In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 01-2683

IN RE: ANDREW J. KONTRICK,

Debtor-Appellant.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 00 C 5736—Harry D. Leinenweber, Judge.

____________

ARGUED JANUARY 10, 2002—DECIDED JULY 8, 2002

____________

Before HARLINGTON WOOD, JR., RIPPLE and ROVNER,

Circuit Judges.

RIPPLE, Circuit Judge. Dr. Andrew Kontrick filed a Chapter

7 bankruptcy petition on April 4, 1997. Dr. Robert Ryan, a

judgment creditor, then filed an adversary proceeding

objecting to Dr. Kontrick’s discharge. Ruling on summary

judgment, the bankruptcy court denied Dr. Kontrick discharge under 11 U.S.C. § 727(a)(2)(A). The district court

affirmed the bankruptcy court’s decision. Dr. Kontrick now

appeals and raises three objections to the bankruptcy court’s

decision. First, he argues that Dr. Ryan’s complaint was untimely. Second, he argues that the bankruptcy court incorrectly concluded that he had waived his objection to the

timeliness of Dr. Ryan’s complaint and, further, that he

could not have waived such an objection because Federal

Rule of Bankruptcy Procedure 4004(a)’s time limit is jurisdictional and not subject to waiver. Finally, Dr. Kontrick
2 No. 01-2683

contends that the bankruptcy court improperly granted

summary judgment because there is a genuine issue of

material fact about his intent in transferring his paychecks

to his wife in the year before bankruptcy. For the reasons set

forth in this opinion, we affirm the judgment of the district

court. 

I

A. Facts

Dr. Ryan and Dr. Kontrick, both cosmetic and plastic

surgeons, were business associates. Each was a 50% shareholder in a professional corporation that Dr. Ryan had

established. Dr. Kontrick had begun as an employee of the

corporation and then, in 1989, he became part-owner. The

association of the two physicians in this arrangement was

a short and unhappy one. A variety of disputes, the details

of which are not material to this appeal, arose. These disagreements were heard in two separate arbitrations. In the

first, commenced in January 1992, Dr. Ryan was awarded

$47,157.81 plus interest, expenses and attorneys’ fees. Dr.

Kontrick paid a total of $65,261.32 in satisfaction of this first

arbitration. The second arbitration, commenced in October

1992, resulted in a 1995 award to Dr. Ryan of $519,324.42,

including punitive damages, costs, expenses and attorneys’

fees. The Circuit Court of Cook County entered a judgment

on the award; the Illinois Appellate Court later reversed the

punitive damages award and reduced the prejudgment

interest rate. See Ryan v. Kontrick, 710 N.E.2d 11 (Ill. App. Ct.

1999).

During the first arbitration, Dr. Ryan filed a citation to

discover Dr. Kontrick’s assets. In an ensuing deposition, Dr.

Kontrick was asked about his family finances, including his

decision to remove his name from the family checking
No. 01-2683 3

account. Dr. Kontrick testified that personal expenses were

paid from that account, now only in his wife’s name, and

admitted that “[i]t used to be my personal account. I don’t

have that account anymore.” R.16-1, Ex.7 at 7-8; see id. at 10-

11, 17-19. He continued: “What prompted this change was

the ridiculous maneuvers that you and your client [Dr.

Ryan] have put me through in order to collect money which

you don’t have coming to you.” Id. at 9. Dr. Kontrick further

elaborated, stating that “there are just thousands and

thousands of thieves out there that are ready to come after

you on any pretense and rob you of whatever belongings

you might have. So I felt this was a way of protecting

myself.” Id. at 12. In Dr. Kontrick’s view, this arrangement

would protect him from people who were “more than

willing to take your money on some pretense or some

technicality that they push through some court and all kinds

of wranglings. As you know, this is exactly what went on.”

Id. To protect himself from individuals, whom he identified

as former patients who have suffered “some perceived

wrong,” Dr. Kontrick divested himself of his personal

wealth, transferring much of it to his wife and daughter. See

id. at 13-14. As part of this effort to insulate his assets from

potential judgment creditors, Dr. Kontrick removed his

name from the family checking account, leaving his wife as

the sole signatory; he continued to deposit his paychecks

into that account. See id. at 17-19. Summing up his approach

to his finances, Dr. Kontrick testified that “I felt that to have

any sort of assets that could possibly be taken away from

me would be foolish. So I basically divested myself of

everything.” Id. at 29-30. 

B. Bankruptcy Court Proceedings

Dr. Kontrick filed for bankruptcy in April 1997. On January 13, 1998, Dr. Ryan, after having been granted three
4 No. 01-2683

1 The original complaint included an objection to discharge

based on § 727(a)(2)(A), but did not include a factual allegation

with respect to the family account.

extensions of time, filed his adversary complaint objecting

to Dr. Kontrick’s discharge. This adversary complaint included four counts (I-IV) objecting to discharge under 11

U.S.C. §§ 727(a)(2)-(5) and three counts (V-VII) seeking a

determination of the nondischargeability of Dr. Kontrick’s

debts to Dr. Ryan under 11 U.S.C. §§ 523(a)(2), (4) & (6). Dr.

