United States Bankruptcy Appellate Panel

FOR THE EIGHTH CIRCUIT

 

No. 97-6055

 

In re: Food Barn Stores, Inc.*

*

Debtor *

*

Hartford Casualty Insurance Co. * 

* Appeal from the United States

Appellant * Bankruptcy Court for the 

* Western District of Missouri

vs. *

*

Food Barn Stores, Inc. *

*

 Appellee *

 

Submitted: September 30, 1997

Filed: November 14, 1997

 

Before KRESSEL, SCHERMER, and SCOTT

SCOTT, Bankruptcy Judge

I

Hartford Casualty Insurance Company (“Hartford”) appeals

from an order denying a motion to extend the time for filing

a Notice of Appeal. Inasmuch as the bankruptcy court did not

clearly err in its determination that the appellant failed to

show excusable neglect, we affirm. 
Although the Notice of Appeal was submitted to the clerk for filing, it was apparently 1

later “withdrawn.” The Notice of Appeal in the record has VOID written across the clerk's file

stamp. Thus, it does not appear that there is a valid Notice of Appeal filed in the bankruptcy case.

2

Food Barn Stores, Inc. (“Food Barn”) filed its Chapter 11

petition in bankruptcy on January 5, 1993. Hartford timely

filed its proof of claim in the case on January 22, 1993. On

the same date, Hartford's counsel filed a Request for Notice

and Entry of Appearance. Hartford thereafter was properly

served with all objections, motions, and notices, at the

address on the Request for Notice.

On August 31, 1994, the debtor filed a Motion to Deny

Claims. This motion contained objections to numerous claims

filed by various creditors, including the Hartford claim. The

Motion included a notice of a hearing date, October 20, 1994,

and advised that a response to the motion should be filed at

least five days prior to the date set for hearing. Hartford's

attorney received the motion but, apparently not realizing

that the motion contained an objection to its claim, took no

action in response to the motion. On October 20, 1994, no

response having been filed, and no one appearing at hearing on

behalf of Hartford, the bankruptcy court entered an order

sustaining the objection to Hartford's proof of claim.

Twenty-seven months later Hartford filed a Motion for

Reconsideration of the October 20, 1994, order disallowing its

claim. Hearing was held and the motion was denied mainly due

to Hartford's failure to show excusable neglect in not

defending its proof of claim. Hartford then moved for

reconsideration of the order denying reconsideration of the

October 20, 1994, order. This motion was also denied by order

entered June 6, 1997. It was not until June 17, 1997, however,

that Hartford submitted a Notice of Appeal of the June 6, 1997,

Order. On that same date it also filed a Motion for Leave to 1
3

File Notice of Appeal out of Time. That motion was denied in

a brief order entered on June 23, 1997. Hartford timely filed

its Notice of Appeal from this order three days later. It is

the order denying Hartford's Motion for Leave to File Notice

of Appeal Out of Time that is before this Court.

II
4

This Court reviews the bankruptcy court's findings of fact

for clear error and reviews legal conclusions de novo. Fed.

R. Bankr. Proc. 8013; First National Bank of Olathe v. Pontow,

111 F.3d 604, 609 (8 Cir. 1997). While the meaning of

th

"excusable neglect" is a question of law, whether excusable

neglect exists is a question of fact and thus the trial court's

findings may be reversed only if they are clearly erroneous.

Cf. Belfance v. Black River Petroleum, Inc. (In re Hess), 209

B.R. 79, 80 (BAP 6th Cir. 1997).

III

Rule 8002(a), Federal Rules of Bankruptcy Procedure,

requires that a Notice of Appeal be filed within ten days of

entry of the order from which an appeal is taken. Once the

time for filing an appeal has expired, "an appellate court is

without authority to exercise its jurisdiction." Vogelsang v.

Patterson Dental Co., 904 F.2d 427, 429 (8th Cir. 1990); accord

Crockett v. Lineberger, 205 B.R. 580, 581 (8 Cir. BAP 1997). th

However, Rule 8002(c) provides that the bankruptcy court may

enlarge the time for filing a notice of appeal “for a period

not to exceed 20 days from the expiration of the time otherwise

prescribed.” The rule also permits, in most circumstances, an

untimely request--one made after the time for filing the notice

of appeal--upon a showing of excusable neglect.

