Fox Chevrolet, LLC v. Boies et al

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
In re: 	*
JEFFREY BOIES and 	* 	Case No. 04-12155-JS
KIMBERLY BOIES,
Debtors 	* 	Chapter 7
* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	*
FOX CHEVROLET, LLC, 	*
Plaintiff 	*
v. 	* 	Adv. Proc. No. 04-1513-JS
JEFFREY BOIES and 	*
KIMBERLY BOIES,
Defendants *
* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	* 	*
MEMORANDUM OPINION GRANTING
DEFENDANTS’ MOTION TO DISMISS
The matter before the Court is the motion of the debtors to dismiss the instant
complaint to determine dischargeability on the ground that the complaint was filed
after the bar date. For the reasons stated herein, the motion will be granted.
Date signed September 16, 2005
Entered: September 19, 2005 Case 04-01513 Doc 31 Filed 09/19/05 Page 1 of 8

1The certificate of service prepared by the Court that was attached to the Notice
did not include Mr. Rauch or Fox.
2
FINDINGS OF FACT
On July 20, 2002, the District Court of Maryland for Anne Arundel County
entered a judgment in favor of Fox Chevrolet (“Fox”) against Jeffrey and Kimberly
Boies (the “debtors”), the amount of $15,445.31. Fox was represented Lee B. Rauch,
Esquire, of the law firm of Tydings & Rosenberg, LLP (“Tydings”). On January 29,
2004, the debtors filed the instant voluntary Chapter 7 bankruptcy petition in this
Court. The Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Deadlines
(“Notice”) stated that the deadline for filing complaints objecting to dischargeability
was May 3, 2004. Fox was listed on the debtors’ Amended Statement of Financial
Affairs, Schedule F and the creditor matrix. However, Fox did not receive the Notice.
In addition, although Mr. Rauch was listed on the Amended Voluntary Petition as
attorney for Fox, he never received a copy of the Notice. 1
On March 9, 2004, the law firm of Andrew G. Wilson, II, Esquire, filed a
Suggestion of Bankruptcy in the district court case and mailed a notice to Mr. Rauch.
On March 22, 2004, the district court issued an order that stayed the proceedings until
further notice. The order was mailed to Tydings & Rosenberg, LLP, as counsel for
Case 04-01513 Doc 31 Filed 09/19/05 Page 2 of 8

2Section 523(a)(2)(A) and (B) provides:
§ 523. Exceptions to discharge.
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or
1328(b) of this title does not discharge an individual debtor from any
debt–
* 	* 	* 	*
(2) for money, property, services, or an extension, renewal, or
refinancing of credit, to the extent obtained by–
(A) false pretenses, a false representation, or actual fraud, other
than a statement respecting the debtor's or an insider's financial
condition;
(B) use of a statement in writing--
(i) that is materially false;
(ii) 	respecting 	the 	debtor's 	or 	an 	insider's 	financial
condition;
3
the plaintiff. Fox did not deny that Tydings received the Suggestion of Bankruptcy
or the stay order.
On May 1, 2004, the plaintiff filed a timely proof of claim in the debtors’
bankruptcy case. The proof of claim was signed by Freeman, Wolfe & Greenbaum,
“Freeman”). On May 11, 2004, eight days after the bar date, Freeman filed the instant
complaint on behalf of Fox against the debtors to determine dischargeability of the
judgment rendered against the debtors in Anne Arundel County, pursuant to Section
523(a)(2)(A) and (B) of the Bankruptcy Code. 2
Case 04-01513 Doc 31 Filed 09/19/05 Page 3 of 8

(iii) on which the creditor to whom the debtor is liable for
such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with
intent to deceive[.]
11 U.S.C. § 523(a)(2)(A) and (B).
3Section 523(c)(1) provides:
(c)(1) Except as provided in subsection (a)(3)(B) of this section,
the debtor shall be discharged from a debt of a kind specified in
paragraph (2), (4), (6), or (15) of subsection (a) of this section, unless, on
request of the creditor to whom such debt is owed, and after notice and
a hearing, the court determines such debt to be excepted from discharge
under paragraph (2), (4), (6), or (15), as the case may be, of subsection
(a) of this section.
11 U.S.C. § 523(c)(1).
4Section 523(c) provides:
(c) Time for filing complaint under § 523(c) in a chapter 7 liquidation,
chapter 11 reorganization, or chapter 12 family farmer's debt adjustment
case; notice of time fixed.
A complaint to determine the dischargeability of a debt under §
523(c) shall be filed no later than 60 days after the first date set for the
4
CONCLUSIONS OF LAW
Section 523(c)(1) of the Bankruptcy Code requires the filing of a complaint in
order to determine nondischargeability of a debt, pursuant to Section 523(a)(2), (a)(4),
(a)(6) and (a)(15).3 The complaint must be filed within 60 days of the first date set for
the meeting of creditors, pursuant to Federal Rule of Bankruptcy Procedure 4007(c). 4
Case 04-01513 Doc 31 Filed 09/19/05 Page 4 of 8

