No UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Transcription

1 Case: /30/2012 ID: DktEntry: 25-1 Page: 1 of 41 (1 of 50) In re: No UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT D. LEE JOHNSON, Debtor(s) AMINA ANWAR and DAVID C. MCCLANAHAN, v. Appellants, D. LEE JOHNSON; DAVID LYN VERGEYLE; MARGARET HORNE VERGEYLE; AND THE MARITAL COMMUNITY COMPOSED OF DAVID LYN VERGEYLE AND MARGARET HORNE VERGEYLE, On Appeal from the United States District Court, District of Arizona District Court No. 2:10-cv SRB U.S. Bankruptcy Court, Arizona 2:10-ap RTB/2:10-ap SSC (Jointly Administered) Appellees. ANSWERING BRIEF OF APPELLEES Randy Nussbaum (AZ Bar No ) Beth J. Shapiro (AZ Bar No ) NUSSBAUM GILLIS & DINNER, P.C N. Scottsdale Road, Suite 450 Scottsdale, Arizona Telephone: (480) Facsimile: (480) rnussbaum@ngdlaw.com bshapiro@ngdlaw.com Attorneys for Appellees

2 Case: /30/2012 ID: DktEntry: 25-1 Page: 2 of 41 (2 of 50) TABLE OF CONTENTS Page Table of Authorities... iii I. JURISDICTIONAL STATEMENT... 1 II. STANDARD OF APPELLATE REVIEW... 1 III. STATEMENT OF THE ISSUES... 2 IV. STATEMENT OF THE CASE/RELEVANT FACTS... 3 A. JOHNSON/VERGEYLE CHAPTER 7 ADMINISTRATIVE CASES B. UNTIMELY NONDISCHARGEABILITY COMPLAINTS C. MISSTATEMENTS AND OMISSIONS OF FACT D. OUTCOME OF APPEAL TO U.S. DISTRICT COURT V. SUMMARY OF ARGUMENT VI. ARGUMENT A. ANWAR/MCCLANAHAN'S ARGUMENT THAT THE DEBTS IN QUESTION ARE UNSCHEDULED TORT CLAIMS PURSUANT TO 11 U.S.C. 523(a)(3)(B) HAS NO MERIT The Argument Has Been Waived Anwar/McClanahan Had Notice Of These Claims B. LOCAL BANKRUPTCY RULE (n) DOES NOT GOVERN i

3 Case: /30/2012 ID: DktEntry: 25-1 Page: 3 of 41 (3 of 50) C. THIS CASE DOES NOT WARRANT THE BANKRUPTCY COURT'S EXERCISE OF DISCRETION UNDER 11 U.S.C. 105(a) TO CURE THE UNTIMELY COMPLAINTS VII. CONCLUSION CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE STATEMENT OF RELATED CASES ii

4 Case: /30/2012 ID: DktEntry: 25-1 Page: 4 of 41 (4 of 50) TABLE OF AUTHORITIES CASES Page(s) Allred v. Kennerley (In re Kennerley), 995 F.2d 145 (9 th Cir. 1993)... 26, 27 Bersher Invs. v. Imperial Sav. Ass'n. (In re Bersher Invs.), 95 B.R. 126 (9 th Cir. BAP 1988) Bilbruck v. BNSF Railway Company, 243 Fed. Appx. 293, 2007 WL (9 th Cir. 2007) Classic Auto Refinishing, Inc. v. Marino (In re Marino), 37 F.3d 1354 (9 th Cir. 1994) Concrete Equip. Co., Inc. v. Fox (In re Vigil Bros. Constr., Inc.), 193 B.R. 513 (9th Cir. BAP 1996) In re Cybernetic Serv., Inc., 252 F.3d 1039 (9th Cir. 2001) Erie Insurance Company v. Romano (In re Romano), 262 B.R. 429 (N. D. Ohio 2001) Evans v. Bantek West, Inc., 2009 WL (E.D. Cal.) Greene v. Savage (In re Greene), 583 F.3d 614 (9 th Cir. 2009)... 2 In re Harris, 464 F.3d 263 (2 nd Cir. 2006)... 30, 31 Jones v. Hill (In re Hill), 811 F.2d 484 (9 th Cir. 1987) Leavitt v. Soto (In re Leavitt), 171 F.3d 1219 (9 th Cir. 1999) Litton Loan Servicing, LP v. Garvida (In re Garvida), 347 B.R. 697 (9 th Cir. BAP 2006)... 1 Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007) Nardei v. Maughan (In re Maughan), 340 F.3d 337 (6 th Cir. 2004) iii

5 Case: /30/2012 ID: DktEntry: 25-1 Page: 5 of 41 (5 of 50) Nicholson v. Isaacman (In re Isaacman), 26 F.3d 629 (6 th Cir. 1994) Nw. Bank Worthington v. Ahlers, 485 U.S. 197 (1988) O Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955 (9th Cir. 1989) Owen v. Miller (In re Miller), 333 B.R. 368 (N.D. Texas 2005) Phoenix Global Ventures, LLC v. Phoenix Hotel Associates, Ltd., 422 F.3d 72 (2 nd Cir. 2005)... 29, 30 Pincay v. Andrews, 389 F.3d 853 (9 th Cir. 2004) Pioneer Investment Services Company v. Brunswick Associates Limited Partnership, 507 U.S. 380 (1993) Santos v. Schunck (In re Santos), 112 B.R (9th Cir. BAP 1990) Scovis v. Henrichsen (In re Scovis), 249 F.3d 975 (9th Cir. 2001) Sonders v. Mezvinsky (In re Mezvinsky), 2001 WL (Bankr. E.D. Pa. 2001) Sunahara v. Burchard (In re Sunahara), 326 B.R. 768 (9 th Cir. 2005) Taylor v. Freeland & Kronz, 503 U.S. 638 (1992) Western Wood Fabricators, Inc. v. Sirmans (In re Sirmans), 2009 WL (E.D. Cal. 2009)... 21, 26 In re Woods, 260 B.R. 41 (N.D. Fla. 2001) United States v. Hinkson, 585 F.3d 1247 (9 th Cir. 2009)... 1, 2 iv