Hartford argues that the bankruptcy court erred in failing

to undertake an equitable analysis as required by Pioneer

Investment Services Company v. Brunswick Associates Limited

Partnership, 113 S. Ct. 1489 (1993), and that excusable neglect

existed. Specifically, it asserts that the failure to timely

file the notice of appeal was due solely to counsel's mistake

in calculating the time under Rule 6(a) of the Federal Rules
Under the Federal Rules of Civil Procedure holidays and weekends are not taken into 2

account in calculating a time period less than eleven days. In contrast, under the Federal Rules of

Bankruptcy Procedure holidays and weekends are excluded in calculating any time period of less

than eight days. Since the ten-day period for filing an appeal falls between these two methods of

calculation, whether Rule 6(a) of the Federal Rules of Civil Procedure or Rule 9006 of the Federal

Rules of Bankruptcy Procedure applies makes a difference.

5

of Civil Procedure, rather than Rule 9006(a) of the Federal

Rules of Bankruptcy Procedure.2
Inasmuch as it is well-settled that Rule 9006 applies rather than Rule 6(a), Fed. R. Civ. 3

Proc. 81(a)("These rules...do not apply to proceedings in bankruptcy..."); e.g., Aycock v. Eaton

(In re Eichelberger), 943 F.2d 536, 538-39 (5th Cir. 1991), Hartford prudently did not pursue this

argument on appeal.

6

In Pioneer Investment Services Company v. Brunswick

Associates Limited Partnership, 113 S. Ct. 1489 (1993), the

Supreme Court addressed the burdens and standards a party must

meet when seeking a determination of excusable neglect. Whether

a party's neglect of a deadline is excusable is an equitable

determination, "taking account of all the relevant

circumstances surrounding the party's omission." Id. at 1498.

Factors for consideration include: 

(1) The danger of prejudice to the debtor; 

(2) The length of the delay and its potential impact on

judicial proceedings;

(3) The reason for the delay, including whether it was

within the reasonable control of the movant; and

(4) Whether the movant acted in good faith. 

Pioneer Investment, 113 S. Ct. at 1498. The proper focus is

upon whether the neglect is excusable. Id. at 1499.

While all of these factors are to be analyzed by the

Court, it is first the movant's burden to demonstrate to the

trial court that excusable neglect exists. McGraw v. Betz (In

re Bell & Beckwith), 112 B.R. 879, 880 (N.D. Ohio 1990).

Hartford's motion before the bankruptcy court, however, stated

only that it was unclear whether Rule 9006, Federal Rules of

Bankruptcy Procedure, or Rule 6(a), Federal Rules of Civil

Procedure, applied, and that Hartford's counsel, in

3

calendaring, relied on Rule 6(a) rather than Rule 9006.

Hartford made no argument raising the equitable factors it now

asserts before this Court. By failing to even argue these

factors before the bankruptcy court, Hartford failed to meets

its burden of demonstrating excusable neglect.
7

Moreover, we find, in examining the Pioneer factors, that

the bankruptcy court did not err in its determination that

excusable neglect did not exist. Like the bankruptcy court's

earlier determination of May 8, 1997, there is no indication

of bad faith on the part of Hartford or a lengthy delay in

filing this motion. However, the remaining factors weigh
8

heavily against a finding that the neglect is excusable. Cf.

Pyramid Energy Limited v. Duquoin National Bank (In re Pyramid

Energy Limited), 165 B.R. 249 (Bankr. S.D. Ill 1994)(although

many factors weighed in favor of excusable neglect, where delay

was in control of party, no excusable neglect existed). In

this instance delay was solely within the control of Hartford.

It was Hartford's responsibility to review the rules, ascertain

the correct date for filing the Notice of Appeal, and to timely

file the Notice of Appeal. There was no reason offered other

than neglect for its failure to do these acts. Indeed,

Hartford apparently located the relevant rule regarding time

to file an appeal from a bankruptcy court order in the logical

place, the Federal Rules of Bankruptcy Procedure, but there is

no excuse offered for not locating the procedure to follow

regarding the proper calculation of time for taking an appeal

within the same set of rules.

Courts have long held, both prior to and after Pioneer,

that ignorance or misreading of the law, particularly in the

application of Rule 8002(c), does not constitute excusable

neglect. Silver Oak Homes, Ltd, 169 B.R. 349 (D. Md.

1994)(unfamiliarity with bankruptcy and reliance upon the

Federal Rules of Civil Procedure is not excusable neglect);

Romas v. Callahan (In re Callahan), 211 B.R. 131 (N.D.N.Y.

1997)(confusion over "proper procedure" is not excusable

neglect); Pyramid Energy, Ltd. v. Duquoin National Bank (In re

Pyramid Energy, Ltd.), 165 B.R. 249 (Bankr. S.D. Ill.

