Court Opinion

ID: 3039401
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:00:44.418812+00
Date Added: 2024-06-11T11:48:53.842161
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 05-1095
                                   ___________

In re: Donald Lynn Pierce, Jr.,         *
                                        *
          Debtor.                       *
_____________________                   *
                                        *
Myron Roberts,                          * Appeal from the United States
                                        * District Court for the
             Appellant,                 * Eastern District of Arkansas.
                                        *
      v.                                *
                                        *
Donald Lynn Pierce, Jr.,                *
                                        *
             Appellee.                  *
                                   ___________

                           Submitted: December 12, 2005
                               Filed: January 25, 2005
                                    ___________

Before LOKEN, Chief Judge, WOLLMAN and RILEY, Circuit Judges.
                             ___________

RILEY, Circuit Judge.

       Myron Roberts (Roberts) filed a proof of claim in the voluntary Chapter 13
bankruptcy proceeding of Donald Lynn Pierce, Jr. (Pierce). Pierce objected to
Roberts’s proof of claim. Pierce’s counsel served a “negative notice” on Roberts by
attaching to the objection a document entitled “Notice of Opportunity to Respond and
Request a Hearing,” which advised Roberts that if Roberts did not respond and request
a hearing within thirty days, the bankruptcy court could enter an order without further
hearing. Roberts did not respond to the negative notice, nor did Roberts request an
evidentiary hearing.

       Without holding an evidentiary hearing, the bankruptcy court1 issued an
amended order granting Roberts’s claim in part and disallowing the balance. Roberts
appealed to the district court,2 arguing the bankruptcy court should have held an
evidentiary hearing on his claim. The district court concluded Federal Rule of
Bankruptcy Procedure 9007 “grants bankruptcy courts the discretion to set the
particularities of notice procedures,”3 and the bankruptcy court did not abuse its
discretion by not conducting an evidentiary hearing. This appeal followed.

       Section 502 of the Bankruptcy Code provides that if a debtor objects to a proof
of claim, “the court, after notice and a hearing, shall determine the amount of such
claim.” 11 U.S.C. § 502(b). Section 102 defines the phrase “after notice and a
hearing” to “authorize[] an act without an actual hearing if such notice is given
properly and if . . . such a hearing is not requested timely by a party in interest.” Id.
§ 102(1)(B)(i). Negative notices are therefore authorized by the Code. Cf. In re

      1
       The Honorable James G. Mixon, United States Bankruptcy Judge for the
Eastern District of Arkansas.
      2
       The Honorable William R. Wilson, Jr., United States District Judge for the
Eastern District of Arkansas.
      3
        Rule 9007 states: “When notice is to be given under these rules, the court shall
designate, if not otherwise specified herein, the time within which, the entities to
whom, and the form and manner in which the notice shall be given. When feasible,
the court may order any notices under these rules to be combined.” Fed. R. Bankr. P.
9007. Although Rule 9007 may give the bankruptcy court discretion to adopt a
practice of “negative notices,” as explained hereafter, the Bankruptcy Code more
directly authorizes such a practice in 11 U.S.C. § 102(1)(B)(i).

                                          -2-
Looney, 823 F.2d 788, 791 (4th Cir. 1987) (finding section 102 does not require
actual hearings (here preliminary hearings under 11 U.S.C. § 362(e)) in all cases, but
“requires at a minimum that notice be given to the parties before taking such action”).
Negative notices shift the burden to an interested party, such as Roberts, to evaluate
his claim and the debtor’s objections, and then make his own decision whether an
evidentiary hearing would be helpful, and request a hearing, if desired.

      In this case, Pierce served a negative notice on Roberts, Roberts admittedly
received the notice, the notice was clear, and Roberts failed to request an evidentiary
hearing. Roberts received adequate notice and an opportunity to be heard. We find
no error.

      We affirm the district court’s affirmance of the bankruptcy court’s order
granting, in part, and disallowing, in part, Roberts’s proof of claim without holding
an evidentiary hearing.
                        ______________________________

                                         -3-