Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-06183/USCOURTS-ca10-91-06183-0/pdf.json

Parties Involved:
Claudia K. Barnes
Appellee
Harold E. Barnes
Appellee
First National Bank in Okeene
Appellant

Document Text:

F l .L ~ LJ UNITED STATES COURT OF APPEALS Unit.ed States Court of Apl)C!als 

Tenth Circuit 

FOR THE TENTH CIRCUIT 

FIRST NATIONAL BANK IN OKEENE, 

Plaintiff-Appellant, 

v. 

HAROLD E. BARNES, 

Defendant-Appellee, 

and 

CLAUDIA K. BARNES, 

Defendant. 

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FEB 18 1992 

ROBERT L. HOECKER 

Clerk . 

No. 91-6183 

(D.C. No. 90-CV-1700-T) 

( W. D. Okla . ) 

ORDER AND JUDGMENT* 

Before MOORE, TACHA, and BRORBY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The case is therefore ordered 

Plaintiff appeals the district court's Order affirming the 

bankruptcy court's dismissal of Plaintiff's action objecting to 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 91-6183 Document: 010110222598 Date Filed: 02/18/1992 Page: 1 
discharge of indebtedness and denial of leave to amend the 

complaint. On appeal, Plaintiff argues that (1) because the time 

limitations set under Bankruptcy Rules 4004 and 4007 are not 

jurisdictional, the amendment and relation back rules of 

Bankruptcy Rule 7015 and Federal Rule of Civil Procedure 15 apply 

to permit amendment of the complaint; (2) the evidence does not 

support the bankruptcy court's decision to permit discharge; and 

(3) the bankruptcy court failed to make findings of fact in its 

order dismissing Plaintiff's complaint. We affirm. 

Defendant filed for Chapter 7 bankruptcy relief. Thereafter, 

Plaintiff filed an adversary proceeding objecting to Defendant's 

discharge under 11 U.S.C. § 727(a)(5). After a pretrial 

conference, Plaintiff filed a motion to amend the complaint to 

include a cause of action for denial of discharge under 11 u.s.c. 

§ 523(a)(6). The bankruptcy court denied leave to amend. After a 

trial on dischargeability pursuant to§ 727(a)(5), the bankruptcy 

court dismissed Plaintiff's adversary action. The district court 

affirmed the bankruptcy court after determining the bankruptcy 

court properly denied Plaintiff's motion to amend and the 

bankruptcy court's findings regarding dischargeability were not 

clearly erroneous. 

We review a bankruptcy court's factual 

clearly erroneous standard. 

90-8113, 90-8114, slip op. 

In re Coones, 

findings under a 

F.2d , Nos. 

at 2 (Jan. 3, 1992). We review the 

district court's and bankruptcy court's legal determinations de 

novo. Id.; In re Mullet, 817 F.2d 677, 679 (10th Cir. 1987). 

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Appellate Case: 91-6183 Document: 010110222598 Date Filed: 02/18/1992 Page: 2 
Plaintiff first argues that it should have been permitted to 

amend its complaint because the time limits under Bankruptcy Rules 

4004 and 4007 are not jurisdictional and the relation back rule of 

Federal Rule of Civil Procedure 15, as made applicable by 

Bankruptcy Rule 7015, apply. Plaintiff maintains that a claim for 

no discharge under S 523(a)(6) is factually similar to the stated 

claim under§ 727(a)(5). 

The bankruptcy court refused amendment on the grounds that a 

§ 523(a)(6) claim was untimely, see Rule 4007(c), and could not be 

added because it was not sufficiently similar to the§ 727(a)(5) 

claim to relate back to the date the complaint was filed. The 

district court concurred. 

We agree that the Rule 4007(c) filing requirements are 

jurisdictional. See In re Alton, 837 F.2d 457, 459 (11th Cir. 

1988)(per curiam); Neeley v. Murchison, 815 F.2d 345, 347 (5th 

Cir. 1987); In re American Sports Innovations (ASI), 105 B.R. 614, 

616 (Bankr. W.D. Wash. 1989); In re Booth, 103 B.R. 800, 802 

(Bankr. S.D. Miss. 1989). Contra In re Santos, 112 B.R. 1001, 

1006, 1009 (Bankr. 9th Cir. 1990). Because Plaintiff did not file 

a timely claim under§ 523(a)(6) in its original complaint, it may 

amend the complaint only if the claim relates back to the date the 

original complaint was filed. See In re Mufti, 61 B. R. 514, 517 

(Bankr. C.D. Cal. 1986). 

Grant or denial of leave to amend is within the discretion of 

the bankruptcy court. 

Inc., 401 U.S. 321, 

(Bankr. W.D. Ky. 1983) . 

