In Re United Airlines, Inc. , 318 F. App'x 429 ( 2009 )

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted March 31, 2009*
Decided March 31 2009
Before
FRANK H. EASTERBROOK, Chief Judge
DIANE P. WOOD, Circuit Judge
DIANE S. SYKES, Circuit Judge
Nos. 08-3428 & 08-3429
In the Matter of: Appeals from the United States District
UNITED AIRLINES, INC., Court for the Northern District of Illinois,
Debtor-Appellee. Eastern Division.
Nos. 07 C 5612 & 08 C 594
Appeals of: John W. Darrah,
PETER HOFFMAN. Judge.
ORDER
These consolidated appeals arise from Peter Hoffman’s unsuccessful claim in the
United Airlines bankruptcy. Hoffman worked for United in ground operations for six
months during 1992, earning $7 per hour. He resigned at the end of his probationary
period. United maintains that Hoffman resigned to avoid being fired for unsatisfactory
performance, but Hoffman alleged in a later lawsuit that he resigned in exchange for
*
After examining the briefs and the record, we have concluded that oral argument is
unnecessary. Thus, the appeals are submitted on the briefs and the record. See FED. R. A PP.
P. 34(a)(2).
Nos. 08-3428 & 08-3429 Page 2
United’s oral promise to process his application for a “competitive transfer” to a job as a
pilot. United never processed that application. The breach-of-contract case proceeded as a
diversity suit in the Southern District of New York until the airline filed for Chapter 11
bankruptcy in 2002. Hoffman then filed a $2.25 million proof of claim in the bankruptcy
court, and United objected.
The bankruptcy court, applying Federal Rule of Civil Procedure 56, see FED. R.
B ANKR. P. 9014(c), 7056, disallowed Hoffman’s claim. The court, ruling from the bench,
explained that Hoffman needed to, but could not, establish that he would have been hired
as a pilot if his application had been processed. The court reasoned that Hoffman lacked
evidence that he was qualified to fly for United and noted that Hoffman admitted during
his deposition that he was unqualified and that other airlines had rejected his applications
for pilot positions. The bankruptcy court advised Hoffman that he could file an appeal to
the district court within ten days and warned that the time would “begin running as soon
as the order is docketed, so you’ll want to check, if you do wish to pursue appeal, to find
out when that docketing takes place.” Hoffman replied that he “understood,” and the
bankruptcy court went on to explain that Hoffman could also ask the court to reconsider its
ruling under Federal Rules of Bankruptcy Procedure 9023 and 9024. That same day the
court issued a written judgment, which the clerk of the bankruptcy court docketed on
July 2, 2007. See FED. R. B ANKR. P. 9021, 5003.
Hoffman did not file a notice of appeal within the allotted ten days. Instead,
seventeen days later, Hoffman filed in the bankruptcy court what he titled as a motion to
reconsider. See FED. R. B ANKR. P. 3008 (“A party in interest may move for reconsideration
of an order allowing or disallowing a claim against the estate.”). Hoffman argued that he
possessed additional evidence establishing that United lowers its hiring standards when
screening internal candidates for competitive transfers and, thus, he would have been hired
as a pilot. Because Hoffman filed his motion more than ten days after entry of the
underlying decision, the bankruptcy court analyzed it under Bankruptcy Rule 9024, which
incorporates Federal Rule of Civil Procedure 60(b). See In re Wylie, 349 B.R. 204, 209-11
(B.A.P. 9th Cir. 2006) (explaining that Rule 3008 motions are governed by Rule 60(b) if filed
more than ten days after entry of judgment). In its oral ruling, the court concluded that
Hoffman did not qualify for relief under Rule 60(b) because he did not proffer any evidence
that was unavailable when his claim was disallowed.
Hoffman timely appealed this decision to the district court. On August 1, 2007, he
also filed a notice of appeal from the order disallowing his claim and moved for an
extension of time to appeal from that decision. Hoffman recognized that the deadline for
filing that appeal had expired, but he argued that his failure to meet the deadline qualified
as excusable neglect. He explained that he thought United would notify him when the
Nos. 08-3428 & 08-3429 Page 3
court’s order was docketed, and so he ignored the matter until July 12, when he learned by
other means that the order had been docketed. And at that point, Hoffman added, he
“concluded that a motion for reconsideration was the appropriate step to take.” In another
oral ruling, the bankruptcy court refused to extend the appeal deadline, reasoning that
Hoffman’s lack of diligence was not excusable because he had been told about the process
for appealing and warned to check the docket. Hoffman then filed a second appeal to the
district court from this decision.