Ryan filed an amended complaint on May 6, 1998, without

a court-approved extension, which included for the first

time the specific allegation that Dr. Kontrick had violated

§ 727(a)(2)(A) by taking his name off of a family checking

account (“family account”) and continuing to deposit his

paychecks into the account.1

 Dr. Kontrick answered the

amended complaint on June 10, 1998; in his answer, Dr.

Kontrick admitted the transfers to the family account but

denied violating § 727(a)(2)(A). 

In March 1999, Dr. Ryan moved for summary judgment

on all counts. Appended to his motion was a statement of

facts pursuant to Local Bankruptcy Rule 402 (“402 M statement”). In August 1999, Dr. Kontrick filed a motion to strike

portions of Dr. Ryan’s 402 M statement. Dr. Kontrick

maintained that “Ryan’s 402 M statement contains an array

of material that is not tied to anything alleged in the complaint.” R.10-1, Ex.12 at 2. In this motion, Dr. Kontrick

quoted Dr. Ryan’s amended complaint for the purpose of

comparing the allegations in the amended complaint with

the facts claimed in the 402 M statement. Dr. Kontrick also

filed a cross-motion for summary judgment.

The bankruptcy court granted Dr. Ryan’s motion for

summary judgment on Count I. The court also granted in

part and denied in part Dr. Kontrick’s motion to strike. The
No. 01-2683 5

court found that, because Dr. Kontrick continued to place

his paycheck into the family account, there was a transfer

within one year of bankruptcy, as required by § 727(a)

(2)(A). Further, the court reasoned that, although “[g]enerally, the question of intent will prevent the granting of

summary judgment . . . here, the Debtor’s intent is clear.”

Bankr. Op. at 14. “Kontrick, during the deposition pursuant

to the citation to discover assets, freely admitted he transferred the bank account to Carolyn [his wife] to prevent his

creditors from attaching the funds.” Id. at 14-15. Therefore,

the court concluded, Dr. Kontrick had made transfers within

one year of bankruptcy with the “intent to hinder, delay, or

defraud his creditors” within the meaning of § 727(a)(2)(A).

The court denied discharge and then dismissed the remaining counts in Dr. Ryan’s complaint.

Dr. Kontrick filed a motion to reconsider the bankruptcy

court’s decision. He argued that he had objected to the

timeliness of Dr. Ryan’s amended complaint and that the

family account claim was improperly considered because it

was untimely under Bankruptcy Rule 4004(a). In denying

the motion to reconsider, the bankruptcy court held that Dr.

Kontrick had waived an objection to the timeliness of the

family account claim.

C. District Court Proceedings

Dr. Kontrick appealed the bankruptcy court’s decision to

the United States District Court for the Northern District of

Illinois. Dr. Kontrick submitted that the bankruptcy court

had erred in finding that he had waived his Rule 4004(a)

objection and that, even if he had failed to raise the objection, it could not be waived because Rule 4004(a) is jurisdictional and thus not subject to equitable doctrines such as

waiver. Dr. Kontrick also contended that the bankruptcy
6 No. 01-2683

2 Neither the bankruptcy court nor the district court discussed

whether the family account allegation properly related back to

the timely complaint of January 13, 1998, such that the family

account claim itself was timely. See In re Magno, 216 B.R. 34, 37-40

(BAP 9th Cir. 1997). Both courts assumed that the amended

complaint and the family account allegation of May 6, 1998, were

untimely. Dr. Ryan does not contest this assumption on appeal.

(continued...)

court erred in granting summary judgment because there

was a genuine issue of material fact about his intent in

transferring his paycheck to his wife’s account in the year

before bankruptcy. 

The district court rejected all of Dr. Kontrick’s arguments.

First, the court concluded that Rule 4004(a) was not jurisdictional; it was more like a statute of limitations and could be

waived. Second, the court determined, that, although Dr.

Kontrick had mentioned that the amendment was late in his

motion to strike, he did not raise the issue in his responsive

pleading and thus had waived it. Finally, the court agreed

with the bankruptcy court that Dr. Kontrick’s deposition

testimony from 1993 was conclusive on the issue of intent

and affirmed the bankruptcy court’s grant of summary

judgment.

II

A.

We turn first to the timeliness of Dr. Ryan’s objection to

the discharge in bankruptcy. There is no dispute that Dr.

Ryan’s amended complaint, which included the family

account allegation, was filed beyond the 60-day limit for

filing objections and that there was no court-approved

extension of time permitting him to file when he did.2

 The
No. 01-2683 7

2 (...continued)

Therefore, we shall proceed in the same fashion as the bankruptcy and district courts and assume that the amended complaint was untimely. 

bankruptcy court and the district court concluded that Dr.

Kontrick had waived any objections to the timeliness of

Dr. Ryan’s complaint. To determine whether the 60-day

time limit precludes consideration of Dr. Ryan’s objection to

discharge, we must engage in a two-part inquiry. First,

we must decide whether the 60-day time limit for filing

objections to discharge under § 727(a), see Fed. R. Bankr.

