Court Opinion

ID: 9406823
Source: CourtListenerOpinion
Date Created: 2023-07-03 21:00:49.063732+00
Date Added: 2024-06-11T17:20:33.440740
License: Public Domain

BAP Appeal No. 23-4       Docket No. 24      Filed: 06/23/2023     Page: 1 of 12

                               NOT FOR PUBLICATION 1
             UNITED STATES BANKRUPTCY APPELLATE PANEL
                              OF THE TENTH CIRCUIT
                        _________________________________

 IN RE KATE BUFFY DRAKEWYCK,                               BAP No. CO-23-004

             Debtor.

 __________________________________
                                                           Bankr. No. 22-10977
                                                            Adv. No. 22-01250
 KATE BUFFY DRAKEWYCK,                                          Chapter 7

              Plaintiff - Appellant.

                                                                 OPINION

                        _________________________________

                    Appeal from the United States Bankruptcy Court
                              for the District of Colorado
                       _________________________________

Submitted on Appellant’s brief. 2
                         ______________________________

Before MICHAEL, PARKER, and THURMAN, Bankruptcy Judges.
                   ______________________________

       1
        This unpublished opinion may be cited for its persuasive value, but is not
precedential, except under the doctrines of law of the case, claim preclusion, and issue
preclusion. 10th Cir. BAP L.R. 8026-6.
       2
        The Appellant did not request oral argument, and after examining the
Appellant’s brief and appellate record, the Court has determined unanimously that oral
argument would not materially assist in the determination of this appeal. See Fed. R.
Bankr. P. 8019(b). The case is therefore ordered submitted without oral argument.
     BAP Appeal No. 23-4        Docket No. 24        Filed: 06/23/2023    Page: 2 of 12

THURMAN, Bankruptcy Judge.

                            _________________________________

       Due process is fundamental to the legal system. Put simply, nothing happens in the

dark. An affected party is entitled to proper notice before being deprived of its rights.

Accordingly, there are rules promulgated by the Judicial Conference and approved by

Congress to ensure parties receive the process due to them.

       Here, a chapter 7 debtor filed an adversary proceeding to discharge her student

loan debt naming the United States Department of Education as the defendant (the

“Defendant”). The Bankruptcy Court issued a summons to the Defendant and the debtor

filed an affidavit of service asserting she served the Defendant. The Defendant never filed

an answer. Several weeks later, the debtor filed a motion for entry of default judgment.

The Bankruptcy Court denied the motion because the debtor failed to properly effectuate

service. The order denying the motion set forth the steps the debtor needed to take to

effectuate proper service. The debtor attempted to cure, but failed once again. Undaunted,

the debtor filed a second motion for entry of default judgment. The Bankruptcy Court

entered an order denying the second motion for failure to properly effectuate service and

an order dismissing the adversary proceeding without prejudice, which the debtor appeals

now. Finding no error, we affirm the order dismissing the adversary proceeding.

       I. Background

          a. The Bankruptcy and Prior Appeal

       Appellant Kate Buffy Drakewyck (herein “Drakewyck”) filed a chapter 7 petition

for bankruptcy relief on March 25, 2022. On August 27, 2022, Drakewyck filed a motion

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      BAP Appeal No. 23-4       Docket No. 24       Filed: 06/23/2023   Page: 3 of 12

in the bankruptcy case seeking to discharge her student loan debt. A few days later, the

Bankruptcy Court entered an order denying the motion without prejudice (the “Order

Denying Motion”) concluding such relief must be sought in an adversary proceeding. 3 On

September 18, 2022, Drakewyck filed a motion to reconsider the Order Denying Motion,

which the Bankruptcy Court denied without prejudice to the filing of an adversary

proceeding. Drakewyck appealed both orders to the BAP on September 21, 2022. The

BAP determined the Order Denying Motion was final and summarily affirmed the

Bankruptcy Court concluding the relief sought required an adversary proceeding. 4

            b. The Adversary Proceeding

       On October 17, 2022, Drakewyck filed an adversary proceeding against the

Defendant seeking to discharge her student loan debt (the “Complaint”). That same day,

the clerk of the Bankruptcy Court issued a summons to the Defendant (the “Original

Summons”). On October 29, 2022, Drakewyck filed an affidavit of service asserting a

process server served Roland Stallings, Clerk, a person authorized to accept service on

behalf of the Defendant. Drakewyck filed no other affidavits of service.

