Facts

The debtor/defendant Nicole Marie Wright (hereinafter referred to as debtor) filed her bankruptcy on May 20, 2009. The debtor properly listed her former accountant, Sepehr Kamjoo (hereinafter referred to as plaintiff), as a general unsecured creditor. The Notice of Chapter 7 Bankruptcy Case Meeting of Creditor and Deadlines (hereinafter referred to as the Notice) set Aug. 17, 2009 as the deadline to file complaints for nondischargeability of debts.

The plaintiff was properly notified of the deadline as he was listed in the BANS Proof of Service to the Notice. Page 2 of the Notice has an explanation entitled: "Discharge of Debts" that provides: "The debtor is seeking a discharge of most debts, which may include your debt. A discharge means that you may never try to collect the debt from the debtor. If you believe that the debtor is not entitled to receive a discharge under Bankruptcy Code section 727(a) or that a debt owed to you is not dischargeable under Bankruptcy Code section 523(a) (2), (4), or (6), you must start a lawsuit by filing a complaint in the bankruptcy clerk's office by the "Deadline to File a Complaint Objecting to Discharge of the Debtor or to Determine Dischargeability of Certain Debts" listed on the front side. The bankruptcy clerk's office must receive the complaint and any required filing fee by that deadline."

The plaintiff appeared at the debtor's 341(a) meeting on June 17, 2009, and questioned defendant. Thereafter, plaintiff retained counsel. On July 31, 2009, with less than the mandatory 21 days notice, the plaintiff filed an untimely motion for 2004 examination of debtor and for production of documents unilaterally setting the 2004 examination on Aug. 13, 2009, and a 36-point document demand for Aug. 12, 2009, less than 13-14 days of notice – making it virtually impossible for the debtor to file protective orders (not less than 11 days before the examination).

The plaintiff cited the Aug. 17, 2009, deadline in his 2004 motion. "Local Bankruptcy Rule 2004-1(c) provides that notice of a 2004 examination should be noticed 21 days out, "unless otherwise ordered by the court." In the case at bar, since the deadline for nondischargeability claims is currently set for Aug. 17, 2009, and debtor is unwilling to stipulate to a short continuance of the date, Creditor Kamjoo respectfully requests that the 2004 examination be scheduled with less than 21 days notice." 2004 Motion, Page 3, lines 25-28, Page 4, 1-3.

On Aug. 17, 2009, the plaintiff went on PACER to check the ECF docket to determine which parties were entitled to receive electronic mail notice from the court. The plaintiff e-filed his proof of service on Aug. 19, 2009, attesting it. On Aug. 18, 2009, 9 minutes past the deadline, the plaintiff e-filed an untimely complaint for determination of nondischargeability of debts and for objection to discharge pursuant to 11 U.S.C. section 523 (a)(2)(A), 11 U.S.C. section 523(a)(2)(B), 11 U.S.C. section 523(a)(6), 11 U.S.C. section 727(a)(2), 11 U.S.C. section 727(a)(3), 11 U.S.C. section 727(a)(5).

PLAINTIFF'S CONTENTIONS:
The plaintiff claimed that his attorney attempted to file the complaint on Aug. 17, 2009, at 11:50 p.m., but that there was a technical difficulty in e-filing the complaint. The plaintiff cited cases, which apply equitable principles to relieve a party from a late filed complaint. Plaintiff contended that the complaint should not be dismissed because the debtor should not be entitled to a fresh start due to her dishonesty, unscrupulous acts and unclean hands. In consideration with these factors, plaintiff should not be penalized for a technical failure. Plaintiff also disputed the defense's contention that the technical problems resulted from plaintiff's attempt to file a complaint while logged into PACER. Plaintiff's counsel offered to subpoena his records from CM/ECF to show that plaintiff was logged into the correct program, but the judge in oral argument stated that the complaint was late regardless.

DEFENDANT'S CONTENTIONS:
No reasons were provided in the 2004 motion for why plaintiff sat on his hands for 2½ months since May 20, 2009, and waited until the last minute to move this court for a 2004 examination – depriving the debtor of her statutory 21-day notice. No reasons were provided in the 2004 motion why it was not brought on an ex parte basis for shortened notice. Accordingly, this court denied the plaintiff's 2004 motion.

While the plaintiff cited cases that applied equitable principles to relieve a party from a late filed complaint, none of the cases are within the Ninth Circuit. Although the Supreme Court in Kontrick v. Ryan, 124 S.Ct. 906 (2004) found that the Fed.RBankr.P. 4004 ("Rule 4004") was not jurisdictional, it also expressly stated that it did not address whether the strict time limitation of Rule 4004 "could be softened on equitable grounds," Kontrick, 124 S.Ct. at 916. Prior to Kontrick, courts within the Ninth Circuit also held that "the deadlines for filing dischargeability complaints and objections to discharge set forth in Rules 4007(c) and 4004(a) are not jurisdictional time limits." Schunck v. Santos (In re Santos), 112 B.R. 1001, 1006 (9th Cir. BAP 1990); Schreiber v. Halstead (In re Halstead), 158 B.R. 485, 487 (9th Cir. BAP 1993).

