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No. 95-1020

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In re: Ronald Ellis, *

*

Debtor. *

*

_____________________________ *

* Appeal from the United States

Susan Ellis, * District Court for the Eastern

* District of Missouri.

Appellee, *

*

v. *

*

Ronald Ellis, *

*

Appellant. *

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 Submitted: May 18, 1995

 Filed: December 18, 1995

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Before BOWMAN, MAGILL, and LOKEN, Circuit Judges.

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BOWMAN, Circuit Judge.

Ronald Ellis appeals from the decision of the District Court

affirming the Bankruptcy Court's decision holding nondischargeable in

bankruptcy a $300,000 obligation Ronald owed to his former wife Susan Ellis

by virtue of a dissolution decree. We reverse.

Susan and Ronald Ellis were divorced in November 1989. At issue here

is paragraph 1 of the attachment to the Ellises' Decree of Dissolution,

which reads as follows:
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As and for her partial share of the parties' marital

property, Petitioner [Susan] is awarded Three Hundred Thousand

Dollars ($300,000.00) to be paid to her by Respondent [Ronald],

as her interest in Respondent's pension and profit sharing plan

with Vantage Footwear, Inc., and Vantage Footwear, Inc. Said

award shall be deemed a judgment lien against Respondent's

interest in said plan and his interest in the stock of Vantage

Footwear, Inc., which is held in or by said plan. Respondent

shall execute a Qualified Domestic Relations Order consistent

with this Decree and the Court retains jurisdiction thereof.

On February 7, 1990, the above language was modified, for reasons not in

the record, on Ronald's motion to alter and amend the judgment. The only

change of substance was the deletion of the last sentence requiring Ronald

to execute a Qualified Domestic Relations Order (QDRO).

In an opinion filed January 22, 1991, the Missouri Court of Appeals

found that the $300,000 award was not an abuse of discretion. Ellis v.

Ellis, 802 S.W.2d 546, 549 (Mo. Ct. App. 1991). The court of appeals

modified the award, at Ronald's request, so that $50,000 was to be paid to

Susan on July 1, 1991; thereafter, every six months, Ronald was to pay

Susan $50,000 plus interest "until the amount is paid in full." Id. The

court apparently took this action after being persuaded by Ronald of

"possible tax consequences," and that "the value of the plan would be

substantially reduced if liquidated at one time." Id. On June 7, 1991,

less than one month before the first payment was due, Ronald filed a

voluntary petition in bankruptcy. On October 11, 1991, Susan filed this

adversary proceeding challenging the dischargeability of various

obligations Ronald owed to her pursuant to the dissolution decree

(including his maintenance and child support obligations, which Ronald had

listed as dischargeable debts), arguing they were not dischargeable as they

were in the nature of maintenance and support.
 Presumably, the caption of the motion was inaccurate. 1

Susan did not seek leave to alter or amend the judgment; only the

court could alter or amend its own judgment. She states in

paragraph 4 of her motion that she wanted leave to file an

untimely motion to alter or amend under Rule 59(e) (Rule 59(e)

motions are required to be filed within ten days of entry of the

judgment) and, in case the court granted the motion for untimely

filing, she included the motion to alter or amend and her

arguments on the merits.

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On January 28, 1993, the Bankruptcy Court held that the $300,000

award to Susan was a property settlement not intended as support, and

therefore was a dischargeable debt in Ronald's bankruptcy. On February 24,

1993, Susan filed a "Motion for Leave to Alter or Amend Court's Judgment"1

or, alternatively, leave to file a late notice of appeal. Susan's attorney

averred that she did not receive the Bankruptcy Court order from the court,

and only learned of it on February 11 from opposing counsel. She asked the

court for leave to file a motion to alter or amend the judgment outside the

ten-day limit set forth in Federal Rule of Civil Procedure 59(e) (made

applicable in the bankruptcy courts by Bankruptcy Rule 9023). On April 15,

the court granted Susan leave to file an untimely motion to alter or amend,

relying on Federal Rule of Civil Procedure 60(b) (made applicable in the

bankruptcy courts by Bankruptcy Rule 9024) and finding that excusable

neglect explained her tardy filing. In the same order, the court extended

the time within which Susan could file her notice of appeal. In a separate

order filed on the same day, the Bankruptcy Court amended its judgment and

held that the $300,000 Ronald owed to Susan was nondischargeable under the

law as set forth in this Court's opinion in Bush v. Taylor, 912 F.2d 989

(8th Cir. 1990) (en banc). The District Court affirmed. Ronald Ellis

appeals.

For his first issue on appeal, Ronald Ellis contends that the

Bankruptcy Court abused its discretion by reopening its judgment pursuant

to Federal Rule of Civil Procedure 60(b), and that the District Court erred

in affirming that decision. He focuses his argument on the rules

concerning a motion for leave to file a late
 For its authority to consider Susan's claim of "unusual 2

circumstances," the Bankruptcy Court relied on the judiciallycreated doctrine pursuant to which a court may allow the filing

of an untimely notice of appeal, where the filing is untimely

because of reasonable reliance on the erroneous actions of the

court. We do not decide whether this doctrine is applicable to

an untimely Rule 59(e) motion to alter or amend a judgment. Cf.

