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FILED

APR 11 2014

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NOT FOR PUBLICATION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-13-1350-DKiTa

)

RAED YAHIA ALAZZEH, ) Bk. No. 8:11-24735

)

Debtor. ) Adv. Proc. No. 8:12-ap-1058

______________________________)

)

MOSTAFFA SHAHRESTANI, )

)

Appellant, )

)

v. ) M E M O R A N D U M1

)

RAED YAHIA ALAZZEH, )

)

Appellee. )

______________________________)

Argued and Submitted on March 20, 2014

at Pasadena, California

Filed - April 11, 2014

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Catherine E. Bauer, Bankruptcy Judge, Presiding

 

Appearances: David Brian Lally, Esq. argued for Appellant

Mostaffa Shahrestani; and David Van Luu, Esq.

argued for Appellee Raed Yahia Alazzeh.

 

Before: DUNN, KIRSCHER, and TAYLOR, Bankruptcy Judges.

FILED

APR 11 2014

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

1 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 8013-1.
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The chapter 72 debtor agreed to extend the time for the

creditor to file an adversary proceeding seeking to deny debtor’s

discharge pursuant to § 727 of the Bankruptcy Code. The creditor

filed the adversary proceeding complaint (“Complaint”) within the

agreed extension. More than a year later, after engaging in an

unsuccessful mediation and substantial discovery, the debtor

filed a motion for summary judgment (“SJ Motion”) seeking

dismissal of the Complaint on the basis that it was untimely

filed. The bankruptcy court granted the SJ Motion and dismissed

the Complaint. We AFFIRM.

I. FACTUAL BACKGROUND

In November 2008, Raed Yahia Alazzeh assumed, as obligor, a

promissory note (“Note”) obligation payable to Mostaffa

Shahrestani in the amount of $140,800. The Note was due and

payable in full in August 2010.

After Mr. Alazzeh defaulted on his payment obligation under

the Note, Mr. Shahrestani obtained a default judgment against

Mr. Alazzeh in the Orange County (California) Superior Court. 

The judgment was for the full amount due under the Note, plus

interest, costs, and attorneys’ fees.

Mr. Alazzeh filed a chapter 7 bankruptcy case on October 24,

2011. Thereafter, Mr. Shahrestani filed the Complaint seeking

denial of Mr. Alazzeh’s discharge pursuant to §§ 727(a)(2),

2 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, Rules 1001-9037. The Federal Rules of Civil Procedure

are referred to as “Civil Rules.”

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(a)(3), (a)(4)(A), and (a)(5).

As provided in the “Notice of Chapter 7 Bankruptcy Case,

Meeting of Creditors, & Deadlines” issued by the bankruptcy court

on October 25, 2011, the § 341(a) Meeting of Creditors

(“Creditors’ Meeting”) was set for December 6, 2011, and the

deadline (“Deadline”) for filing the Complaint was February 6,

2012.3 The chapter 7 trustee held the Creditors’ Meeting as

scheduled on December 6, 2011, but thereafter continued it, first

to January 19, 2012, and finally to February 21, 2012. 

On January 20, 2012, Mr. Shahrestani’s attorney, Susan K.

Ashabraner, began an email correspondence with Mr. Alazzeh’s

attorneys with the goal of obtaining an agreement to extend the

Deadline. On February 2, 2012, attorney Michael N. Nicastro

responded: 

Mr. Alazzeh has agreed to extend the time to object to

one week after the continued 341a meeting date. That

provides enough time for you to examine the documents

and then examine Mr. Alazzeh at the continued 341a

meeting.

Mr. Nicastro’s email to Ms. Ashabraner concluded, “I await your

proposed stipulation to extend.” Seven minutes later

Ms. Ashabraner sent a follow up email which stated, 

I will stipulate to extend the deadline for Mr.

Shahrestani to object to Mr. Alazzeh’s discharge from

Monday, February 6, 2012, to Tuesday, February 28,

2012, which is 7 days after the February 21 creditors’

meeting.

The Complaint was filed February 24, 2012, four days prior

to the date contemplated by the parties as the extended Deadline. 

3 The sixtieth day following the date set for the

Creditors’ Meeting was February 4, 2012, a Saturday. See

Rule 9006(a)(1)(C).

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Mr. Alazzeh, acting in pro per, filed his answer (“Answer”) on

March 21, 2012. The Answer denied each of the allegations of the

Complaint and asserted generically a boilerplate laundry list of

sixteen affirmative defenses, including one alleging that

Mr. Shahrestani’s claims were barred “by the applicable Statute

of Limitations.”

