Opinion
M-47 (MBM).
December 21, 2001.
JOSEPH J. D'ERASMO, ESQ., JONATHAN AI, ESQ., Rockville, MD., Attorney[s] for Ming Hsiung Fang, Shou Tai Hsu, and Mao Chung Liao, Chief Members of the Labor Union of Singer Industries Taiwan Ltd.
JOHN WILLIAM BUTLER, JR., ESQ., TIMOTHY R. POHL, ESQ., Skadden, Arps, Slate, Meagher Flom (Illinois), Chicago, IL., JAY M. GOFFMAN, ESQ., Skadden, Arps, Slate, Meagher Flom, New York, NY., Attorney[s] for the Reorganized Debtor[s].
OPINION AND ORDER
Creditors Ming Hsiung Fang, Shou Tai Hsu, and Mao Chung Liao, Chief Members of the Labor Union of Singer Industries Taiwan Ltd. ("the Union"), appeal certain decisions rendered by Bankruptcy Judge Burton R. Lifland in proceedings against debtor, The Singer Company N.V. ("Singer"). For the reasons set forth below, those appeals are denied.
I.
The Union represents approximately 600 former employees of Singer's Taiwanese affiliate, Singer Industries Taiwan Ltd., many of whom seek to recover certain employment and pension benefits from Singer. On February 7, 2001, during bankruptcy proceedings against Singer in the United States Bankruptcy Court for the Southern District of New York, the Union made a motion seeking an extension of the time in which to file an objection to Singer's discharge. In an order entered on March 30, 2001, Judge Lifland denied the motion. In re The Singer Co., Nos. 99-10578 to 99-10607, 99-10613, 99-10616 to 99-10629, 00-10423 (Bankr. S.D.N.Y. Mar. 30, 2001). Eleven days later, on April 10, the Union filed an appeal of that order. That appeal is now pending before this court. Singer urges that the appeal be dismissed as untimely under Fed.R.Bankr. p. 8002(a), which sets a 10-day time limit for appeals, and under Fed.R.Bankr.P. 6009(a), which provides that intermediate Saturdays, Sundays, and holidays are to be included in the 10-day computation. (Singer Objection of 4/20/01) The Union contends, however, that its appeal is timely under Fed.R.Civ. p. 6(a), which specifically excludes intermediate weekends and holidays from the 10-day calculation. (Union Opp. Mot. of 4/25/01) At issue is whether to grant leave to appeal.
Fed.R.Bankr.P. 8002(a) states that "notice of appeal shall be filed with the clerk within 10 days of the date of the entry of the judgment, order, or decree appealed from" (emphasis added).
Fed.R.Bankr. p. 9006(a) provides that "[w]hen the period of time prescribed or allowed is less than 8 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation" (emphasis added).
Fed.R.Civ.P. 6(a) states that "[w]hen the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation" (emphasis added).
Also before me is a second appeal. On April 25, 2001, the Union requested that Judge Lifland use his equitable powers to extend the deadline for the Union's appeal and thereby cure any possible untimeliness. (Union Opp. Mot. of 4/25/01) After a May 9 hearing on the issue whether the Union's mistake of law constituted "excusable neglect" such that the filing period could be extended, the Judge entered a May 22 order denying the request. In re The Singer Co., Nos. 99-10578 to 99-10607, 99-10613, 99-10616 to 99-10629, 00-10423 (Bankr. S.D.N.Y. May 22, 2001). On May 29, the Union appealed that decision to this court. Therefore, I must also decide whether Judge Lifland's refusal to excuse the Union's untimeliness was an abuse of discretion.
II.
As to the Union's first appeal, the Federal Rules of Bankruptcy Procedure, not the Federal Rules of Civil Procedure, govern the time period during which bankruptcy appeals may be brought, and the Union's appeal is therefore untimely. Precedent in this court and elsewhere makes clear that Fed.R.Bankr.P. 9006(a) governs the computation of time periods in bankruptcy proceedings. See Williams v. EMC Mortgage Corp. (In re Williams), 216 F.3d 1295, 1297 n. 3 (11th Cir. 2000); Butler v. Merchants Bank Trust Co. (In the matter of Butler, Inc.), 2 F.3d 154, 156 (5th Cir. 1993); Aycock v. Eaton (In the Matter of Eichelberger), 943 F.2d 536, 539 (5th Cir. 1991); Galt v. Jericho-Britton (In re Nucorp Energy, Inc.), 812 F.2d 582, 583-84 (9th Cir. 1987); Johnson v. 1187 Tenants Group, H.D.F.C., No. 00 Civ. 4298, 2001 U.S. Dist. LEXIS 3662, at *3 (S.D.N.Y. Mar. 29, 2001); Hirsch v. Kelley, Drye, Warren, L.L.P. (In re Colonial Realty Co.), 216 B.R. 323, 324-25 (Bankr. D. Conn. 1997); In re Blue Mountain Invs., Ltd., 1991 WL 17573, at *1 (D. Kan. Jan. 23, 1991); Wiggs, Inc. v. Richman (In re Miramar, Inc.), 70 B.R. 32, 33-34 (Bankr. E.D. Mich. 1987). It is significant that the Union cites no case, nor have I found any case, holding to the contrary — namely, that Fed.R.Civ.P. 6(a) controls rather than Fed.R.Bankr.P. 9006(a).
