IN THE UNITED STATES BANKRUPTCY COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

IN RE:

MIHAELA M. CALINOIU : Case No. 09-11733-TPA

Debtor : Chapter 7

GRETA POPA, : Adversary No. 10-1006-TPA

Plaintiff : Related to Document No. 20

:

v. :

:

MIHAELA M. CALINOIU :

Defendant :

Appearances: William G. McConnell, Esq., for Plaintiff

 Robert J. Tesone., Esq. for Debtor/Defendant

MEMORANDUM OPINION

Currently before the Court is a Motion for Summary Judgment (“Motion”) filed by

the Debtor/Defendant, Mihaela M. Calinoiu (“Debtor”) at Document No. 20 in reference to the

Complaint Objecting to Dischargeability of Debt Pursuant to 11 U.S.C. §523 filed by Greta Popa

(“Popa” or “Plaintiff”).1

 Plaintiff seeks a denial of discharge of the Debtor’s obligation to her

pursuant to 11 U.S.C. §523(a)(2). For the reasons that follow, the Court will deny the Motion.

1 The Court’s Jurisdiction to hear and determine the Motion for Summary Judgment on the

Complaint Objecting to Dischargeability arises under 28 U.S.C. §§1334 and 157. This is a core matter pursuant to

28 U.S.C. §157(b)(2)(I). This Opinion constitutes the Court’s findings of fact and conclusions of law pursuant to

Fed.R.Bankr.P. 7052.

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Factual Background

This action arises from an installment sales agreement entered into between Popa and

the Debtor on June 18, 2005, under which the Debtor agreed to sell to Popa residential real property

located in Sharon, Pennsylvania for a sale price of $32,000 to be paid in installments over time. In

August, 2009, Popa filed a complaint against the Debtor in the Court of Common Pleas of Mercer

County, Pennsylvania, in which Popa set forth a single cause of action for breach of contract and

sought money damages. On September 22, 2009, the Debtor filed her voluntary Petition under

Chapter 7 of the Bankruptcy Code.

 On September 28, 2009, a Notice of Chapter 7 Bankruptcy Case, Meeting of

Creditors & Deadlines, Document No. 9, was issued and served by the Court on all of the Debtor’s

creditors, including Popa. The Notice set November 10, 2009, as the date for the first meeting of

creditors pursuant to 11 U.S.C. §341 and January 11, 2010, as the deadline to file complaints

objecting to discharge of the debtor or to determine dischargeability of certain debts. On November

22, 2009, the meeting of creditors was held and concluded.

On December 22, 2009, Popa filed her original Complaint Objecting to

Dischargeability of a Debt Pursuant to 11 U.S.C. §523 at Document No. 16, however, it was filed

as a pleading in the main bankruptcy case rather than as an independent adversary action. The next

day, the Bankruptcy Clerk’s Office issued a corrective entry which provided that: 

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“....COMPLAINTS OBJECTING TO DISCHARGEABILITY OF DEBT

MUST BE FILED AS AN ADVERSARY

PROCEEDING.......ATTORNEY MUST CORRECT AND REFILE AS

NECESSARY.2

 

See Corrective Entry dated December 22, 2009, at Document No. 16. On January 13, 2010, the

present Adversary Proceeding was initiated, two days after the “bar date.” Based on this record, the

Debtor seeks summary judgment asserting no genuine issue of material fact since the Complaint was

both untimely filed and fails to state a claim upon which relief may be granted.

Timeliness of the Complaint filing

Fed.R.Bankr.P. 4004(a) and 4007(c) each provide that a complaint objecting to a

debtor’s discharge, or to the dischargeability of a particular debt under Section 523(c), must be filed

within 60 days of the first date set for the meeting of creditors. Both Rules provide that the Court

may, for cause shown, extend the deadline, but only if the party seeking the extension files a motion

before the time deadline expires. Accordingly, pursuant to Rule 4007(c) and Section 523(c)(1),

which incorporates Section 523(a)(2)(A), it is clear that the deadline for objecting to the discharge

of a debt in this case was January 11, 2010.

