Court Opinion

ID: 2994615
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:15:40.90456+00
Date Added: 2024-06-11T13:34:39.824747
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 99-3710

IN RE:
FRANK VINCZE and ELIZABETH VINCZE,

Debtors-Appellants.

FRANK BAK,

Plaintiff-Appellee,

v.

FRANK VINCZE and ELIZABETH VINCZE,

Defendants-Appellants.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 3594--James B. Moran, Judge.

Argued July 12, 2000--Decided October 13, 2000

      Before RIPPLE, ROVNER and WILLIAMS, Circuit Judges.

      PER CURIAM. The bankruptcy court entered a
default judgment against Frank and Elizabeth
Vincze, husband and wife, when they failed to
answer an adversary complaint filed by Frank Bak,
one of their creditors. Six years later, the
Vinczes moved to stay post-judgment proceedings,
arguing that the judgment be vacated due to
insufficient service of process because they were
out of the country when Mr. Bak mailed them the
summons and complaint. The district court denied
the motion, as well as the Vinczes’ subsequent
motion for reconsideration. The issue raised by
the appeal is whether service of process under
Federal Rule of Bankruptcy Procedure 7004(b)(9)
requires that the intended recipients of a
summons and complaint actually receive the mailed
documents. We join the few courts that have
considered this issue in concluding that service
in such cases is valid and effective as long as
the required documents are mailed to the address
last listed by the debtor on documents filed with
the court. Therefore, we affirm the judgment of
the district court.
I
BACKGROUND

      In August 1992, the Vinczes filed for bankruptcy
pursuant to Chapter 7 of Title 11 of the United
States Code. In May 1993, Mr. Bak filed an
adversary complaint that challenged the
dischargeability of their debt to him. Mr. Bak
mailed a summons and complaint to the Vinczes at
the address they listed on their bankruptcy
petition. Mr. Bak also mailed a summons and
complaint to the Vinczes’ attorney of record.
Although the Vinczes resided at the address
listed on their petition, they were not at the
address to receive the mailing. Unbeknownst to
Mr. Bak, to the court, and to their attorney,
they temporarily had left the United States for
Hungary. The Vinczes never answered the
complaint. When neither the Vinczes nor their
counsel appeared at a hearing held on August 19,
1993, the bankruptcy judge issued a default
judgment for $99,200.

      In October 1993, the Vinczes’ attorney
unsuccessfully moved to vacate the default
judgment because of his "excusable neglect" in
failing to appear at the August 1993 hearing.
R.11. According to an affidavit accompanying the
motion before the bankruptcy court, the
attorney’s efforts to reach the Vinczes had been
and still were "fruitless." Id. He stated that at
the August 1993 hearing he had planned to present
both his objections to the default judgment and a
motion to withdraw as counsel for the Vinczes.
Id. He explained that automotive trouble caused
him to miss the hearing, resulting in the default
judgment against the Vinczes. Id.

      In May 1999, Mr. Bak sought to enforce the
judgment. In response, the Vinczes filed a motion
to vacate the default judgment with the
bankruptcy court and an "Emergency Motion to Stay
Post-Judgment Activity" with the district court.
The bankruptcy judge declined to hear the motion
because post-judgment proceedings had already
commenced in the district court.

      After conducting a brief hearing, the district
court orally denied the motion to stay. The court
explained that it did not "have any jurisdiction
at this point to start vacating defaults from six
years ago when [Mr. Bak] did everything that he
was supposed to do, and if [the Vinczes] didn’t
know, which I find a little hard to believe, it
was their own doing." R.19-1.

      The district court held a subsequent hearing to
consider the Vinczes’ motion for reconsideration.
The court denied the motion. The court determined
that "under the rules, if the debtor is in
bankruptcy proceedings, they are served by having
somebody mail a summons to the address that they
have on their bankruptcy petition, and that was
done." R.19-2. Therefore, the court concluded,
the Vinczes "disabled themselves" by failing to
"put themselves in a posture" where they could
actually receive the mail that was sent to their
address. Id.

