Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-02548/USCOURTS-ca10-87-02548-0/pdf.json

Parties Involved:
Cheryl Lynn Green
Not Party
Kevin Scott Green
Appellee
Yukon Self Storage Fund
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

In Re: KEVIN SCOTT GREEN ) 

and CHERYL LYNN GREEN, ) 

) 

Debtors, ) 

) -------------------------------) ) 

YUKON SELF STORAGE FUND, ) 

) 

Plaintiff-Appellant, ) 

) 

FILED 

Unit.ed Stauia Court ot Appeals Tenth Cirl'llit 

JUNO 51989 

ROBERT L. HOECKER 

Clerk 

v. ) 

) 

No. 87-2548 

KEVIN SCOTT GREEN, ) 

) 

Defendant-Appellee. ) 

Appeal from the United States District Court 

For the Western District of Oklahoma 

D.C. No. CIV-87-1473-R 

Susan Bates Ward of John Lampton Belt & Associate~, Oklahoma City, 

Oklahoma, for Plaintiff-Appellant. 

Jerry J. Dunlap II, Oklahoma City, Oklahoma, for DefendantAppellee. 

Before MOORE, ANDERSON, and EBEL, Circuit Judges. 

MOORE, Circuit Judge. 

Appellate Case: 87-2548 Document: 01019785636 Date Filed: 06/05/1989 Page: 1 
This is an appeal from the district court's affirmance of a 

bankruptcy court judgment dismissing a creditor's complaint to 

determine dischargeability as untimely. The question is whether a 

creditor who does not receive formal notice of the filing of a 

petition for bankruptcy relief under Chapter 7, but who has actual 

knowledge shortly after the filing, is bound by the bar date for 

filing complaints to determine dischargeability. 

question is answered in the affirmative. 

We hold the 

The creditor, Yukon Self Storage Fund, asserted a claim 

against the debtor, Kevin Scott Green, in state court. While the 

creditor was seeking sanctions against Mr. Green for failure to 

respond to discovery, Mr. Green filed a petition for relief under 

Chapter 7 of the Bankruptcy Code. 1 As a consequence, Yukon's 

request for sanctions was stayed in the state proceeding. 2 

For reasons not pertinent ~ere, Mr. Green did not list Yukon 

as a creditor, but he did list another creditor from whom Yukon's 

alleged debt arose. Because Yukon was not separately scheduled, 

it did not receive a formal notice of the filing and the meeting 

of creditors set pursuant to 11 u.s.c. § 341. 

Despite the failure of formal notice, Yukon learned of Mr. 

Green's petition before the September 2, 1986 bar date for the 

filing of complaints to determine dischargeability. In a hearing 

conducted in the bankruptcy court, Yukon's general partner 

1At the same time, other entities with which Mr. Green was 

affiliated also filed petitions for relief in which various 

creditors asserting claims against Mr. Green were scheduled. 

2we were advised of these circumstances at oral argument. 

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Appellate Case: 87-2548 Document: 01019785636 Date Filed: 06/05/1989 Page: 2 
testified that he had received copies of Mr. Green's bankruptcy 

papers from his attorney sometime in August 1986. In addition, 

the time sheets of Yukon's counsel disclosed a billing statement 

for "research regarding bankruptcy motion to debtor" on August 11, 

1986, and for research on the 26th and 27th of August 3 concerning 

dischargeability of Mr. Green's debt. The instant complaint was 

prepared by counsel on August 29, 1986, but for some unexplained 

reason, its filing was delayed until September 4, 1986, two days 

after the bar date. 

On the basis of these facts, the bankruptcy court found Yukon 

had actual timely notice of the filing and the bar date and 

dismissed Yukon's complaint. 4 The district court determined this 

finding was supported by evidence ''not substantially disputed" and 

concluded the finding was not clearly erroneous. The court thus 

refused to overturn that finding. Fed. R. Bankr. P. 8013; C.I.T. 

Fin. Servs., Inc. v. Pesta, 866 F.2d 364 (10th Cir. 1989). 

The district court further concluded, as a matter of law, 

because of its actual knowledge of the bar date, Yukon was not 

deprived of due process although _it did not receive formal notice. 

Additionally, the district court pointed out 11 u.s.c. 

§ 523(a)(3)(A) contemplates that the debt of a creditor with 

3Neither the bankruptcy papers nor the billing statements have 

been included in the record on appeal. The billing statements are 

contained in an addendum to the appellant's brief, but the papers 

were not presented to the district court. 

4The bankruptcy court specifically found that Yukon had obtained a 

copy of "the Notice of the First Meeting of Creditors." We assume 

the court referred to the notice of the§ 341 meeting which would 

contain the notice of the bar date, (see Official Form 16) but the 

document is not included in the record on appeal. 

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Appellate Case: 87-2548 Document: 01019785636 Date Filed: 06/05/1989 Page: 3 
"actual knowledge of the [bankruptcy] case 

for . • timely filing [of a proof of claim]" will be 

notwithstanding failure of formal notice. 

in time 

discharged 

11 u.s.c. 

§ 523(a)(3)(A) (emphasis added). Thus, the court reasoned the 

Code "clearly contemplates" that· actual notice of a bar date 

received in time to file a complaint to determine dischargeability 

will foreclose an untimely complaint. We agree with the district 

court and the reasoning it employed in support of that conclusion. 

Yukon now argues the district court erred because "no 

evidence was adduced to support the finding that Yukon was aware 

of the bar date." Beyond those facts set forth already, nothing 

was presented to the bankruptcy court on this issue. Yukon bears 

the burden of showing the bankruptcy court's findings are clearly 

erroneous, MBank Dallas, N.A. v. O'Connor, 808 F.2d 1393, 1397 

(10th Cir. 1987), and it failed to include in the record on appeal 

either the documents upon which the bankruptcy court relied for 

its finding or any other evidence indicating the bankruptcy 

court's findings were clearly erroneous. Consequently, Yukon's 

contention is without substance. 

