Opinion
6:24-bk-02053-TPG
10-08-2024
In re: Peter Paul Mitrano, Debtor.
Chapter 13
ORDER GRANTING MOTION TO ALLOW LATE FILED CLAIM
Tiffany P. Geyer, United States Bankruptcy Judge.
THIS CASE came before the Court for hearing on September 11, 2024 (Doc. No. 44) upon Creditor Virginia Kelly's "Motion To Allow Late Filed Claim" (the "Motion") (Doc. No. 30). After considering the Motion, the case docket, and the parties' arguments asserted at the hearing, the Court will permit Kelly to file an untimely claim for the reasons explained below.
A court may take judicial notice of its own records. ITT Rayonier Inc. v. United States, 651 F.2d 343, 345 n.2 (5th Cir. Unit B July 20, 1981). The decisions of the United States Court of Appeals for the Fifth Circuit issued on or before September 30, 1981, are binding precedent in the Eleventh Circuit. Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th Cir. 1981).
Pro se debtor, Peter Paul Mitrano, filed a Chapter 13 case on April 26, 2024. (Doc. No. 1.) The proof of claim deadline was set for July 5, 2024 (the "Bar Date"). (Doc. No. 20 at 2.) On Schedule E/F, Mitrano included Kelly as an unsecured creditor with a $200,000 priority claim. (Doc. No. 19 at 16.) However, Mitrano listed Kelly's address as "12, Charlottesville, Virginia 22901," omitting any street name. (Id. at 16, 54.) Kelly's claim relates to a pre-petition domestic support obligation that led to a criminal case against Mitrano and an ensuing judgment. (Doc. No. 30 ¶ 3.) Kelly argues she did not receive notice of Mitrano's bankruptcy case and related Bar Date because Mitrano failed to supply her correct address when he filed his schedules. (Id. ¶ 4.)
Mitrano disputes Kelly's claim. (Doc. No. 19 at 16.) Kelly's claim is also the subject of adversary proceeding case number 6:24-ap-00055-TPG.
On May 31, 2024, Mitrano filed an adversary proceeding against Kelly seeking a declaratory judgment that the judgment underlying Kelly's claim is void ab initio. (No. 6:24-ap-00055-TPG, Doc. No. 1.) The certificate of service for the complaint reflects it was mailed to Kelly on June 21, 2024, at MD DMED Clinical Research Unit, 560 Ray C. Hunt Drive, Charlottesville, Virginia 22903. (No. 6:24-ap-00055-TPG, Doc. No. 5 at 2.) On August 13, 2024, Kelly filed a motion to dismiss the adversary proceeding. (No. 6:24-ap-00055-TPG, Doc. No. 13.) She filed the Motion two days later. (Doc. No. 30.) According to Kelly's counsel, the adversary complaint was mailed to her work address when she was out of the office on vacation, and Kelly only became aware of the Bar Date in late July, after it had passed.
At the hearing, Mitrano argued Kelly failed to establish excusable neglect for failing to timely file her claim, although he conceded her mailing address was incorrect in his schedules. But, he argues, Kelly was served (albeit not at her home address) with the adversary complaint before the Bar Date, putting Kelly on notice of his Chapter 13 case and triggering a concurrent duty to investigate the Bar Date. Mitrano further contends that Kelly did not act timely once she became aware of the Bar Date, as she did not file the Motion until August 15, 2024.
Federal Rule of Bankruptcy Procedure 9006(b)(1) supplies the court with the discretion to permit untimely filings in certain instances if the failure to timely act resulted from excusable neglect, upon cause shown. However, the excusable neglect standard supplied in Rule9006(b)(1) does not apply to requests to extend the time to file proofs of claim. Rather, Rule 3002(c), which was amended in 2022, governs the exceptions for untimely proofs of claim.
"Rule" refers to the Federal Rules of Bankruptcy Procedure.
Rule 3002(c)(6) authorizes a court to permit an untimely proof of claim if "the court finds that the notice was insufficient under the circumstances to give the creditor a reasonable time to file a proof of claim." The advisory committee's note to the 2022 amendment explains that Rule 3002(c)(6) was amended to provide a single standard for granting motions for an extension of time to file a proof of claim. If notice was insufficient to supply a creditor with reasonable time to file a proof of claim, the court may grant an extension. "The creditor has the burden to demonstrate the insufficiency of the notice." In re JC Farms, LLC, No. 23-10278-357, 2024 WL 3352120, at *2 (Bankr. E.D. Mo. July 9, 2024) (granting motion to allow late filed claim where creditor was not listed on the debtor's schedules or on the creditor matrix and thus did not receive form notice of the deadline to file proofs of claim); see also In re Sanomedics, Inc., 655 B.R. 502, 506 (Bankr. S.D. Fla. 2023) (declining to extend the claims bar date where creditors had sufficient notice of the bar date order even though the creditors' failure to timely file proofs of claims may be due to excusable neglect).
Very few cases have addressed the 2022 amendment. In re Lambert, No. 23-40161-NGH, 2024 WL 3713138, at *3 (Bankr. D. Idaho Aug. 7, 2024) (citing JC Farms, No. 23-10278-357, 2024 WL 3352120, as the only decision to have applied it).
At the hearing, Mitrano cited the following cases in support of his argument that Kelly failed to demonstrate excusable neglect: In re Bicoastal Corp., 176 B.R 966, 970 (Bankr. M.D. Fla. 1994); In re Stewart, 247 B.R. 515, 519 (Bankr. M.D. Fla. 2000); In re Banco Latino Int'l, 310 B.R. 780, 784 (S.D. Fla. 2004), aff'd, 404 F.3d 1295 (11th Cir. 2005); In re Peninsular Oil Corp., 399 B.R. 532 (Bankr. M.D. Fla. 2008); and In re Stone, 473 B.R. 465, 468 (Bankr. M.D. Fla. 2012). However, these cases were decided before the 2022 amendment to Rule 3002(c)(6) permitting late filed claims in instances where notice was insufficient to supply a reasonable time to file a proof of claim. Mitrano also cited In re Access Care, Inc., 333 B.R. 706 (Bankr. E.D. Pa. 2005), and In re Brennan, 275 B.R. 172, 173 (Bankr. D. Mass. 2002), at the hearing, but those cases do not address whether late filed proofs of claims should be permitted.
Here, the Court concludes Kelly adequately demonstrated that she received insufficient notice of the Bar Date to give her a reasonable time to file a proof of claim. Indeed, she received no actual notice, and only became aware of the Bar Date and need to file a proof of claim when she investigated such after receiving Mitrano's complaint seeking to have the judgment underlying her claim declared void. Mitrano conceded that the address he supplied for Kelly on his schedules is inaccurate or incomplete. As such, Kelly did not receive sufficient notice of the Bar Date.
Accordingly, it is
ORDERED:
1. The Motion (Doc. No. 30) is GRANTED.
2. Kelly has 14 DAYS from the date this Order is entered to file a proof of claim.
Stephen R. Caplan is directed to serve a copy of this order on interested parties who are non-CM/ECF users and file a proof of service within three days of entry of the order.