1994)(confusion as to whether to exclude holidays and weekends

is not excusable neglect); In re Auto Specialties MFG Co., 133

B.R. 384, 391-392 (Bankr. W.D. Mich. 1991); Thistlethwaite v.

Federal Deposit Insurance Corp. (In re Pernie Bailey Drilling

Co.), 111 B.R. 561 (Bankr. W.D. La. 1989); Federal Land Bank

of Columbia v. Fisher (In re Fisher), 65 B.R. 261 (Bankr. N.D.

Ga. 1986); Speciner v. Miller (In re Miller), 59 B.R. 572
9

(Bankr. E.D.N.Y. 1986); Tyler v. Capitol Chemical Industries,

Inc. (In re Metro Paper Co.), 18 B.R. 831 (Bankr. D.D.C. 1982).

Moreover, as noted by the court in Duquoin, 165 B.R. 249,

Pioneer does not, in fact, furnish relief for the error of

applying an incorrect rule: "The Pioneer court, in assessing

the culpability of counsel's actions, gave `little weight' to

the fact that counsel was experiencing upheaval in his law

practice at the time of the bar date....Further, the court

indicated that ignorance of the rules or a mistake in

construing the rules does not constitute 'excusable 
10

neglect' even under the liberal standard there espoused. 113

S. Ct. at 1496." See also Harlow Fay, Inc. F. Federal land

Bank of St. Louis (In re Harlow Fay, Inc.), 993 F.2d 1351 (8th

Cir. 1993), cert. denied, 510 U.S. 825 (1993).

As to the remaining factor Hartford merely offers its

legal conclusion that no prejudice results, but fails to offer

any specific, factual argument regarding this element. The

record is not silent, however, on this point inasmuch as the

bankruptcy court, in its earlier order of May 8, 1997,

addressed the prejudice to the debtor if the litigation on the

now almost three year old objection to Hartford's proof of

claim were to go forward. In light of the passage of time in

this case and litigation which would remain before the ultimate

conclusion of this matter, the prejudice not only to the

debtor, but to other creditors, as well as to the

administration of the case, is obvious. Since the time of the

disallowance of the claim in October of 1994, the debtor has

liquidated its assets and destroyed its books and records,

including documents relating to the claims resolution process

and documents relating to Hartford's proof of claim. The

debtor would be thus severely limited in its ability, at this

late date, to prosecute the objection to claim. Moreover,

distribution under the plan of reorganization commenced and has

progressed such that it appears that the plan may be

substantially consummated. Since there is no indication that

Hartford obtained a stay of the reorganization process, it is

even questionable whether, by the time Hartford is able to

obtain a hearing on the objection its claim, there would exist

any funds for distribution to it.

Second, we do not believe the bankruptcy court "erred in

failing to undertake an equitable analysis." Although the

bankruptcy court's order is brief, the record reveals that the

bankruptcy court undertook the appropriate analysis. In its
11

order of May 8, 1997, decided less than two months prior to the

order at issue, the bankruptcy court thoroughly analyzed the

Pioneer standard. Thus, the record demonstrates that the trial

court was well aware of the required analysis. A reading of

the bankruptcy court's citation to authority in the order of

June 23, 1997, also indicates that it not only considered the

facts of this case and the relevant law, but also undertook the

appropriate analysis. 

Lastly, although not an issue raised by the appellee, we

note that this appeal may be moot. The Federal Rules of

Bankruptcy Procedure, as currently written, provide:
This result will be obviated by amendment to Rule 8002(c) which will be effective 4

December 1, 1997. Under this amendment, the bankruptcy judge will have the authority to

extend the time for filing a notice of appeal for up to ten days following the order granting the

motion.

12

The bankruptcy judge may extend the time for filing

the notice of appeal by any party for a period not to

exceed 20 days from the expiration of the time

otherwise prescribed by this rule.

Fed. R. Bankr. P. 8002(c). Even if we were to agree with the

appellant and reverse the decision of the bankruptcy court, the

maximum relief that the bankruptcy court could grant under the

rule would be to extend the time to timely file a notice of

appeal to July 7, 1997. Since that time has long passed,

neither this court nor the bankruptcy court can issue an order

providing meaningful relief such that this appeal is moot.4

IV

The bankruptcy court's determination that Hartford failed

to show excusable neglect with regard to Hartford's motion to

extend the time for filing a Notice of Appeal under Rule 8002,

Federal Rules of Bankruptcy Procedure was not clearly

erroneous. Accordingly, we affirm.

A true copy.

Attest:

CLERK, U.S. BANKRUPTCY APPELLATE PANEL FOR THE

EIGHTH CIRCUIT