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FILED

FEB 13 2017

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-16-1118-LNTa

)

JOHN LOUIS AVITABILE, ) Bk. No. 8:14-bk-14381-ES

)

Debtor. )

______________________________)

)

JOHN LOUIS AVITABILE, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

KATHY ROCHELEAU; )

BRUCE ROCHELEAU, )

)

Appellees. )

______________________________)

Argued and Submitted on January 19, 2017

at Pasadena, California

Filed - February 13, 2017

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Erithe A. Smith, Bankruptcy Judge, Presiding

_________________________

Appearances: Michael A. Wallin of Slater Hersey and Lieberman

LLP argued for appellant; Timothy Krantz argued

for appellees.

_________________________

Before: LAFFERTY, TAYLOR, and NOVACK,** Bankruptcy Judges.

* This disposition is not appropriate for publication.

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8024-1.

** Hon. Charles Novack, United States Bankruptcy Judge for

the Northern District of California, sitting by designation.
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INTRODUCTION

Judgment Creditors Kathy and Bruce Rocheleau missed the

deadline for filing a formal proof of claim against the estate of

Debtor John Avitabile. Upon filing a formal proof of claim

almost eight months after the claims bar date, the Rocheleaus

also filed a motion requesting that the bankruptcy court allow

their claim, arguing that (1) their failure to timely file a

proof of claim was due to “excusable neglect,” and the bankruptcy

court should deem it timely pursuant to Rule 9006(b)(1);1 and

(2) the formal proof of claim should be deemed timely because,

prior to the expiration of the claims bar date, the Rocheleaus

sent a letter to the chapter 7 trustee that constituted a timely

“informal” proof of claim. After a hearing at which Debtor

opposed the requested relief, the bankruptcy court rejected the

Rocheleaus’ excusable neglect argument but agreed that their

letter constituted an informal proof of claim. Debtor appealed. 

We AFFIRM.

FACTS

A. The Prepetition Judgment and the Bankruptcy Filing

On February 10, 2014, the Orange County Superior Court

entered a default judgment against Debtor John Avitabile

(“Avitabile”) in favor of Kathy and Bruce Rocheleau

(collectively, the “Rocheleaus”) in the amount of $513,976.35. 

The judgment represented the expenses for repair of construction

1 Unless otherwise indicated, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all “Rule” references are to the Federal Rules of Bankruptcy

Procedure.

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work that the Rocheleaus stated was not properly performed by

Avitabile.

On July 15, 2014, Avitabile filed a voluntary petition for

relief under chapter 7. On the front page of the petition,

Avitabile indicated that there were no assets in the estate and

therefore no funds would be available for distribution to

unsecured creditors. Consistent with that assertion, Avitabile

did not list any interest in real property on Schedule A. 

Schedule F listed the debt owed to the Rocheleaus at $600,000 and

did not indicate that the debt was disputed or otherwise invalid. 

The creditor mailing matrix filed along with the petition listed

the Rocheleaus at their home address.

B. Letter from Avitabile to the Chapter 7 Trustee

On August 17, 2014, Timothy Krantz (“Krantz”), counsel to

the Rocheleaus, sent the chapter 7 trustee Thomas H. Casey (the

“Trustee”) a one-page letter (the “August 17 Letter”) suggesting

that Avitabile held an apparently undisclosed interest in a trust

that owned certain real property in Trabuco Canyon, California. 

In the opening paragraph of the August 17 Letter, Krantz stated: 

I represent an unsecured creditor, Bruce Rocheleau. My

client obtained a Judgment of $513,976.35 against the

debtor on 2/10/14. My client wanted me to pass on to

you the following information about possible assets

that the debtor may have but is not disclosing. You

may want to ask him about [it] during the 341a meeting

of creditors.

C. The Notice of Dividend and the Claims Bar Date

On March 12, 2015, the Trustee filed a Notification of Asset

Case (the “Notification”) in which he indicated that assets would

be administered in the case; on the same date the Clerk of the

Court sent out a Notice of Possible Dividend and Order Fixing

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Time to File Claims (the “Notice”) to all creditors listed in the

mailing matrix, thereby setting the deadline for filing proofs of

claim for June 15, 2015.

The Notice was sent to the Rocheleaus at the address listed

on the mailing matrix; however, the Rocheleaus deny its receipt. 

In any event, it is undisputed that the Rocheleaus did not file a

formal proof of claim prior to the June 15, 2015 deadline. 