II
DISCUSSION

      On appeal, the Vinczes argue that the district
court erred when it denied their motion to vacate
the default judgment./1 They contend that Mr.
Bak’s service of process was insufficient because
Federal Rule of Bankruptcy Procedure 7004(b)(9)
requires that both the debtor and the attorney be
in actual receipt of the summons and complaint.
Here, only the attorney actually received the
documents.

      Rule 7004(b)(9) provides that in adversary
proceedings service upon the debtor may be made
within the United States by first class mail
postage prepaid:

after a petition has been filed by or served upon
the debtor and until the case is dismissed or
closed, by mailing a copy of the summons and
complaint to the debtor at the address shown in
the petition or statement of affairs or to such
other address as the debtor may designate in a
filed writing and, if the debtor is represented
by an attorney, to the attorney at the attorney’s
post-office address.

Rule 7004’s allowance for service by mail offers
constitutionally adequate notice of suit. See In
re Park Nursing Ctr. Inc., 766 F.2d 261, 263-64
(6th Cir. 1985) (approving constitutionality of
Rule 704(c), the predecessor to Rule 7004(b));
see also Greene v. Lindsey, 456 U.S. 444, 455
(1982) (in housing repossession action where
"personal service is ineffectual, notice by mail
may reasonably be relied upon to provide
interested persons with actual notice of judicial
proceedings"). The Rule requires that both the
debtor and the attorney be served. If either one
is not served, then service is insufficient, see
In re Bloomingdale, 137 B.R. 351, 354 (Bankr.
C.D. Cal. 1991); In re Graham, 6 B.R. 219, 220
(Bankr. N.D. Ga. 1980) (analyzing Rule
7004(b)(9)’s predecessor, Rule 704(c)(9)), and
any judgment resulting from the complaint is
void. Peralta v. Heights Med. Ctr., Inc., 485
U.S. 80, 84-86 (1988).

      The Vinczes do not dispute that Mr. Bak mailed
his complaint and summons to the address listed
in their petition. Rather, they argue that Mr.
Bak’s service was insufficient because his
mailing, though mailed to a valid address, failed
to provide them notice of his suit because they
were not present at their address and thereby
could not and did not receive his mailing.

      The Vinczes misconstrue the plain language of
Rule 7004(b)(9). Rule 7004(b)(9) does not require
proof of actual receipt; it requires only that
the summons and complaint be mailed to both the
debtor and the debtor’s attorney. See In re
Coggin, 30 F.3d 1443, 1450 (11th Cir. 1994); In
re Cossio, 163 B.R. 150, 155 (B.A.P. 9th Cir.
1994); In re Love, 232 B.R. 373, 377 (Bankr. E.D.
Tenn. 1999). Thus, the Rule required only that
Mr. Bak mail the required documents to the
Vinczes’ address as listed on documents filed
with the court. See In re Goforth, 183 B.R. 560,
562 (Bankr. W.D. Ark. 1995). Thus, "service is
effective on a debtor even if mailed to the wrong
address, if the address to which it is mailed is
the last listed by the debtor in a filed
writing." In re Coggin, 30 F.3d at 1450 n.8.

Conclusion

      The Vinczes cannot show that Mr. Bak’s complaint
was not properly served upon them. Accordingly,
the district court did not abuse its discretion
when it refused to vacate the default judgment.
The judgment of the district court is affirmed.
We decline Mr. Bak’s request to sanction the
Vinczes.

AFFIRMED
MOTION FOR SANCTIONS DENIED

/1 The district court apparently construed the
"Emergency Motion to Stay Post-Judgment Activity"
as incorporating the motion to vacate that the
Vinczes had filed with the bankruptcy court in
1999. During the hearings on the emergency motion
and the subsequent motion to reconsider, the
parties argued to the district court about
whether the default judgment should be vacated
due to insufficiency of process. The district
court, too, seemed to interpret the emergency
motion as seeking to vacate the default judgment,
concluding that it lacked jurisdiction "to start
vacating defaults from six years ago." R.19-1.