Opinion ID: 2815873
Heading Depth: 2
Heading Rank: 3

Heading: facts

Text: The following facts are undisputed: In January 2003, Utica National Insurance Group (“Utica National”) hired Debtor Michael Sheppard’s law firm, Craft & Sheppard P.L.C., to pursue a subrogation action (“Original Action”). Utica National operated through its subsidiary, Creditor Republic Franklin Insurance Company (“Republic Franklin”). In January 2011, a settlement was reached and settlement proceeds totaling $145,000.00 were entrusted to Debtor’s law firm, where Sheppard was the managing partner in the two-partner firm. Under the fee agreement made between Republic Franklin and the law firm, Republic Franklin was entitled to $130,740.03 of the award. This award was not distributed to Republic Franklin. In 2012, Republic Franklin retained the law firm Lewis, King, Krieg and Waldrop P.C. (“Lewis King”), to recover the proceeds of the settlement agreement from Sheppard and his law partner. Lewis King continues to represent Republic Franklin in this action (hereinafter “Appellant’s Counsel”). On May 15, 2013, Republic Franklin initiated a fee dispute against Sheppard’s firm. This fee dispute was resolved through arbitration. On October 28, 2013, the parties reached a settlement agreement in which Sheppard, his former law partner, and their law firm agreed to be jointly and severally liable for the settlement proceeds owed to Utica National. The award was to be paid out in two portions. The first payment, $60,000.00, was due on or before November 29, 2013. The second payment, $70,740.03, was to be paid on or before December 30, 2013. Both of these amounts were payable to “Utica National Insurance Group,” specifically the Utica National regional office located in Atlanta, Georgia. This office was the same location that was listed in the Original Action and that worked with Sheppard’s law firm originally. The Atlanta office also handles claims relating to its member companies, including Republic Franklin. On December 11, 2013, Appellant’s Counsel sent a letter to Sheppard informing him that while his partner had remitted $30,000.00 in keeping with the settlement agreement, Sheppard’s portion, $30,000.00, had not been received by Utica National. At this point, emails began to be exchanged regularly regarding the overdue amount. 3 No. 14-8045, In re Shepard On January 30, 2014, Appellant’s Counsel met with Sheppard to discuss the overdue settlement payments. Utica National had only received the $30,000.00 from Sheppard’s former partner. Sheppard remains jointly and severally liable for the remaining $100,740.03. On February 28, 2014, Michael G. and Sharon L. Sheppard filed a Voluntary Joint Bankruptcy Petition under Chapter 7. On the Summary of Schedules “UTICA National Insurance” is listed as a creditor, holding a $60,000.00 non-secured priority lien. The address listed for Utica National is its home office in New Hartford, New York. On March 2, 2014, the Bankruptcy Court sent notice by first-class mail to all creditors, including Utica National. Notice was sent to the New York address of Utica National’s corporate office. This notice informed creditors of the May 30, 2014 bar date by which creditors had to file a complaint or challenge the dischargeability of certain debts. No notice was sent to Appellant’s Counsel or Republic Franklin about the bankruptcy.1 On May 21, 2014 Appellant’s Counsel initiated an action in Tennessee State Court against the Debtor, unaware of the pending bankruptcy. Appellant’s Counsel only had actual notice of the bankruptcy proceeding on May 28, 2014 when Debtor’s bankruptcy attorney notified Appellant’s Counsel that they should not have filed the suit due to the Debtor’s pending bankruptcy. The next day, May 29, 2014, Appellant’s Counsel filed a timely motion to extend the deadline for filing until July 30, 2014. This is the motion at issue in this case. The justification for the motion was that Appellant’s Counsel only had two days prior to the May 30, 2014 deadline to file a complaint and simply would not have enough time to properly form the necessary legal arguments. 1 Attached to Debtor-Appellee’s reply brief is a letter from Sheppard to Appellant’s Counsel dated March 6, 2014. Debtor-Appellee offers this document as evidence of a courtesy email informing Appellant’s Counsel of the bankruptcy proceeding. Because this document was offered first on appeal and was not considered by the Bankruptcy Court, we need not consider the document. See Fed. R. Bankr. P. 8009(a)(4). The letter, however, does not actually inform the Appellant’s Counsel of the bankruptcy, but rather states that Sheppard will “have to” file bankruptcy in the future. By this date, Sheppard had filed bankruptcy. 4 No. 14-8045, In re Shepard On July 8, 2014, the Bankruptcy Court held a hearing on the motion and determined that “cause [had] not been established adequately” to justify granting the motion. (Transcript of Hearing, 22-23). On July 29, 2014, a timely notice for appeal was filed.