Opinion
Case No. 4:05-CV-118 (CDL).
January 30, 2006
ORDER
Johnathan Askew ("Appellant") appeals the bankruptcy court's dismissal of his complaint to determine dischargeability of his claim against Arvind D. Patel ("Appellee"), who filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code. Askew v. Patel ( In re Patel), 331 B.R. 497 (Bankr. M.D. Ga 2005). For the following reasons, the Court reverses the bankruptcy court's dismissal of Appellant's complaint and remands the case to the bankruptcy court for further proceedings.
STANDARD OF REVIEW
This Court reviews the bankruptcy court's findings of law de novo and the bankruptcy court's findings of fact for clear error. Fed.R.Bankr.P. 8013; Unsecured Creditors Comm. v. Webb Daniel, 204 B.R. 830, 832 (M.D. Ga. 1997).
BACKGROUND
The material facts in this case are undisputed. Appellant obtained a judgment on a malicious prosecution claim against Appellee in the State Court of Muscogee County, Georgia in the amount of $3,788,421.00. On the same day that judgment was entered in favor of Appellant, Appellee filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code. Appellee sought to have Appellant's judgment discharged in the bankruptcy proceedings. Appellant contends that pursuant to 11 U.S.C. § 523(a)(6) his judgment against Appellee should not be discharged because it arises from Appellee's alleged willful and malicious conduct. The bankruptcy court dismissed Appellant's complaint to determine dischargeability as untimely.
This judgment consisted of an award of $1,288,421.00 in compensatory damages and $2,500,000.00 in punitive damages.
To challenge the dischargeability of his judgment, Appellant had sixty days from the date of the first meeting of creditors to file a complaint to determine dischargeability of a debt. Fed.R.Bankr.P. 4007(c). The first meeting of creditors in the bankruptcy case was scheduled for March 30, 2005. Therefore, the deadline for filing complaints to determine dischargeability was May 31, 2005. Appellant was notified of the meeting of creditors and was aware of the deadline.
Appellant's attorney waited until the day of the deadline, May 31, 2005, to file the complaint. After he finished editing the complaint, he instructed his secretary to file the complaint. His secretary was familiar with the procedure for filing materials electronically with the U.S. District Court for the Middle District of Georgia. At that time, the District Court had fully implemented an electronic filing system. The bankruptcy court was transitioning toward electronic filing and required by local rule that a complaint such as this one be filed in electronic format and in paper form. The secretary electronically filed the complaint, and it was received by the bankruptcy court clerk via the court's "Case Management/Electronic Case Filing System" ("CM/ECF"). The secretary also made hard copies of the complaint and mailed them to the Bankruptcy Clerk, counsel for Appellee, and the Trustee. (Babcock Aff. 2.) Although the Clerk received the complaint in electronic form on May 31, 2005 and thus prior to the expiration of the deadline, the hard copy of the complaint did not reach the Clerk until June 2, 2005, two days after the deadline.
Appellee subsequently filed a Motion to Dismiss Appellant's complaint, contending that under the bankruptcy court's local rules the complaint was not deemed filed until the hard copy was received by the Clerk and thus the complaint was untimely filed. The bankruptcy court granted Appellee's motion, ruling that the complaint was deemed filed on the date the hard copy was received by the Clerk. Askew v. Patel ( In re Patel), 331 B.R. 497 (Bankr. M.D. Ga 2005), (citing a general administrative order previously issued by the bankruptcy court, "Mandatory Compliance with the Court's Electronic Document System and Related Issues Involving Information Technology" (Bankr. M.D. Ga., Nov. 16, 2004)). The court rejected Appellant's argument that it should be relieved from the late filing due to excusable neglect. Askew, 331 B.R. at 499. The bankruptcy court found that it had no authority to extend the deadline since no motion to extend the deadline was filed prior to the expiration of the deadline. Id. (citing Byrd v. Alton ( In re Alton), 837 F.2d 457, 459 (11th Cir. 1988)). It therefore dismissed Appellant's complaint. Appellant appeals the bankruptcy court's dismissal of his complaint.
DISCUSSION
Federal Rule of Bankruptcy Procedure 4007(c) states that a complaint to determine dischargeability "shall be filed no later than sixty days after the first date set for the meeting of creditors." It is undisputed that the bankruptcy clerk received in its electronic data base Appellant's complaint in electronic form prior to the expiration of this sixty day deadline. It is likewise clear that the bankruptcy clerk did not receive the hard copy of the complaint until two days after the expiration of the deadline. The issue presented by this appeal is whether the receipt of the complaint in electronic format by the clerk prior to the filing deadline constitutes timely filing of the complaint under Rule 4007(c).The Court agrees with the bankruptcy court that if Appellant's complaint is deemed to have been filed after the deadline, then under the law of this Circuit, Appellant would not be relieved of the consequences of the untimely filing even if his neglect was excusable. See Byrd v. Alton, 837 F.2d 457 (11th Cir. 1988) (explaining that a motion for extension of the deadline must be filed prior to the expiration of the deadline); but see Kontrick v. Ryan, 540 U.S. 443, 457 n. 11 (2004) (recognizing division among lower courts on this issue). However, the Court does not agree with the bankruptcy court's ultimate conclusion that Appellant's complaint, for purposes of determining whether it was timely filed, should be deemed filed on the date the hard copy was physically received by the bankruptcy clerk.