Yukon asserts due process requires adequate notice to a 

creditor before its rights can be adversely affected, citing 

Reliable Elec. Co. v. Olson Constr. Co., 726 F.2d 620 (10th Cir. 

1984). As did the district court, we find this case remarkably 

distinguishable from Reliable. There are two reasons which make 

Reliable inapposite. 

First, the quality of notice is entirely different in the two 

cases. In Reliable the creditor itself received no notice at all, 

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Appellate Case: 87-2548 Document: 01019785636 Date Filed: 06/05/1989 Page: 4 
and counsel for the creditor received only one telephone call 

indicating the debtor had filed a petition for Chapter 11 relief. 

Reliable, 726 F.2d at 621. In light of these facts, we said: 

As specifically applied to bankruptcy reorganization 

proceedings, ..• a creditor, who has general knowledge 

of a debtor's reorganization proceeding, has no duty to 

inquire about further court action. The creditor has a 

"right to assume" that he will receive all of the 

notices required by statute before his claim is forever 

barred. New York v. New York, New Haven & Hartford R.R. 

Co., 344 U.S. 293, 297, 73 S. Ct. 299, 301, 97 L. Ed. 

333 (1953). 

Reliable, 726 F. 2d at 622 (emphasis added). Under this 

circumstance, we held the single telephone call to the creditor's 

counsel by the debtor's attorney was insufficient to constitute 

actual knowledge. 5 By contrast, in this case both Yukon and its 

counsel had actual notice of the bar date. 

Second, the statutory and substantive differences between 

creditor's rights under Chapters 11 and 7 cannot be gainsaid. As 

we indicated in Reliable, a Chapter 11 plan of arrangement cannot 

discharge the claim of a Greditor who has not received "notice of 

the proceeding or of the confirmation hearing." Id. at 623. We 

held that langua9e of the pertinent statute, 11 U.S.C. § 114l(c) 

and (d), 6 which would appear to allow the discharge of the debt of 

5see also Rowe Int'l, Inc. v. Herd, 840 F.2d 757 (10th Cir. 1988). 

611 u.s.c. § 1141 provides in pertinent part: 

(c) After confirmation of a plan, the property 

dealt with by the plan is free and clear of all claims 

and interests of creditors ••• except as otherwise 

provided in the plan or in the order confirming the 

plan. 

(d)(l) Except as otherwise provided in this 

subsection, in the plan, or in the order confirming the 

plan the confirmation of a plan--

(Continued to next page.) 

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Appellate Case: 87-2548 Document: 01019785636 Date Filed: 06/05/1989 Page: 5 
a creditor without actual notice failed to meet due process 

muster. Id. In distinction, however,. the pertinent statutory 

provision in Chapter 7, 11 u.s.c. § 523(a)(3)(A), 7 specifically 

states that the debt of a creditor with actual, timely notice can 

be discharged. Because of the basic difference in the notice 

provisions of the relative statutes, the rule that governs notice 

and dischargeability in Chapter 11 does not apply in Chapter 7. 

Indeed, because of the specific language of § 523(a)(3)(A) 

allowing discharge of the debt of a creditor with actual, timely 

notice, a Chapter 7 creditor holding an unsecured claim does not 

have the "right to assume'' receipt of further notice. When a 

creditor receives notice of a bar date in time sufficient to act, 

the requirement of due ·process is satisfied. Cumberline 

Auctioneers v. Rider, 89 Bankr. 137, 140 (D. Colo. 1988). 8 

(Continued from previous page.) · (A) discharges the debtor from any debt that arose 

before the date of such confirmation ... whether or 

not--

(i) a proof of the claim based on such debt is 

filed or deemed filed under section 501 of this title. 

711 u.s.c. § 523(a)(3)(A) provides in part: 

(a) A discharge under section 727, 1141, or 1328(b) of 

this title does not discharge an individual debtor from 

any debt--

(3) neither listed nor scheduled under section 

521(1) of this title, with the name, if known to the 

debtor, of the creditor to whom such debt is owed, in 

time to permit--

(A) ••. timely filing of a proof of claim, 

unless such creditor had notice or actual knowledge of 

the case in time for such timely filing. 

8rn contrast with Reliable, other courts have also held that 

(Continued to next page.) 

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Appellate Case: 87-2548 Document: 01019785636 Date Filed: 06/05/1989 Page: 6 
Standing on the formality of notice from the court will not 

excuse a creditor with actual notice of a bar date from its 

effect. Indeed, a Chapter 7 creditor with such notice has a duty 

to protect itself from being adversely affected. Cumberline, 89 

Bankr. at 140; Walker v. Wilde, 91 Bankr. 968, 980 (D. Utah 1988). 

Yukon also contends the bankruptcy court improperly taxed 

costs in this case. The issue was not considered and ruled upon 

by the district court; therefore, we are unwilling to do so. 

Farmers Ins. Co. v. Hubbard, 869 F.2d 565, 570 (10th Cir. 1989). 9 

AFFIRMED. 

(Continued from previous page.) 

Chapter 11 creditors with actual notice of a bar date would be 

similarly bound. Neeley v. Murchison, 815 F.2d 345, 347 (5th Cir. 

1987); Byrd v. Alton, 837 F.2d 457, 460 (11th Cir. 1988). 

9we could not fault the bankruptcy court's reasoning if we did 

consider the issue, however. 

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Appellate Case: 87-2548 Document: 01019785636 Date Filed: 06/05/1989 Page: 7