6 Case: /30/2012 ID: DktEntry: 25-1 Page: 6 of 41 (6 of 50) STATUTES 11 U.S.C U.S.C. 105(a)...passim 11 U.S.C U.S.C , U.S.C. 523(a) U.S.C. 523(c) U.S.C. 523(a)(3)(B)...passim 11 U.S.C. 523(a)(2) U.S.C. 523(a)(4) U.S.C. 523(a)(6) U.S.C. 523(e) U.S.C. 706(d) U.S.C U.S.C. 1307(c) U.S.C. 1447(c) RULES Federal Rules of Appellate Procedure Section 4(a)(5)(A) Fed. R. Bankr. P Fed. R. Bankr. P. 4003(b) Fed. R. Bankr. P. 4004(a) Fed. R. Bankr. P. 4007(c)...passim Fed. R. Bankr. P. 5005(a) Fed. R. Bankr. P. 9006(a)(3) Fed. R. Bankr. P. 9006(b)(1) Fed. R. Bankr. P. 9006(b)(3)...passim Fed. R. Bankr. P , 25 Local Rules of Bankruptcy Procedure Local Rules of Bankruptcy Procedure (n)...passim v

7 Case: /30/2012 ID: DktEntry: 25-1 Page: 7 of 41 (7 of 50) I. JURISDICTIONAL STATEMENT Appellees D. Lee Johnson, David Lyn Vergeyle, Margaret Horne Vergeyle, and the Marital Community composed of David Lyn Vergeyle and Margaret Horne Vergeyle (hereinafter Johnson/Vergeyle ) concur with the Jurisdictional Statement set forth in the Opening Brief of Appellants Amina Anwar and David C. McClanahan (hereinafter Anwar/McClanahan ). II. STANDARD OF APPELLATE REVIEW The issues in this appeal concern the interplay among the Federal Rules of Bankruptcy Procedure, specifically FRBP 4007(c) and FRBP 9006(b)(3), Local Bankruptcy Rule (n) and 11 U.S.C. 105(a), and their interpretation by the U.S. Bankruptcy Court and the U.S. District Court. The Ninth Circuit Court of Appeals follows a two-prong approach in determining whether the trial court, i.e. Bankruptcy Court, has abused its discretion in dismissing Anwar/McClanahan s complaints with prejudice and denying relief to Anwar/McClanahan under LRBP (n). First, the Bankruptcy Court s interpretation and application of the Bankruptcy Code and Rules in its September 8, 2010 order dismissing the complaints with prejudice are reviewed de novo. United States v. Hinkson, 585 F.3d 1247, (9 th Cir. 2009); Litton Loan Servicing, LP v. Garvida (In re Garvida), 347 B.R. 697, 703 (9 th Cir. BAP 2006). Also, the District Court s order 1

8 Case: /30/2012 ID: DktEntry: 25-1 Page: 8 of 41 (8 of 50) dated June 3, 2011, affirming the Bankruptcy Court s ruling is reviewed de novo. Greene v. Savage (In re Greene), 583 F.3d 614, 618 (9 th Cir. 2009). Second, if the Bankruptcy Court has identified the correct legal rule to apply, the Ninth Circuit determines whether the Bankruptcy Court s application of the facts to the relevant law was "(1) illogical, (2) implausible, or (3) without support in inferences that may be drawn from the facts in the record." United States v. Hinkson, 585 F.3d at III. STATEMENT OF THE ISSUES A. Did Anwar/McClanahan waive their arguments, raised for the first time on appeal, that this case involves debts that are neither listed nor scheduled and that Anwar/McClanahan were not provided with notice or actual knowledge of [the Johnson/Vergeyle cases] under 11 U.S.C. 523(a)(3)(B) and did Anwar/McClanahan actually receive such notice? B. Did the U.S. Bankruptcy Court have a proper legal basis under FRBP 4007(c) and FRBP 9006(b)(3) to dismiss the Anwar/McClanahan Complaints with prejudice for untimeliness, while at the same time implicitly denying the Anwar/McClanahan Motions for Relief from Untimely Filing and to Determine Timeliness? C. Did the U.S. Bankruptcy Court and U.S. District Court properly determine that Local Bankruptcy Rule (n) of the United States Bankruptcy 2

9 Case: /30/2012 ID: DktEntry: 25-1 Page: 9 of 41 (9 of 50) Court for the District of Arizona does not apply in a case in which FRBP 4007(c) and FRBP 9006(b)(3) are controlling? D. Did the U.S. District Court have a proper legal basis in affirming the U.S. Bankruptcy Court s order dated September 8, 2010 dismissing the Anwar/McClanahan Complaints with prejudice and denying the Anwar/McClanahan Motions for Relief? Addendum to Brief: Per Circuit Rule , Johnson/Vergeyle file their separate Addendum to the Answering Brief. IV. STATEMENT OF THE CASE/RELEVANT FACTS The heart of this case concerns the inability of Anwar/McClanahan to meet what is probably the most critical deadline in the Bankruptcy Code and Rules the filing of complaints to determine the dischargeability of certain debts 1 because of their own dilatory conduct. They failed to heed the strict time limitations established in FRBP 4007(c) and FRBP 9006(b)(3) for filing nondischargeability complaints under 11 U.S.C. 523(c). It is undisputed that the complaints in this case were untimely filed on April 14, (APP ER ; APP ER ) 2 No timely motions to extend the court-ordered extended deadline of April 1 Throughout this brief, Johnson/Vergeyle refer to complaints to determine the dischargeability of certain debts under 11 U.S.C. 523(a) - 523(e) as nondischargeability complaints. 2 References by Johnson/Vergeyle to the record are taken from Appellants Excerpts of Record and cited as ( APP ER.) 3

10 Case: /30/2012 ID: DktEntry: 25-1 Page: 10 of 41 (10 of 50) 13, 2010 were filed as required by FRBP 4007(c). (APP ER ; APP ER ) Anwar/McClanahan caused the untimely filings by inexplicably waiting until days before the deadline to commence discovery to form the basis of their nondischargeability complaints, leading the Bankruptcy Court and the District Court to reject their pleas for relief. A. JOHNSON/VERGEYLE CHAPTER 7 ADMINISTRATIVE CASES. Anwar/McClanahan are former employees of a bankrupt business known as Xperex Corporation (hereinafter Xperex ). Appellees D. Lee Johnson (hereinafter Johnson ) and David Lyn Vergeyle (hereinafter Vergeyle ) served as two of the corporation s executive officers until Xperex filed a Chapter 7 business bankruptcy case with the United States Bankruptcy Court, Northern District of California, on July 27, 2009, in Case No DM. (APP ER ; APP ER ) Subsequently, Johnson filed his individual Chapter 7 bankruptcy case with the U.S. Bankruptcy Court, District of Arizona on August 6, (APP ER 942.) David and Margaret Vergeyle (hereinafter Vergeyles ) filed their individual Chapter 7 bankruptcy case with the U.S. Bankruptcy Court, District of Arizona on August 26, (APP ER 833.) Johnson/Vergeyle received their Chapter 7 Discharge Orders on April 19, 2010 and March 19, 2010, respectively. (APP ER ; APP ER ) 4