D. The Filing of the August 17 Letter with the Bankruptcy Court

On March 12, 2015, the same day that the Trustee filed the

Notification and the Clerk of the Court sent out the Notice, the

Trustee also filed his Motion for Order Extending Time to File

11 U.S.C. § 727 Complaint (the “Extension Motion”). The

Extension Motion sought additional time for the Trustee to

determine whether filing a complaint for denial of discharge

pursuant to Section 727 was warranted. The Extension Motion

stated that the Trustee had recently discovered that Avitabile

held an unscheduled beneficial interest in a trust established by

Avitabile’s mother prior to the filing of the petition. The

Extension Motion further stated that the Trustee was “only made

aware of this asset by a creditor who had obtained a judgment

against [Avitabile] in the amount of $513,976.33 prior to the

Petition Date.” Furthermore, a copy of the August 17 Letter was

attached to the Extension Motion as an exhibit.

E. The Settlement

On January 25, 2016, the Trustee and Avitabile entered into

a settlement agreement regarding the estate’s potential interest

in the undisclosed family trust. Pursuant to the settlement

agreement, the estate would receive $76,750 in exchange for the

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release of the estate’s interest in the trust. The settlement

agreement also set forth the proposed distribution of the $76,750

to be received by the estate. Although the settlement agreement

acknowledged the existence of the Rocheleaus’ judgment against

Avitabile, it did not include the debt owed to the Rocheleaus as

a claim that would be paid from the settlement, presumably

because they had not filed a proof of claim. 

A copy of the settlement agreement was filed with the

bankruptcy court and served on all parties, including the

Rocheleaus. The Rocheleaus contended that they first became

aware that there would be a dividend in the case when they

received a copy of the motion to approve settlement; and they

were alarmed to read that they were not listed as unsecured

creditors who would receive a distribution from the estate. 

Nevertheless, the Rocheleaus did not file an opposition to the

motion to approve the settlement agreement. On February 19,

2016, the bankruptcy court entered an order approving the

settlement agreement.

F. The Rocheleaus’ Proof of Claim and Accompanying Motion

On February 8, 2016, the Rocheleaus filed a formal proof of

claim, which included as an attachment a copy of the state court

judgment. Shortly thereafter, on February 12, 2016, they also

filed the Motion for Order to Allow Late Filing of Proof of Claim

(the “Claim Motion”). 

The Claim Motion requested that the bankruptcy court allow

the Rocheleaus’ formal proof of claim as timely based on two

alternative theories: first, that the June 15, 2015 deadline to

file a proof of claim should be extended as to the Rocheleaus

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because their mistaken belief that no proof of claim had to be

filed was the result of “excusable neglect”; second, that

pursuant to applicable Ninth Circuit case law, the August 17

Letter qualified as a timely informal proof of claim to which the

late-filed claim could relate back and therefore the formal claim

should be deemed an amendment to the informal claim. Avitabile

opposed the Claim Motion2 asserting that the August 17 Letter did

not meet the requirements for an informal proof of claim, mainly

because it was not brought to the attention of the bankruptcy

court.

G. The Bankruptcy Court’s Disposition

On April 12, 2016, the bankruptcy court held a hearing on

the Claim Motion and granted the Claim Motion in part and

rejected it in part. 

The bankruptcy court denied the Rocheleaus’ excusable

neglect argument because it determined that the application of

Rule 9006 was limited by Rule 3002(c), which controls the

expansion of the deadline under which creditors must file a proof

of claim against the estate in chapter 7 cases. Specifically,

the bankruptcy court determined that Rule 3002(c) listed only six

exceptions to the requirement to timely file a proof of claim,

and excusable neglect was not one of them. This aspect of the

bankruptcy court’s ruling is not contested in this appeal. 

The bankruptcy court granted the Claim Motion insofar as it

asserted that the August 17 Letter satisfied the requirements set

2 As part of the settlement, the Trustee assigned standing

to oppose the Claim Motion to Avitabile.

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forth for a finding that it was a timely informal proof of claim. 

Avitabile timely appealed.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(B). We have jurisdiction under 28 U.S.C.

§ 158.

ISSUE

Did the bankruptcy court err in determining that the

August 17 Letter constituted a timely informal proof of claim?

STANDARD OF REVIEW

Whether a document satisfies the requirements for an

informal proof of claim is a question of law that we review de

novo. Dicker v. Dye (In re Edelman), 237 B.R. 146, 150 (9th Cir.