The bankruptcy court began transitioning to an electronic filing system on August 1, 2004. During this transition, it required attorneys to file documents in both electronic format and in hard copy. Due to some confusion, the bankruptcy court issued an administrative order on November 16, 2004 that clearly explained that in addition to the electronic filing, the hard copy must be filed. Mandatory Compliance with the Court's Electronic Document System and Related Issues Involving Information Technology (Bankr. M.D. Ga., Nov. 16, 2004). The order further cautioned that if the electronic document is sent and the paper document is not timely filed, the electronic document would be deleted. Id. Finally, the order stated "[t]he date of filing is the date the paper document is received by the court and not the date the electronic copy is transmitted." Id. Based upon this order (or local rule), the bankruptcy court understandably concluded that Appellant's complaint should be deemed filed when the hard copy was received, which was two days after the deadline. Consequently, the complaint was untimely and subject to dismissal.
This Court finds that the issue is not quite that simple. The bankruptcy court's dismissal of Appellant's complaint denies Appellant access to the court based upon a local rule that, under the unique circumstances of this case, has the effect of disregarding a timely filed complaint based solely upon its form. Preliminarily, the Court notes that bankruptcy courts are authorized to accept electronically filed documents and may establish local rules to govern electronic filing. Fed.R.Civ.P. 5(e). At the time that Appellant filed her complaint, the bankruptcy court accepted electronically filed documents with the additional requirement that a paper copy had to also be filed. It is undisputed that Appellant's complaint was received by the clerk in electronic form prior to the expiration of the deadline. Generally, a complaint is considered "filed" when in the "actual or constructive possession of the clerk." Leggett v. Strickland, 640 F.2d 774, 776 (5th Cir. 1981); see also Rodgers v. Bowen, 790 F.2d 1550, 1552 (11th Cir. 1986); Hatchell v. Heckler, 708 F.2d 578, 579 (11th Cir. 1983); Cosper v. Frederick, 73 B.R. 636 (Bankr. N.D. Fla. 1986). Appellant's complaint was in the clerk's electronic data base and thus in the clerk's possession and control. Furthermore, once a filing is received into the clerk's possession and control, it is typically deemed filed as of that date even if it is not in the proper form or does not fully comply with other prerequisites for maintaining an action. See e.g. McClellon v. Lone Star Gas Co., 66 F.3d 98, 101-02 (5th Cir. 1995) (filed as of date received by clerk although did not conform with pleading requirements); Rodgers, 790 F.2d at 1552 (filed as of date received even if no filing fee paid at that time); Loya v. Desert Sands Unified Sch. Dist., 721 F.2d 279, 280-81 (9th Cir. 1983) (filed as of date received even if paper size conflicts with local rule); Plumb v. Comm'r of Internal Revenue, No. 05-80351-CIV-RYSKAMP, 2005 WL 2249118, at *2 (S.D. Fla. 2005) (filed as of date received despite deficiency in civil cover sheet); Cosper, 73 B.R. at 637-38 (filed as of date received even if accompanied by no filing fee or cover sheet). Under the specific circumstances of this case, the Court finds that Appellant's complaint should be deemed filed as of the date it came into the custody and control of the clerk even if it was not in the proper form. Since the clerk received the complaint in electronic form prior to the expiration of the filing deadline, Appellant's complaint was timely.
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981.
One may question whether this result allows a party to flagrantly ignore a court's local rules. Rule 83(a)(2) of the Federal Rules of Civil Procedure and Rule 9029(a)(2) of the Federal Rules of Bankruptcy Procedure address this concern. They state that "[a] local rule imposing a requirement of form shall not be enforced in a manner that causes a party to lose rights because of a nonwillful failure to comply with the requirement." Consistent with this principle, the Eleventh Circuit has explained that dismissal of a case is a severe sanction that should only be implemented for violation of a local rule when "(1) a party engages in a clear pattern of delay or willful contempt (contumacious conduct); and (2) the district court specifically finds that lesser sanctions would not suffice." World Trust Films, Inc. v. Int'l Family Entm't, Inc., 41 F.3d 1454, 1456 (11th Cir. 1995); see also Kilgo v. Ricks, 983 F.2d 189, 192-93 (11th Cir. 1993). Furthermore, "local rules . . . should not be applied in a manner that defeats altogether a litigant's right to access to the court." Loya, 721 F.2d at 280; Strickland, 760 F.2d at 1115.
In this case, the application of a local rule regarding the form of a complaint has the effect of denying Appellant access to the courts, even though the complaint was timely received by the clerk, albeit in the wrong format. Moreover, Appellant's conduct cannot be characterized as willful or contumacious. Appellant filed the complaint in electronic format in a timely manner as required by the local rule. He also filed a hard copy of the complaint as required, although it was admittedly received two days late. The Court finds that this is the type situation that Rule 9029(a)(2) was designed to address. Accordingly, the dismissal of Appellant's complaint is reversed.
The Court observes that Appellant did not present the bankruptcy court with the argument that this Court adopts as its rationale in its ruling today. Therefore, the bankruptcy court presumably never had an opportunity to consider it. Rather than remanding the matter to the bankruptcy court to allow it to consider that argument, the Court finds that for the sake of judicial economy, it should simply decide the matter.
CONCLUSION
Based on the foregoing, the bankruptcy court's order dismissing Appellant's complaint is reversed, and this case is remanded for further proceedings consistent with this Order.
If it is determined that this Court's Order is not directly appealable as a matter of right, the Court makes the additional finding that this Order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from this Order may materially advance the ultimate termination of the litigation.
IT IS SO ORDERED.