11 Case: /30/2012 ID: DktEntry: 25-1 Page: 11 of 41 (11 of 50) Anwar/McClanahan were listed as unsecured wage claimants in the Xperex Bankruptcy Schedules as well as in the respective Chapter 7 Schedules in the Johnson/Vergeyle cases. (APP ER ; APP ER ; APP ER 711, 757, 852 and 877.) Anwar/McClanahan were provided Notices of Chapter 7 Bankruptcy Case, Meeting of Creditors & Deadlines by the Clerk of the Court that Johnson/Vergeyle were seeking to discharge any personal liability owed for those and other claims. (APP ER and ) The notices stated that the deadline to file nondischargeability complaints in the Johnson case was November 10, 2009 and the deadline to file in the Vergeyle case was November 30, (APP ER 420 and 451) The Johnson/Vergeyle administrative cases were ordered by the Bankruptcy Court to be jointly administered on December 30, (APP ER ) In November 2009, Anwar/McClanahan timely filed Motions for Extension of Time to file nondischargeability complaints (hereinafter Motions to Extend Time ) in both the Johnson and Vergeyle cases. (APP ER and ) The Motions to Extend Time informed the Court that their planned investigation will provide sufficient evidence pursuant to Code Sections 523(a)(2), (4) or (6), to justify denial of discharge (APP ER 662, lines 20-25; APP ER 681, lines 18-24) and averred false pretenses, false representations and statements [made by Johnson/Vergeyle] regarding Debtor s and Xperex s financial condition. (APP 5

12 Case: /30/2012 ID: DktEntry: 25-1 Page: 12 of 41 (12 of 50) ER 664, lines 3-4; APP ER 683, lines 3-4.) The Motions to Extend in the jointly administered cases were set for hearing on January 13, (APP ER 963.) Anwar/McClanahan filed Motions for Order Authorizing Rule 2004 Examinations in the Johnson/Vergeyle cases to conduct discovery that they said would focus on their allegation of reliance on the oral pretenses, representations or fraud made by Johnson/Vergeyle. (APP ER 547, lines 3-4; APP ER 574, lines 3-4.) The Rule 2004 Motions did not seek to compel the production of documents from Johnson/Vergeyle, and no subpoenas were issued demanding document production. On December 30, 2009, the Court granted the Rule 2004 Motions to permit oral examination of Johnson/Vergeyle, effective upon the granting of the pending Anwar/McClanahan Motions to Extend Time. (APP ER 541.) Following the January 13, 2010 hearing on the Motions to Extend Time, the Bankruptcy Court issued a Minute Entry/Order dated January 25, 2010, granting Anwar/McClanahan an extension of time to file their nondischargeability complaints up to and including April 13, (APP ER 517.) The Minute Entry/Order stated: Counsel for creditors [Anwar/McClanahan] to prepare and lodge an appropriate form of order. Anwar/McClanahan lost nearly two weeks of their extension following this Minute Entry because they did not lodge the order as directed by the Court until February 8, 2010 (APP ER 966). The formal order granting the extension was entered on February 9, (APP ER ) 6

13 Case: /30/2012 ID: DktEntry: 25-1 Page: 13 of 41 (13 of 50) On February 10, 2010, counsel for Johnson/Vergeyle ed counsel for Anwar/McClanahan to request a list of documents to be produced for the examinations and to inquire about scheduling the Rule 2004 examinations of Johnson/Vergeyle. (APP ER 282.) Counsel for Johnson/Vergeyle did not receive a response to the February 10 th . B. UNTIMELY NONDISCHARGEABILITY COMPLAINTS. Counsel for Anwar/McClanahan waited until April 5, 2010, eight days prior to the April 13 th nondischargeability complaint deadline, to contact counsel for Johnson/Vergeyle about scheduling the Rule 2004 examinations. (Opening Brief at p. 22.) 3 Johnson/Vergeyle and their counsel were available on April 12th for the examinations, which took place at the law offices of counsel for Johnson/Vergeyle. (Opening Brief at pp ) It was not until Friday, April 9, 2010, three days before the scheduled examinations, that counsel for Anwar/McClanahan provided a list of requested documents to be produced in conjunction with the examinations, even though there was no court order to compel such production. (APP ER In their Opening Brief at page 21, Anwar/McClanahan stated they filed a Bankruptcy Rule 2004 examination request in the Xperex case. To be more specific, the Xperex docket report reveals that their Rule 2004 application, which was not approved, was filed on April 5, 2010, the same day they sought to schedule discovery in the Johnson/Vergeyle cases, only days before the nondischargeability deadline. 7

14 Case: /30/2012 ID: DktEntry: 25-1 Page: 14 of 41 (14 of 50) 436.) There is no dispute that Johnson/Vergeyle substantially complied with the request. Anwar/McClanahan waited until two and one-half hours before the April 13 th deadline expired to begin the process of opening their Adversary Proceedings in the Johnson/Vergeyle cases, i.e., April 13, 2010 at 9:34 p.m. and 9:51 p.m., respectively. (APP ER 504A and APP ER 438.) However, both Complaints were filed the following day, April 14, Specifically, the Complaint against Johnson was filed at 12:26 a.m. and the Complaint against Vergeyle was filed at 12:38 a.m., according to the Electronic Case Filing system. (APP ER and ) The Bankruptcy Court dockets in the Adversary Proceedings reflect that Anwar/McClanahan did not file motions seeking to extend the time to file their complaints in the Johnson/Vergeyle cases either on or after the April 13 th deadline in accordance with FRBP 4007(c). (APP ER and ) Thereafter, on May 18, 2010, Johnson/Vergeyle filed their respective Motions to Dismiss the Anwar/McClanahan Complaints with prejudice for violating the court-ordered deadline of April 13, 2010, as well as for violating the strict deadlines established in FRBP 4007(c). (APP ER and ) The Johnson/Vergeyle adversary cases were ordered to be jointly administered on June 2, (APP ER ) 8