P. 4004(a), is a jurisdictional prerequisite that cannot be

waived, or whether it is akin to a statute of limitations and

thus subject to waiver. If Rule 4004(a) is a jurisdictional requirement, then Dr. Kontrick cannot have waived his objection. Second, if we determine that the time limit is not

jurisdictional, we must decide whether the bankruptcy court

correctly determined that Dr. Kontrick did indeed waive

objection. 

1.

We first focus on whether the time limit for filing objections to discharge contained in Federal Rule of Bankruptcy

Procedure 4004(a) is a jurisdictional prerequisite and, therefore, cannot be waived. “Statutory filing deadlines are generally subject to the defenses of waiver, estoppel, and equitable tolling.” United States v. Locke, 471 U.S. 84, 94 n.10

(1985). Our task is to determine whether Rule 4004(a) is an

exception to this principle. This question has divided the

bankruptcy courts that have had occasion to confront it.

Compare In re Santos, 112 B.R. 1001, 1008 (BAP 9th Cir. 1990)

(holding that Rules 4004(a) and 4007(c) are subject to waiv-
8 No. 01-2683

3 Because the rules are almost identical, it is appropriate to

consider decisions by courts construing Rule 4007(c) as well as

(continued...)

er); In re Steiner, 209 B.R. 281, 286 (Bankr. E.D.N.Y. 1996)

(same); In re Walker et al., 195 B.R. 187, 206-07 (Bankr. N.H.

1996) (same); In re Begue, 176 B.R. 801, 804 (Bankr. N.D. Ohio

1995) (same), with In re Glover, 212 B.R. 860, 861 (Bankr. S.D.

Ohio 1997) (holding that time limits are jurisdictional and

not subject to waiver); In re Ham, 174 B.R. 104, 106-07

(Bankr. S.D. Ill. 1994) (same); In re Kirsch, 65 B.R. 297, 299-

303 (Bankr. N.D. Ill. 1986) (same). United States Courts of

Appeals opinions, however, have produced unanimity. See

In re Benedict, 90 F.3d 50, 54-55 (2d Cir. 1996) (holding that

time limits are not jurisdictional and thus are subject to

equitable defenses); Farouki v. Emirates Bank Int’l, Ltd., 14

F.3d 244, 248 (4th Cir. 1994) (same). 

We begin with the text of the provision in issue. Rule

4004(a) provides: “In a chapter 7 liquidation case a complaint objecting to the debtor’s discharge under § 727(a) of

the Code shall be filed no later than 60 days after the first

date set for the meeting of creditors.” Fed. R. Bankr. P.

4004(a). The analogous provision to Rule 4004(a) for objections to the dischargeability of a particular debt is Rule

4007(c) which provides: “A complaint to determine the dischargeability of a debt under § 523(c) shall be filed no later

than 60 days after the first date set for the meeting of

creditors under § 341(a).” Fed. R. Bankr. P. 4007(c). Both of

these rules contain provisions for the extension of the time

limit. Rule 4004(b) permits the bankruptcy court to extend

the time limit for cause, if the motion is filed before time

expires. See Fed. R. Bankr. P. 4004(b). Rule 4007(c) has a

similar provision for extending its time limit. See Fed. R.

Bankr. P. 4007(c).3
No. 01-2683 9

3 (...continued)

Rule 4004(a). See In re Santos, 112 B.R. 1001, 1004 n.2 (BAP 9th Cir.

1990). 

As the opinions of the courts that have confronted this

issue demonstrate, the texts of these bankruptcy rules yield

no definitive answer to the question of whether the time

limitations contained in these rules are jurisdictional in

nature. The rules we have just described do not, as a matter

of textual interpretation, address the issue. Although Rule

9006(3) restricts the grounds upon which the bankruptcy

court may enlarge the time for actions required by Rules

4004(a) and 4007(c), these restrictions still vest a great deal

of discretion in the bankruptcy court.

In the absence of a clear textual resolution of the issue, we

must look elsewhere. In our view, the decision of the United

States Bankruptcy Appeals Panel of the Ninth Circuit in In

re Santos, 112 B.R. 1001, 1005 (BAP 9th Cir. 1990), presents a

sound framework for analyzing whether the time limitations of Rules 4004(a) and 4007(c) are jurisdictional. As that

court noted, Zipes v. Trans World Airlines, Inc., 455 U.S. 385,

393-97 (1982), teaches that, in order to determine whether

the filing requirements are jurisdictional, we must examine

“the structure, legislative history and underlying policy of

the provision in question and the related statutory scheme.”

In re Santos, 112 B.R. at 1005. 

a.

We turn first to an examination of the role that these rules

play within the overall structure of the bankruptcy rules in

the hope that such an inquiry might yield a more definitive

understanding of whether the rules in question ought to be

governed by the general principle that a filing deadline is
10 No. 01-2683

subject to equitable defenses or whether they are jurisdictional in nature.