The deadline for objections to discharge or to the dischargeability of a debt as set

forth in Rules 4004 and 4007 is not jurisdictional in nature therefore its enforcement is subject to

equitable considerations. See In re Forsythe, 2005 WL 4041162 at *4 citing Kontrick v. Ryan, 540

2

 Counsel for Popa asserts that notice of the corrective entry was not received and that he first learned of

the issue when he was contacted by the Bankruptcy Court Clerk’s Office on January 12, 2010, and advised that the

Complaint had been filed in the main case and not as an adversary proceeding. Upon such notification, Counsel

promptly filed an adversary proceeding on January 13, 2010. Although this may present an issue of fact which

would be counsel’s burden to prove, the resolution of the claim is immaterial to a ruling on the present Motion.

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U.S. 443 (2004) and Nardei v. Maughan, 330 F.3d 337 (6th Cir. 2004). Numerous courts have

addressed the identical issue – where an objection to discharge has been timely filed in the main

bankruptcy case and later refiled after the “bar date” as an adversary proceeding – and have either

applied the equitable “relation back” doctrine or simply deemed the late filed complaint as timely

filed. See, e.g., In re Rutherford, 2010 WL 1245025, ___B.R.___(Bankr. S.D. Ohio, March 31,

2010); In re Dunaway, 346 B.R. 449 (Bankr. N.D. Ohio 2006); In re Caldwell, 2007 WL 1702610

(Bankr. N.D. Ala., June 8, 2007); In re Little, 220 B.R. 13 (Bankr. D.N.J. 1998); In re Sherf, 135

B.R. 810 (Bankr. S.D Tex. 1991); and In re Forsythe, 2005 WL 4041162 (Bankr. S. D. Ohio, May

24, 2005).3

In Rutherford, the court allowed the reopening of a case after the debtor had received

a discharge so that the Plaintiff who timely filed a Complaint objecting to discharge in the main case

could re-docket the Complaint in a separate adversary proceeding. The court followed cases which

have held that complaints are deemed filed even if they were improperly submitted in the main

bankruptcy case rather than in a separate adversary proceeding. Rutherford at *5 citing In re Citek, 

3 Coincidentally, on the same date as the argument on the Motion, the Supreme Court of the United

States decided the case of Krupski v. Costa Crociere S. p. A., ___S. Ct.___, 2010 WL 2243705, No. 09-337 (June 7,

2010), a case which involved the relation back doctrine under Fed.R.Civ.P. 15(c)(1)(C). In this analogous situation,

the Supreme Court relied upon equitable principles to allow the late filing of an amended complaint which related

back to a previous, timely filed complaint. The Supreme Court held that “relation back” under Rule 15(c)(1)(C)

depends on what the party to be added knew or should have known at the relevant time period and not the amending

party’s knowledge or timeliness in seeking to amend the pleadings. Similarly, upon the filing of the original, timely

complaint in the main bankruptcy case, the Debtor here was on notice and knew or should have known of the issue

raised by the Plaintiff regarding the dischargeability of the Debtor’s obligation to the Plaintiff and therefore cannot

now allege any prejudice with the initiation of the Adversary Proceeding under these facts, two days after the filing

deadline.

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390 B.R. 773, 777 (Bankr. N.D. N.Y. 2008); In re Dunaway, 346 B.R. 449, 454 (Bankr. N.D. Ohio

2006); and In re Forsythe, 2005 WL 4041162 at *3 (Bankr. S.D. Ohio, May 24, 2005).

In Dunaway, the court denied a motion to dismiss a complaint objecting to discharge

as being untimely filed. The objection was timely filed in the main bankruptcy case rather than as

a separate adversary proceeding, then refiled as an adversary proceeding after the deadline for the

filing of an objection to discharge had passed. The court expressed great reluctance to extinguish

statutorily created rights based solely upon violations of procedural protocol and found no prejudice

to the defendants as the complaint, being initially filed in the main bankruptcy case, afforded them

notice of the dischargeability action. Dunaway, 346 B.R. at 455-56.

In Caldwell, a complaint objecting to discharge was timely filed in the main case. 