15 Case: /30/2012 ID: DktEntry: 25-1 Page: 15 of 41 (15 of 50) In response, Anwar/McClanahan filed Motions for Relief from Untimely Filing and to Determine Timeliness pursuant to Local Bankruptcy Rule (n), seeking the Bankruptcy Court s determination that relief was appropriate on the basis of good cause or excusable neglect. 4 (APP ER ) The Motions for Relief were supported by the declarations of counsel for Anwar/McClanahan and counsel s legal assistant. (APP ER ; APP ER ) Among the reasons stated for the untimely complaints include, but are not limited to: The mistaken belief that Arizona time was one hour ahead of Oregon time on April 13, 2010 (APP ER ); The malfunction and slow speed of counsel s computer (App ER ); Counsel s other professional obligations and personal time commitments (APP ER ); The difficult and time-consuming effort to locate and analyze various Bankruptcy and non-bankruptcy laws (APP ER ); The time-consuming effort to investigate Xperex/Paine Security Interest; UForce Transaction (APP ER ); and 4 Since November 23, 2009, Anwar/McClanahan have been associated with the local law firm of Marc J. Victor, P.C. in the Johnson/Vergeyle cases (APP ER 948 and APP ER 963.) It is baffling that local counsel did not provide assistance to ensure that the complaints were timely filed. 9

16 Case: /30/2012 ID: DktEntry: 25-1 Page: 16 of 41 (16 of 50) Time spent to determine who had access to important Xperex business records and information and to investigate the relationship of the Xperex case to the Johnson/Vergeyle cases. (APP ER ) On August 3, 2010, the Bankruptcy Court heard oral argument on Johnson/Vergeyle s Motions to Dismiss and Anwar/McClanahan s Motions for Relief from Untimely Filing and to Determine Timeliness. (APP ER ) Following the Bankruptcy Court s consideration of briefing and oral argument, the Court issued a four-page written decision on August 25, 2010, in support of its order granting the Motions to Dismiss and denying the Motions for Relief from Untimely Filing. (APP ER ) The Court cited to case law controlling in the Ninth Circuit that the Court has no or very little discretion to grant relief when [nondischargeability] complaints are untimely filed. (APP ER 13.) The Court noted that Anwar/McClanahan had been given a lengthy extension, almost five months and yet inexplicably waited until under three hours before the deadline to begin the filing process. (APP ER ) The formal order dismissing the Anwar/McClanahan nondischargeability complaints was entered on September 8, (APP ER 9-10.) C. MISSTATEMENTS AND OMISSIONS OF FACT. It has come to the attention of counsel for Johnson/Vergeyle that the Opening Brief contains certain misstatements and omissions of fact by 10

17 Case: /30/2012 ID: DktEntry: 25-1 Page: 17 of 41 (17 of 50) Anwar/McClanahan concerning their continuing allegations of unproven fraud committed by Johnson/Vergeyle in connection with 1) Xperex security interest involving Dorothy Paine, Johnson s sister-in-law and 2) UForce, Inc. Asset Purchase Agreement. (Opening Brief at pp ) Anwar/McClanahan purport to make these allegations to support more than one cause of action in their untimely nondischargeability complaints. (APP ER and APP ER ) As explained below, Anwar/McClanahan have been aware for many months that the matters concerning Ms. Paine and the UForce contract were resolved by the Xperex Trustee between September 23, 2010 and March 30, These continuing and inappropriate assertions are prejudicial to Johnson/Vergeyle and are meant to obfuscate the real issue that the untimely filed complaints were due to self-inflicted delay. To the extent that the Court considers any of these allegations, then the Court should be aware of and take judicial notice of the following bankruptcy proceedings which have already resolved the two Xperex disputes raised by Anwar/McClanahan: The Xperex Bankruptcy Court docket report (U.S. Bankruptcy Court, Northern District of California, Case No DM) reveals that two disputes 5 It is important to note that counsel for Johnson/Vergeyle does not and has never represented Xperex Corporation in Bankruptcy Court or in any other capacity. 11

18 Case: /30/2012 ID: DktEntry: 25-1 Page: 18 of 41 (18 of 50) referred to by Anwar/McClanahan in their Opening Brief Dorothy Paine security interest and UForce, Inc. contract (Opening Brief at pp.19-20) have been resolved by Xperex Bankruptcy Trustee E. Lynn Schoenmann. The Xperex docket report reflects that the Bankruptcy Court in California entered an order on September 23, 2010, approving the Xperex Trustee s compromise with Dorothy Paine to resolve the disputed pre-petition security interest. (Xperex docket entry no. 55.) The order makes no reference to any fraud or other bad acts committed by Johnson/Vergeyle. But the Rider to the Order specifically refers to correspondence to the Xperex Court from Mark McClanahan, counsel for Anwar/McClanahan, who evidently sought a stay of the Dorothy Paine matter pending the outcome of the appeal to the District Court from the ruling adverse to them in the Johnson/Vergeyle cases in Arizona. In denying the stay request, the Court found that Mr. McClanahan has not intimated or suggested that there has been an abuse of discretion. The order was entered approximately two weeks after the Bankruptcy Court in Arizona entered its September 8, 2010 order dismissing the complaints in the Johnson/Vergeyle cases. In addition, on March 31, 2011, during the time when Johnson/Vergeyle were preparing their Answering Brief in the District Court appeal, the Bankruptcy Court in the Xperex case entered another order approving of the Xperex Trustee s 12