Zenith Radio Corp. v. Hazeltine Research, 

330 (1971); In re Wahl, 28 B.R. 688, 690 

Rule 15(a) provides that leave to amend 

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Appellate Case: 91-6183 Document: 010110222598 Date Filed: 02/18/1992 Page: 3 
shall be freely given when justice requires. Before granting 

leave to amend, the bankruptcy court must inquire whether there 

was undue delay by the movant and undue prejudice to the party 

opposing amendment. See Farnan v. Davis, 371 U.S. 178, 182 (1962). 

In the absence of undue delay or prejudice, amendment may be 

permitted if the amendment claim arises out of the t r ansaction or 

occurrence set forth in the original complaint. In re Barnes, 96 

B.R. 833, 836 (Bankr. N.D. Ill. 1989). 

In this case, the bankruptcy court did not abuse its 

discretion in denying leave to amend. The facts forming the basis 

for the claim Plaintiff wished to assert in the amended complaint 

were known to Plaintiff before he moved to a.mend. See Rufenacht, 

Bromagen, & Hertz, Inc. v. Russell, 69 B.R. 394, 395 (D. Kan. 

1987). Plaintiff cited § 523(a)(6) on the cover sheet to its 

complaint. Such citation, however, was insufficient to raise a 

§ 523(a)(6) claim in the complaint. 

In addition, actions under§ 727 are different from actions 

under§ 523 as to the fact basis for the claims, the allegations, 

the type and measure of the burdens of proof, and the ultimate 

effect of a judgment in the plaintiff's favor. In re Harrison, 71 

B.R. 457, 459 (Bankr. D. Minn. 1987); Rufenacht, Bromagen, & 

Hertz, Inc., 69 B. R. at 395; In re McClellan, 60 B.R. 719, 721 

(Bankr. E.D. Va. 1986). Accordingly, an exception to discharge 

under § 523(a)(6) would not relate back to the original 

complaint's claim for objection to discharge under§ 727(a)(5). 

The bankruptcy court did not abuse its discretion in denying leave 

to amend. 

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Appellate Case: 91-6183 Document: 010110222598 Date Filed: 02/18/1992 Page: 4 
Plaintiff argues that the evidence before the bankruptcy 

court did not support the court's conclusion to dismiss the 

action. Plaintiff contends it was not reasonable to believe that 

only one calf had been born in three years and that Defendant sold 

registered Brangus cattle at regular cattle sales. The bankruptcy 

court concluded that Plaintiff's circumstantial evidence, when 

compared with Defendant's credible testimony, did not prove by a 

preponderance of the evidence that Defendant failed to account for 

Plaintiff's collateral. 

After reviewing the briefs and appendices of the parties, we 

agree with the district court that the bankruptcy court's findings 

were not clearly erroneous. Plaintiff failed to prove its case by 

a preponderance of the evidence. See In re Serafini, 938 F.2d 

1156, 1157 (10th Cir. 1991)(11 u.s.c. § 727(a)(2)). 

Plaintiff's final argument is that the bankruptcy court 

failed to make findings of fact in its order dismissing 

Plaintiff's complaint. The bankruptcy court did not make explicit 

fact findings. Rather, it stated 

the Court is not prepared to set forth in this opinion 

specific findings of fact, nor does it appear such 

findings are required to be made in this case. This 

matter is one which can be disposed of by a 

determination of which party bears the ultimate burden 

of proof. 

Federal Rule of Civil Procedure 52(a), as adopted by 

Bankruptcy Rule 7052, requires the bankruptcy court to make fact 

findings in all actions tried to the court. Rule 52(a) is 

designed to provide the appellate court with a clear understanding 

of the basis for the bankruptcy court's decision and to aid the 

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Appellate Case: 91-6183 Document: 010110222598 Date Filed: 02/18/1992 Page: 5 
bankruptcy court in its consideration and adjudication of the 

facts. See Colorado Flying Academy, Inc. v. United States, 724 

F.2d 871, 877 (10th Cir. 1984), cert. denied, 476 U.S. 1182 

(1986). Any findings of fact satisfy Rule 52(a) if they give the 

appellate court a clear understanding of the fact basis for the 

bankruptcy court's decision. Bell v. AT&T, 946 F.2d 1507, 1510 

(10th Cir. 1991). Findings may be sufficient irrespective of 

their form, Featherstone v. Barash, 345 F.2d 246, 250 (10th Cir. 

1965), and need not be detailed, Colorado Flying Academy, 724 F.2d 

at 878. 

The bankruptcy court's finding that Plaintiff did not meet 

its burden of proof was sufficient for this court to understand 

the bankruptcy court's fact basis for its decision. Thus, we 

conclude the bankruptcy court's fact findings were sufficient. 

The judgment of the United States District Court for the 

Western District of Oklahoma is AFFIRMED. 

Entered for the Court 

Deanell Reece Tacha 

Circuit Judge 

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