In Re: Christina Traneil Taylor
Filing
8
ORDER REMANDING CASE TO BANKRUPTCY COURT. Signed by Judge Susie Morgan. (Copy to Bankruptcy Court, Bankruptcy Judge, U.S. Trustee)(cbn)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CIVIL ACTION
IN RE CHRISTINA TRANEIL TAYLOR
No. 12-1908
SECTION “E”
ORDER AND REASONS
Before the Court is appellant Christina Taylor’s (“Taylor”) appeal1 from the United
States Bankruptcy Court for the Eastern District of Louisiana (“the Bankruptcy Court”).
Taylor is appealing a May 16, 2012 order in which the Bankruptcy Court denied Taylor’s
April 23, 2012 amended motion to reopen her case in that court. For the reasons set forth
below, the Court remands this action for further explanation of the reasoning behind the
May 16, 2012 order.
BACKGROUND
On May 4, 2011, Taylor filed a voluntary petition for relief under Chapter 7 of the
United States Bankruptcy Code.2 In completing Schedule F of that petition, Taylor listed
a number of creditors holding unsecured nonpriority claims.3 The third creditor listed on
Taylor’s Schedule F is “First Consumers Finance,” with an address listed as 211 Capitol
Street, Denham Springs, LA 70726.”4
Taylor listed her debt to this creditor as
approximately $9,000. On August 5, 2011, Taylor’s debts were discharged under 11 U.S.C.
1
See R. Doc. 1 (Notice of appeal); R. Doc. 3 (Taylor’s appellant’s brief).
2
2:11-bk-11453, R. Doc. 1.
3
2:11-bk-11453, R. Doc. 12 at p. 11-13.
4
Id.
1
§ 727.5 The case was closed shortly thereafter.
On February 13, 2012, Taylor filed a “Motion to Reopen Case” in the Bankruptcy
Court.6 In this motion, Taylor argued that she erroneously listed First Consumers Finance
on her Schedule F when she meant to list First Consumers Financial, LLC (“First
Consumers Financial”), the creditor to whom she actually owed the $9,000.7 She went on
to explain that, because First Consumers Financial takes the position her debt was not
discharged, First Consumers Financial continued to garnish her wages throughout the
bankruptcy proceeding and after.8 In her prayer for relief in the motion filed in February,
Taylor requested that her case be reopened “for the limited purpose of avoiding the judicial
lien of First Consumer Financial.”9 First Consumers Financial opposed the motion to
reopen, explaining that it is not affiliated with First Consumers Finance10 and did not
receive timely notice of Taylor’s bankruptcy,11 and thus that her debt to First Consumers
Financial was never properly discharged.12 After a hearing on March 7, 2012,13 the
5
2:11-bk-11453, R. Doc. 16.
6
2:11-bk-11453, R. Doc. 18.
7
2:11-bk-11453, R. Doc. 18.
8
Id.
9
Id.
10
First Consumers Financial is located at 14580 Florida Blvd., Baton Rouge, LA 70819. See 2:11bk-11453, R. Doc. 23 at p. 2.
11
Counsel for First Consumers Financial explained in opposition to the motion to reopen that he
first learned of Taylor’s bankruptcy on August 21, 2011, after Taylor’s bankruptcy case was closed. See
2:11-bk-11453, R. Doc. 23 at p. 2.
12
2:11-bk-11453, R. Doc. 23.
13
See 2:11-bk-11453, R. Doc. 49 (Transcript from March 7, 2012 hearing).