In a thoughtful effort to apply this methodology, one

bankruptcy decision, In re Kirsch, 65 B.R. 297, 301-02 (Bankr.

N.D. Ill. 1986), reasoned that the situation presented by

these bankruptcy rules is analogous to the one presented to

this court in Hulson v. Atchison, Topeka & Santa Fe Railway

Co., 289 F.2d 726 (7th Cir. 1961). In Hulson, this court,

applying the Federal Rules of Civil Procedure, held that the

deadline for filing a motion for a new trial or a judgment

notwithstanding the verdict under Rule 50(b) was jurisdictional and could not be extended pursuant to Rule 6(b). See

Hulson, 289 F.2d at 729. The bankruptcy court in Kirsch

analogized Rule 6(b) to Bankruptcy Rule 9006(b). See In re

Kirsch, 65 B.R. at 301-02. It first noted that Rule 9006(b) was

modeled on Rule 6 and serves a similar purpose in describing the proper functioning of time limits elsewhere in the

rules and in limiting the power of courts to enlarge the time

limits contained in certain rules. The court then noted that

Rule 6(b), although generally permitting the district court to

enlarge the time in which an act must be done under the

rules, specifically excludes from this general approach,

actions “under Rules 50(b) and (c)(2), 52(b), 59(b), (d) and

(e), and under 60(b), except to the extent and under the conditions stated in them.” See In re Kirsch, 65 B.R. at 301 (quoting Fed. R. Civ. P. 6(b)). In Hulson, this court had said that

the time limitations contained in Rules 50(b), and 59 (b), (d)

and (e) prohibit the district court from acting on a motion

not filed within the time specified in the rule. See Hulson,

289 F.2d at 729. Because Bankruptcy Rule 9006(b) contains

the same limit with respect to Rule 4004(a), reasoned the

court in Kirsch, the limitations in Rule 4004(a) also are not

subject to judicial abrogation. See In re Kirsch, 65 B.R. at 302.

In light of the policy concerns that animate the bankruptcy

rules at issue, we do not think that the analogy to the civil
No. 01-2683 11

rules relied upon by the court in Kirsch is very helpful in

resolving the problem before us. Rule 50(b) and the other

civil rules referenced in Rule 6(b) govern actions after a final

judgment has been entered. Unless the time limits are

strictly construed, a prevailing party will be left uncertain as

to the status of his judgment. Substantial prejudice to a

prevailing party could occur if the defeated party had an

indefinite time period to seek a new trial. By contrast, Rules

4004(a) and 4007(c) apply before any adjudication has taken

place and govern the timeliness of a complaint, which in

turn invites a responsive pleading, an answer. A debtor can

defeat an untimely complaint by raising Rule 4004(a) or

Rule 4007(c) as an affirmative defense in his answer. Although there is an important interest in limiting the time in

which the dischargeability of debts can be challenged in

order to ensure that debtors are not “harassed by creditors

after their claims have been discharged in bankruptcy,”

Kirsch, 65 B.R. at 300, we do not think that it is at all evident

that Congress intended to limit the authority of the bankruptcy court so rigidly as to preclude all relief from the time

constraints of the rule. Notably, Rules 4004(b) and 4007(c)

explicitly permit the bankruptcy court to enlarge the time

for filing a complaint objecting to discharge. As the court

pointed out in In re Santos, 112 B.R. at 1006, if Rule 4004(a)

is jurisdictional, then even a final judgment would be

subject to collateral attack, a result that would hardly serve

the Bankruptcy Code’s goal of promoting certainty and

finality for debtors. Were we to hold that these rules were

jurisdictional, bankruptcy judgments would be subject to

collateral attack after the bankruptcy court has completed its

work and after the parties have complied with the court’s

mandate. See In re Santos, 112 B.R. at 1006. This situation

would be “clearly at odds with the purpose of promoting

finality and certainty of relief.” Id.
12 No. 01-2683

Even when the underlying policy concerns of the Bankruptcy Code are reviewed without reference to the analogy

to the civil rules suggested in Kirsch, characterization of

these bankruptcy rules as jurisdictional would yield too

rigid a result to achieve the goals of the bankruptcy statute.

As the bankruptcy panel pointed out in Santos, there are, to

be sure, some goals of bankruptcy relief that are promoted

by expeditious and definitive resolution of the question of

dischargeability. Indeed, among the goals of the rules in

question is furtherance of the prompt administration of

bankruptcy estates and protection of the “fresh start” objective of the Code by allowing the debtor to enjoy finality

and certainty of relief. See In re Santos, 112 B.R. at 1006.

However, as the panel in Santos also pointedly noted, these

goals are best fostered, not by a rigid jurisdictional approach, but by the exercise of equitable discretion in a manner consistent with the policies that animate the Bankruptcy

Code. See id. Indeed, as another Ninth Circuit bankruptcy

panel intimated, requiring that an enlargement of time be

sought during the period in which the complaint should

have been filed, but nevertheless giving at least that limited

opportunity evidences that Congress, although desirous of

finality, realized that a rigid rule also could be inequitable

at times and frustrate the goals of the Code. See In Re Rhodes,

61 B.R. 626, 629-30 (BAP 9th Cir. 1986).

b.