Thompson v. INS, 375 U.S. 384, 387 (1964) (per curiam) (holding

that lower court's representation that Rule 59(b) motion for new

trial was timely, when it was not, constituted "unique

circumstances" to excuse untimely notice of appeal); Osterneck v.

Ernst & Whinney, 489 U.S. 169, 179 (1989) ("By its terms,

Thompson applies only where a party has performed an act which,

if properly done, would postpone the deadline for filing his

appeal and has received specific assurance by a judicial officer

that this act has been properly done."). The question is of no

moment here, as the court found no "unusual circumstances"

existed to excuse Susan's untimely filing of her Rule 59(e)

motion.

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notice of appeal, arguing that the court's decision under Rule 60(b)

effectively granted Susan an appeal. That argument misses the mark. The

real procedural issue is the court's use of Rule 60(b) as a vehicle to

overcome the untimeliness of Susan's Rule 59(e) motion to alter or amend.

Susan's motion for leave to file a notice of appeal out of time was granted

in a separate ruling, but became irrelevant when the Bankruptcy Court

amended its judgment so as to find in Susan's favor on the merits of the

dischargeability question.

As the Bankruptcy Court noted, enlargement of the ten days allowed

for filing a Rule 59(e) motion to alter or amend the judgment, regardless

of the reason, is expressly prohibited by Bankruptcy Rule 9006(b)(2). The

court also rejected Susan's argument that "unusual circumstances" excused

her failure to file her motion within ten days. The court therefore was 2

without jurisdiction to consider Susan's Rule 59(e) motion. See Townsend

v. Terminal Packaging Co., 853 F.2d 623, 624 (8th Cir. 1988). But the

Bankruptcy Court then turned to Rule 60(b), which allows a reasonable time

(but not more than one year) within which to file a motion for relief from

judgment based on excusable neglect, and
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found the requisite excusable neglect for Susan's failure to make timely

post-judgment motions. 

In the context of excusable neglect as a ground for relief from a

judgment or order, Rule 60(b) is appropriately invoked to offer excuses for

neglect leading up to the judgment in the first place, not excuses for

neglect for failure to file post-judgment motions to alter or amend.

Sanders v. Clemco Indus., 862 F.2d 161, 168 n.14 (8th Cir. 1988); see,

e.g., In re Freightway Corp., 170 B.R. 108 (Bankr. N.D. Ohio 1994) (seeking

reconsideration under Rule 60(b) of order denying creditor's claim for

failure of creditor to appear); In re King, 165 B.R. 296 (Bankr. M.D. Fla.

1994) (seeking rehearing under Rule 60(b) for order granting motion to

value collateral where creditor failed to respond); Elliot v. Hancock (In

re Hancock), 160 B.R. 677 (Bankr. M.D. Fla. 1993) (seeking relief under

Rule 60(b) from default judgment entered when no answer was filed); cf. In

re Gray, 156 B.R. 707 (Bankr. D. Maine 1993) (holding creditors could not

attack debtor's discharge as it applied to them by characterizing motion

as under Rule 60(b) where procedure to challenge discharge was provided by

statute); In re Bowden, 138 B.R. 584 (Bankr. E.D. Ark. 1992) (assuming that

motion seeking reinstatement of bankruptcy case that was dismissed after

debtors' failure to file the required documents was made pursuant to Rule

60(b)); In re Fuller, 111 B.R. 660 (Bankr. S.D. Ohio 1989) (assuming that

motion seeking reinstatement of automatic stay where debtor failed to file

responsive pleading to motion for relief from stay was made pursuant to

Rule 60(b)). A Rule 60(b) motion alleging excusable neglect is

appropriately used when seeking relief from judgment for excusable neglect,

not when seeking relief from the deadlines set by the rules for postjudgment motions, even if those deadlines are not met because of excusable

neglect. Contrary to Susan's arguments, Pioneer Investment Services v.

Brunswick Associates Limited Partnership, ___ U.S. ___, 113 S. Ct. 1489

(1993), is inapplicable to this case. The issue in that case was the

interpretation of the term "excusable neglect" in a case
 Because of our resolution of the procedural question, and 3

our alternate holding on the merits of the dischargeability

question, we do not consider Ronald's argument that the

Bankruptcy Court abused its discretion in altering its judgment

based on a legal theory (derived from Bush v. Taylor, 912 F.2d

989 (8th Cir. 1990) (en banc)) that was raised for the first time

in Susan's motion to alter or amend.

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where a creditor failed to timely file a proof of claim. Pioneer had

nothing to do with deciding whether excusable neglect under Rule 60(b) can

be used to grant leave to file an untimely motion to alter or amend, which

implicates Rule 59(e).