       On November 28, 2022, Drakewyck filed a Motion to Rule in Favor of the Debitor

[sic]: Dismissal of the Student Loan Balance (the “First Motion”) requesting the

Bankruptcy Court fully rule in her favor because the Defendant had not complied with

       3
           Order Denying Motion to Rule in Favor of the Debtor, in Appellant App. at 152–
53.
       4
      Order Denying Leave to Appeal as Unnecessary and Affirming Order Appealed,
BAP CO-22-16, ECF No. 26.

                                                3
     BAP Appeal No. 23-4         Docket No. 24        Filed: 06/23/2023   Page: 4 of 12

the Original Summons and deadlines. On November 29, 2022, the Bankruptcy Court

entered an Order Denying Motion to Rule in Favor of the Debtor (the “First Motion

Order”) 5 finding Drakewyck failed to properly serve the Defendant in accordance with

Federal Rule of Bankruptcy Procedure 7004(b)(4) and (5). 6 The Bankruptcy Court then

ordered Drakewyck to file a motion for issuance of an alias summons 7 and serve the

Defendant with the alias summons and a copy of the Complaint on or before December

13, 2022, in accordance with Rule 7004(b)(4) and (5). 8

       Drakewyck never filed a motion for or obtained an alias summons—the only way

to cure the stale Original Summons—but instead, on December 12, 2022, Drakewyck

filed certificates of service with the Bankruptcy Court showing she mailed copies of the

Complaint and Original Summons to the District Attorney of Washington, D.C., and the

Office of the Attorney General in Washington, D.C., on December 10, 2022, the entities

Drakewyck believed she should serve under Rule 7004(b)(4) and (5).

       On December 14, 2022, the Bankruptcy Court entered an order (the “Order to

File”) finding Drakewyck did not file a motion for, and serve the parties with, an alias

summons and copy of the Complaint in accordance with Rule 7004(b)(4) and (5). The

       5
           First Motion Order at 2, in Appellant App. at 150.
       All future references to Rule or Rules shall mean the Federal Rules of Civil
       6

Procedure when followed by one or two-digit numbers and Federal Rules of Bankruptcy
Procedure when followed by four-digit numbers.
       7
         An alias summons is the term used to describe a reissued summons after the
original summons has gone stale.
       8
           First Motion Order at 2, in Appellant App. at 150.

                                                  4
     BAP Appeal No. 23-4          Docket No. 24       Filed: 06/23/2023   Page: 5 of 12

Order to File provided Drakewyck an extension of time to do so by December 28, 2022.

The Bankruptcy Court warned Drakewyck that failure to do so would result in dismissal

of the adversary proceeding. 9

       On January 16, 2022, Drakewyck again filed a Motion to Rule in Favor of the

Debitor [sic]: Dismissal of the Student Loan Balance (the “Second Motion”). Drakewyck

requested the Bankruptcy Court to rule in her favor and dismiss (discharge) the student

loan balance because she properly served the Defendant and thirty-five days had passed.

       On January 18, 2022, the Bankruptcy Court entered an order denying the Second

Motion 10 and the Order Dismissing Case (the “Final Order”) dismissing the adversary

proceeding without prejudice. 11 In the Final Order, the Bankruptcy Court concluded

Drakewyck’s failure to comply with the Order to File warranted dismissal. 12 The

Bankruptcy Court further concluded that Rule 4(m) provided additional grounds for

dismissal because more than ninety days elapsed since the commencement of the

adversary proceeding, and Drakewyck still had not supplied proof of proper service. 13

This appeal followed.