The Clerk’s office issued a notice of incorrect event directing plaintiff’s counsel to file the complaint

as a separate adversary proceeding and not in the main case. After the deadline for the filing of an

objection to discharge as set forth in the notice of the bankruptcy case had expired, plaintiff’s

counsel complied with the corrective entry and instituted an adversary proceeding with the filing of

a complaint. The defendant filed a motion to dismiss the complaint as late filed. The court held that

the relation back doctrine applied to the otherwise, untimely commencement of the adversary

proceeding. In re Caldwell, 2007 WL 1702610 (Bankr. N.D. Ala., June 8, 2007).

In Little, prior to the 60 day deadline for the filing of a complaint objecting to

discharge, plaintiff filed a pleading entitled “Objections to Discharge.” The objection was not filed

as an adversary proceeding as required by Rule 7001. After the time for the filing of a complaint

had passed, the court by letter to counsel acknowledged receipt of the “objection” and informed the

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plaintiff that in order to commence a discharge proceeding a complaint must be filed within the

filing period allowed for the commencement of an adversary proceeding. The plaintiff sought to

amend the “objection” making it a complaint and have it relate back to the filing date of the

“objection.” The court held that the “objection”, even though deficient in format, could be amended

and that the complaint would relate back to the filing of its “objection.” In re Little, 220 B.R. 13

(Bankr. D.N.J. 1998).

In Sherf, a creditor filed a timely objection to discharge in the main case more than

a month before the “bar date.” The clerk’s office informed the creditor that it needed to file a

complaint and not merely an objection. Thereafter, the creditor filed a pleading styled as a

“complaint” approximately three weeks before the “bar date” in the main case and served a copy on

the debtors and their attorney. After the “bar date” had passed, the clerk’s office informed the

creditor that the complaint was improperly filed because it was not filed as an adversary proceeding

and because no fee had been paid. The court found that the original complaint put the debtors on

notice that the creditor objected to discharge as well as the basis for the objection and therefore the

complaint filed in the adversary proceeding would relate back to the filing date of the objection. The

court treated the improperly, though timely filed “objection,” entered in the main case as a motion

to extend time for objecting to discharge in allowing the “objection” to be properly filed as a

separate adversary proceeding. In re Sherf, 135 B.R. 810 (Bankr. S.D. Tex. 1991).

In Forsythe, the court relied on the doctrine of equitable tolling where a complaint

objecting to discharge was originally filed in the main case and refiled as an adversary proceeding

after the deadline for the filing of such complaints.. The court found that the plaintiff diligently

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pursued its rights and that there was no prejudice to the debtor. In re Forsythe, 2005 WL 4041162

at *4 (Bankr. S.D. Ohio, May 24, 2005).

The Caldwell court looked to a test set forth in In re Markus, 268 B.R. 556 (9th Cir.

BAP 2001), rev’d on other grounds 313 F.3d 1146, which was used to determine whether an

untimely adversary proceeding related back to a timely filed contested matter. The two-part test

requires that the court consider, first, if the initial document provided the debtor with fair notice of

the creditor’s claims and grounds and, second, to consider if the claims in the new pleading, the

adversary proceeding complaint, arise from the same conduct as the claims made in the initial

document. Caldwell, 2007 WL 1702610 (Bankr. N.D. Ala. June 8, 2007) citing In re Markus, supra

In the case before us, the original complaint, filed in the main case prior to the “bar

date,” and the present Complaint filed in the adversary proceeding, make identical allegations

relying, prior to the “bar date,” on the exact same section of the Bankruptcy Code for their relief.

No claim is made that the Debtor received anything but fair and timely notice of the allegations upon

which the dischargeability action is premised. 

The Court always prefers to decide issues on the merits rather than to dismiss an

action or grant summary judgment solely on procedural grounds. Here, the adversary proceeding

was commenced a mere two days after the bar date. The Debtor, having been aware of the action

prior to that date, cannot – and has not – shown any prejudice if the Court were to allow the

Complaint to proceed to decision on the merits. As such, consistent with the decisions of the many

courts confronting the issue, the Court will treat the Complaint as being timely filed.

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Failure to State a Claim

In the Motion, the Debtor also includes allegations to the effect that Popa failed to

state a claim for relief since no allegations of fraud exist. While this is a matter more akin to a

motion to dismiss than one for summary judgment, the Court agrees, to an extent, with the Debtor’s

position in this regard. 