BAP 1999) (citing Pizza of Hawaii, Inc. v. Shakey’s, Inc. (Matter

of Pizza of Hawaii, Inc.), 761 F.2d 1374 (9th Cir. 1985)).

DISCUSSION

The Ninth Circuit has long applied a rule of “liberality in

amendments” to creditors’ proofs of claim, permitting a later

filed claim to relate back to a prior informal claim. Wright v.

Holm (In re Holm), 931 F.2d 620, 622 (9th Cir. 1991); County of

Napa v. Franciscan Vineyards, Inc. (In re Franciscan Vineyards,

Inc.), 597 F.2d 181, 182-83 (9th Cir. 1979) (citing

In re Patterson-MacDonald Shipbldg. Co., 293 F. 190, 191 (9th

Cir. 1923)). To constitute an informal proof of claim, a

document must: (1) be presented via a writing; (2) be presented

within the time frame for the filing of claims; (3) be asserted

by or on behalf of the creditor; (4) be brought to the attention

of the bankruptcy court; (5) indicate an intent to assert a claim

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against the estate in a set or determinable amount. 

In re Franciscan Vineyards, Inc., 597 F.2d at 182-83; Pacific

Resource Credit Union v. Fish (In re Fish), 456 B.R. 413, 417

(9th Cir. BAP 2011); In re Edelman, 237 B.R. at 155. 

Avitabile does not dispute that the August 17 Letter was a

writing presented on behalf of the Rocheleaus within the time

frame for filing proofs of claim or that it indicated an intent

to assert a claim against the estate; the only element at issue

is whether the August 17 Letter was brought to the attention of

the bankruptcy court.3

The Ninth Circuit has expressly determined that it is not

necessary that an informal proof of claim be filed with the

bankruptcy court or otherwise appear on the bankruptcy court’s

record in order to satisfy this requirement. In re Holm,

931 F.2d at 622 (“The document that purports to be an informal

proof of claim need not be filed in the court.”);

In re Franciscan Vineyards, Inc., 597 F.2d at 183 (informal

3 With respect to the second element, whether the August 17

Letter was presented within the time frame for filing proofs of

claim, the bankruptcy court found that this element was met

because under Rule 3002, (in the absence of other court order) a

proof of claim is timely if filed no later than 90 days after the

first date set for the § 341 meeting. However, when the

August 17 Letter was sent to Trustee, no claims bar date had been

set because the case appeared to be a no asset chapter 7. We are

not convinced that a document presented before a claims bar date

has been set could always satisfy the timing requirement. Such a

document would not be relevant where no assets are available to

pay creditors, and the creditor could not plausibly argue that it

intended to assert a claim against an estate with no assets. But

to the extent the bankruptcy court erred in this aspect of its

ruling, it was harmless error because the August 17 Letter was

filed with the court as an attachment to the Extension Motion on

the same day the claims bar date was set.

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letter sent to the trustee who did not forward it to the

bankruptcy court or any other party); In re Anderson-Walker

Indus., Inc., 798 F.2d 1285, 1286 (9th Cir. 1986) (informal

letter sent to trustee’s counsel in response to a collection

letter demanding payment to the estate); In re Sambo’s

Restaurants, Inc., 754 F.2d 811, 812 (9th Cir. 1985) (wrongful

death complaint filed in a different jurisdiction from bankruptcy

case). 

Moreover, although the Rocheleaus sent the August 17 Letter

to the Trustee and not the bankruptcy court, a closer look at the

record demonstrates that the August 17 Letter was filed with the

bankruptcy court on March 12, 2015 as an exhibit to the Extension

Motion. The Extension Motion not only included a copy of the

August 17 Letter but it also explained that the information from

the Rocheleaus was the reason why the Trustee was able to uncover

Avitabile’s interest in the undisclosed asset. The certificate

of service attached to the Extension Motion reflects that service

was made on Avitabile, Avitabile’s counsel, the United States

Trustee, and all creditors. It is undisputed that Avitabile

received a copy of the August 17 Letter after it was filed with

the bankruptcy court. Thus, even if the document had to be filed

with the bankruptcy court, the Extension Motion satisfied that

requirement.

CONCLUSION

For the reasons set forth above, we find no error in the

bankruptcy court’s allowance of the Rocheleaus’ formal proof of

claim as an amendment to their timely informal proof of claim.

Accordingly, we AFFIRM.

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