In re Ryan Edwards ( 2019 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 19a0024n.06
Case No. 18-5625
UNITED STATES COURT OF APPEALS FILED
FOR THE SIXTH CIRCUIT Jan 15, 2019
DEBORAH S. HUNT, Clerk
IN RE: RYAN EDWARDS; ) ON APPEAL FROM THE UNITED
LESLIE EDWARDS, ) STATES BANKRUPTCY PANEL
) FOR THE SIXTH CIRCUIT
Debtors. ) COURT OF APPEALS
)
COMMUNITY FINANCIAL SERVICES )
BANK, )
) OPINION
Plaintiff-Appellee, )
)
v. )
)
RYAN EDWARDS, )
)
Defendant-Appellant.
)
BEFORE: MERRITT, GIBBONS, and NALBANDIAN, Circuit Judges.
NALBANDIAN, Circuit Judge.
Appellant Ryan Edwards missed the fourteen-day deadline to file a notice of appeal after
the bankruptcy court presiding over his Chapter 7 filing awarded his creditor a non-dischargeable
judgment. Sixteen days after the deadline passed, Edwards filed a late notice of appeal, along with
a motion to extend the deadline for filing that notice. Under the Federal Rules of Bankruptcy
Procedure, Edwards’s only chance at winning the motion was to show that his delay was the
product of “excusable neglect.” That is a high standard—one that Edwards does not meet.
No. 18-5625, In re Edwards
Accordingly, we AFFIRM the bankruptcy court’s denial of Edwards’s motion to extend the
deadline for filing his notice of appeal.
I.
Ryan Edwards filed a Chapter 7 bankruptcy proceeding in October 2014 and retained Steve
Vidmer as his attorney. After the bankruptcy proceedings began, Appellee Community Financial
Services Bank (“CFSB”) filed an adversary proceeding against Edwards, and on July 17, 2017,
the bankruptcy court awarded CFSB a non-dischargeable judgment of $610,053.55. Edwards
learned of the adverse judgment on the day of its entry; the next day, he called Vidmer to discuss
the path forward and the possibility of appealing the judgment. By Edwards’s account, Vidmer
“said there is a deadline [for filing a notice of appeal], but [Edwards] didn’t ask him if it was a
numbered amount.” (R. 94, Tr. at 15:23–24.) Because Vidmer was not an appellate attorney, he
declined to take the appeal and recommended that Edwards retain new counsel. Thus, Edwards
began to search for appellate counsel.
Edwards went online to identify potential attorneys to take his case and began calling and
emailing several of them on July 19. Louisville attorney Jamie McGee was the first to respond,
and on July 25, McGee referred Edwards to Todd Farmer, a colleague in Paducah. When Farmer
and Edwards spoke on July 27, Farmer informed Edwards that the deadline to file a notice of
appeal was fourteen days after entry of the judgment but that he lacked capacity to handle the
appeal. So Farmer referred Edwards to yet another attorney, Michael Byers. The clock kept
ticking.
Edwards and Byers first communicated, by email, on August 5, and Edwards agreed to
retain Byers on August 11. With Byers acting as his appellate counsel, Edwards filed a notice of
appeal on August 16, but because the July 31 deadline to file a notice of appeal had long passed,
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No. 18-5625, In re Edwards
Edwards also moved to extend the deadline for filing the appeal. After holding a hearing at which
Edwards provided sworn testimony, the bankruptcy court denied Edwards’s motion to extend, and
the Bankruptcy Appellate Panel of the Sixth Circuit affirmed that decision. This appeal followed.
II.
We review the bankruptcy court’s decision, which comes to us through appeal from the
Bankruptcy Appellate Panel of the Sixth Circuit. In re Maughan, 340 F.3d 337, 341 (6th Cir.
2003). Here, we apply two standards of review. Whether the bankruptcy court correctly applied
the Federal Rules of Bankruptcy Procedure is a question of law that we review de novo. In re
Downs, 103 F.3d 472, 477 (6th Cir. 1996). But we review the bankruptcy court’s ultimate refusal
to extend the deadline to file a notice of appeal for abuse of discretion. See United States v. Dotz,
455 F.3d 644, 647 (6th Cir. 2006). That standard is deferential: we may overturn a lower court’s
decision only if it was “arbitrary, unjustifiable or clearly unreasonable.” Plain Dealer Pub. Co. v.