As the bankruptcy panel in Santos also noted, the overall

statutory structure of the bankruptcy statute also provides

support for the view that the rules are not jurisdictional. See

In re Santos, 112 B.R. at 1005. The statutes granting jurisdiction to the bankruptcy and district courts over bankruptcy matters do not indicate that timeliness of objections to discharge is a jurisdictional predicate. See 28 U.S.C.
No. 01-2683 13

§§ 157(b)(1), 1334. An “objection[ ] to discharge” is a “core

proceeding[ ]” over which the bankruptcy court exercises

jurisdiction. 28 U.S.C. § 157(b)(2)(J). Nowhere in the definition of core proceedings is the adjective “timely” used to

define a core proceeding. Thus, there is nothing within

§ 157(b) to indicate that a bankruptcy court is precluded

from considering untimely objections to discharge.

Matters of timeliness are, notably, present in other provisions. For instance, section 157(b)(3) states that “[t]he

bankruptcy judge shall determine, on the judge’s own

motion or on timely motion of a party, whether a proceeding is a core proceeding.” 28 U.S.C. § 157(b)(3). Further, for

a party to obtain de novo review in the district court of a

bankruptcy court’s findings of fact and conclusions of law

in a non-core proceeding, that party must “timely and specifically object[ ].” 28 U.S.C. § 157(c)(1). These references to

timeliness in sections other than the grants of jurisdiction

support the view that timeliness is not a prerequisite to the

bankruptcy court’s exercise of jurisdiction in a core proceeding such as Dr. Ryan’s objection to discharge.

c.

We find the legislative history of the rules in question to

be of marginal assistance in our task. The notes of the Advisory Committee with respect to Rule 4007 state in part:

Subdivision (c) differs from subdivision (b) by imposing

a deadline for filing complaints to determine the issue

of dischargeability of debts set out in § 523(a)(2), (4) or

(6) of the Code. The bankruptcy court has exclusive

jurisdiction to determine dischargeability of these debts.

If a complaint is not timely filed, the debt is discharged.

See § 523(c). 
14 No. 01-2683

4 Contrary to Dr. Kontrick’s assertion, we do not think that the

Supreme Court’s decision in Taylor v. Freeland & Kronz, 503 U.S.

638 (1992), requires a different result. But see In re Leet, 274 B.R.

695, 696-97 (BAP 6th Cir. 2002). In Taylor, the Court held that

there was no good-faith exception to the time limits for filing

objections to a debtor’s list of exempt property. See Taylor, 503

U.S. at 644-45. Under 11 U.S.C. § 522(b), a debtor may claim

certain property as exempt from his bankruptcy estate; the debtor

(continued...)

One plausible reading of this passage is, as the court in

Santos acknowledged, that the bankruptcy court can only act

on a dischargeability complaint if it is filed in a timely

manner. See Santos, 112 B.R. at 1005. However, the notes to

the 1999 amendments explicitly reiterate the right of a party

to seek an enlargement of time, thus acknowledging that

some flexibility was intended by the drafters. In any event,

we agree with the panel in Santos that this passage in the

Committee note is hardly conclusive or even persuasive in

light of the structure and policy of the Code and the bankruptcy rules. 

d.

Accordingly, we join our colleagues in the Second and

Fourth Circuits in holding that the timeliness provisions at

issue here are not jurisdictional. SeeIn re Benedict, 90 F.3d 50,

53-54 (2d Cir. 1996); Farouki v. Emirates Bank Int’l Ltd., 14

F.3d 244, 248 (4th Cir. 1994). These rule provisions are

subject to equitable defenses, although those defenses must

be applied in a manner consistent with the manifest goals of

Congress to resolve the matter of dischargeability promptly

and definitively in order to ensure that the debtor receives

a fresh start unobstructed by lingering doubts about the

finality of the bankruptcy decree.4
No. 01-2683 15

4 (...continued)

may elect to use exemptions under state or federal law. See 11

U.S.C. § 522(b)(1)-(2). Section 522(l) describes the procedures for

claiming such exemptions: “The debtor shall file a list of property

the debtor claims as exempt. . . . Unless a party in interest objects,

the property claimed on such list is exempt.” Id. § 522(l). Bankruptcy Rule 4003(b) provides that “[t]he trustee or any creditor

may file objections to the list of property claimed as exempt

within 30 days after the conclusion of the meeting of creditors.”

Fed. R. Bankr. P. 4003(b). 

In Taylor, the debtor had claimed as exempt the proceeds from

an employment discrimination lawsuit that was pending in state

court at the time of her bankruptcy filing. See Taylor, 503 U.S. at

640. The parties agreed that there was no basis for her to claim an

exemption for the full amount of the proceeds. See id. at 642.

Nevertheless, the trustee declined to object to the exemption

because he believed that the lawsuit was meritless. See id. at 641.