Thereafter, Mr. Alazzeh engaged counsel to represent him in

defending the adversary proceeding. The adversary proceeding

docket reflects that the matter was submitted to mediation, where

it was reported settled by the mediator on July 24, 2012. On

September 13, 2012, Mr. Shahrestani filed a motion to approve the

compromise under Rule 9019, which ultimately was withdrawn.

Following the failed settlement effort, a status hearing was

set for November 28, 2012, and was continued to December 18,

2012, to January 8, 2013, to February 12, 2013, to April 2, 2013,

and to June 4, 2013; during this time the parties completed

discovery. In a Joint Status Report filed May 20, 2013,

Mr. Alazzeh advised that a motion for summary adjudication was to

be filed “fairly soon.” 

Mr. Alazzeh’s motion for summary judgment (“SJ Motion”) was

filed on May 20, 2013, and asserted that the Complaint should be

dismissed because all of the claims it asserted were statutorily

barred by Rule 4004(a). Mr. Shahrestani opposed the SJ Motion on

the basis that the parties had agreed to an extension of the

Deadline. At the hearing on the SJ Motion held July 2, 2013, the

bankruptcy court granted the SJ Motion after noting that no

motion ever had been filed requesting that the bankruptcy court

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extend the Deadline as required by Rule 4004(b).4

On July 15, 2013, the bankruptcy court entered an order

granting the SJ Motion and dismissing the Complaint. 

Mr. Shahrestani timely appealed.

II. JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C.

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

§ 158.

III. ISSUE

Whether the bankruptcy court erred and/or abused its

discretion when it dismissed the Complaint as untimely in light

of the agreement of Mr. Alazzeh’s attorney to extend the

Deadline.

IV. STANDARDS OF REVIEW

We review the trial court's order granting summary judgment

de novo. Aguilera v. Baca, 510 F.3d 1161, 1167 (9th Cir. 2007). 

De novo review requires that we consider a matter afresh, as if

no decision had been rendered previously. United States v.

Silverman, 861 F.2d 571, 576 (9th Cir. 1988); B-Real, LLC v.

Chaussee (In re Chaussee), 399 B.R. 225, 229 (9th Cir. BAP 2008).

We review for an abuse of discretion the bankruptcy court’s

decision regarding the treatment of an affirmative defense. 

389 Orange St. P’ship v. Arnold, 179 F.3d 656, 664 (9th Cir.

4 The bankruptcy court focused on the “public policy” of

ensuring that an extension of the Deadline appears on the docket,

because the court should not have to guess whether it was

appropriate to enter the discharge once the Deadline had run. 

However, it does not appear that a discharge ever has been

entered in Mr. Alazzeh’s case.

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1999). However, whether an affirmative defense is waived, is a

question of law reviewed de novo. See Owens v. Kaiser Found.

Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001). 

A bankruptcy court abuses its discretion if it applies an

incorrect legal standard or misapplies the correct legal

standard, or its factual findings are illogical, implausible or

without support from evidence in the record. TrafficSchool.com

v. Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011). Only if the

bankruptcy court did not apply the correct legal standard, or if

its fact findings were illogical, implausible, or without support

in inferences that can be drawn from facts in the record, is it

proper to conclude that the bankruptcy court abused its

discretion. United States v. Hinkson, 585 F.3d 1247, 1262 (9th

Cir. 2009) (en banc).

V. DISCUSSION

Rule 4004 is a claim processing rule that governs the grant

or denial of a debtor’s discharge. Rule 4004(a) provides, “In a

chapter 7 case, a complaint . . . objecting to the debtor's

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

date set for the meeting of creditors under § 341(a).” 

Mr. Shahrestani asserts that notwithstanding Rule 4004(a),

the Complaint was timely, because Mr. Alazzeh “stipulated” to the

extension of the Deadline. However, agreements between the

parties that implicate court deadlines are not always effective.

Rule 9006(b) governs requests for extensions of time. 

Rule 9006(b)(3) specifically states that the bankruptcy court can

extend the time for taking action under Rule 4004(a) “only to the

extent and under the conditions stated in that rule.” 

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Rule 4004(b) governs the procedure for requesting an extension of

the deadline set forth in Rule 4004(a): 

(1) On motion of any party in interest, after notice

and hearing, the court may for cause extend the time to

object to discharge. Except as provided in subdivision

(b)(2),5 the motion shall be filed before the time has

expired.

Thus, Rule 4004(b) sets forth two guiding principles

governing the filing of the Complaint after the Deadline. First,

a motion for an extension must not only be filed, it must be

filed before the Deadline has passed. Second, an extension is

not automatically granted just because a motion has been filed. 