       9
           Order to File, in Appellant App. at 144.
       10
        Order Denying Plaintiff’s Second Motion to Rule in Favor of the Debtor, in
Appellant App. at 137–38.
       11
            Final Order, in Appellant App. at 135–36.
       12
            Id., in Appellant App. at 135.
       13
            Id.

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     BAP Appeal No. 23-4          Docket No. 24        Filed: 06/23/2023   Page: 6 of 12

       II. Jurisdiction

       This Court has jurisdiction to hear timely filed appeals from “final judgments,

orders, and decrees” of bankruptcy courts within the Tenth Circuit, unless a party elects

to have the district court hear the appeal. 14 Drakewyck timely filed her notice of appeal. 15

A prior panel determined the Final Order was final as to whether the Bankruptcy Court

erred in dismissing Drakewyck’s adversary proceeding for failure to timely effectuate

proper service. 16 Drakewyck did not elect to have the district court hear the appeal.

Accordingly, this Court has jurisdiction to hear this appeal.

       III.     Issue on Appeal and Standard of Review

       There is one issue on appeal—whether the Bankruptcy Court erred by dismissing

Drakewyck’s adversary proceeding for failure to timely effectuate proper service on the

Defendant, which we review for abuse of discretion. 17 Under the abuse of discretion

       14
            28 U.S.C. § 158(a)(1), (b)(1), and (c)(1); Fed. R. Bankr. P. 8003, 8005.
       15
         See In re Durability, Inc., 893 F.2d 264, 266 (10th Cir. 1990) (noting that “the
appropriate ‘judicial unit’ for application of these finality requirements in bankruptcy is
not the overall case, but rather the particular adversary proceeding or discrete controversy
pursued within the broader framework cast by the petition”).
       16
            Order Allowing Appeal to Proceed, BAP CO-23-4, ECF No. 11.
       17
          The Bankruptcy Court cites two grounds for its dismissal: (i) failure to comply
with the Bankruptcy Court’s Order and (ii) failure to effectuate timely service. A
dismissal for failure to comply with a court’s order is reviewed for abuse of discretion.
See Gripe v. City of Enid, 312 F.3d 1184, 1188 (10th Cir. 2002) (“The Federal Rules of
Civil Procedure authorize sanctions, including dismissal, . . . for failing to comply with
the court rules or any order of the court” which is reviewed for abuse of discretion)
(citing Fed. R. Civ. P. 41(b)). Similarly, a court’s dismissal for failure to comply with
Rule 4(m) is also reviewed for abuse of discretion. See Espinoza v. United States, 52 F.3d
838, 840 (10th Cir. 1995) (“We review the [lower] court’s dismissal for untimely service
for an abuse of discretion.”) (citing Jones v. Frank, 973 F.2d 872, 872 (10th Cir. 1992)).

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     BAP Appeal No. 23-4         Docket No. 24        Filed: 06/23/2023    Page: 7 of 12

standard, this Court will not disturb a bankruptcy court’s decision unless it “has a definite

and firm conviction that the lower court made a clear error of judgment or exceeded the

bounds of permissible choice in the circumstances.” 18 An abuse of discretion occurs

when “the [trial] court’s decision is ‘arbitrary, capricious or whimsical,’ or results in a

‘manifestly unreasonable judgment.’” 19 “A clear example of an abuse of discretion exists

where the trial court fails to consider the applicable legal standard or the facts upon

which the exercise of its discretionary judgment is based.” 20

       IV.      Analysis

       To satisfy due process, a party must effectuate proper service of process upon the

party from whom it seeks relief. 21 Rule 7004 governs service of process in a bankruptcy

case. 22 Unless otherwise stated by Rule 7004, service may be made within the United