He was incorrect, and the debtor eventually settled for about

$110,000, a portion of which the debtor paid to her attorneys in

the discrimination suit. See id. Upon learning of the settlement,

the trustee returned to the bankruptcy court almost two years

after the bankruptcy proceedings ended and demanded that the

debtor and her attorneys turn over the funds on the ground that

they were the property of the bankruptcy estate. See id. The trustee argued that the time limits in Rule 4003(b) only applied to

exemptions filed in good faith and because the debtor had no

good-faith basis for claiming the exemption, the trustee was able

to file his objection outside of the time limit. See id.

The Supreme Court rejected this argument. See Taylor, 503 U.S.

at 642. The Court held that the deadline in Rule 4003(b) should be

construed strictly: “By negative implication, the Rule indicates

that creditors may not object after 30 days ‘unless, within such

period, further time is granted by the court.’ ” Id. at 643. Since no

objection was filed within 30 days, the property was exempt by

(continued...)
16 No. 01-2683

4 (...continued)

the operation of 11 U.S.C. § 522(l). See id. The Court noted that

“despite what respondents repeatedly told him, [the trustee] did

not object to the claimed exemption. If [the trustee] did not know

the value of the potential proceeds of the lawsuit, he could have

sought a hearing on the issue, see Rule 4003(c), or he could have

asked the Bankruptcy Court for an extension of time to object.”

Id. at 644. Thus, the Court concluded that objections filed outside

the time limit were untimely and should not have been considered by the bankruptcy court. Id. The Court further concluded

that there was no statutory basis for reading a good-faith

exception into § 522(l). See id. at 644-45. The Court did not hold,

however, that the debtor had an unlimited time in which to object

to the trustee’s untimely objection or that Rule 4003(b) was not

subject to the usual equitable doctrines that apply to other

deadlines and statutes of limitations.

While the Court in Taylor did stress the importance of deadlines, see Taylor, 503 U.S. at 644, we believe this emphasis supports our conclusion, rather than undermines it. As the Court

noted, “[d]eadlines may lead to unwelcome results, but they

prompt parties to act and promote finality.” Id. This analysis

applies with equal force to the doctrine of waiver, which requires

parties to put all of their arguments before the appropriate court

at the appropriate time for a full resolution of their claims. Here,

parties are prompted to action and finality is served by our

conclusion that parties may waive any objection to the untimeliness of a creditor’s complaint if the objection is not raised at the

proper time.

2.

Having determined that an objection to the timeliness of

a complaint under Rule 4004(a) is subject to waiver, we

must now decide whether Dr. Kontrick did waive his objection. In making that determination, we must keep in

mind the Congressional policy of resolving the matter of

dischargeability promptly and of permitting the debtor to
No. 01-2683 17

begin his fresh start without lingering doubts about the

finality of the bankruptcy court’s actions. 

As a general matter, a statute of limitations defense must

be raised in an answer or responsive pleading. See Fed. R.

Civ. P. 8(c); see also Jackson v. Rockford Housing Auth., 213

F.3d 389, 392-93 (7th Cir. 2000). Federal Rule of Civil

Procedure 8 is incorporated into the Bankruptcy Rules. See

Fed. R. Bankr. P. 7008. Dr. Kontrick filed his voluntary

petition for relief under Chapter 7 on April 4, 1997. On

January 13, 1998, Dr. Ryan filed his original adversary complaint. Later, on May 6, 1998, Dr. Ryan filed an amended

complaint. Dr. Kontrick answered the amended complaint

on June 10, 1998, without raising his Rule 4004(a) untimeliness defense. 

Dr. Kontrick argues that he raised the issue in his motion

to strike portions of Dr. Ryan’s motion for summary judgment. Dr. Kontrick’s motion to strike was filed on August 2,

1999. Even assuming, arguendo, that Dr. Kontrick’s motion

to strike was an acceptable vehicle for raising a Rule 4004(a)

objection, we must conclude that Dr. Kontrick waived his

objection to the timeliness of Dr. Ryan’s complaint. 

Waiver is the “intentional relinquishment or abandonment of a known right.” United States v. Sumner, 265 F.3d

532, 537 (7th Cir. 2001). A waiver may be explicit or implicit.

A party may waive an argument if it is not raised at the

proper time. See Carr v. O’Leary, 167 F.3d 1124, 1126 (7th Cir.

1999). Generally, statute of limitations defenses must be

raised in an answer or responsive pleading. See Fed. R. Civ.