2
Bankruptcy Court, apparently agreeing that Taylor’s failure to list the correct creditor on
her Schedule F meant she could not discharge her debt against the unnamed creditor,
entered an order denying Taylor’s motion to reopen on March 12, 2012.14 Taylor then filed
a notice of appeal of the March 12, 2012 order,15 but voluntarily dismissed her appeal16 in
favor of filing an “Amended Motion to Reopen Case.”17 Taylor’s amended motion to reopen
was similar to her first motion to reopen, but requested different relief.18 In this amended
motion to reopen, Taylor prayed that her case be reopened so she could file an “adversarial
complaint to determine dischargeability.”19 After a hearing on May 16, 2012,20 the
Bankruptcy Court denied Taylor’s amended motion to reopen that same day.21 Taylor
subsequently filed this appeal. Taylor’s appellant’s brief was filed on August 7, 2012.22 First
Consumers Financial’s appellee’s brief was filed on August 20, 2012.23 Taylor’s appellant’s
reply brief was filed on September 4, 2012.24
14
2:11-bk-11453, R. Doc. 24.
15
2:11-bk-11453, R. Doc. 26.
16
2:11-bk-11453, R. Doc. 29.
17
2:11-bk-11453, R. Doc. 32.
18
Id.
19
Id.
20
2:11-bk-11453, R. Doc. 50 (Transcript from May 16, 2012 oral argument).
21
2:11-bk-11453, R. Doc. 39.
22
R. Doc. 3.
23
R. Doc. 6.
24
R. Doc. 7.
3
ANALYSIS
The Court has jurisdiction to hear this appeal pursuant to 28 U.S.C. § 158(a)(1),
which authorizes appellate review of final orders, judgments and decrees of a United States
Bankruptcy Court entered consistent with 28 U.S.C. § 157. 28 U.S.C. § 158(a)(1). The
standard of review applicable to this bankruptcy appeal is identical to the standard of
review employed by a court of appeal reviewing a district court proceeding. See 28 U.S.C.
§ 158(c)(2); see also In re Nat'l Gypsum Co., 208 F.3d 498, 504 (5th Cir. 2000). As a
result, this Court reviews the Bankruptcy Court's conclusions of law de novo, its findings
of fact for clear error, and any mixed questions of law and fact de novo. In re Nat'l
Gypsum, 208 F.3d at 504. Only upon a “definite and firm” conviction that the Bankruptcy
Court erred will this Court reverse the factual findings of the Bankruptcy Court. See In re
Quinlivan, 434 F.3d 314, 318 (5th Cir. 2005) (citing Anderson v. City of Bessemer City,
N.C., 470 U .S. 564, 573 (1985)). When sitting as an appellate court, a district court “may
affirm, modify or reverse a bankruptcy court's judgment, order or decree or remand with
instructions for further proceedings.” Bankr. R. 8013. When an appellate court has “no
notion of the basis for a [lower] court's decision because its reasoning is vague or simply left
unsaid, there is little opportunity for effective review.” Liberty Mut. Ins. Co. v. Brown, 86
F. App'x 718, 719 (5th Cir. 2004) (unpublished) (citing McInrow v. Harris Cnty., 878 F.2d
835, 836 (5th Cir. 1989)). In such cases, the appellate has “not hesitated to remand the case
for an illumination of the court’s analysis through some formal or informal statement of
reasons.” Id. (citing Myers v. Gulf Oil Corp., 731 F.2d 281, 284 (5th Cir. 1984); see also
Thule Drilling ASA v. Schimberg, 290 F. App’x 745, 747 (5th Cir. 2008) (unpublished)
(remand appropriate where the appellate court was “uncertain about the rationale for the
4
[lower] court’s decision”)) .
Pursuant to 11 U.S.C. § 523(a)(3), a debtor lists her debts in conjunction with a
bankruptcy petition in order to give her creditors an opportunity to file a request for a
determination of non-dischargeability of those debts. 11 U.S.C. § 523(a)(3); see also 11
U.S.C. § 727(a)-(b) (providing mechanism for discharge of properly scheduled debts).
