Summary
The United States Court of Appeals for the Tenth Circuit affirmed the District Court's judgment upholding a Bankruptcy Judge's determination that $27,034 owed to First National Bank was nondischargeable. The court held that the debtor's notice of appeal and motion for a new trial were untimely, and that the motion for rehearing did not establish grounds for relief under Federal Rule of Civil Procedure 60(b).
Topics
Practice areas
Questions Presented
- Whether the appellants' notice of appeal from the June 30, 1978 bankruptcy judgment was timely under Bankruptcy Rules 802 and 803.
- Whether the appellants established excusable neglect sufficient to extend the time for filing the notice of appeal.
- Whether the motion for new trial was timely under Federal Rule of Civil Procedure 59(b).
- Whether the motion for rehearing, treated as a motion under Federal Rule of Civil Procedure 60(b), established grounds for relief from judgment.
- Whether the bankruptcy court abused its discretion by denying the motion for rehearing and refusing to reopen the evidentiary matter.
Holdings
- A notice of appeal filed 34 days after entry of the bankruptcy judgment was untimely under Bankruptcy Rule 802, and because it was legally ineffective it did not divest the bankruptcy court of jurisdiction over the post-judgment motions or preserve appellate review of the underlying judgment.
- Counsel's inability to contact the appellant because counsel sent a letter to the wrong address did not constitute excusable neglect.
- The bankruptcy court properly denied the motion for new trial because it was filed 34 days after judgment, beyond the ten-day period prescribed by Federal Rule of Civil Procedure 59(b).
- The bankruptcy court properly treated the motion for rehearing as a Rule 60(b) motion and denied relief because the appellants showed no qualifying mistake, inadvertence, excusable neglect, newly discovered evidence, or fraud warranting relief from judgment.
Key quotations
“The inability of counsel to contact Garroutte because he sent a letter to Garroutte at a wrong address does not constitute excusable neglect.” (647 F.2d at 123)
“The untimely notice of appeal filed on August 4, 1978, also did not preserve for judicial review the Bankruptcy Judge's order of June 30, 1978.” (647 F.2d at 123)
Factual background
International Coating Applicators, Inc., and Lou Ann and Jerry Dean Garroutte filed bankruptcy petitions. The Bank objected to discharge of the debt arising from loans allegedly obtained through false and misleading financial statements and inventory records. After an evidentiary hearing, the bankruptcy court found the representations false or misleading and entered a $27,034 nondischargeability judgment. The appellants later argued that the bankruptcy judge had considered material outside the evidence, including computations in the Bank's letter responding to the judge's inquiry.
Procedural history
The bankruptcy court entered judgment for the Bank in the amount of $27,034, determining that the debt was nondischargeable because the appellants obtained loans through false and misleading financial statements and inventory records. The appellants filed a notice of appeal 34 days after judgment, along with motions for a new trial and rehearing. The bankruptcy court denied the motions, the district court affirmed in all respects, and the Tenth Circuit affirmed the district court.