19 Case: /30/2012 ID: DktEntry: 25-1 Page: 19 of 41 (19 of 50) compromise to resolve the UForce, Inc. contract controversy. (Xperex docket entry no. 59.) These orders should have been brought to the Court s attention in the Johnson/Vergeyle cases as soon as they were known to Anwar/McClanahan. It is highly improper and prejudicial to Johnson/Vergeyle for Anwar/McClanahan to continue to falsely assert that Johnson/Vergeyle committed fraud in these matters when they are fully aware that the controversies have been resolved to the satisfaction of the Xperex Bankruptcy Trustee. Therefore, Johnson/Vergeyle request that the Court disregard these false and prejudicial allegations. D. OUTCOME OF APPEAL TO U.S. DISTRICT COURT. Anwar/McClanahan timely appealed the Bankruptcy Court s order of September 8, 2011, dismissing the complaints to the United States District Court for the District of Arizona. (APP ER and ) The District Court granted three extensions of time for Anwar/McClanahan to file their Opening Brief to U.S. District Court, with the final extension deadline set on February 28, (APP ER ) However, on March 1, 2011, one day after the deadline, Anwar/McClanahan untimely filed their Motion for One-Day Enlargement of Time to File Opening Brief and their Opening Brief, to which Johnson/Vergeyle responded. (APP ER ) After considering the briefing on the untimely Opening Brief, the District Court granted the Motion for One-Day 13

20 Case: /30/2012 ID: DktEntry: 25-1 Page: 20 of 41 (20 of 50) Enlargement of Time to allow the Anwar/McClanahan Opening Brief to be timely filed. (APP ER 993.) Following briefing and without oral argument, the District Court issued a Judgment and written decision filed on June 3, 2011, affirming the Bankruptcy Court s September 8, 2010 decision. (APP ER 1-8.) The District Court ruled that it was bound by FRBP 4007(c) and 9006(b)(3) and that a bankruptcy court has no or very little discretion to grant relief when complaints for Section 523 or 727 claims are untimely filed. (APP ER 6, lines ) The District Court found that the Bankruptcy Court engaged in a detailed analysis of the law and facts and circumstances of this case (APP ER 6, lines 13-14) and upheld the Bankruptcy Court s finding that: the deadline for filing nondischargeability Complaints [is] rigid and that the bankruptcy court had no discretion to extend the deadline unless a motion to extend was filed before the time ran out. (APP ER 4, lines ) The District Court also ruled that LRBP (n) clearly conflicts with FRBP 4007(c) and 9006(b)(3), and those rules prohibit consideration of factors such as excusable neglect. (APP ER 6, lines ) The District Court concluded that: The policy in favor of firm deadlines to support prompt and final resolutions of bankruptcy proceedings and clean slates for debtors is bolstered by a system that does not permit after-the-fact extensions of due dates. In sum, a party that misses a deadline to file a 14

21 Case: /30/2012 ID: DktEntry: 25-1 Page: 21 of 41 (21 of 50) nondischargeability complaint may not rely on excusable neglect to extend the time limitation. (APP ER 7, lines 2-6.) The Court further concluded that it was not legal error for the Bankruptcy Court to dismiss the Anwar/McClanahan complaints with prejudice and to deny the Motions for Relief because no amendment could cure this defect. (APP ER 7, lines 7-11.) On June 30, 2011, Anwar/McClanahan filed a timely Notice of Appeal to the Ninth Circuit Court of Appeals from the District Court s June 3, 2011 Order. (APP ER ) V. SUMMARY OF ARGUMENT Anwar/McClanahan argue that the deadline to file their nondischargeability complaints should be extended or equitably tolled pursuant to 11 U.S.C. 523(a)(3)(B) because their alleged fraud claims were not listed and/or scheduled and they did not have notice or actual knowledge of alleged tort claims by the April 13, 2010 extended filing deadline in order to timely file their nondischargeability complaints. (Opening Brief at p. 26.) First, Anwar/McClanahan waived their right to make this argument by failing to raise it prior to this appeal. Second, they had notice or actual knowledge that their unsecured Xperex wage claims were listed in both the Johnson and Vergeyle Bankruptcy Schedules. Both creditors received official Notice from the 15

22 Case: /30/2012 ID: DktEntry: 25-1 Page: 22 of 41 (22 of 50) Clerk of the Court of the Johnson/Vergeyle bankruptcy cases and the deadlines to file nondischargeability complaints. (APP ER ; APP ER ) Section 523(a)(3)(B) comes into play only if the debts in question were neither listed nor scheduled. Anwar/McClanahan s knowledge of their own allegations is demonstrated by the assertions of alleged misrepresentations and fraudulent conduct raised in their Motions to Extend Time filed in November 2009 (APP ER ; APP ER ) and in their Motions for Order Authorizing Rule 2004 Examinations filed in December (APP ER ; APP ER ) It was not Johnson/Vergeyle s responsibility to divine the nature of the claims that Anwar/McClanahan might raise (and had not yet raised) upon filing their Bankruptcy Schedules. Next, both the Bankruptcy Court and the District Court properly determined that Local Bankruptcy Rule (n) does not apply based upon the facts presented in this case to relieve the untimely filed nondischargeability complaints. If applied, the Rule would override the strict and unambiguous deadlines established under FRBP 4007(c) and FRBP 9006(b)(3). Local rules must be consistent with the Federal Bankruptcy Rules pursuant to FRBP Finally, the Bankruptcy Court did not abuse its discretion when it relied upon the significant and controlling case law in the Ninth Circuit upholding the strict deadlines of FRBP 4007(c) and FRPB 9006(b)(3) for filing section

23 Case: /30/2012 ID: DktEntry: 25-1 Page: 23 of 41 (23 of 50) complaints and dismissing the untimely Anwar/McClanahan nondischargeability complaints. After a review of the record, an analysis of the Electronic Case Filing System in the District of Arizona, a review of Ninth Circuit precedent relating to the deadline for filing nondischargeability complaints, consideration of the extension of time previously granted, and Anwar/McClanahan s list of reasons for the untimely filings, the Bankruptcy Court soundly concluded in its written decision dated August 25, 2010, that there were no unique circumstances or other equities to justify exercising its discretion under 11 U.S.C. 105(a) to relieve the untimely complaints. (APP ER ) The District Court s later written decision dated June 3, 2011, provides a proper and logical basis to affirm the Bankruptcy Court s ruling. (APP ER 2-8.) VI. ARGUMENT A. ANWAR/MCCLANAHAN S ARGUMENT THAT THE DEBTS IN QUESTION ARE UNSCHEDULED TORT CLAIMS PURSUANT TO 11 U.S.C. 523(a)(3)(B) HAS NO MERIT. 1. The Argument Has Been Waived. The record shows that Anwar/McClanahan has never raised the argument that the alleged claims of Anwar/McClanahan are tort debts that were neither listed nor scheduled pursuant to 11 U.S.C. 523(a)(3)(B) in order to file timely proofs of claim and/or nondischargeability complaints. The argument was not argued before the Bankruptcy Court in Anwar/McClanahan's response to the 17

