F I L E D

United States Court of Appeals

Tenth Circuit

DEC 23 2002

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

IN RE: RICHARD W. PARKER,

Debtor.

_________________________

JENEE MARIE WATSON,

Appellant,

v.

RICHARD W. PARKER,

Appellee.

No. 01-3251

Appeal from the United States Bankruptcy

Appellate Panel

(BAP No. KS-00-066)

(KS Bankruptcy Court No. 96-42822)

Submitted on the Briefs:

John Kurtz of Hubbard & Kurtz, L.L.P., Kansas City, Missouri, filed briefs for

Appellant.

Richard W. Parker, Appellee, filed a brief pro se.

Before SEYMOUR, ANDERSON and O’BRIEN, Circuit Judges.
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SEYMOUR, Circuit Judge.

The issue in this case is whether the bankruptcy court properly reopened a

bankruptcy case to discharge a claim. The bankruptcy court permitted debtor

Richard W. Parker to reopen his Chapter 7 case and amend his schedules to

include a legal malpractice claim that Jenee Watson, a former client, held against

him. Ms. Watson appeals the decision of the bankruptcy appellate panel

affirming the bankruptcy court. She contends the debtor should have been

precluded by various equitable principles from reopening his case. Alternatively,

she maintains the claim is nondischargeable because it arose after the debtor’s

discharge and/or because her claim otherwise met the requirements of

nondischargeability under the bankruptcy code. We affirm.

There are two issues of first impression in this case. Because we agree

with the position and reasoning of the bankruptcy appellate panel’s published

decision on both of these matters, see Watson v. Parker (In re Parker), 264 B.R.

685 (10th Cir. BAP 2001), we write only to make clear the position of the circuit

on these two issues.

The first issue we address is whether a debtor’s intent in failing to schedule

a claim is relevant to a bankruptcy court’s decision to reopen a case in which

there are no assets and no bar date. The circuits are split between applying
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equitable principles which include consideration of the debtor’s intent, or a more

mechanical analysis which does not. Compare Faden v. Ins. Co. of North

America (In re Faden), 96 F.3d 792, 797 (5th Cir. 1996); Samuel v. Baitcher (In

re Baitcher), 781 F.2d 1529, 1534 (11th Cir. 1986); and Stark v. St. Mary’s

Hospital (In re Stark), 717 F.2d 322, 323-34 (7th Cir. 1983) (per curiam), with

Zirnhelt v. Madaj (In re Madaj), 149 F.3d 467, 471 (6th Cir. 1998); Judd v. Wolfe

(In re Judd), 78 F.3d 110, 115-16 (3d Cir. 1996); and Beezley v. Calif. Land Title

Co. (In re Beezley), 994 F.2d 1433 (9th Cir. 1993) (per curiam). 

After reviewing the cases, we are persuaded that the more mechanical

approach is “better reasoned and more faithful to the language of the Bankruptcy

Code.” Parker, 264 B.R. at 694. As the bankruptcy appellate panel explained:

Pursuant to § 727(b), the Debtor receives a discharge from all debts

that arose before the date of the order for relief under Chapter 7,

regardless of whether a proof of claim based on any such debt or

liability is filed, unless an exception in 523(a) applies. Under §

523(a)(3)(A), a claim will not be discharged if it was neither listed

nor scheduled and the creditor did not have notice or actual

knowledge of the case so that the creditor could timely file a claim. 

Here the bankruptcy court correctly found that § 523(a)(3)(A) does

not apply because the Debtor’s Chapter 7 case was a no asset case

with no claims bar date set; therefore, Watson had suffered no

prejudice because Watson will have an opportunity to file a claim if

any assets are discovered. Because § 523(a)(3)(A) does not apply,

unless Watson can establish that the claim was nondischargeable

under one of the exceptions referenced in § 523(a)(3)(B), her Claim

was discharged by operation of law under § 727(b). We conclude

that equitable considerations do not impact the dischargeability of a

debt under § 523(a)(3)(A), and therefore, it was unnecessary to

reopen the Debtor’s Chapter 7 case for the purpose of making that
1The bankruptcy appellate panel noted that the courts embracing a conduct

(continued...)

