Document: 503 U.S. 638 112 S.Ct. 1644 118 L.Ed.2d 280 TAYLORv.FREELAND & KRONZ et al. No. 91-571. Argued March 2, 1992. Decided April 21, Syllabus On the schedule she filed pursuant to § 522(l ) of Bankruptcy Code, debtor Davis listed as exempt property expected proceeds from her pending employment discrimination suit. Petitioner Taylor, trustee Davis' bankruptcy estate, did not object claimed exemption within 30-day period allowed by Rule 4003(b). However, upon later learning that suit had been settled for a substantial sum, Taylor complaint in Court against respondents, attorneys suit, demanding they turn over settlement estate. Concluding no statutory basis claiming exempt, court ordered respondents "return" sum sufficient pay off all unpaid creditors, and District affirmed. The Appeals reversed, holding erred because money question failed timely manner. Held: A may contest validity after 4003(b) has expired, even though colorable exemption. Pp. 3-8. (a) Because parties agree have right more than small portion lawsuit proceeds, let alone full amount, apparently could made valid objection under )—which provides, inter alia, "property . is exempt" "[u]nless party interest objects," but does specify time objecting—if he acted promptly 4003(b)—which establishes objections trustees creditors "unless, such period, further granted court." P. 642 (b) Taylor's failure precludes him challenging at this time, regardless whether or it. By negative implication, indicates 30 days unless extension granted. was case, exempt. This rejects argument that, order discourage debtors meritless exemptions merely hopes one will object, invalidate an expiration where good-faith reasonably disputable To extent various Code Rules provisions aimed penalizing their improper conduct fail limit bad-faith claims, Congress, rather Court, rewrite include requirement. 643-645. (c) assertion 105(a) permits courts disallow good faith despite absence be considered since first raised opening brief on merits neither nor resolved lower courts. 645-646. [[SC2Q!]] 938 F.2d 420 (CA 3 1991), THOMAS, J., delivered opinion which REHNQUIST, C.J., WHITE, BLACKMUN, O'CONNOR, SCALIA, KENNEDY, SOUTER, JJ., joined. STEVENS, dissenting opinion. Timothy B. Dyk, Washington, D.C., petitioner. Phillip S. Simon, Pittsburgh, Pa., respondents. Justice THOMAS Court. 1 Section requires file list claims statutorily distribution creditors. 4003 affords exemptions. We must decide case if 2 * Emily Davis, declared while pursuing claim state relevant proceedings began 1978 when with Pittsburgh Commission Human Relations. alleged employer, Trans World Airlines (TWA), denied promotions race sex. held liability calculate damages owed TWA. Pennsylvania Common Pleas reversed Commission, Commonwealth reinstated Commission's determination liability. TWA next appealed Supreme In October 1984, appeal pending, Chapter 7 petition. Petitioner, Robert J. became Respondents, Wendell G. Freeland, Richard F. Kronz, law firm, represented win She described "Proceeds [Davis] v. TWA" "Claim lost wages" its value "unknown." App. 18. 4 Performing his duty trustee, required initial meeting January 1985. See 11 U.S.C. 341; Bkrtcy. 2003(a). At meeting, told estimated might $90,000 Several wrote letter telling them potential He also asked details about Respondents procedural posture expressed optimism settle $110,000. 5 decided record reveals doubted any value. point explained: "I past experience examining debtors. [M]any indicate lawsuits. do out advantageous many wind up settling far limitation." 52. said thought "nullity." Id., 58. 6 proved mistaken. 1986, affirmed Court's discriminated Davis. subsequent issue damages, agreed total paid part amount issuing check both $71,000. signed payment fees. remainder $110,000 other means. Upon settlement, demanded received it argued keep fees sided Taylor. It concluded "no basis" approximately $23,000 re 105 B.R. 288 (WD Pa.1989). affirmed, 272 Pa.1990), Third Circuit (1991). require certiorari, 502 ----, 632, 116 602 (1991), now affirm. II 8 When files petition, becomes 541. however, allows prevent certain 522(b) choose afforded federal 522(d). states procedure objecting follows: 9 "The shall subsection section. Unless objects, exempt." 10 Although itself exemption, provides part: creditor conclusion 2003(a) unless, 12 noted, listing ). these either specified fact result, promptly. hold, so prevents now. A. 13 acknowledges argues, nonetheless, preclude time. view, serve only narrow judicial inquiry into days, altogether. particular, maintains asserts, thus lacked faith. 14 justifies interpretation arguing requiring object. stand reading 522(b). Courts adopted same position similar reasoning. Peterson, 920 1389, 1393-1394 (CA8 1990); Dembs, 757 777, 780 (CA6 1985); Sherk, 918 1170, 1174 (CA5 1990). 15 reject argument. ), repeat, says gives creditors' extend period. therefore cannot 16 Deadlines lead unwelcome results, prompt act produce finality. what repeatedly him, If know lawsuit, sought hearing issue, see 4003(c), Having done neither, seek deprive 17 suggests our create incentives. asserts chance whatever reason, requirement can Eighth termed "exemption declaration." F.2d, 1393. concern, cause us alter 18 Debtors face penalties engaging proceedings. See, e.g., 727(a)(4)(B) (authorizing denial discharge presenting fraudulent claims); 1008 (requiring filings "be verified contain unsworn declaration" truthfulness penalty perjury); 9011 sanctions signing documents "well grounded warranted existing extension, modification, reversal law"); 152 (imposing criminal fraud cases). These not, Congress enact comparable address difficulties predicts follow decision. authority application B 19 consider different provision 105(a), That states: 20 order, process, judgment necessary appropriate carry title. No title providing raising construed from, sua sponte, taking action making enforce implement orders rules, abuse process." (emphasis added). 