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- NOTICE: This opinion is subject to formal revision before publication in
- the preliminary print of the United States Reports. Readers are
- requested to notify the Reporter of Decisions, Supreme Court of the
- United States, Washington, D.C. 20543, of any typographical or other
- formal errors, in order that corrections may be made before the
- preliminary print goes to press.
-
- SUPREME COURT OF THE UNITED STATES
-
- --------
- No. 91-1695
- --------
-
- PIONEER INVESTMENT SERVICES COMPANY, PE-
- TITIONER v. BRUNSWICK ASSOCIATES LIMITED ____
- PARTNERSHIP ET AL.
-
- ON WRIT OF CERTIORARI TO THE UNITED
- STATES COURT OF APPEALS FOR THE SIXTH
- CIRCUIT
-
- [March 24, 1993]
-
- JUSTICE WHITE delivered the opinion of the Court.
-
- Rule 3003(c) of the Federal Rules of Bankruptcy Procedure sets out the
- requirements for filing proofs of claim in Chapter 9 Municipality and Chapter 11
- Reorganization cases. (Ftnote. 1) Rule 3003(c)(3) provides that the (Ftnote. 1)
- "court shall fix and for cause shown may extend the time within which proofs of
- claim or interest may be filed." Rule 9006 is a general rule governing the
- computation, enlargement, and reduction of periods of time prescribed in other
-
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- ____________________
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- 1) Bankruptcy Rule 3003(c), in relevant part, provides: 1)
- "(c) Filing Proof of Claim.
- ``(1) Who May File. Any creditor or indenture trustee may file a proof of _____________
- claim within the time prescribed by subdivision (c)(3) of this rule.
- ``(2) Who Must File. Any creditor or equity security holder whose claim or ______________
- interest is not scheduled or scheduled as disputed, contingent, or unliquidated
- shall file a proof of claim or interest within the time prescribed by
- subdivision (c)(3) of this rule; any creditor who fails to do so shall not be
- treated as a creditor with respect to such claim for the purposes of voting and
- distribution.
- ``(3) Time for Filing. The court shall fix and for cause shown may extend ________________
- the time within which proofs of claim or interest may be filed. Notwithstanding
- the expiration of such time, a proof of claim may be filed to the extent and
- under the conditions stated in Rule 3002(c)(2), (c)(3), and (c)(4)." 91-1695 - OPINION
-
- 2 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
-
- bankruptcy rules. Rule 9006(b)(1) empowers a bankruptcy court to permit a late
- filing if the movant's failure to comply with an earlier deadline "was the
- result of excusable neglect." (Ftnote. 2) In this case, we are called upon to (Ftnote. 2)
- decide whether an attorney's inadvertent failure to file a proof of claim within
- the deadline set by the court can constitute "excusable neglect" within the
- meaning of the rule. Finding that it can, we affirm.
-
- I
- On April 12, 1989, petitioner filed a voluntary petition for bankruptcy in the
- United States Bankruptcy Court for the Eastern District of Tennessee. The
- petition sought relief under Chapter 11 of the Bankruptcy Code. Petitioner also
- filed a list of its 20 largest unsecured creditors, including all but one of
- respondents here. The following month, after obtaining extensions of time from
- the Bankruptcy Court, petitioner filed a statement of financial affairs and
- schedules of its assets and liabilities. The schedules, as amended, listed all
- of the respondents except
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- ____________________
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- 2) Bankruptcy Rule 9006(b) provides: 2)
- "(b) Enlargement.
- ``(1) In General. Except as provided in paragraphs (2) and (3) of this ___________
- subdivision, when an act is required or allowed to be done at or within a
- specified period by these rules or by a notice given thereunder or by order of
- court, the court for cause shown may at any time in its discretion (1) with or
- without motion or notice order the period enlarged if the request therefor is
- made before the expiration of the period originally prescribed or as extended by
- a previous order or (2) on motion made after the expiration of the specified
- period permit the act to be done where the failure to act was the result of
- excusable neglect.
- ``(2) Enlargement Not Permitted. The court may not enlarge the time for ___________________________
- taking action under Rules 1007(d), 1017(b)(3), 2003(a) and (d), 7052, 9023, and
- 9024.
- ``(3) Enlargment Limited. The court may enlarge the time for taking action ___________________
- under Rules 1006(b)(2), 1017(e), 3002(c), 4003(b), 4004(a), 4007(c), 8002, and
- 9033, only to the extent and under the conditions stated in those rules." 91-1695 - OPINION
-
- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 3 ____
-
- Ft. Oglethorpe Associates Limited Partnership as creditors holding contingent,
- unliquidated, or disputed claims; the Ft. Oglethorpe partnership was not listed
- at all. Under S1111 of the Bankruptcy Code, 11 U. S. C. S1111(a), and
- Bankruptcy Rule 3003(c)(2), all such creditors are required to file a proof of
- claim with the bankruptcy court before the deadline, or "bar date," established
- by the court.