24 Case: /30/2012 ID: DktEntry: 25-1 Page: 24 of 41 (24 of 50) Motions to Dismiss their complaints, in their own Motions for Relief from Untimely Filing, or during the oral argument held on August 3, (APP ER G, APP ER and APP ER ) Nor was this issue discussed in Anwar/McClanahan s Opening and Reply Briefs to the District Court. (Not included in APP ER per Circuit Rule ) The Ninth Circuit will not consider an argument raised for the first time on appeal. O Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957 (9th Cir. 1989); Concrete Equip. Co., Inc. v. Fox (In re Vigil Bros. Constr., Inc.), 193 B.R. 513, 520 (9th Cir. BAP 1996); see also In re Cybernetic Serv., Inc., 252 F.3d 1039, 1045 n.3 (9th Cir. 2001) (Appellate court will not explore ramifications of argument because it was not raised below and, accordingly, was waived); Scovis v. Henrichsen (In re Scovis), 249 F.3d 975, 984 (9th Cir. 2001) (Court will not consider an issue raised for first time on appeal absent exceptional circumstances). 2. Anwar/McClanahan Had Notice Of These Claims. Section 523(a)(3)(B) excludes a debt from discharge in an individual s bankruptcy case if the debt involved was neither listed nor scheduled with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit (B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for 18

25 Case: /30/2012 ID: DktEntry: 25-1 Page: 25 of 41 (25 of 50) a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request. (Emphasis added.) Even if the Court considers Anwar/McClanahan s novel argument, it must be rejected because Anwar/McClanahan received actual notice of the Johnson/Vergeyle cases from the Clerk of the Court. (APP ER and ) It is irrelevant that that their claims were possibly in the nature of tort claims. The statute only provides an exception if the creditor lacks notice or knowledge of the case, not lack of knowledge of the type of claim a creditor may allege against a debtor. The debts owed to Anwar/McClanahan were listed and scheduled as unsecured debts in the respective Schedules F in the Johnson and Vergeyle cases. (APP ER ; APP ER ; APP ER 711, 757, 852 and 877.) Anwar and McClanahan do not deny receiving notice of the Johnson/Vergeyle bankruptcy cases. There has never been a claim made by Anwar/McClanahan that they did not have proper notice or actual knowledge of the cases in order to timely file a proof of claim under section 523(a)(3)(B). There is no question that Anwar/McClanahan knew well in advance of the April 13 th deadline about their allegations of fraudulent concealment because they raised these same allegations in their own pleadings as early as November It was their burden to prove the type of claim they may have had against 19

26 Case: /30/2012 ID: DktEntry: 25-1 Page: 26 of 41 (26 of 50) Johnson/Vergeyle through formal discovery. The important point is that they did not avail themselves of the more than two additional months granted by the Bankruptcy Court to conduct discovery so that they could file timely complaints. The case relied on by Anwar/McClanahan, Erie Insurance Company v. Romano (In re Romano), 262 B.R. 429 (N. D. Ohio 2001) (Opening Brief at p. 29), is inapposite because the creditor had no reason to believe there was any fraud until more than a year following the deadline to file nondischargeability complaints. Here, the record reflects that Anwar/McClanahan had plans to investigate these allegations long before the April 13 th deadline. The Motions to Extend Time specifically reference alleged false pretenses, false representations and statements made concerning the security interest of Johnson s sister-in-law in Xperex assets and the UForce, Inc. contract. (APP ER 664; APP ER 683.) The Rule 2004 Motions reference their plans to examine Johnson/Vergeyle and subpoena Dorothy Paine, Johnson s sister-in-law, in connection with the Xperex security interest and the UForce, Inc. contract. (APP ER ; APP ER ) In the face of their own filings, therefore, Anwar/McClanahan cannot claim they were without notice to assert their allegations in timely nondischargeability complaints. Further, there is nothing in the record to demonstrate that Johnson/Vergeyle prevented Anwar/McClanahan from conducting discovery, and that issue was not 20

27 Case: /30/2012 ID: DktEntry: 25-1 Page: 27 of 41 (27 of 50) argued to the Bankruptcy Court. (APP ER ) To the contrary, the record shows that as early as February 10, 2010, Johnson/Vergeyle reached out to opposing counsel to inquire about scheduling discovery. (APP ER 282.) Anwar/McClanahan chose to wait until the week before the extended deadline to contact counsel for Johnson/Vergeyle about scheduling discovery. A lack of diligent effort by a creditor can be fatal to a creditor s last minute attempt to achieve an extension of the nondischargeability deadline. In re Woods, 260 B.R. 41, (N.D. Fla. 2001); see also Western Wood Fabricators, Inc. v. Sirmans (In re Sirmans), 2009 WL , *2 (E.D. Cal. 2009) (Bankruptcy Court did not commit error or an abuse of discretion in denying creditor s motion for extension of time to file nondischargeability complaint; court found that creditor s difficulty in seeking discovery from the debtor in a state court proceeding did not justify the creditor s failure to conduct any discovery in the debtor s bankruptcy case). B. LOCAL BANKRUPTCY RULE (n) DOES NOT GOVERN. Local Bankruptcy Rule (n) provides that an attorney or other filer whose filing is untimely or otherwise improper may seek appropriate relief from the bankruptcy court upon a showing of good cause or excusable neglect. None of the applicable federal or local bankruptcy rules or Judicial Conference commentary expressly or implicitly permits LRBP (n) to override the strict 21

28 Case: /30/2012 ID: DktEntry: 25-1 Page: 28 of 41 (28 of 50) deadlines set by FRBP 4007(c) and 9006(b)(3) or to operate in direct contravention of FRBP Under FRBP 9029, the Local Rules cannot enlarge or otherwise be inconsistent with the Federal Rules of Bankruptcy Procedure, including the longestablished deadlines for filing nondischargeability complaints set forth in FRBP 4007(c) and FRBP 9006(b)(3). Even in Arizona, Local Bankruptcy Rule [General Scope] requires that the Local Rules be applied consistently with the expedite administration policy and FRBP LRBP provides in part: The Local Rules supplement or, if permitted, modify the Federal Rules of Bankruptcy Procedure, as amended. They shall be construed to be consistent with such Rules to promote speedy and inexpensive litigation. (Emphasis added.) The Ninth Circuit recognizes that district and bankruptcy courts have been delegated authority to adopt local rules prescribing the conduct of business, but the rules must be consistent with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. Sunahara v. Burchard (In re Sunahara), 326 B.R. 768, 782 (9 th Cir. 2005) (interpreting FRBP 9029); see also Bersher Invs. v. Imperial Sav. Ass'n. (In re Bersher Invs.), 95 B.R. 126, 129 (9th Cir. BAP 1988) (FRBP 9029 permits the establishment of local bankruptcy rules as long as they are not inconsistent with the more general bankruptcy rules ). 22