The BAP further held that application of equitable principles to relieve a party from the filing deadlines is not available in full measure. "Any equitable doctrines must be applied in a manner consistent with the plain language of the rules and the purposes served by those rules and with a mind to the strict construction of the rules consistently followed in the Ninth Circuit." Santos, 112 B.R. at 1006; see also CBS Inc. v. Folks (in re Folks), 211 B.R. 378, 389 (9th Cir. BAP 1997) ("The equitable power of the court to lift the statutory time bar within which a complaint objecting to discharge must be filed is limited. It may only be exercised if the court finds fraud or injustice has prevented the creditor from timely filing its complaint").

In Santos, the BPA held that the plain language of Rules 4004 and 4007 "precludes the application of the doctrine of equitable tolling . . . Rules 4007(c) and 4004(a) clearly state that the 60-day time period begins to run on the date of the section 341(a) meeting of creditors. The running of this period is not dependant on the discovery or accrual of a cause of action as it would be in a statute to which tolling is more appropriately applied." Id. The doctrine of equitable estoppel, however, could be strictly applied. Equitable estoppel requires reasonable reliance on the defendant's words or conduct in forebearing from taking the necessary action within the applicable time period.

A plaintiff cannot reasonably rely upon the defendants' representation that they would extend a deadline when the applicable rules clearly provide that a motion to extend the bar date must be filled prior to the expiration of the bar date and only the court may extend the deadline. To determine otherwise would allow the parties to determine among themselves to what extent the bar would be extended and would remove the court control over extensions which is mandated by the rules. Id. at 1007-1008[1].

The BAP further acknowledged that it "has consistently held that there is no discretion to enlarge the time periods at issue on the basis of excusable neglect when the request is made after the time period has expired." Id. at 1008.

In the instant case, while the plaintiff requests the court to apply equitable principles to relieve him from the untimely filing of the complaint. Notwithstanding, as noted above, the BAP has held that the doctrine of equitable tolling is not applicable. In addition, for purposes of equitable estoppel, the plaintiff makes no assertions that debtor said or did anything, which caused him not to timely file the complaint. Rather, the plaintiff contended that the complaint should not be dismissed, because the debtor is not entitled to a "fresh start" because of her alleged dishonesty and unscrupulous acts and that he should not be penalized for a technical failure. Opposition at 19.

However, the allegations regarding debtor have yet to be proven and cannot serve as a basis to excuse plaintiff's failure to comply with the bar dates. With respect to the technical problem, the review of the e-mails attached to the opposition indicates that the problem was not due to any outrage as defined at section 3-12 of the CM/ECF Procedures. Rather, the plaintiff's technical problem appears to have been due to plaintiff's attempt to file the complaint while logged into PACER. Exhibit 5 to Opposition at 3.

Consequently, the plaintiff cannot seek relief for the untimely filing pursuant to section 3-12. In addition, section 3-3 of the CMIECF Procedures (emphasis added) governs the effective date of a filing and provides in relevant part:

(a) Effectiveness of Electronically Filed Document. The electronic filing of a document, together with the transmission by the court of a Notice of Electronic Filing to the user filing the document, constitutes the filing of the document for all purposes of the FRBP and the court's Local Bankruptcy Rules and constitutes entry of the document on the docket by the clerk under FRBP 5003. The official records of all document is the electronic recording of the documents as stored by the court

(b) Time of Filing. Filing of a document electronically does not alter the filing for that document. Filing must be completed before midnight, Pacific Standard or Daylight Saving Time, whichever is then in effect, to be considered timely filed on that day. The date and time of filing is stated on the Notice of Electronic Filing from the court. This time, stamp is based on the time of the electronic receipt of the document by the court, and not by the time of transmission by the ECF User.

It is undisputed that the filing of the complaint was not prior to midnight on Aug. 17, 2009 as required by section 3-3(b); the Notice of Electronic Filing (NEF) of the complaint states that it was filed on Aug. 18, 2009 at 12:09 a.m. Although the plaintiff's counsel may have been trying to transmit the complaint 10 minutes prior to midnight on Aug. 17, 2009, the time stamp on the NEF is not based on the transmission of the document. Consequently, even though filed only nine minutes late, the complaint was untimely filed pursuant to the CM/ECF Procedures.

Damages

According to plaintiff's counsel: the amount of damages was uncertain as the underlying lawsuit was yet to be proven. According to defense counsel: damages were in excess of $80,000.

Result

Defendant's motion to dismiss was granted.

Other Information

FILING DATE: Aug. 18, 2009.