Timothy Heidel

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re
TIMOTHY HEIDEL
Debtor
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Case No. 05-22645
Chapter 7
Judge Hopkins
MEMORANDUM OF DECISION ON ORDER DENYING MOTION
TO EXTEND DEADLINE TO OBJECT TO DISCHARGEABILITY
Before 	the 	Court 	is 	the 	Motion 	for 	Extension 	of 	Time 	to 	Object 	to
Dischargeability of Debt ("Motion")(Doc. 32) filed by American Telemarketing
Specialists ("ATS"). ATS seeks an order extending the deadline to allow it to file an
objection to dischargeability. The Debtor opposes the Motion (Doc. 33). The Court
held a hearing on the Motion on May 30, 2006.
The issue before this Court is whether ATS timely filed the Motion. Under Fed.
R. Bank. P. 4007(c) "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 meeting of
creditors under § 341(a)." Additionally, any motion to extend the time for the filing
of such a complaint "shall be made before the time [to file the complaint] has
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: October 16, 2006
____________________________________________________________
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expired." Fed. R. Bank. P. 4007(c) (emphasis added).
In this case, the first date set for the meeting of creditors under § 341(a) was
December 6, 2005. The Court sent notice of the 341 meeting to all creditors of the
estate in accordance with Rule 2002. Thus, the last day to oppose dischargeability
under Rule 4007(c) was February 6, 2006. 	ATS's motion for extension to file its
complaint was filed on April 18, 2006. Although the Motion was filed after February
6, 2006, ATS argues that it should be granted leave to file its complaint under the
authority of Nardei v. Maughan (In re Maughan), 340 F.3d 337 (6th Cir. 2003). In
In re Maughan, the Sixth Circuit Court of Appeals held that a filing deadline such as
Rule 4007(c) is a statute of limitation or a deadline that is subject to the defenses of
waiver, estoppel, and equitable tolling. Maughan, 340 F.3d at 343-344.
Under its Motion, ATS, asks the Court to apply the doctrine of equitable tolling
and to grant it leave to file a complaint Objecting to the Debtor's Dischargeability of
Debt, despite the expiration of the February 6, 2006 deadline. In the Sixth Circuit,
courts generally weigh the following five factors when determining whether to apply
the doctrine of equitable tolling: "1) lack of actual notice of filing requirement; 2) lack
of constructive knowledge of filing requirement; 3) diligence in pursuing one’s rights;
4) absence of prejudice to the defendant; and 5) a plaintiff’s reasonableness in
remaining ignorant of the notice requirement." Chattanooga Agric. Credit Ass’n v.
Davis (In re Davis), 330 B.R. 606, 611 (Bankr. E.D. Tenn. 2005).
In response to Debtor’s objection, ATS argues primarily that it was diligent and
that to allow the extension for it to file its complaint will not unfairly prejudice the
Debtor. This Court agrees that ATS’ claim is comparable to other similarly situated
creditors and that allowing an extension will not work an extreme prejudice against
Debtor. However, this Court cannot overlook Plaintiff’s conduct with respect to
prongs one, two, and five of the doctrine of equitable tolling.
The creditor in this dispute, ATS, 	was served with actual notice of the
bankruptcy on November 2, 2005. The notice was mailed to American Telemarketing
Specialists, 924 West University Drive, Denton, TX, 76201-1893 and to ATS's
attorney John Breen, Esq., at 	3856 Lampton Place, Suite 100, New Albany, OH,
43054-8737. See Doc. 13. Further, this notice clearly establishes December 6, 2005
as the first date for the § 341 meeting of creditors. 	More importantly, the notice
establishes February 6, 2006, as the deadline for all creditors to file a complaint to
object to the discharge of certain debts.
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ATS alleges that it failed to receive notice because its address was incorrectly
listed on the schedule of creditors. However, it is well established that notice received
by the a creditor’s attorney constitutes notice to the creditor. Cent. Oil Field Supply
Co. of Logan v. Cover (In re Cover), 97 B.R. 375, 378 (Bankr. S.D. Ohio 1989) (citing
In re Walker, 91 B.R. 968, 976-977 (Bankr. D. Utah 1988)). ATS admits that its
attorney attended the 341 meeting of creditors held on December 6, 2005, and the
adjourned meeting on December 29, 2005. This serves as further evidence that actual
notice was, in fact, received by the attorney for ATS. Thus, even if, as ATS alleges,
its address was incorrectly listed, notice was served on its counsel. This constitutes
actual notice to the creditor.