21 stresses asserting broad authorization equity derogation code accepted position. Ragsdale Genesco, Inc., 674 277, 278 (CA4 1982); Staniforth, 127, 131 Wis.1990); Budinsky, 90-01099, 1991 WL 105640 Pa. June 10, 1991). 22 decline merits. Our 14.1(a) makes clear "[o]nly questions set forth petition [for certiorari], fairly included therein, Court," 24.1(a) should "raise additional change substance already presented" Yee Escondido, 1522, --- ---- (1992). addition, we "[o]rdinarily, court[s]." Youakim Miller, 425 231, 234, 96 1399, 1401, 47 701 (1976) (per curiam principles help maintain integrity process certiorari. Cf. Oklahoma City Tuttle, 471 808, 816, 2427, 2432, 85 791 (1985). decides through well-established procedures; allowing able counsel who argue before devise last minute would thwart system. "unusual circumstances" warrant addressing Berkemer McCarty, 468 420, 443, n. 38, 104 3138, 3152, 82 317 (1984). 23 Affirmed. 24 dissenting. 25 faith." Ante, 6. deny, ample hold doctrine equitable tolling applies limitations 4003(b).1 my result supported strong considerations, common law, widespread practice courts, text 26 4003, derived former 403, shifted emphasis earlier rule, placing burden raise objections. particular fills gap remains silent adoption furthered orderly administration, there suggestion put effect avoid prejudice debtor. Thus, identifiable reason why ordinary apply contexts proceedings; indeed, generally character especially rules context. 27 familiar harsh consequences statutes limitation avoided times relying concealment undiscovered toll limitation. For example, Bailey Glover, Wall. 342, 349-350, L.Ed. 636 (1875), two situations "strict general limitation" followed. 347. situation "where ignorance produced affirmative acts guilty concealing facts," second injured without fault want diligence care part." 347-348. involves concealment; latter defines fraud. concealment, tolls running statute "has concealed, conceal itself." 349-350. otherwise, reasoned "make designed means successful secure." 349. Holmberg Armbrecht, 327 392, 397, 66 582, 585, 90 743 (1946), extended reach observed "read every limitation."2 28 fraud, assumed exercise due diligence, true trustee's are innocent Moreover, undisputed legitimate entire award. ante, 642. Under circumstances, establish some caused promptly, I filing frivolous tantamount purposes deciding begins run. 29 This, essence, numerous three Appeals.3 Over years, make dispositive, notwithstanding. Hackett, 755, 756 (Bkrptcy.Ct. ED Pa.1981), explained "[e]quitable considerations dictate obviously entitled." view echoed Rollins, 63 780, 783-784 Tenn.1986): "[T]he simply apparent legal situation, exemption." More recently, Ehr, 665, 667 Wis.1988), reaffirmed approach, 130 WD Wis.1990). As "Read strictly, support appellants' concerning waiver. But, most followed provisions. Instead, overcome untimely objection." Stutterheim, 109 1010, 1012 (Kan.1989). motivated best encapsulated Bennett, 36 893 Ky.1984). There, rigidly encourage leaving sift myriad assess validity. Such policy reversion "the streets, bare possession constituting nine, ten, parts law; administration estates replaced uncertainty constant litigation outright anarchy." 895.4 31 several go preferring instead examine determine "good-faith nevertheless eschewed literal rule today. They believed important strike proper balance between avoiding undesirable yet permitting "another bite debtor's apple 1985). 32 Here, succeed approach. Whether always permitted entertain (at least until closed)5 invalid lacks basis, mean review acknowledge award backpay tort recovery 522(d)(5). III 33 explicitly "[t]he section." Subsection limits "any State local applicable date petition." 522(b)(2)(A). arguably satisfy condition,6 comply 522 begin "[i]f Debtor select manner exemptions, then purpose served inclusion terms." Kingsbury, 124 146, 148, (Bkrptcy.Ct.Maine declined conclude added requirements exempted "under law" "refused grant meaning." Ibid. (Emphasis omitted.) IV 34 disposition straightforward. regards meaning "plain," end case. doubt, were readily ignore treats insurmountable barrier "plain equities implicated, power just meaning" exactly (1875). Bailey, guided common-law limitation, and, recognized need achieve results fair cases kind. mistake adopt letter" id., 347, justice searching inquiry. Accordingly, respectfully dissent. provides: amendment supplemental schedules court. Copies mailed person attorney person." limited medical malpractice suits, long endorsed bar "blameless[ly] ignoran[t]" injury; rather, run knowledge injury. Urie Thompson, 337 163, 170, 69 1018, 1024, 93 1282 (1949). Some read narrowly refused objection. Bradlow, 119 330, 331 (Bkrptcy.Ct.SD Fla.1990); Duncan, 107 754 Okla.1988); Payton, 73 31, Tex.1987); Kretzer, 48 587 (Bkrptcy.Ct.Nev.1985); Gullickson, 39 922 Wis.1984). Hawn, 567 Tenn.1987) took "evidence fraudulently negligently concealed facts creditors." 568. understandably reluctant contribute overburdening "Last year 880,000 filings, 291 judges deal those real rely otherwise whole system collapse." Tr. Oral Arg. 13. "had hundred year, typical across country." 15. stipulated never closed. 56. provide basic information inform adequately indicated Schedule B-4 Property Claimed Exempt form "[p]roceeds lawsuit," 14-15. ended amounting $110,000, $24,000 amended reflect precise

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