P. 8(c). With these principles in mind, we turn to an examination of Dr. Kontrick’s motion to strike portions of the

motion for summary judgment. In that motion, Dr. Kontrick

submitted that “Ryan’s Rule 402 M statement contains an

array of material that is not tied to anything alleged in his

complaint.” R.10-1, Ex.12 at 2. To support this argument, Dr.
18 No. 01-2683

Kontrick then listed the allegations made in Dr. Ryan’s

amended complaint in order to compare them with factual

statements in Dr. Ryan’s 402 M statement. In short, he used

the allegations of the amended complaint as a “baseline” to

establish that the Rule 402 M statement went beyond the

bounds of that complaint. Included within the excerpts from

Dr. Ryan’s amended complaint are his factual allegations

under Count I, the objection to discharge under § 727(a)

(2)(A). From paragraph 56 of Dr. Ryan’s amended complaint, Dr. Kontrick recites: “Removing name from family

bank account.” Id. at 4. At the conclusion of this summary

of Dr. Ryan’s allegations, Dr. Kontrick states: “This is the

extent of the allegations in the complaint. Ryan has not even

attempted to amend his complaint to add additional

allegations.” Id. at 5.

What is clear from Dr. Kontrick’s motion to strike is that

he is relying on Dr. Ryan’s amended complaint, including

the family account claim, to object to additional allegations

made in Dr. Ryan’s 402 M statement. Nowhere does Dr.

Kontrick contest the timeliness of the allegations in the

amended complaint. This failure is sufficient to constitute

waiver of Dr. Kontrick’s objection to the timeliness of the

complaint. Indeed, Dr. Kontrick did not raise the timeliness

issue until after the bankruptcy court entered summary

judgment for Dr. Ryan. 

Under these circumstances, we must conclude that Dr.

Kontrick waived the argument that Dr. Ryan’s allegation

that discharge ought to be denied because of Dr. Kontrick’s

handling of his checking account was untimely. This conclusion is compatible with the general principles that govern

the application of the waiver defense and is also compatible

with the policies underlying the Bankruptcy Code. Here, the

timeliness issue was not presented to the bankruptcy court

until after it had ruled on the question of whether a dis-
No. 01-2683 19

charge ought to be refused. The policy concerns of expeditious administration of bankruptcy matters and the finality

of the bankruptcy court’s decision hardly are fostered by

requiring the bankruptcy court to consider the timeliness of

an issue that it already has adjudicated.

B.

We must now determine whether the bankruptcy court

properly granted summary judgment to Dr. Ryan and denied Dr. Kontrick his discharge. We review a grant of summary judgment de novo. See In re Lefkas Gen’l Partners, 112

F.3d 896, 899-900 (7th Cir. 1997). Summary judgment is

appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a

judgment as a matter of law.” Fed. R. Civ. P. 56(c). A party

resisting summary judgment cannot succeed simply by

resting on his pleadings, he must come forth with positive

evidence in support of his position. See Celotex Corp. v.

Catrett, 477 U.S. 317, 324 (1986). There is no “genuine” issue

of material fact “for trial unless there is sufficient evidence

favoring the nonmoving party for a jury to return a verdict

for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

249 (1986). “When the moving party has carried its burden

under Rule 56(c), its opponents must do more than simply

show that there is some metaphysical doubt as to the

material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 586 (1986). In making this determination,

all reasonable inferences must be drawn in favor of the

nonmovant. 

The bankruptcy court granted summary judgment on

Count I of Dr. Ryan’s complaint, which alleged that dis-
20 No. 01-2683

charge should be denied because Dr. Kontrick had violated

11 U.S.C. § 727(a)(2)(A). Section 727(a)(2)(A) provides, in

relevant part, that “[t]he court shall grant the debtor a

discharge unless . . . the debtor, with intent to hinder, delay,

or defraud a creditor . . . has transferred . . . property of the

debtor, within one year before the date of the filing of the

petition.” 11 U.S.C. § 727(a)(2)(A). To prevail, Dr. Ryan must

prove that (1) the debtor, Dr. Kontrick, (2) transferred (3) the

debtor’s property, (4) with the intent to hinder, delay, or

defraud a creditor (5) within one year of bankruptcy. See id.

The exception to discharge in § 727(a)(2)(A) essentially

“consists of two components: an act (i.e., a transfer or a

concealment of property) and an improper intent (i.e., a

subjective intent to hinder, delay, or defraud a creditor).”

Rosen v. Bezner, 996 F.2d 1527, 1531 (3d. Cir. 1993). “The

party seeking to bar discharge must prove that both these

components were present during the one year before

bankruptcy; anything occurring before that one year period

is forgiven.” Id. (emphasis in original). In bankruptcy,

“exceptions to discharge are to be construed strictly against

a creditor and liberally in favor of the debtor.” In re Zarzynski, 771 F.2d 304, 306 (7th Cir. 1985). Even with these principles in mind, we believe that Dr. Ryan has satisfied the

statute’s prerequisites sufficiently to support the bankruptcy

court’s grant of summary judgment.

Dr. Kontrick does not dispute that he continued to deposit

his paycheck into the family account in the year before

bankruptcy. Instead, he argues that there is a question of

fact about his intent and that there was no act to hinder,

delay or defraud creditors within one year. See Appellee’s

Br. at 13. Dr. Kontrick cites In re Ratner, 132 B.R. 728, 733

(N.D. Ill. 1991), for the proposition that a debtor has no

obligation to maintain a checking account for the benefit of

his creditors. This proposition is true as far as it goes, but

§ 727(a)(2)(A) makes it clear that a debtor may not divest
No. 01-2683 21

himself of property with the intent to hinder, delay or defraud his creditors and still receive a discharge. In Ratner,

the court determined that the bankruptcy court had not

committed error in concluding that the circumstances

surrounding the use of a spouse’s checking account did not

supply sufficient circumstantial evidence to permit the

conclusion that the debtor had attempted to evade payment

to his creditors. Here, however, we have direct evidence of

Dr. Kontrick’s intent. 