meeting of creditors under § 341(a). The court shall give all creditors no
less than 30 days' notice of the time so fixed in the manner provided in
Rule 2002. On motion of a party in interest, after hearing on notice, the
court may for cause extend the time fixed under this subdivision. The
motion shall be filed before the time has expired.
11 U.S.C. § 523(c).
5In Piercy, Judge Derby stated the following:
The overwhelming weight of case law has held that where a
creditor, listed or unlisted, has notice or actual knowledge of the debtor's
bankruptcy proceedings and fails to file a complaint within the deadline
under Rule 4007, a complaint pursuant to 11 U.S.C. §§ 523(c)(1) and
523(a)(2), (4) or (6), or a motion to extend under Rule 4007, is barred.
Essentially, 11 U.S.C. § 523(c)(1) places the burden on the creditor
claiming nondischargeability under § 523(a)(2), (4) or (6) affirmatively
to assert his claim and to protect his interests. The policy is in accord
with an underlying principle of bankruptcy to ensure the debtor a fresh
5
Despite the failure of the clerk to send the Notice of Bankruptcy to Fox, its
counsel had actual notice of the bankruptcy filing nearly two months before the bar
date. Actual notice has been held by this Court to be sufficient to dismiss an untimely
dischargeability complaint filed by a creditor who was not scheduled. Lawrence Steel
Erection Co. v. Piercy (In re Piercy), 140 B.R. 108 (Bankr. Md. 1992) (Derby, J.), and
Herman v. Bateman (In re Bateman), 254 B.R. 866 (Mannes, J.) (Bankr. D. Md.
2000). Therefore, when a creditor was scheduled and did not receive notice of the bar
date from the court, but received actual, timely notice of the filing from a different
source, its late-filed complaint is time-barred. See Piercy, 140 B.R. at 110-11. 5
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start. See In re Compton, 891 F.2d 1180 (5th Cir.1990); In re Sam, 894
F.2d 778 (5th Cir.1990); In re Price, 871 F.2d 97 (9th Cir. 1989); In re
Alton, 837 F.2d 457 (11th Cir. 1988); Neely v. Murchinson, 815 F.2d 345
(5th Cir. 1987); In re Rhodes, 61 B.R. 626 (9th Cir. BAP 1986) and In
re Walker, 103 B.R. 281 (D. Utah 1989). See also, Rule 4007– Advisory
Committee Note (1983) and 11 U.S.C. section 523(c) H.R. and S. R. for
the Reform Act of 1978.
Piercy, 140 B.R. at 110-11.
6
As stated in the Findings of Fact, Fox and its attorneys received actual notice
of the instant bankruptcy case prior to the bar date. Fox was on inquiry notice when
its attorneys received the notice of the Suggestion of Bankruptcy. Fox should have
checked the case docket at that time. There was sufficient time between March and
the bar date for Fox to file a timely complaint or, at the very least, a request to extend
the bar date.
“Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive
issue of law.” Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S. Ct. 1827, 104 L. Ed.
2d 338 (1989), citing Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229,
2232, 81 L. Ed. 2d 59 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99,
101-02, 2 L. Ed. 280 (1957). “When ruling upon a motion to dismiss a complaint for
failure to state a claim for which relief can be granted pursuant to Federal Rule
12(b)(6), the Court must accept as true all well-pleaded allegations in the complaint,
including all reasonable inferences that may be drawn from them, in the light most
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7
favorable to the plaintiff.” 	Hemelt v. Pontier (In re Pontier), 165 B.R. 797, 798
(Bankr. D. Md. 1994). Thus, a Rule 12(b)(6) motion can be granted only when “it
appears certain that the plaintiff cannot prove any set of facts in support of his claim
entitling him to relief.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.
1999). Under the circumstances of the instant adversary proceeding, there is no way
that the plaintiff can prevail.
WHEREFORE, the debtors’ motion to dismiss will be GRANTED and the
instant complaint will be DISMISSED.
ORDER ACCORDINGLY.
Case 04-01513 Doc 31 Filed 09/19/05 Page 7 of 8

8
cc: 	Andrew G. Wilson, II, Esquire
275 West Street, Suite 216
Annapolis, Maryland 21401
Attorney for the Debtor
Steven R. Freeman, Esquire
Freeman, Wolfe & Greenbaum, P.A.
409 Washington Avenue, #300
Towson, Maryland 21204
Attorney for Fox Chevrolet
Marc H. Baer, Esquire
3545 Chestnut Avenue
Baltimore, Maryland 21211
Chapter 7 Trustee
Office of the U.S. Trustee
300 W. Pratt Street, Suite 350
Baltimore, Maryland 21201
Case 04-01513 Doc 31 Filed 09/19/05 Page 8 of 8