       18
          In re Arenas, 535 B.R. 845, 849 (10th Cir. BAP 2015) (quoting Moothart v.
Bell, 21 F.3d 1499, 1504 (10th Cir. 1994)).
       19
         Moothart, 21 F.3d at 1504–05 (quoting United States v. Wright, 826 F.2d 938,
943 (10th Cir. 1987)).
       20
         Jackson v. Los Lunas Cmty. Program, 880 F.3d 1176, 1191 (10th Cir. 2018)
(quoting Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir. 1997)).
       21
           See Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950) (“An
elementary and fundamental requirement of due process in any proceeding which is to be
accorded finality is notice reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an opportunity to present
their objections.”). Even though Drakewyck is proceeding pro se, she still needs to
comply with the relevant rules. In re Onyeabor, BAP No. UT-14-047, 2015 WL
1726692, at *6 (10th Cir. BAP Apr. 15, 2015) (unpublished) (“[P]ro se status does not
excuse a party’s obligation to know and comply with the same rules that govern other
litigants.”) (citing Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th
Cir. 2005)).
       22
            Fed. R. Bankr. P. 7004.

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     BAP Appeal No. 23-4         Docket No. 24       Filed: 06/23/2023   Page: 8 of 12

States by first class mail or by a method authorized by Rule 4(e)–(j). 23 Rule 4(i) applies

in bankruptcy adversary proceedings and governs serving the United States and its

agencies and provides service may also be made by registered or certified mail. 24 Such

service must occur, or be deposited in the mail, within seven days after the bankruptcy

court issues the summons. 25 Should timely delivery not occur, the summons becomes

stale and is no longer effective. 26 To remedy a stale summons, a party may file a motion

for another summons—often called an alias summons—with the bankruptcy court, and

only then may the party effectuate proper service. 27

       Under Rule 7004(b)(4) and (5), when serving a United States agency, a party must

also serve the United States. 28 To properly serve the United States, the Rules require a

       23
            Id. at 7004(b).
       24
         Fed. R. Civ. P. 4(i) made applicable to bankruptcy proceedings by Rule
7004(a)(1).
       25
            Fed. R. Bankr. P. 7004(e).
       26
          See id. (“If service is by any authorized form of mail, the summons and
complaint shall be deposited in the mail within 7 days after the summons is issued.”). See
also Menges v. Menges (In re Menges), 337 B.R. 191, 193 (Bankr. N.D. Ill. 2006) (“If
service is not made in that time, the summons is stale, and another summons must be
issued.”); Carter v. Hall (In re Hall), No. 07-11393-R, 2009 WL 1652202, at *1 (Bankr.
N.D. Okla. June 10, 2009) (unpublished) (concluding a summons becomes “stale” when
not delivered or mailed within the time prescribed by the Rule); Peter v. Hutchings (In re
Hutchings), No. BAP MW 10-078, 2011 WL 4572017, at *3 (1st Cir. BAP May 25,
2011) (unpublished) (failure to serve a summons within the time period prescribed by the
rule renders the summons invalid, thus requiring a party to obtain a new summons)
(citing cases).
       27
          See In re Hutchings, 2011 WL 4572017, at *3; Fed. R. Bankr. P. 7004(b)(4),
(b)(5), (e) and (i).
       28
            Fed. R. Bankr. P. 7004(b)(5).

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     BAP Appeal No. 23-4           Docket No. 24         Filed: 06/23/2023   Page: 9 of 12

party must mail a copy of the summons and complaint to (i) the United States agency, 29

(ii) the civil process clerk at the office of the United States Attorney for the district in

which the action is brought, 30 and (iii) the Attorney General of the United States in

Washington, D.C. 31 Should a party fail to properly serve a copy of the summons and

complaint to any one of these entities, the court must provide reasonable time to cure the

deficiency. 32 Failure to effectuate proper service within ninety days after a complaint is

filed, without a showing of good cause for the failure, will result in case dismissal

without prejudice. 33

       The Bankruptcy Court dismissed the adversary proceeding on two grounds. First,

Drakewyck failed to comply with the Order to File requiring her to file a motion for an

alias summons and then properly serve the alias summons on the Defendant and the

United States. Second, Drakewyck failed to timely effectuate service on the Defendant

and the United States within ninety days pursuant to Rule 4(m).