29 Case: /30/2012 ID: DktEntry: 25-1 Page: 29 of 41 (29 of 50) The language of FRBP 4007(c) is thus controlling and unambiguous concerning the strict deadline to file nondischargeability complaints: On motion of any party in interest, after hearing on notice, the court may for cause extend the time fixed under this subdivision. The motion shall be filed before the time has expired. (Emphasis added.) FRBP 9006(b)(3) enforces the mandate of FRBP 4007(c), by providing that the court may enlarge the time for taking action under 4007(c) only to the extent and under the conditions stated in [the Rule]. (Emphasis added.) As a result, Anwar/McClanahan did not comply with FRBP 4007(c) and 9006(b)(3) because they failed to file a Motion to Extend before the April 13 th deadline expired. Therefore LRBP (n) cannot be used in this case to undermine the clear-cut Federal Bankruptcy Rules of Procedure. If Anwar/McClanahan had filed Motions to Extend Time before the April 13 th deadline expired, the Court may have entertained another request for extension of time to file their nondischargeability complaints. The Bankruptcy Court, however, had a proper and logical basis to conclude that under the facts and circumstances here, it had no discretion to grant relief to Anwar/McClanahan. The Court considered LRBP (n) at the hearing on the Motions to Dismiss and Motions for Relief from Untimely Filing, but the Court rejected the Rule s application despite counsel s attempt to argue for relief: 23

30 Case: /30/2012 ID: DktEntry: 25-1 Page: 30 of 41 (30 of 50) Mr. McClanahan: We would ask Your Honor to consider that the attack on the validity of local Rule (n) is, I believe, unprecedented. I haven t found anyplace else, at least, where that s been questioned. It does leave the matter for your discretion, and on the grounds of either good cause or excusable neglect, and as defined by the Supreme Court in the Pioneer decision, why, excusable neglect seems not to involve neglect anymore. (APP ER 193, lines ) This Court should reject Anwar/McClanahan's policy rationale which argues inapplicable Judicial Conference history regarding electronic filing and survey of Local Bankruptcy Rules from other jurisdictions concerning technical failure, because the circumstances here, caused by Anwar/McClanahan s own delay, are controlled by the governing Federal Bankruptcy Rules and Ninth Circuit precedent explained above. The Court s electronic filing system is hardly a phenomenon as Anwar/McClanahan argues, but rather the CM/ECF system has become standard operating procedure throughout the federal court system. Since March 1, 2007, nearly all documents are required to be electronically filed in the U.S. Bankruptcy Court, District of Arizona. There is no support for Anwar/McClanahan s claim that the Ninth Circuit embraces a policy of providing relief from the possible effects of technical failure. (Opening Brief at p. 46.) In effect, Anwar/McClanahan are asking the Ninth Circuit to inappropriately modify or expand the application of FRBP 5005(a) and/or LRBP (n), the electronic filing rules, to revive their late complaints. 24

31 Case: /30/2012 ID: DktEntry: 25-1 Page: 31 of 41 (31 of 50) Despite their lengthy survey of local ECF rules from around the country, Anwar/McClanahan fail to confront how those local rules should be interpreted in conjunction with FRBP Anwar/McClanahan can provide no legal or policy support to reconcile the intent of FRBP 9029 with the local electronic filing rules. That is because FRBP 9029 does not permit local rules like FRBP (n) to contradict and change the meaning and operation of FRBP 4007(c) and FRBP 9006(b)(3), which are the seminal bankruptcy rules governing the nondischargeability complaint deadline. This Court need not engage in judicial rulemaking to reverse the sound decisions of the Bankruptcy Court and the District Court to grant relief to cure the untimely-filed nondischargeability complaints of Anwar/McClanahan who caused their own misfortune. Such a finding would effectively create an exception to FRBP 4007(c) and FRBP 9006(b)(3) where none has ever existed and would encourage parties-in-interest involved in adversary proceedings to use their computer problems as excuses to bend these long-established rules. 6 Under these facts, Anwar/McClanahan simply missed a deadline due to their own lack of diligence. Deadlines may lead to unwelcome results, but they prompt parties to 6 In an effort to divert the Court from the deadline issue, Anwar/McClanahan argue that the District Court should have granted relief based upon the bald and unproven assertion that this case involves debtors who hood-wink employees into working for them for nothing. (APP ER 39.) The merits of this case have never been reached. 25

32 Case: /30/2012 ID: DktEntry: 25-1 Page: 32 of 41 (32 of 50) act and they produce finality... Taylor v. Freeland & Kronz, 503 U.S. 638, 644 (1992) (Supreme Court denied equitable argument of Trustee who missed the deadline to object to the debtor s exemption claim under FRBP 4003(b), a timelimiting rule, which parallels Bankruptcy Rule 4007(c).) Here, the Court must not provide extraordinary relief to Anwar/McClanahan in light of their pattern of dilatory conduct. C. THIS CASE DOES NOT WARRANT THE BANKRUPTCY COURT S EXERCISE OF DISCRETION UNDER 11 U.S.C. 105(a) TO CURE THE UNTIMELY COMPLAINTS. It is well-settled in the Ninth Circuit that FRBP 4007(c) and FRBP 9006(b)(3), which impose the deadline to file nondischargeability complaints, are strictly construed. Classic Auto Refinishing, Inc. v. Marino (In re Marino), 37 F.3d 1354 (9 th Cir. 1994); Jones v. Hill (In re Hill), 811 F.2d 484 (9 th Cir. 1987). Deadlines provided in the Rules exist to further the prompt resolution of bankruptcies. Western Wood Fabricators, 2009 WL at *2, quoting from Hill, 811 F2d at 487. The Ninth Circuit has addressed the question of whether the Bankruptcy Court should exercise its discretion to apply the equitable powers in 11 U.S.C. 105(a) to relieve an untimely nondischargeability complaint, and has expressed that the validity of the unique or extraordinary circumstances doctrine remains doubtful. Allred v. Kennerley (In re Kennerley), 995 F.2d 145, 147 (9 th Cir. 26