Failure to timely list or schedule a debt generally means the debt is not dischargeable
through bankruptcy, unless it is determined that the creditor had “notice or actual
knowledge” of the bankruptcy case such that the creditor could participate in a timely
fashion. See In re Kenvadis, 249 F.3d 383, 386 (5th Cir. 2001). 11 U.S.C. § 523(a)(3) is to
be “construed with an eye toward the equitable principles which underlie the bankruptcy
law.” In re Stone, 10 F.3d 285, 290 (5th Cir. 1994). A court considering whether a debtor’s
failure to timely list a creditor will prevent the discharge of the unscheduled debt must
examine three factors: “(1) the reasons the debtor failed to list the creditor, (2) the amount
of disruption which would likely occur, and (3) any prejudice suffered by the listed creditors
and the unlisted creditor in question.” Id. (citing Robinson v. Mann, 339 F.2d 547, 549-550
(5th Cir. 1964)).
Based on the available record, the Court cannot determine whether the Bankruptcy
Court considered these Stone/Robinson factors in denying Taylor’s amended motion to
reopen, whether the Bankruptcy Court’s decision was based on procedural irregularities
with that amended motion to reopen,25 or whether that decision was based on some
25
In its appellee’s brief, First Consumers Financial argues that Taylor’s appeal is untimely under
Bankruptcy Rule 8002, which provides that a notice of appeal must be filed within 14 days of the entry of
the order appealed from. See R. Doc. 6 at pp. 9-10. First Consumers Financial argues that the instant
appeal is not really an appeal of the M ay 16, 2012 order, but actually an appeal of the M arch 12, 2012
order, and thus Taylor’s notice of appeal was filed several weeks late. First Consumers Financial
5
combination of the two, or on something else entirely. Because the reasoning behind the
Bankruptcy Court’s legal conclusions in the May 16, 2012 order is unclear, the Court cannot
say whether the Bankruptcy Court’s legal conclusions were correct and/or whether the
Bankruptcy Court’s factual findings were clearly erroneous.26
CONCLUSION
Accordingly, IT IS ORDERED that this matter be and hereby is REMANDED to
the United States Bankruptcy Court for the Eastern District of Louisiana for further
explanation of the reasoning behind the May 16, 2012 order.
21st
New Orleans, Louisiana, this ____ day of February, 2013.
_____________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
characterizes the May 16, 2012 order as a denial of a motion for relief under Federal Rule of Civil
Procedure 60 from the March 12, 2012 order. In response, Taylor argues in her appellant’s brief, as she
did at oral argument in the Bankruptcy Court, that the two motions are substantively different and sought
different relief, and thus her most recent notice of appeal was timely. Because it is remanding this action,
the Court need not resolve this issue at this time.
26
The Court takes this opportunity to note that this is not the first time either Taylor’s attorney or
First Consumers Financial has encountered this issue. For example, in In Re Picou, No. 04-12494, 2005
W L 4677820, at *1-2 (Bankr. E.D. La. Aug. 10, 2005) (Brown, J.), the debtor inadvertently listed a
Portland, Oregon based business called First Consumer Bank as an unsecured creditor instead of the
Baton Rouge, Louisiana based First Consumers Financial. After the debtor’s properly scheduled debts
were discharged and the case was closed, the debtor’s attorney filed a motion to avoid First Consumers
Financial’s garnishment of the debtor’s wages - which garnishment proceeding was instituted prior to the
initiation of the bankruptcy proceeding and continued throughout the bankruptcy proceeding and after and to hold First Consumers Financial in contempt for attempting to collect a debt the debtor claimed had
been discharged. Id. The Bankruptcy Court considered the Stone court’s statement that § 523(a) is to be
construed with an eye toward equity and examined the three Stone/Robinson factors. Id., at *2. After
exam ining these factors and noting that the debtor’s failure to schedule her debt to First Consumers
Financial did not appear to be intentional and noting the prejudice First Consumers Financial would
suffer if it were not allowed to contest the dischargeability of the debtor’s debt, the Bankruptcy Court
decided not to reopen the debtor’s case, but ordered First Consumers Financial to file a complaint
objecting to the dischargeability of the debt within a certain period of time. Id., at *2-3. This Court takes
no position on whether this is the approach the Bankruptcy court should take with respect to this case, but
instead points to In re Picou as an example of the kind of reasoned decision the Court requires to be able
to adequately assess any appeal Taylor may file in the future.
6
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?