       29
            Id.
       30
            Fed. R. Bankr. P. 7004(b)(4) (emphasis added).
       31
            Id.
       32
            Id. at 7004(b)(4) and (5).
       33
         Fed. R. Civ. P. 4(m), made applicable to bankruptcy cases by Fed. R. Bankr. P.
7004, provides,
                  [i]f a defendant is not served within 90 days after the complaint is
                  filed, the court — on motion or on its own after notice to the plaintiff
                  — must dismiss the action without prejudice against that defendant or
                  order that service be made with a specified time. But if the plaintiff
                  shows good cause for the failure, the court must extend the time for
                  service for an appropriate period.

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    BAP Appeal No. 23-4         Docket No. 24     Filed: 06/23/2023     Page: 10 of 12

       Drakewyck contends she effectuated proper service by (i) serving the Defendant,

the US Attorney, and the Attorney General pursuant to Rule 7004(b)(4) and (5), (ii)

complying with the First Motion Order and the Order to File (the “Orders”), and (iii)

doing so in the time frame specified. Drakewyck also asserts Rule 7004 does not state a

summons “can go stale,” and thus the Bankruptcy Court erred in dismissing the adversary

proceeding on that ground.

       The Bankruptcy Court did not abuse its discretion in dismissing the adversary

proceeding for Drakewyck’s failure to effectuate proper service and comply with the

Orders for several reasons. First, Drakewyck failed to properly serve the Original

Summons and Complaint addressed to the civil process clerk at the office of the United

States Attorney for the District of Colorado, the district in which the action was brought.

Instead, Drakewyck mailed, via first class mail, a copy of the Original Summons and

Complaint to the United States Attorney for the District of Washington, D.C. 34

       Second, Drakewyck did not send a copy of the Original Summons and Complaint

to the United States Attorney for the District of Colorado or the Attorney General within

seven days of the Bankruptcy Court issuing the Original Summons, thus rendering the

summons stale. 35 Nor did Drakewyck file a motion for, and receive, an alias summons,

which would allow her to effectuate proper service on the Defendant and the United

States pursuant to the Order to File and Rule 7004.

       34
            December 12, 2022 Certificates of Service, in Appellant App. at 145–48.
       35
            Fed. R. Bankr. P. 7004(e).

                                                10
    BAP Appeal No. 23-4        Docket No. 24       Filed: 06/23/2023      Page: 11 of 12

       Third, as of the date of the Final Order, more than ninety days had passed since the

commencement of the adversary proceeding and Drakewyck still had not effectuated

proper service. Notably, Rule 4(m) provides a court must extend time for service for an

appropriate period if the party shows good cause for failure to timely effectuate service.

Drakewyck does not, however, argue good cause existed. Moreover, even if Drakewyck

raised such an argument on appeal, the record shows Drakewyck failed to comply with

the Orders, both of which emphasized Drakewyck needed to obtain an alias summons—

which was required to timely effectuate proper service—and serve the proper entities by

a certain date. In effect, the Bankruptcy Court extended Drakewyck’s time to serve the

proper entities after she failed to meet the first deadline, and expressly noted failure to do

so would result in a dismissal without prejudice. 36 Accordingly, under Rule 4(m), the

dismissal was warranted.

       V.     Conclusion

       We find no abuse of discretion. The original summons went stale when

Drakewyck did not comply with the Rules to effectuate proper service within the time

provided. Additionally, Drakewyck did not comply with the Orders, nor did Drakewyck

effectuate proper service within ninety days pursuant to Rule 4(m). The Bankruptcy

Court applied the appropriate legal standard, the decision was not arbitrary, whimsical, or

        See First Motion Order at 2, in Appellant App. at 150; Order to File at 1, in
       36

Appellant App. at 143.

                                                 11
    BAP Appeal No. 23-4        Docket No. 24       Filed: 06/23/2023      Page: 12 of 12

capricious, and it did not result in manifest injustice. Thus, the decision of the

Bankruptcy Court is AFFIRMED.

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