- On April 13, 1989, the day after petitioner filed its Chapter 11 petition, the
- Bankruptcy Court mailed a "Notice for Meeting of Creditors" to petitioner's
- creditors. Along with the announcement of a May 5 meeting was the following
- passage:
-
- "You must file a proof of claim if your claim is scheduled as disputed,
- contingent or unliquidated, is unlisted or you do not agree with the amount.
- See 11 U. S. C. Sec. 1111 & Bankruptcy rule 3003. Bar date is August 3,
- 1989." App. 29a.
-
- The notice was received and read by Mark A. Berlin, president of the corporate
- general partners of each of the respondents. Berlin duly attended the
- creditors' meeting on May 5. The following month, respondents retained an
- experienced bankruptcy attorney, Marc Richards, to represent them in the
- proceedings. Berlin stated in an affidavit that he provided Richards with a
- complete copy of the case file, including a copy of the court's April 13, 1989,
- notice to creditors. Berlin also asserted that he inquired of Richards whether
- there was a deadline for filing claims and that Richards assured him that no bar
- date had been set and that there was no urgency in filing proofs of claim. Id., ____
- at 121a. Richards and Berlin both attended a subsequent meeting of creditors on
- June 16, 1989.
- Respondents failed to file any proofs of claim by the August 3, 1989, bar
- date. On August 23, 1989, respondents filed their proofs, along with a motion
- that the court permit the late filing under Rule 9006(b)(1). In particular, 91-1695 - OPINION
-
- 4 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
-
- respondents' counsel explained that the bar date, of which he was unaware, came
- at a time when he was experiencing "a major and significant disruption" in his
- professional life caused by his withdrawal from his former law firm on July 31,
- 1989. Id., at 56a. Because of this dispruption, counsel did not have access to ____
- his copy of the case file in this matter until mid-August. Ibid. _____
- The Bankruptcy Court refused the late filing. Following precedent from the
- Court of Appeals for the Eleventh Circuit, the court held that a party may claim
- "excusable neglect" only if its " `failure to timely perform a duty was due to
- circumstances which were beyond [its] reasonable control.'" Id., at 124a ____
- (quoting In re South Atlantic Financial Corp., 767 F. 2d 814, 817 (CA11 1985), ____________________________________
- cert. denied sub nom. Biscayne 21 Condominium Associates, Inc. v. South Atlantic ________ ________________________________________ ______________
- Financial Corp., 475 U. S. 1015 (1986)). Finding that respondents had received_______________
- notice of the bar date and could have complied, the court ruled that they could
- not claim "excusable neglect."
- On appeal, the District Court affirmed in part and reversed in part. The
- court found "respectable authority for the narrow reading of `excusable
- neglect'" adopted by the Bankruptcy Court, but concluded that the Court of
- Appeals for the Sixth Circuit would follow "a more liberal approach." App.
- 157a. Embracing a test announced by the Court of Appeals for the Ninth Circuit,
- the District Court remanded with instructions that the Bankruptcy Court evaluate
- respondents' conduct against several factors, including: " ` ``(1) whether
- granting the delay will prejudice the debtor; (2) the length of the delay and
- its impact on efficient court administration; (3) whether the delay was beyond
- the reasonable control of the person whose duty it was to perform; (4) whether
- the creditor acted in good faith; and (5) whether clients should be penalized
- for their counsel's mistake or neglect.'' ' " Id., at 158a-159a (quoting In re ____ _____
- Dix, 95 B. R. 134, 138 (CA9 Bkrptcy. Appellate Panel 1988) (in turn quoting In___ __
- re__ 91-1695 - OPINION
-
- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 5 ____
-
- Magouirk, 693 F. 2d 948, 951 (CA9 1982))). The District Court also suggested________
- that the Bankruptcy Court consider whether the failure to comply with the bar
- date "resulted from negligence, indifference or culpable conduct on the part of
- a moving creditor or its counsel." App. 159a.
