soon thereafter, debtor converted the case to a Chapter 11 reorganization proceeding, and, on December 19, 1990, see Boryla App., vol. II at 68, 403, the bankruptcy court appointed Ms. Jobin as trustee.
On September 24, 1993, within two years of her appointment as Chapter 7 trustee, but over two years after her initial appointment as Chapter 11 trustee, Ms. Jobin amended an ongoing adversarial proceeding to assert claims against Eagle Trace Pension Plan and its trustee, Vincent Boryla. She sought recovery of transfers under, among other statutory provisions, 11 U.S.C. §§ 547 and 548. Also on that date, Ms. Jobin commenced an action against Ms. Vizcarra, also seeking to recover transfers under 11 U.S.C. §§ 547 and 548.
Defendants moved for the dismissal of these avoidance proceedings, arguing that they were barred by § 546(a)’s two-year limitations period running from Ms. Jobin’s initial appointment as Chapter 11 trustee.
In affirming, the district court concluded that § 546(a)
The two courts of appeal that have addressed this issue have concluded that the limitations period does not begin to run again following the conversion of a Chapter 11 case to a Chapter 7 proceeding and the appointment of a second trustee. McCuskey v. Central Trailer Services, Ltd.,
The language of § 546(a) is clear. It provides that the two-year limitations period begins to run “after the earlier of’ either the appointment of a trustee or the time the case is closed or dismissed. Once a trustee is appointed, the limitations period is set in motion. See Gillman v. Mark Oakes Trucking (In re CVA Assocs.),
Nothing in the statute suggests that the clock should be reset following the appointment of another trustee later in the proceedings. See McCuskey,
“[Wjhere, as here, the statute’s language is plain, ‘the sole function of the courts is to enforce it according to its terms.’” United States v. Ron Pair Enters., Inc.,
Our interpretation gives full effect to the policies embodied in § 546(a). The purposes of statutes of limitation are to insure finality and to prevent the assertion of stale claims. See McCuskey,
Our decision does not completely resolve the trustee’s claims for the recovery of prepetition transfers from defendants. The trustee argues that, even if her pursuit of these adversary proceedings is subject to a single two-year limitations period beginning upon her appointment as Chapter 11 trustee, that time frame was equitably tolled under the circumstances of this bankruptcy proceeding.
Defendants counter that, while tolling is ordinarily a fact-based inquiry, see, e.g., Schwartz v. Kursman (In re Harry Levin, Inc.),
Section 546(a) is subject to the doctrine of equitable tolling. See id. at 1385 (noting that every court that has considered this issue has held that equitable tolling ápplies to § 546(a)(1)). Equitable tolling will prevent § 546(a) from running when the trustee, despite the exercise of due diligence, is prevented from asserting a cause of action because she remains unaware of that cause of action due to fraud, id., or when “extraordinary circumstances beyond plaintiff’s] control made it impossible to file claims on time,” Amazing Enters. v. Jobin (In re M & L Business Machs., Inc.),
While defendants do not dispute these facts, 'they argue that the trustee’s ability to commence several hundred other avoidance actions within two years of her appointment as Chapter 11 trustee demonstrates that she did not diligently pursue these avoidance actions as a matter of law. See generally In re United Ins. Management, Inc.,
The fact that the trustee was able to commence other avoidance actions within two years of her Chapter 11 appointment, however, does not show that she had knowledge of these particular causes of action and could have asserted them within that time frame. Because the trustee asserts some facts that could support her argument that she was in fact prevented from raising these claims
The judgment of the district court is REVERSED, and the causes are REMANDED for proceedings consistent with this opinion.
Notes
. These appeals do not concern the claims plaintiff asserts against Vincent Boryla individually.
. The cases are unanimously ordered submitted without oral argument in accordance with the appropriate rules.
. The parties do not argue that the § 546(a) limitations period started to run from the date of the filing of the Chapter 11 petition. See Zilkha Energy Co. v. Leighton,
. As additional grounds supporting the dismissal of the complaint asserted against her, Ms. Vizcarra argued that she was not a creditor of the estate and, therefore, could not be found liable to the estate, that the bankruptcy court lacked personal jurisdiction over her, and that the trustee had failed sufficiently to allege venue and subject matter jurisdiction. Vizcarra’s App. at 20-22. Ms. Vizcarra reasserts these arguments on appeal to this'court.
Our jurisdiction under 28 U.S.C. § 1292(b) is not confined to the question certified for appeal, which in this case is the issue of the application of § 546(a)’s statute of limitations, see Vizcarra’s App. at 123-24; we may address any issue necessary to the resolution of these appeals. See Homeland Stores, Inc. v. RTC,
. The pertinent version of the statute provides that
[a]n action or-proceeding under section 544, 545, 547, 548, or 553 of this title may not be commenced after the earlier of—
(1) two years after the appointment of a trustee under section 702, 1104, 1163, 1302, or 1202 of this title; or
(2) the time the case is closed or dismissed.
11 U.S.C. § 546(a) (subsequently amended in 1994).
. We recognize that, in 1994, Congress amended § 546(a) to make it clear that the limitations period runs after the appointment of the first trustee. 11 U.S.C. § 546(a)(1)(B). "In light of the fact that § 546(a)(1) was amended against the backdrop of inconsistent case law and that Congress chose to underscore the importance of a statute of limitations rather than the various roles of trustees under different chapters,” In re Dryland Marina, Inc.,
. Defendant-Appellant Vizcarra's request that we strike the trustee’s.statement of the case con-tamed in her brief is denied.