The application of Fed.R.Bankr.P. 9006 to this appeal is supported not only by the weight of precedent, but also by the text of the federal rules themselves. Whereas Fed.R.Civ.P. 6 contains no language allowing its use in bankruptcy, the Advisory Committee Notes to Rule 9006 explicitly state that Rule 9006(a) "is an adaptation of Rule 6 F. R. Civ. P." that governs "the time for acts to be done and proceedings to be had in cases under the [Bankruptcy] Code and any litigation arising therein." Furthermore, Fed.R.Civ.P. 81(a)(1) expressly states that the Federal Rules of Civil Procedure do not apply to bankruptcy proceedings unless the Supreme Court specifically makes them applicable. See Aycock, 943 F.2d at 536. As a practical matter, without the uniform application of Fed.R.Bankr.P. 9006 to all time-period calculations in bankruptcy proceedings, considerable confusion would result as courts struggle in each individual case to determine when to apply the Federal Rules of Civil Procedure in place of the bankruptcy code. See Wiggs, 70 B.R. at 34.
II.
The Union's second appeal arises from Judge Lifland's May 22 refusal to excuse any potential untimeliness under Fed.R.Bankr. p. 8002(c)(2) and 9006(b)(1), both of which state that the court may allow a late filing upon a finding of "excusable neglect." The Union contends that their good-faith application of the wrong rule in computing the time period for appeals constitutes excusable neglect, and that Judge Lifland's decision to deny relief was an abuse of discretion. (Union Mot. of 5/29/01) I conclude that it was not.
First, I note (and the Union does not dispute) that Judge Lifland applied the correct legal standard in his analysis. Under the Supreme Court's decision in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. Partnership, 507 U.S. 380 (1993), a finding of excusable neglect is made through an equitable balancing of four separate factors: "[1] the danger of prejudice to the debtor, [2] the length of the delay and its potential impact on judicial proceedings, [3] the reason for the delay, including whether it was within the reasonable control of the movant, and [4] whether the movant acted in good faith." Id. at 395. In his May 9 disposition from the bench, later embodied in an order entered on May 22, Judge Lifland acknowledged the applicability of the Pioneer factors. (Tr. at 17) He found that there was no dramatic ambiguity in Fed.R.Bankr. p. 9006 and that, therefore, the reasons for the delay were well within the Union's control. (Id. at 18) Furthermore, he found that any additional delay of the bankruptcy proceedings to allow the appeal would be highly prejudicial to Singer's interests. (Id. at 18-19) Although Judge Lifland did not explicitly discuss the Union's good faith or that its filing was only one day late, his opinion makes clear that he found the control and prejudice factors dispositive.
Although appellate courts "review excusable neglect decisions only for an abuse of discretion, application of an incorrect legal standard is an abuse of discretion." Advanced Estimating System, Inc. v. Riney, 77 F.3d 1322, 1324 (11th Cir. 1996). Thus, it is necessary to examine whether the proper legal standard was applied.
Judge Lifland's decision did not constitute an abuse of discretion; in fact, his refusal to make a finding of excusable neglect in this case is entirely consistent with both the instructions of the Supreme Court and the dispositions of other courts that have considered similar factual circumstances. The Supreme Court has explicitly stated that although the concept of excusable neglect is somewhat elastic, "inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute 'excusable' neglect." Pioneer, 507 U.S. at 392. Although the Union argues that there is a distinction between ignorance of the law and a "plausible misconstruction" of the law (Tr. at 10), see Weinstock v. Cleary, Gottlieb, Steen Hamilton, 16 F.3d 501, 503 (1994), it was reasonable for Judge Lifland to determine that the applicability of Fed.R.Bankr. p. 9006 is well settled, and that the Union's misconstruction was therefore not plausible or excusable.
Indeed, at least three different courts have held, under nearly identical circumstances, that when a litigant misses the deadline in which to file a bankruptcy appeal because he relies on Fed.R.Civ.P. 6(a) instead of Fed.R.Bankr.P. 9006(a), there is no excusable neglect. See HML II, Inc. v. Ginley (In re HML II, Inc.), 234 B.R. 67, 71-73 (B.A.P. 6th Cir. 1999); Hartford Cas. Ins. Co. v. Food Barn Stores, Inc. (In re Food Barn Stores, Inc.), 214 B.R. 197, 200-01 (B.A.P. 8th Cir. 1997); Auto Specialties Mfg. Co. v. Sachs (In re Auto Specialties Mfg. Co.), 133 B.R. 384, 391-92 (Bankr. W.D. Mich. 1991). Although the Union's miscalculation as to the appropriate appeals deadline was in good faith and resulted in only one day's delay, not every minor error can or should be excused. Compliance with deadlines is not a game of horseshoes; close doesn't count. As one court has opined, "[i]f the inability of competent counsel to know and abide by the rules constitutes excusable neglect, then there is in fact no purpose for the rules; nearly any failure, short of a conscious, willful failure to obey the rules for tactical purposes, would become excusable." Auto Specialties Mfg., 133 B.R. at 392. With this observation in mind, Judge Lifland's decision that the Union's mistake as to the applicable law was not excusable neglect is a reasonable one and one that this court will not disturb. The May 22, 2001 order of the bankruptcy court is affirmed.
In accordance with the above, the Union's motion for leave to appeal Judge Lifland's March 30, 2001 order is denied because the motion was not timely filed. In addition, because Judge Lifland's refusal to find "excusable neglect" was a proper exercise of the bankruptcy court's discretion, his May 22, 2002 order is affirmed.