We hold that the Bankruptcy Court was without jurisdiction to

consider Susan's Rule 59(e) motion (and we note that the court, in at least

a formal sense, did reject that motion). We further hold that the

Bankruptcy Court erred in relying upon Rule 60(b) to grant Susan leave to

file an untimely motion to alter or amend the judgment, and the District

Court erred in affirming that decision. We need not and do not consider

what now becomes of the Bankruptcy Court's order granting Susan's motion

to file her notice of appeal out of time because the issue is moot, and has

been since the entry of the amended judgment in Susan's favor, issued the

same day as the ruling on her motion for leave to file an untimely Rule

59(e) motion, made it unnecessary for her to appeal. Instead, the appeal

to the District Court from the amended judgment was taken by Ronald. 

We conclude that Ronald is correct that the amended judgment must be

reversed for the procedural reasons we already have discussed. Moreover,

even if we are mistaken in our conclusions as to the convoluted procedural

history of this case, our resolution of the case on the merits of the

dischargeability question results in judgment for Ronald in any case.3

Relying on our opinion in Bush v. Taylor, the Bankruptcy Court

summarily reversed its original decision adjudging Ronald's
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$300,000 obligation dischargeable. The District Court, in its de novo

review and affirmance, elaborated somewhat, concluding that the installment

payments for the $300,000 obligation were debts not incurred until payment

was due, and thus were not dischargeable under Bush. After our own de novo

review, we find that we must disagree with the application of Bush by the

lower courts in this case.

In Bush, the debtor, pursuant to a decree of dissolution entered

before the days of QDROs, was required to pay a portion of his pension

benefits, as he received them, to his former wife as her "sole and separate

property." The district court, affirming the bankruptcy court, refused to

discharge the obligation in the debtor's bankruptcy proceedings. This

Court affirmed, holding that the obligation was not pre-petition debt

dischargeable in bankruptcy. Instead, we held, the amount due was the

former wife's "sole and separate property," to be paid to her by the debtor

only because the pension plan administrator did not pay her share of the

pension to her directly. Moreover, as we noted, the pension payments would

continue to flow to the debtor for as long as he lived, and if his

obligation to pay his former wife a portion of these payments as he

received them were discharged in bankruptcy, she thereby would be deprived

of the "sole and separate property" in these payments that the state

divorce court had awarded her.

Here, Susan was not awarded a fixed share of payments to be received

by Ronald from his employer's pension and profit sharing plan as her "sole

and separate property," as was the case in Bush. Instead, the divorce

court awarded Susan a sum certain that represented her "interest" in the

plan and in Vantage Footwear, but it was not in any way linked to pension

or profit-sharing payments to be received by Ronald. If the amount was to

have been more than a division of property, that is, if it was based on

actual payments
 Employee Retirement Income Security Act, Pub. L. No. 93- 4

406, 88 Stat. 829 (codified as amended at 29 U.S.C. §§ 1001-1461

(1988 & Supp. V 1993), and in scattered sections of the United

States Code).

 Susan's lien on Ronald's interest in the pension and 5

profit-sharing plan and Vantage Footwear stock, created by the

explicit language of the divorce decree, is unaffected by our

decision today. The record indicates, however, that the plan and

the stock are now worthless.

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due Ronald from an ERISA-regulated pension and profit-sharing plan, then 4

a QDRO should have and presumably would have been executed. But the

installment payments owed to Susan were not Susan's "sole and separate

property" payable by Ronald only when he received payments from his

company's plan. Rather, the $300,000 was a division of marital property

representing the divorce court's determination of Susan's present interest

in the pension and profit-sharing plan and in the company itself. It was

owed to Susan regardless of any later changes in the value of the plan or

of the company.5

 

Ronald prevailed upon the Missouri Court of Appeals to modify the

award to make it payable in installments, evidently convincing the court

that modification was necessary to protect the plan assets. Ronald filed

his bankruptcy petition before any of the court-ordered payments to Susan

became due. But the installment payments did not become post-petition debt

merely because the dates of payment had not yet arrived. Unlike Bush, in

which the former husband became obligated to pay over his former wife's

portion of his pension checks only as he received them, Ronald's obligation

to Susan was merely unmatured debt. Ronald owed those amounts to Susan

whether or not he ever received a nickel from the pension and profitsharing plan or from his interest in the company. The record does not

indicate that he was even drawing--or eligible to draw--any funds from the

plan at the time his marriage to Susan was dissolved. We therefore must

conclude that Susan's interest in the plan and the company was reduced to

an amount certain that Ronald
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was obligated to pay to her from whatever assets he had, and thus is a prepetition debt that, not being in the nature of maintenance and support for

his former wife, see 11 U.S.C. § 523(a)(5) (1994), is dischargeable in

bankruptcy, see id. § 727 (1994) (pre-petition debts shall be discharged);

id. § 101(5), (12) (defining debt and claim under the Bankruptcy Code).

The judgment of the District Court is reversed.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.