The district court consolidated the appeals and upheld both of the bankruptcy
court’s rulings. Hoffman now appeals to this court. Our review is de novo, meaning that
we evaluate the bankruptcy court’s rulings using the same standard applied by the district
court. In re Wiese, 552 F.3d 584, 588 (7th Cir. 2009); In re KMart Corp., 381 F.3d 709, 712
(7th Cir. 2004). Both decisions must be upheld unless the bankruptcy court abused its
discretion. See In re President Casinos, Inc., 397 B.R. 468, 470-72 (B.A.P. 8th Cir. 2008); In re
HML II, Inc., 234 B.R. 67, 69 (B.A.P. 6th Cir. 1999).
Hoffman does not dispute that Rule 60(b) governed his motion for reconsideration.
And relief under Rule 60(b) is an extraordinary remedy. Harrington v. City of Chi., 433
F.3d 542, 546 (7th Cir. 2006). As relevant here, a judgment may be set aside based upon
“newly discovered evidence that, with reasonable diligence, could not have been
discovered in time to move for a new trial.” FED. R. C IV. P. 60(b)(2); see Hicks v. Midwest
Transit, Inc., 531 F.3d 467, 474 (7th Cir. 2008). Hoffman’s proffered evidence, purporting to
show that United evaluates internal candidates using lower standards that he would have
satisfied, was available to Hoffman at summary judgment and was not “new.” And to the
extent that Hoffman argued that the bankruptcy court in its initial ruling had
misunderstood his contentions or overlooked a material issue of fact, those contentions
were outside the scope of Rule 60(b). As we have repeatedly stated, Rule 60(b) is not a
substitute for a timely appeal. See Stoller v. Pure Fishing Inc., 528 F.3d 478, 480 (7th Cir.
2008), cert. denied, 129 S. Ct. 609 (2008); Bell v. Eastman Kodak Co., 214 F.3d 798, 801 (7th
Cir. 2000); see also In re G.A.D., Inc., 340 F.3d 331, 337 (6th Cir. 2003); Cent. Vt. Pub. Serv.
Corp. v. Herbert, 341 F.3d 186, 190 (2d Cir. 2003). Thus, the bankruptcy court did not abuse
its discretion in denying Hoffman’s first post-judgment motion.
Nor did the bankruptcy court abuse its discretion in refusing to extend Hoffman’s
time to appeal from the order disallowing his claim. Rule 8002 of the Federal Rules of
Bankruptcy Procedure requires that a notice of appeal be filed within ten days after entry of
the bankruptcy court’s decision. Under the bankruptcy rules, “ten days” means ten
calendar days, see FED. R. B ANKR. P. 9006(a), and during that period Hoffman did not file a
notice of appeal or take any step that would have tolled the deadline. Rule 8002 does
authorize the bankruptcy judge to extend the deadline even after it expires if a motion
Nos. 08-3428 & 08-3429 Page 4
establishing “excusable neglect” is made within the next twenty days. FED. R. B ANKR. P.
8002(c)(2); In re Kmart Corp., 311 B.R. 844, 845-46 (N.D. Ill. 2004). The determination of
excusable neglect is “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); see Prizevoits v. Ind. Bell Tel. Co., 76 F.3d 132, 134 (7th Cir.
1996) (concluding that Supreme Court’s definition of “excusable neglect” applies
“throughout the federal procedural domain”); In re Warrick, 278 B.R. 182, 185-87 (B.A.P.
9th Cir. 2002); In re HML II, Inc., 234 B.R. at 71. And in this case Hoffman’s neglect was not
excusable.
Hoffman contends that he failed to timely appeal because he misunderstood the
applicable law. He also argues that the bankruptcy court should have taken into account
that the delay was brief, that he acted in good faith, and that United would not be
prejudiced by allowing the appeal to proceed. See Pioneer Inv. Servs. Co., 507 U.S. at 395.
As the Supreme Court has stated, however, “inadvertence, ignorance of the rules, or
mistakes construing the rules do not usually constitute ‘excusable’ neglect.” Id. at 392.
Indeed, we have noted that an “inability or refusal to read and comprehend the plain
language of the federal rules” can never constitute excusable neglect. Prizevoits, 76 F.3d at
133 (quotation marks and citation omitted); see also Easley v. Kirmsee, 382 F.3d 693, 697-98
(7th Cir. 2004) (holding that litigants have duty of diligence to inquire about status of case
and to seek clarification of court rules); In re Warrick, 278 B.R. at 187 (holding that pro se
debtor’s failure to check docket did not qualify as excusable neglect sufficient to justify an
untimely appeal). Hoffman’s purported misunderstanding, then, would have been weak
support for a finding of excusable neglect. It was no support at all, however, given that the
bankruptcy court cautioned Hoffman that he had just ten days to act and that the time
would begin running as soon as an order was docketed.
Accordingly, both judgments are AFFIRMED.