- On remand, the Bankruptcy Court applied the so-called Dix factors and again ___
- denied respondents' motion. Specifically, the Bankruptcy Court found (1) that
- petitioner would not be prejudiced by the late filings; (2) that the 20-day
- delay in filing the proofs of claim would have no adverse impact on efficient
- court administration; (3) that the reason for the delay was not outside
- respondents' control; (4) that respondents and their counsel acted in good
- faith; and (5) that, in light of Berlin's business sophistication and his actual
- knowledge of the bar date, it would not be improper to penalize respondents for
- the neglect of their counsel. Id., at 168a-172a. The court also found that ____
- respondents' counsel was negligent in missing the bar date and, "[t]o a degree,"
- indifferent to it. Id., at 172a. In weighing these considerations, the Bank- ____
- ruptcy Court "attache[d] considerable importance to Dix factors 3 and 5," and ___
- concluded that a ruling in respondents' favor, notwithstanding their actual
- notice of the bar date, "would render nugatory the fixing of the claims' bar
- date in this case." Id., at 173a. The District Court affirmed the ruling. ____
- The Court of Appeals for the Sixth Circuit reversed. The Court of Appeals
- agreed with the District Court that "excusable neglect" was not limited to cases
- where the failure to act was due to circumstances beyond the movant's control.
- The Court of Appeals also agreed with the District Court that the five "Dix ___
- factors" were helpful, although not necessarily exhaustive, guides. In re _____
- Pioneer Investment Services Co., 943 F. 2d 673, 677 (1991). The court found,________________________________
- however, that the Bankruptcy Court had misapplied the fifth Dix factor to this ___
- case. Because Berlin had inquired of counsel whether there were any 91-1695 - OPINION
-
- 6 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
-
- impending filing deadlines and been told that none existed, the Court of Appeals
- ruled that the Bankruptcy Court had "inappropriately penalized the [respondents]
- for the errors of their counsel." Ibid. _____
- The Court of Appeals also found "it significant that the notice containing the
- bar date was incorporated in a document entitled `Notice for Meeting of
- Creditors.'" Id., at 678. "Such a designation," the court explained, "would ___
- not have put those without extensive experience in bankruptcy on notice that the
- date appended to the end of this notice was intended to be the final date for
- filing proof of claims." Ibid. Indeed, based on a comparison between the _____
- notice in this case and the model notice set out in Official Bankruptcy Form 16,
- the court concluded that the notice given respondents contained a "dramatic
- ambiguity," which could well have confused "[e]ven persons experienced in
- bankruptcy." Ibid. Having determined that the fifth Dix factor favored _______ ___
- respondents rather than petitioner, the Court of Appeals found that the record
- demonstrated "excusable neglect."
- Because of the conflict in the courts of appeals over the meaning of
- "excusable neglect," (Ftnote. 3) we granted certiorari, (Ftnote. 3)
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- ____________________
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- 3) The Courts of Appeals for the Fourth, Seventh, Eighth, and Eleventh 3)
- Circuits have taken a narrow view of "excusable neglect" under Rule 9006(b)(1),
- requiring a showing that the delay was caused by circumstances beyond the
- movant's control. See In re Davis, 936 F. 2d 771, 774 (CA4 1991); In re ___________ _____
- Danielson, 981 F. 2d 296, 298 (CA7 1992); Hanson v. First Bank of South Dakota,_________ ______ ___________________________
- N. A., 828 F. 2d 1310, 1314-1315 (CA8 1987); In re Analytical Systems, Inc., 933_____ ______________________________
- F. 2d 939, 942 (CA11 1991). The Court of Appeals for the Tenth Circuit, by
- contrast, has applied a more flexible analysis similar to that employed by the
- Court of Appeals in the present case. In re Centric Corp., 901 F. 2d 1514, ___________________
- 1517-1518, cert. denied sub nom. Trustees of Centennial State Carpenters Pension ________________________________________________________
- Trust Fund v. Centric Corp., 498 U. S. 852 (1990). The Courts of Appeals__________ _______________
- similarly have divided in their interpretations of "excusable neglect" as found
- in Rule 4(a)(5) of the Federal Rules of Appellate Procedure. Some courts have
- required a showing that the movant's failure to meet the deadline was beyond its
- control, see, e.g., 650 Park Ave. Corp. v. McRae, 836 F. 2d 764, 767 (CA2 ____ _ ___________________ _____
- 1988); Pratt v. McCarthy, 850 F. 2d 590, 592 (CA9 1988), while others have _____ ________
- adopted a more flexible approach similar to that employed by the Court of
- Appeals in this case, see, e.g., Consolidated Freightways Corp. of Delaware v. ____ _ __________________________________________
- Larson, 827 F. 2d 916 (CA3 1987), cert. denied sub nom. Consolidated Freightways______ ________ ________________________
- Corp. v. Secretary of Transp. of Pennsylvania, 484 U. S. 1032 (1988); Lorenzen_____ ____________________________________ ________
- v. Employees Retirement Plan of Sperry-Hutchinson Co., 896 F. 2d 228, 232-233 __________________________________________________
- (CA7 1990). 91-1695 - OPINION
-
- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 7 ____
-
- 504 U. S. ___ (1992), and now affirm.