ATS's attorney's appearance at two separate 341 meetings also goes directly to
the issue of constructive knowledge. ATS clearly had actual knowledge of Debtor’s
chapter 7 case, or else why would its attorney have made an appearance at both
scheduled § 341 meeting of creditors? ATS’s actual knowledge of a bankruptcy case
imposed an obligation on the creditor to make reasonable inquiry regarding the
relevant bankruptcy bar dates and deadlines imposed under the bankruptcy rules. See
Cover, 97 B.R. at 379; Woodson v. Tosenberger (In re Tosenberger), 67 B.R. 256, 259
(Bankr. N.D. Ohio 1986); see also Moody v. Bucknum, 951 F.2d 204, 207 (9th Cir.
1991) (O’Scannlain, J., concurring); Neeley v. Murchinson, 815 F.2d 345, 347 (5th
Cir. 1987). Notice of the 341 meeting and the deadline for filing complaints to
determine the dischargeability of certain debt was posted to the docket on November
3, 2005. These deadlines likewise were accessible via the PACER system as a matter
of public record. Thus, ATS had constructive knowledge of the deadline for
dischargeability and adequate time to protect its rights with regard to the same –
approximately three months – but failed to take any action until April 18, 2006, well
past the February 6, 2006 deadline established under Rule 4007 (c).
Using a somewhat novel approach, ATS asserts that an extension obtained by
the Chapter 7 Trustee should also apply to all creditors. Under this theory, ATS makes
a two pronged argument: 1) ATS failed to receive actual notice of the Trustee’s
extension; and 2) because ATS failed to receive notice of the Trustee’s extension it
was reasonable in remaining ignorant of the filing requirement. This argument goes
directly to prong five of the doctrine of equitable tolling under Maughan.
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The seminal case on this issue is Brady v. McAllister, 101 F.3d 1165 (6th Cir.
1996). In that case, the Sixth Circuit held that a Chapter 7 trustee has standing under
Rule 4007(c) to move for an extension of time to file a nondischargeability complaint
on behalf of all creditors. McAllister, 101 F.3d at 1170. In McAllister, the court
allowed an extension given to the trustee to apply to other creditors of the estate. Id
at 1169. However, that case can be distinguished from the present one because the
plain language of the order specifically provided that the trustee had been granted
additional time for filing "non-dischargeability complaints on behalf of the estate and
all unsecured or under secured creditors of the estate." Id.
In the present case, the trustee’s extension granted by the Court on January 26,
2006, extended the deadline to object to discharge to April 6, 2006. See Doc. 19. The
language of the order clearly indicated that the time period for filing objections was
extended only as to the trustee: 	"The matter of the Trustee’s Application for
Extension of Time to Object to Discharge of Debtor having come to the attention of
this Court, and it appearing that the Trustee needs more time to investigate into the
conduct of the Debtor, no adverse interest appearing, the last date for filing Objections
to Discharge of Debtor is extended from February 6, 2006, to April 6, 2006."
(Emphasis added) It should also be noted that the order granting the trustee’s motion
specifically states "order extending time to object to discharge" which clearly
contemplates 11 U.S.C. § 727, the language in the decree cannot be construed as an
"order extending time to file a complaint to determine the dischargeability" of certain
debts under 11 U.S.C. § 523(c).
Under the plain language of this Court’s January 26 order, the extension was
clearly applicable only to the trustee who had requested it. The extension given by
this Court to the trustee to file a complaint objecting to the discharge was clearly not
applicable to all creditors. See United States v. Ortman, 51 B.R. 7, 8-9 (Bankr. 1984).
Thus, ATS was bound by the original February, 6, 2006 deadline imposed by Rule
4007(c), and it was unreasonable for ATS to remain ignorant of the filing deadline for
nondischargeability complaints applicable to all other creditors.
Assuming that the order granting trustee’s extension did convey an intent that
it apply to all creditors, the deadline for filing Objections to Discharge of Debtor was
April 6, 2006. ATS filed the current Motion seeking an extension of time to object
to the discharge of its debt on April 18, 2006, more than twelve (12) days after the
trustee’s extended deadline had passed. Accordingly, ATS's Motion was untimely
even under the trustee's extended deadline.
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For the foregoing reasons this Court finds that the ATS’s 	Motion was not
timely filed pursuant to Rule 4007 (c) and that none of the equitable defenses apply.
Accordingly, the Motion will be denied. An order consistent with this memorandum
will be entered.
Copies to:
Timothy Heidel
1703 Riverwood Trail
Kings Mills, OH 45034
Steven E. Miller, Esq.
smiller@cbjlawyers.com
smcnamer@cbjlawyers.com
U.S. Trustee
ustpregion09.ci.ecf@usdoj.gov
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