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Sheedy v. Bankowski

United States District Court, D. Massachusetts

January 6, 2017

LAURA SHEEDY, Debtor/Appellant
CAROLYN BANKOWSKI, Standing Trustee, and WILLIAM HARRINGTON United States Trustee for Region I Defendants.



         Currently pending before the Court is Laura Sheedy's (“Sheedy”), appeal, pursuant to 28 U.S.C. § 158(a), of the Bankruptcy Court's[1] denial of her Motion for Extension of Time to File Notice of Appeal (“Motion for Extension”). Sheedy, the Debtor/Appellant, argued below and argues here on appeal that she failed to file her Notice of Appeal by the deadline due to “excusable neglect” under Federal Rule of Bankruptcy Procedure 8002(d)(1), and thus her Motion for Extension should have been granted. For the reasons discussed herein, the Court AFFIRMS the Bankruptcy Court's decision denying the Motion for Extension.

         I. BACKGROUND

         Sheedy's bankruptcy case has a long history, but the facts pertinent to the issue before this Court are simple. On June 8, 2010, Sheedy filed for relief under Chapter 13 of the United States Bankruptcy Code in the Bankruptcy Court. [ECF No. 12-1 at 4]. By 2015, the Bankruptcy Court had not confirmed Sheedy's Chapter 13 plan. As a result, on September 23, 2015, the Standing Chapter 13 Trustee, Carolyn Bankowski (“Bankowski”), filed a motion to dismiss the case. Id. at 8. The Standing Chapter 13 Trustee is a private individual appointed by the United States Trustee to oversee the administrative aspects of a bankruptcy case. U.S. Department of Justice, Executive Office for United States Trustees, Handbook for Chapter 13 Standing Trustees 1-1-1-4 (2012). The Bankruptcy Court granted Bankowski's motion to dismiss on October 20, 2015. [ECF No. 12-1 at 8]. Following this dismissal, on December 8, 2015, Bankowski submitted her Final Report and Account and Request for Discharge of Trustee (“Final Report”). Id. Sheedy filed an Objection to the Final Report, arguing that Bankowski had unlawfully deducted a fee of $7, 512.50. Id. at 12. After a hearing, the Bankruptcy Court overruled Sheedy's objection, and entered an order to that effect on March 10, 2016. Id. at 38.

         On Monday, March 28, 2016, Sheedy filed a Notice of Appeal late, and simultaneously filed a motion requesting an extension of time within which to file the Notice of Appeal. [ECF No. 12-1 at 8]. In the Motion for Extension, Sheedy's attorney claimed he missed the filing deadline because he was a music director in a church and was consumed by the duties of that job leading up to Eastertide, which began the weekend the Notice of Appeal was due. Id. at 42. He argued that missing the filing deadline by one business day was excusable neglect, allowable under Federal Rule of Bankruptcy Procedure 8002(d)(1). Id. Bankowski and the United States Trustee both filed Objections to the Motion for Extension. Id. at 44.

         The Bankruptcy Court denied the Motion for Extension, writing “[t]he Motion is denied for the reasons stated in the Objections to this Motion filed by the Chapter 13 Trustee and the United States trustee.” [ECF No. 9 at 58]. On April 10, 2016, Sheedy appealed the Bankruptcy Court's denial of the Motion for Extension. [ECF No. 1]. In this appeal, the parties disagree as to whether Sheedy's filing of her Motion for Extension one business day past the deadline set by Federal Rule of Bankruptcy Procedure 8002(a)(1) met the standard for excusable neglect.


         Federal Rule of Bankruptcy Procedure 8002(a)(1) states that “a notice of appeal must be filed with the bankruptcy clerk within 14 days after entry of the judgment, order, or decree being appealed.” A bankruptcy court may extend this time “upon a party's motion that is filed: (A) within the time prescribed by this rule; or (B) within 21 days after that time, if the party shows excusable neglect.” Fed. R. Bank. P. 8002(d)(1). Because Sheedy moved for an extension to file a Notice of Appeal after the expiration of the 14 day deadline, this appeal turns on whether Sheedy showed excusable neglect under Federal Rule of Bankruptcy Procedure 8002(d)(1)(B).


         This Court has jurisdiction to hear appeals from the Bankruptcy Court pertaining to “final judgments, orders, and decrees.” 28 U.S.C. § 158(a). An order denying a Motion for Extension under Federal Rule of Bankruptcy Procedure 8002, which governs deadlines for such motions, is a final order. Balzotti et al. v. RAD Investments, LLC et al. (In re Shepherds Hill Dev. Co., LLC), 316 B.R. 406, 413 (B.A.P. 1st Cir. 2004). District courts reviewing an appeal from a bankruptcy court generally review findings of fact for clear error, and conclusions of law de novo. See TI Fed. Credit Union v. DelBonis, 72 F.3d 921, 928 (1st Cir. 1995); Western Auto Supply Co. v. Savage Arms, Inc. (In re Savage Indus., Inc.), 43 F.3d 714, 719-20 n.8 (1st Cir. 1994).

         A bankruptcy court's denial of a motion for extension based on excusable neglect is reviewed for abuse of discretion. See Vasquez v. Cruz (In re Cruz), 323 B.R. 827, 829-30 (B.A.P. 1st Cir. 2005) (“[W]e review the bankruptcy court's determination regarding the existence of excusable neglect for abuse of discretion.”); Lure Launchers, LLC v. Spino, 306 B.R. 718, 721 (B.A.P. 1st Cir. 2004) (same); Eck v. Dodge Chem. Co. (In re Power Recovery Sys.), 950 F.2d 798, 801 (1st Cir. 1991) (“The question of excusable neglect is by its very nature left to the discretion of the bankruptcy court whose decision should not be set aside unless the reviewing court, a district court or court of appeals, has a definite and firm conviction that the court below committed a clear error of judgment.”). A court abuses its discretion “when a material factor deserving significant weight is ignored, when an improper factor is relied upon, or when all proper and no improper factors are assessed, but the court makes a serious mistake in weighing them.” Foster v. Mydas Assocs., Inc., 943 F.2d 139, 143 (1st Cir. 1991) (internal quotation marks omitted). Furthermore, “a court invariably abuses its discretion if it predicates a discretionary decision on a mistaken view of the law.” Mirpuri v. ACT Mfg., Inc., 212 F.3d 624, 627 (1st Cir. 2000).


         On appeal, Sheedy argues that such a small delay in filing is excusable neglect, and that her Motion for Extension should have been granted pursuant to Federal Rule of Bankruptcy Procedure 8002(d)(1). Moreover, Sheedy argues that she is not required to show “unique or extraordinary circumstances, ” and that, even if she is, a religious holiday is sufficiently unique. Bankowski argues that the delay in filing the Motion for Extension is not attributable to excusable neglect because inadvertence, absent unique or extraordinary circumstances, cannot meet the standard. Furthermore, Bankowski responds that Sheedy must provide a “satisfactory explanation” for the delayed filing, which she is unable to do.

         The term “excusable neglect” is broad, and whether a particular reason for delay qualifies as “excusable neglect” is determined by “latitudinarian standards.” Pratt v. Philbrook, 109 F.3d 18, 19 (1st Cir. 1997). “Congress plainly contemplated that the courts would be permitted, where appropriate, to accept late filings caused by inadvertence, mistake, or carelessness, as well as by intervening circumstances beyond the party's control.” Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 388 (1993).[2] The Supreme Court refused to “limit the ‘neglect' which might be excusable to those circumstances caused by intervening ...

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