Opinion ID: 524104
Heading Depth: 2
Heading Rank: 1

Heading: Applicability of In re Warren

Text: 7 Hand's principal argument on appeal is that section 108(c) of the Bankruptcy Code tolled the eight-month enforcement period in RCW 60.04.100 once Hunters Run had filed its petition in bankruptcy. Section 108(c) provides in relevant part: 8 ... if applicable non-bankruptcy law ... fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor ... and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of-- 9 (1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or 10 (2) 30 days after notice of the termination or expiration of the stay under section 362, 922, 1201, or 1301 of this title, as the case may be, with respect to such claim. 11 11 U.S.C. Sec. 108(c) (Supp. V 1987). Hand argues that RCW 60.04.100 is applicable non-bankruptcy law to which section 108(c) applies. 12 Both the bankruptcy court and the district court disagreed. Relying heavily on In re Warren, 192 F.Supp. 801 (W.D.Wash.1961), which held that the predecessor to section 108(c) did not apply to toll RCW 60.04.100, both courts emphasized that Washington's Mechanic's Lien Statute is a statute of duration, not one of limitation. 3 They then tracked the reasoning of In re Warren, explaining that: (1) nothing in the legislative history of section 108(c) or its predecessor, section 11(f) of the Bankruptcy Act ... indicates that they were intended to apply to other than ordinary statutes of limitation (Hunters Run, 70 B.R. at 299) and; (2) that section 108(c) applies to a claim against the debtor while a Mechanic's Lien is not a claim against the debtor but is against the realty or the security for the debt. Id. at 300. 13 Reliance on In re Warren is outdated. Modern section 108(c) differs significantly from old section 11(f). Section 11(f), by its terms, suspended only statutes of limitation. 4 The In re Warren court thus read the section literally when it excluded RCW 60.04.100 from section 11(f)'s scope. In re Warren, 192 F.Supp. at 804. Section 108(c), however, is not limited to statutes of limitation. It applies to applicable non-bankruptcy law, whatever that law may be. Under well-settled principles of statutory construction, it no longer matters whether RCW 60.04.100 is durational or limitational. 14 Plainly read, section 108(c) encompasses RCW 60.04.100, an applicable non-bankruptcy law that fixes a period for commencing a civil action in a court other than a bankruptcy court on a claim against the debtor. See, e.g., Richards v. United States, 369 U.S. 1, 9, 82 S.Ct. 585, 591, 7 L.Ed.2d 492 (1962) (In cases involving statutory construction we assume that the legislative purpose is expressed by the ordinary meaning of the words used.) And while the legislative history of section 108(c) does mention statutes of limitation in describing the statute's purpose, that history in no way suggests that section 108 is to be read so narrowly as to exclude statutes like Washington's mechanic's lien law. See Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980) (Absent a clearly expressed legislative intention to the contrary, [statutory] language must ordinarily be regarded as conclusive) and see H.R.Rep. No. 95-595, 95th Cong., 2d Sess. 318 (1978), U.S.Code Cong. & Admin.News 1978, pp. 5787, 6275. 15 Further, while it is true that section 108(c) refers only to a claim against the debtor, this language must be interpreted according to the rules of construction set forth in 11 U.S.C. Sec. 102, which provides in pertinent part: 16 In this title--... 17 (2) claim against the debtor includes claim against property of the debtor. 18 11 U.S.C. Sec. 102 (1982). Thus Hunters Run's argument that Hand's claim is not against the debtor but is instead against the realty or security for the debt is unavailing. Moreover, reliance on In re Warren is again misplaced. The old statute (section 11(f)) referred only to debts of a bankrupt, a phrase which was also read very strictly by the In re Warren court. 19 In sum, In re Warren does not control the outcome of this case. Bankruptcy law has changed. Section 108(c), on its face, does not exclude RCW 60.04.100 from its purview. It is necessary, therefore, to examine the applicability of section 108(c) within the context of modern bankruptcy law.