The bankruptcy court, rather than the parties, has discretion to

determine if cause exists. 

It is undisputed that Mr. Shahrestani did not file a motion

seeking an order from the bankruptcy court extending the Deadline

before the Deadline expired. The Ninth Circuit recently

reemphasized that the deadlines which implicate a debtor’s

discharge are strict, and “without qualification,” cannot be

extended by the bankruptcy court unless a motion is made before

the deadline expires. Wilms v. Sanderson, 723 F.3d 1094, 1100

(9th Cir. 2013). Thus, the Complaint was untimely as a matter of

law. The bankruptcy court did not err when it granted the SJ

Motion and dismissed the complaint.

Mr. Shahrestani next makes what we construe to be a waiver

argument. Specifically, Mr. Shahrestani contends that where

Mr. Alezzeh (1) agreed to the extension, and (2) did not seek to

5 The exception in Rule 4004(b)(2) does not apply to this

appeal.

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enforce the Deadline until fifteen months after the Complaint had

been filed, and after extensive efforts had been expended to

mediate the dispute and to complete discovery, the bankruptcy

court abused its discretion when it granted the motion for

summary judgment and dismissed the Complaint. 

 The assertion of a time bar constitutes an affirmative

defense that, pursuant to Civil Rule 8(c), applicable in a

bankruptcy adversary proceeding pursuant to Rule 7008(a), 

generally must be raised in an answer or be deemed waived. 

Kontrick v. Ryan, 540 U.S. 443, 458 (2004). In Kontrick, the

Supreme Court answered the question: How long do the affirmative

defenses in Rules 4004(a) and (b) and 9006(b)(3) afforded to a

debtor/defendant “linger” in an adversary proceeding? Id. In

Kontrick, the debtor/defendant did not raise the issue that a new

claim in an amended complaint was untimely until after the

bankruptcy court had entered summary judgment against him on the

new claim. The Supreme Court ruled that the outermost point at

which a time bar may be raised is before a decision on the

merits. 

In the matter before us, Mr. Alazzeh first asserted the time

bar in his Answer as his Twelfth Affirmative Defense: “Defendant

alleges that Plaintiff’s cause of action is barred by the

applicable Statute of Limitations.”6 Because the time bar was

6 Mr. Alazzeh incorrectly characterized the time bar

established by Rules 4004(a) and (b) and 9006(b)(3) as a statute

of “limitations.” It actually is a statute of “repose.” See

DeNoce v. Neff (In re Neff), 505 B.R. 255, 263-64 (9th Cir. BAP

2014)(“Statutes of repose are not concerned with plaintiff’s

continue...

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raised in the Answer, it was not waived in the first instance. 

Further, under Kontrick, because Mr. Alazzeh requested

adjudication of this affirmative defense well before a

determination on the merits, the bankruptcy court did not abuse

its discretion when it enforced the time bar by granting the

SJ Motion and dismissing the Complaint.

Mr. Shahrestani could not properly rely only on the

agreement of Mr. Alazzeh’s counsel to extend the Deadline. We

observe that the “agreement” can be read only to advise

Mr. Shahrestani that Mr. Alazzeh would stipulate to a motion

Mr. Shahrestani would present to the bankruptcy court to obtain

the requested extension of the Deadline. Thus his lawyer’s

concluding statement, “I await your proposed stipulation to

extend,” which left no doubt that something more was required

from Mr. Shahrestani to obtain the extension. That

Mr. Shahrestani’s counsel misinterpreted that sentence does not

translate into an abuse of discretion by the bankruptcy court in

refusing to deem a time bar affirmative defense waived. 

VI. CONCLUSION

Mr. Shahrestani could not rely on Mr. Alazzeh’s agreement to

extend the § 727 complaint Deadline. Any such extension is

6...continue

diligence; they are concerned with the defendant’s peace.”). 

That mischaracterization does not change either our analysis or

the result. We interpret pro se pleadings liberally, and a time

bar defense was asserted in the Answer. We also note that in his

Second Affirmative Defense, Mr. Alazzeh asserted that

Mr. Shahrestani was estopped by his “own acts and omissions

occurring at all times relevant to this action” from obtaining

the relief sought in the Complaint.

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dependent upon the bankuptcy court granting a motion filed prior

to the Deadline, for cause shown. Where Mr. Alazzeh

affirmatively raised the time bar defense in his Answer, the

bankruptcy court did not abuse its discretion in allowing him to

assert it through the SJ Motion, notwithstanding that the

SJ Motion was not filed until fifteen months after the Complaint

had been filed.

We AFFIRM.

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