City of Lakewood, 794 F.2d 1139, 1148 (6th Cir. 1986).
III.
Under the Federal Rules of Bankruptcy Procedure, a party seeking to appeal a judgment
must file a notice of appeal within fourteen days from the entry of that judgment. Fed. R. Bankr.
P. 8002(a). Yet even if a party misses that deadline, the rules provide some leeway. A bankruptcy
court may extend the time to file a notice of appeal if the party files a motion that meets these two
requirements: (1) the party must file the motion within twenty-one days after the original deadline
expired; and (2) the party must show “excusable neglect.” Fed. R. Bankr. P. 8002(d)(1)(B).
Because Edwards filed his motion sixteen days after the original deadline expired, neither party
disputes that he satisfied the first requirement. At issue here is whether Edwards has shown
excusable neglect.
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No. 18-5625, In re Edwards
Congress did not define excusable neglect when it drafted the Federal Rules of Bankruptcy
Procedure, prompting the Supreme Court to conclude that the determination of what constitutes
excusable neglect “is at bottom an equitable one, taking account of all relevant circumstances
surrounding the party’s omission.” Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’Ship.,
507 U.S. 380, 395 (1993). But bankruptcy courts are not completely adrift. In Pioneer, the
Supreme Court identified factors to consider in determining whether a party has shown excusable
neglect, including: “the danger of prejudice to the debtor, the length of the delay and its potential
impact on judicial proceedings, the reason for the delay, including whether it was within the
reasonable control of the movant, and whether the movant acted in good faith.” Id. Since the
Court decided Pioneer, we have considered excusable neglect in different contexts and repeatedly
underscored that it is a difficult standard to satisfy. Nicholson v. City of Warren, 467 F.3d 525,
526 (6th Cir. 2006) (“Excusable neglect has been held to be a strict standard which is met only in
extraordinary cases.”); see also Proctor v. N. Lakes Cmty. Mental Health, 560 F. App’x 453, 458
(6th Cir. 2014); Marsh v. Richardson, 873 F.2d 129, 130 (6th Cir. 1989).
Applying the Pioneer factors, the bankruptcy court determined that Edwards did not show
excusable neglect and denied his motion. On appeal, Edwards raises three issues related to that
determination, which we consider in turn.
A.
We first consider whether the bankruptcy court misapplied the first Pioneer factor—the
danger of prejudice. Edwards argues that the bankruptcy court erred by considering the possibility
of prejudice to CFSB, were it to grant the motion, even though he was the debtor. Although the
first Pioneer factor, when read in isolation, suggests that the bankruptcy court should have
considered the possibility of prejudice to Edwards, context suggests otherwise. In Pioneer, it was
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No. 18-5625, In re Edwards
a group of creditors—not the debtor—that sought to demonstrate excusable neglect for failing to
file a proof of claim by a court-imposed deadline. Id. at 383–84. For that reason, the Court
explained that the lower court properly considered the “danger of prejudice to the debtor” when
determining whether the creditors had shown excusable neglect. Id. at 395 (emphasis added). The
confusion here arises because the Court couched its analysis in particular, rather than general,
language. The Court’s focus was not on the debtor per se but on the debtor because it was the non-
moving party. As a result, this court has repeatedly described the first Pioneer factor as the risk
of prejudice to the non-moving party. See, e.g., Yeschick v. Mineta, 675 F.3d 622, 629 (6th Cir.
2012); Nafziger v. McDermott Intern., Inc., 467 F.3d 514, 522 (6th Cir. 2006); Duncan v.
Washington, 25 F.3d 1047 (6th Cir. 1994) (per curiam). Thus, the bankruptcy court did not err by
considering the risk of prejudice to CFSB—the non-moving party—when it applied the first
Pioneer factor.
B.