In support of the assertion that the Complaint fails to state a claim upon which relief

can be granted, the Debtor avers that the objection to discharge merely relies on the contentions of

the breach of contract action filed in Mercer County where: (1) no allegations of fraud were raised;

(2) an alleged failure to perform under the parties agreement cannot be transformed into a claim for

fraud; and, (3) the allegations of breach of contract, alone, do not state a claim for fraud. 

Conversely, Popa relies on Section 523(a)(2) as the statutory authority for a finding

that the Debtor’s obligation to her is not dischargeable. In support, Popa directs the Court to the

plain language of Section 523(a)(2)(A), noting that a debtor is not entitled to a discharge

(2) for money, property, services, or an extension, renewal

or refinancing of credit, to the extent obtained by–

(A) false pretenses, a false representation, or actual

fraud, other than a statement respecting the debtor’s

or an insider’s financial condition......

11 U.S.C. §523(a)(2)(A)

Under Pennsylvania law, “[a] fraud consists in anything calculated to deceive,

whether by single act or combination, or by suppression of truth, or a suggestion of what is false,

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whether it be by direct falsehood or by innuendo, by speech or silence, word of mouth, or look or

gesture.” Kempson v. American Honda Motor Co., 2009 WL 744115 at *5 (M.D. Pa., March 18,

2009) citing Frowen v. Blank, 493 Pa. 137, 143, 425 A.2d 412, 415 (Pa. 1981). A cause of action

for intentional misrepresentation includes the following elements: (1) a representation; (2) which

is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness

as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) in

justifiable reliance on the misrepresentation; and (6) the resulting injury was caused by the reliance. 

Kempson citing Gibbs v. Ernst, 593 Pa. 193, 207-08 (1994); Kramer v. Dunn, 749 A.2d 984, 990

(Pa. Super. Ct. 2000) citing Bortz v. Noon, 556 Pa. 489, 499 (1999).

Assuming, as we must for purposes of the Debtor’s Motion, the truth of the

allegations set forth in Popa’s Complaint, such a review discloses allegations to the effect that: (1)

the parties entered into the agreement on June 18, 2005; (2) that Popa has paid $35, 279.26; (3) the

Debtor mortgaged the property on June 6, 2006; (4) the Debtor accepted Popa’s payments

subsequent to the date of the mortgage; (5) Popa was unaware of the mortgage; (6) at the time of

execution of the agreement, the Debtor did not intend to convey the property by way of a “clean

deed”; and (7) the Debtor induced Popa to make payments pursuant to the Agreement under false

pretense, by making false representations, and/or committing actual fraud. Possibly more implicit

than express, is the assertion of Popa’s justified reliance on the Debtor’s conduct, although taken

as of a whole, including the incorporated exhibits, it appears Popa has met her burden in regards to

the alleged fraud claim. Nevertheless, many of the specifics of the transaction, vis-a-vis each of the

principals, appears lacking especially as to the specific dates upon which the alleged fraud was

perpetrated and the amounts of monies allegedly obtained. Fed.R.Bankr.P. 7009, which

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incorporates by reference Fed.R.Civ.P. 9, requires that allegations of the circumstances constituting

fraud are to be alleged with particularity. The Debtor is correct in that the Plaintiff has failed in her

responsibility to so articulate the alleged fraud in this case. The Court will address this failure to

sufficiently plead the necessary factual basis separate and apart from its denial of the Motion.

Conclusion

Based on the foregoing, the Complaint is timely filed and the allegations as set forth

in the Complaint, if proven, are sufficient to sustain a cause of action, at least for purposes of

denying the Motion. Therefore, the Debtor’s Motion for Summary Judgment filed at Document No.

20 will be denied. Nevertheless, the Plaintiff will be required to amend the Complaint consistent

with the requirements of Fed.R.Bankr.P. 7009 and this Memorandum Opinion.

An appropriate Order will be entered.

Dated: June 10, 2010 _____________________________________

Thomas P. Agresti, Chief Judge

United States Bankruptcy Court

Case Administrator to serve:

William G. McConnell, Jr., Esq.

Robert J. Tesone, Esq.

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