In his 1993 deposition pursuant to Dr. Ryan’s citation to

discover assets, Dr. Kontrick admitted that he took his name

off the checking account, stating that “[i]t used to be my

personal account. I don’t have that account anymore.” R.16-

1, Ex.7 at 7-8. Moreover, he said that he took this action

because of “the ridiculous maneuvers that you and your

client [Dr. Ryan] have put me through in order to collect

money which you don’t have coming to you.” Id. at 9. Dr.

Kontrick wanted to protect himself from the “thousands and

thousands of thieves out there that are ready to come after

you on any pretense and rob you of whatever belongings

you might have.” Id. at 12. Dr. Kontrick freely admitted that

his divestitures were designed to diminish the amount of

money creditors would be able to obtain from a judgment

against him, including Dr. Ryan with whom Dr. Kontrick

was engaged in a nasty business dispute at the time. “I felt

that to have any sort of assets that could possibly be taken

away from me would be foolish. So I basically divested

myself of everything.” Id. at 29-30.

Intent is normally a question of fact and often not susceptible to summary judgment. Here, however, we have direct

and unrebutted evidence, from Dr. Kontrick’s own words,

of his intent. Dr. Kontrick cannot defeat summary judgment

simply by raising a “metaphysical doubt” about his intent.

See Matsushita, 475 U.S. at 586. Dr. Kontrick has not put forth

any evidence suggesting that his intent with respect to the
22 No. 01-2683

family account changed between his 1993 deposition and his

depositing his paycheck into the family account in the year

before he filed for bankruptcy. There is also nothing in his

circumstances to suggest that his intent was any different in

1997 than it had been in 1993. Dr. Kontrick’s bitter dispute

with Dr. Ryan was ongoing, with Dr. Kontrick owing to Dr.

Ryan a judgment at one point valued at more than $600,000.

The record contains no basis for the conclusion that, although Dr. Kontrick removed his name from the family

account in late 1992 or early 1993 to thwart his creditors, his

deposits in 1996 and 1997 were for a purpose permitted by

the Code. 

The bankruptcy court was entitled to conclude that those

deposits were “transfers” of Dr. Kontrick’s property, with

the “intent to hinder, delay, or defraud a creditor” within

one year of filing for bankruptcy. 11 U.S.C. § 727(a)(2)(A).

By depositing his paycheck into an account over which he

had no control, Dr. Kontrick put those assets beyond the

reach of his creditors, just as he had done with the property

that he transferred to his wife and daughter before 1993. 

In support of his contention that summary judgment was

inappropriate here, Dr. Kontrick invites our attention to

Rosen v. Bezner, 996 F.2d 1527 (3d Cir. 1993). In Rosen, the

debtor transferred his interest in his principal residence to

his wife on December 28, 1987 for no consideration. See

Rosen, 996 F.2d at 1529. Almost two years later, on September 12, 1989, the debtor filed a chapter 7 bankruptcy petition. See id. at 1530. The trustee objected, arguing that the

debtor had transferred his property with the actual intent to

hinder, delay or defraud a creditor. See id. The bankruptcy

court granted summary judgment to the trustee and the

district court affirmed. See id. The Third Circuit reversed,

and remanded the case to the bankruptcy court for a factual

determination of the debtor’s intent. See id. at 1533. Unlike

this case, Rosen involved the application of the “continuing
No. 01-2683 23

concealment” doctrine under which “a concealment will be

found to exist during the year before bankruptcy even if the

initial act of concealment took place before this one year

period as long as the debtor allowed the property to remain

concealed into the critical year.” Id. at 1531. That doctrine is

inapplicable when, as here, the transfers took place within

one year of bankruptcy. Finally, unlike the court in Rosen,

we have unrefuted evidence of Dr. Kontrick’s intent in first

arranging his finances as he did and no evidence to suggest

that his intent has changed.

There is no genuine issue of material fact regarding the

applicability section 727(a)(2)(A)’s exception to discharge.

Dr. Kontrick violated section 727(a)(2)(A) by depositing his

paycheck into the family account, over which he had no

control. Dr. Ryan is entitled to judgment as a matter of law

on Count I of his amended complaint. 

Conclusion

Dr. Kontrick waived his objection to the timeliness of Dr.

Ryan’s amended complaint. The bankruptcy court properly

granted summary judgment to Dr. Ryan and denied Dr.

Kontrick’s discharge under 11 U.S.C. § 727(a)(2)(A). The

judgment of the district court sustaining that decision is

therefore affirmed.

AFFIRMED

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-97-C-006—7-8-02