Edwards argues that the bankruptcy court misconstrued Pioneer by applying four—rather
than five—discrete factors to determine whether he showed excusable neglect. According to
Edwards, the bankruptcy court erroneously merged whether the delay “was within the reasonable
control of the movant” into the third factor, “the reason for the delay,” when, in fact, the former
question is a standalone factor. Pioneer, 507 U.S. at 395. While Edwards warns that the
bankruptcy court’s analysis “will eviscerate the multi-factor analysis set forth by Pioneer,”
(Appellant Br. at 15), we see no reason for this hyperbole.
The plain language in Pioneer suggests that the excusable neglect analysis comprises four
factors and that the third factor, the reason for the delay, includes the question of whether the delay
was within the reasonable control of the movant. If the Court had meant to isolate the reason for
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No. 18-5625, In re Edwards
the delay from the question of whether the delay was within the reasonable control of the movant,
it would not have added the word, “including,” immediately preceding the clause, “whether it was
within the reasonable control of the movant.” Rather, the Court would have left that clause as a
standalone factor—much like the final Pioneer factor, “whether the movant acted in good faith.”
Although we believe that this is the most accurate reading of Pioneer, we note that our prior
decisions on this issue are inconsistent. In United States v. Munoz, we said that the “four-factor
division is more faithful to the Pioneer Court’s language” and therefore treated the third factor as
inclusive of “whether the delay was within the reasonable control of the late party.” 605 F.3d 359,
368 n.5 (6th Cir. 2010). But our decisions from before and after Munoz refer to the Pioneer Court’s
five factors and separate the reason for the delay from the question of whether the delay was within
the reasonable control of the moving party. See, e.g., Yeschick, 675 F.3d at 629; Nafziger, 467 F.3d
at 522; In re Eagle-Picher Indus., Inc., 131 F.3d 1185, 1188 (6th Cir. 1997).
Whether Pioneer identifies four or five discrete factors makes no difference here because
the bankruptcy court considered both the reason for the delay and whether Edwards had any
reasonable control over the delay. The bankruptcy court refers to the reason for the delay as
Edwards’s “[d]ifficulty finding an attorney to prosecute an appeal,” which it said “cannot form the
basis for an extension under the excusable neglect standard.” (R. 86, Order at Page 5.) But the
bankruptcy court still considered whether Edwards had any control over the delay and concluded
that “nothing prevented [Edwards] from seeking a timely extension pro se.” (Id.) Indeed, the
court found that Edwards “could have requested an extension of time at any time prior to the
running of the appeal deadline,” including during the “several days each week” that he was at
home and not working. (Id. at Page 5–6.) To be sure, Edwards may not have wanted to proceed
pro se, but that does not change the fact that he could have filed a notice of appeal himself (and
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later retained counsel to prosecute the appeal) to avoid the late filing. For these reasons, we find
no error in the bankruptcy court’s application of Pioneer.
C.
Finally, we consider whether the bankruptcy court abused its discretion by denying
Edwards’s motion. Edwards contends that the bankruptcy court should have been more forgiving
of his late filing, given that he was proceeding pro se until after the deadline to file a notice of
appeal had passed. In support of this argument, Edwards cites Haines v. Kerner, in which the
Supreme Court noted that it held the allegations in a pro se complaint “to less stringent standards
than formal pleadings drafted by lawyers . . . .” 404 U.S. 519, 520 (1972).
Although courts must construe liberally the contents of a pro se complaint, the drafting of
which “presupposes some degree of legal training,” it does not follow that courts must excuse a
pro se plaintiff’s failure to comply with straightforward rules for which no legal training is
required. Jourdan v. Jabe, 951 F.2d 108, 110 (6th Cir. 1991). Indeed, when a pro se litigant “fails
to comply with an easily understood court-imposed deadline, there is no basis for treating that
party more generously than a represented litigant.” Pilgrim v. Littlefield, 92 F.3d 413, 416 (6th
Cir. 1996). And specifically in the context of excusable neglect, we have said that “[i]gnorance of
the rules or mistakes in construing the rules,” even by those without counsel, is not necessarily
excusable. Nicholson, 467 F.3d at 527. As a result, the bankruptcy court did not abuse its
discretion by denying Edwards’s motion.
IV.
For these reasons, we AFFIRM the bankruptcy court’s denial of Edwards’s motion to
extend the deadline to file his notice of appeal.
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