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determination. However, we find that the bankruptcy court did not

abuse its discretion when it reopened the Debtor’s case because the

court conducted the right analysis.

Id. at 694-95 (footnote omitted). For the reasons explained by the bankruptcy

appellate panel, we agree with the Third, Sixth, and Ninth Circuits that the

debtor’s intent in failing to schedule a debt is irrelevant to the bankruptcy court’s

decision to reopen.

The second issue concerns determination of the date on which a claim arose

for purposes of classifying it as a pre- or post-petition claim. The circuits are

divided as to whether to use a conduct theory, which determines the date of a

claim by the date of the conduct giving rise to the claim, or an accrual theory,

which determines the date of a claim pursuant to the state law under which

liability for the claim arose. Compare Grady v. A.H. Robins Co., Inc., 839 F.2d

198 (4th Cir. 1988), with Avellino & Bienes v. M. Frenville Co., Inc. (In re

M. Frenville Co. Inc.), 744 F.2d 332 (3d Cir. 1984). We recognized this split of

authority in Franklin Savings Ass’n v. Office of Thrift Supervision, 31 F.3d 1020,

1022 (10th Cir. 1994), but found it unnecessary to take a position.

We now adopt the conduct theory as the one more in tune with the plain

language and the policy underlying the Bankruptcy Code.1

 See Parker, 264 B.R.
1

(...continued)

theory are divided as to a basic conduct theory versus a “narrow conduct theory”

(also called the “Piper test.”) See Parker, 264 B.R. at 697 n.12. The narrow

conduct theory courts hold that a claim arises at the time of conduct only if the

claimant had a specific relationship with the debtor at the time the conduct

occurred. See, e.g., Epstein v. Official Comm. of Unsecured Creditors of Estate

of Piper Aircraft Corp., 58 F.3d 1573 (11th Cir. 1995); Lemelle v. Universal Mfg.

Corp., 18 F.3d 1268 (5th Cir. 1994); California Dep’t of Health Servs. v. Jensen

(In re Jensen), 995 F.2d 925 (9th Cir. 1993). As noted by the panel, because the

relationship in the case before us would meet either test, we need not decide

which version of the conduct theory to adopt.

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at 696. We note, first of all, the Fourth Circuit’s remark that it “ha[s] found no

court outside the Third Circuit which has followed the reasoning and holding of

Frenville. All of the cases coming to our attention which have considered the

issue have declined to follow Frenville’s limiting definition of claim.” Grady,

839 F.2d at 201. As the Fourth Circuit pointed out, “[i]n the case of a claim . . .

the legislative history shows that Congress intended that all legal obligations of

the debtor, no matter how remote or contingent, will be able to be dealt with in

bankruptcy. The Code contemplates the broadest possible relief in the bankruptcy

court.” Id. at 202. Turning “to the pertinent parts of the statutes at hand,” the

court noted: 

Section 362(a)(1) provides for an automatic stay of, among other

things, judicial action against the debtor “. . . to recover a claim

against the debtor that arose before the commencement of the case

under this title.” Section 101(4)(A) defines a claim to be a “right to

payment whether or not such right is reduced to judgment, liquidated,

unliquidated, fixed, contingent, matured, unmatured, disputed,

undisputed, legal, equitable, secured or unsecured.”
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Id. at 202. With respect to contingent claims, the court stated:

We do not believe that there must be a right to immediate payment of

money in the case of a tort . . . , as present here, when the acts

constituting the tort . . . have occurred prior to the filing of the

petition, to constitute a claim under § 362(a)(1). It is at once

apparent that there can be no right to the immediate payment of

money on account of a claim, the existence of which depends upon a

future uncertain event. But it is also apparent that Congress has

created a contingent right to payment as it has the power to create a

contingent tort or like claim within the protection of § 362(a)(1). We

are of opinion that it has done so.

Id. at 203. Pursuant to this reasoning, we hold that the malpractice claim here

arose on the date it allegedly occurred, which was prior to the filing of the

debtor’s petition.

We are also persuaded by the bankruptcy appellate panel’s resolution of the

other issues raised by Ms. Watson substantially for the reasons set forth in its

thorough and well-reasoned opinion. We therefore AFFIRM.