33 Case: /30/2012 ID: DktEntry: 25-1 Page: 33 of 41 (33 of 50) 1993); Santos v. Schunck (In re Santos), 112 B.R. 1001, 1007 (9th Cir. BAP 1990) (Creditor who obtained pre-petition fraud judgment against the debtor was not excused from filing an untimely complaint in reliance upon the debtor s non-court approved agreement to extend the time; Court held that equitable tolling cannot apply because the doctrine is inconsistent with the language of the Rules [4007(c) and 4004(a)] and because the doctrine would significantly impair the purposes of the Rules. ) Further, the equitable power under 11 U.S.C. 105 must and can only be exercised within the confines of the Bankruptcy Code. Nw. Bank Worthington v. Ahlers, 485 U.S. 197, 206 (1988). The Anwar/McClanahan case does not present any unique or extraordinary facts and circumstances to justify the granting of equitable relief. Rather, the record reflects that the list of reasons for the untimely filings demonstrate that Anwar/McClanahan simply waited until the last minute to commence discovery and to file their complaints. After being given months to conduct discovery they requested, Anwar/McClanahan waited until days before the April 13 th deadline to do so and chose not to enlist the help of their local counsel. They then waited until hours before the deadline to begin the process of opening adversary proceedings. That delay is the reason that they missed the deadline and why the Bankruptcy Court and the District Court rejected their pleas for relief on the basis that FRBP 27

34 Case: /30/2012 ID: DktEntry: 25-1 Page: 34 of 41 (34 of 50) 4007(c) and FRBP 9006(b)(3) did not permit the courts to exercise discretion to extend the deadline for excusable neglect. (APP ER 7, lines 2-11.) No third party impaired Anwar/McClanahan s ability to file on time. They have not alleged that under FRBP 9006(a)(3) the Court somehow prevented the nondischargeability complaints from being filed, and there is no proof in the record that the Court s electronic filing system experienced an outage on April 13, Therefore, it is undisputed that the Clerk s Office was accessible on the deadline date. Further, there is no proof in the record that Johnson/Vergeyle hindered the ability of Anwar/McClanahan to conduct discovery. Indeed, Johnson/Vergeyle encouraged Anwar/McClanahan to serve discovery requests on them well before the deadline. The record shows that Anwar/McClanahan delayed their own discovery efforts. Anwar/McClanahan s allegations to the contrary and attempt to disparage Johnson/Vergeyle are simply subterfuge to divert attention from their own dilatory conduct. As a result, none of the thinly veiled reasons listed in the declarations of their counsel or their counsel s legal assistant for their untimely filings considered by the Bankruptcy Court and the District Court rise to the level of unique and extraordinary circumstances to justify invoking the Court s equitable powers under 11 U.S.C. 105(a). There is certainly no case law or commentary to the ECF rules and/or guidelines that support the idea that problems with a party s aging computer 28

35 Case: /30/2012 ID: DktEntry: 25-1 Page: 35 of 41 (35 of 50) can cause the Clerk s office to be inaccessible pursuant to FRBP 9006(b)(3). As properly recognized by both courts, FRBP 4007(c) and FRBP 9006(b)(3) do not excuse Anwar/McClanahan s late filing for any reason. The court decisions cited by Anwar/McClanahan are inapposite and do not support their contention that excusable neglect standard and/or equitable principles can relieve their late-filed nondischargeability complaints. None of these cases address the interplay between FRBP 4007(c), FRBP 9006(b)(3) and LRBP (n), but rather relate only to other inapplicable statutes and rules. For instance, in Pioneer Investment Services Company v. Brunswick Associates Limited Partnership, 507 U.S. 380 (1993), creditors failed to file timely proofs of claim under FRBP 3003 and moved to have the bar date extended under FRBP 9006(b)(1), which permits a party to seek enlargement of the time for filing proofs of claim where failure to act was the result of excusable neglect. FRBP 9006(b)(1) does not apply to late-filed nondischargeability complaints. The applicable rule here, FRBP 9006(b)(3), is expressly conditioned upon the 60-day deadline established under FRBP 4007(c). Likewise, the case of Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007), does not apply because the Bankruptcy Court interpreted Bankruptcy Code section 706(d) with section 1307(c), which expressly allows the Court to convert a Chapter 13 to Chapter 7 for cause. The same is true of Phoenix Global 29

36 Case: /30/2012 ID: DktEntry: 25-1 Page: 36 of 41 (36 of 50) Ventures, LLC v. Phoenix Hotel Associates, Ltd., 422 F.3d 72 (2 nd Cir. 2005) and related cases, Bilbruck v. BNSF Railway Company, 243 Fed. Appx. 293, 2007 WL (9 th Cir. 2007) and Evans v. Bantek West, Inc., 2009 WL (E.D. Cal.), because these cases involved late-filed motions to remand the cases to state court pursuant to 28 U.S.C. 1447(c). All of the remaining cases cited by Anwar/McClanahan are easily distinguished because of their application of different and more lenient rules, such as: Pincay v. Andrews, 389 F.3d 853 (9 th Cir. 2004) (the Court interpreted FRAP 4(a)(5)(A), which permits an extension to file a late Notice of Appeal upon a showing of excusable neglect or good cause); Leavitt v. Soto (In re Leavitt), 171 F.3d 1219 (9 th Cir. 1999) (the Court found cause for dismissal under 11 U.S.C. 349 based upon bad faith in a case where the creditor obtained a pre-petition judgment against the debtor for fraud); Nardei v. Maughan (In re Maughan), 340 F.3d 337 (6 th Cir. 2004) (the Bankruptcy Court exercised equitable powers under 11 U.S.C. 105(a) granting relief to an untimely nondischargeability complaint where the Debtor s delay in providing documents to creditor resulted in the belated filing); Nicholson v. Isaacman (In re Isaacman), 26 F.3d 629 (6 th Cir. 1994) (Bankruptcy Court erroneously issued two bar dates for filing nondischargeability complaints and erred in not exercising its equitable powers under 11 U.S.C. 105(a) to correct the error by accepting the complaint); In re Harris, 464 F.3d