-
- II
- A
- There is, of course, a range of possible explanations for a party's failure to
- comply with a court-ordered filing deadline. At one end of the spectrum, a
- party may be prevented from complying by forces beyond its control, such as by
- an act of God or unforeseeable human intervention. At the other, a party simply
- may choose to flout a deadline. In between lie cases where a party may choose ______
- to miss a deadline although for a very good reason, such as to render first aid
- to an accident victim discovered on the way to the courthouse, as well as cases
- where a party misses a deadline through inadvertence, miscalculation, or
- negligence. Petitioner contends that the Bankruptcy Court was correct when it
- first interpreted Rule 9006(b)(1) to require a showing that the movant's failure
- to comply with the court's deadline was caused by circumstances beyond its
- reasonable control. Petitioner suggests that exacting enforcement of filing
- deadlines is essential to the Bankruptcy Code's goals of certainty and finality
- in resolving disputed claims. Under petitioner's view, any showing of fault on
- the part of the late filer would defeat a claim of "excusable neglect."
- We think that petitioner's interpretation is not consonant with either the
- language of the rule or the evident purposes underlying it. First, the rule
- grants a reprieve to out-of-time filings that were delayed by "neglect." The 91-1695 - OPINION
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- 8 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
-
- ordinary meaning of "neglect" is "to give little attention or respect" to a
- matter, or, closer to the point for our purposes, "to leave undone or unattended
- to esp[ecially] through carelessness." Webster's Ninth New Collegiate _________________________________
- Dictionary 791 (1983) (emphasis added). The word therefore encompasses both
- simple, faultless omissions to act and, more commonly, omissions caused by
- carelessness. Courts properly assume, absent sufficient indication to the _
- contrary, that Congress intends the words in its enactments to carry "their
- ordinary, contemporary, common meaning." Perrin v. United States, 444 U. S. 37, ______ _____________
- 42 (1979). Hence, by empowering the courts to accept late filings "where the
- failure to act was the result of excusable neglect," Rule 9006(b)(1), Congress
- plainly contemplated that the courts would be permitted, where appropriate, to
- accept late filings caused by inadvertence, mistake, or carelessness, as well as
- by intervening circumstances beyond the party's control.
- Contrary to petitioner's suggestion, this flexible understanding of "excusable
- neglect" accords with the policies underlying Chapter 11 and the bankruptcy
- rules. The "excusable neglect" standard of Rule 9006(b)(1) governs late filings
- of proofs of claim in Chapter 11 cases but not in Chapter 7
- cases. (Ftnote. 4) The rules' differentiation between (Ftnote. 4)
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- ____________________
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- 4) The time-computation and -extension provisions of Rule 9006, like those 4)
- of Federal Rule of Civil Procedure 6, are generally applicable to any time
- requirement found elsewhere in the rules unless expressly excepted. Subsections
- (b)(2) and (b)(3) of Rule 9006 enumerate those time requirements excluded from
- the operation of the "excusable neglect" standard. One of the time requirements
- listed as excepted in Rule 9006(b)(3) is that governing the filing of proofs of
- claim in Chapter 7 cases. Such filings are governed exclusively by Rule
- 3002(c). See Rule 9006(b)(3); In re Coastal Alaska Lines, Inc., 920 F. 2d 1428, ________________________________
- 1432 (CA9 1990). By contrast, Rule 9006(b) does not make a similar exception
- for Rule 3003(c), which, as noted earlier, establishes the time requirements for
- proofs of claim in Chapter 11 cases. Consequently, Rule 9006(b)(1) must be
- construed to govern the permissibility of late filings in Chapter 11
- bankruptcies. See Advisory Committee Note accompanying Rule 9006(b)(1). 91-1695 - OPINION
-
- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 9 ____
-
- Chapter 7 and Chapter 11 filings corresponds with the differing policies of the
- two chapters. Whereas the aim of a Chapter 7 liquidation is the prompt closure
- and distribution of the debtor's estate, Chapter 11 provides for reorganization
- with the aim of rehabilitating the debtor and avoiding forfeitures by creditors.
- See United States v. Whiting Pools, Inc., 462 U. S. 198, 203 (1983). In _____________ ___________________
- overseeing this latter process, the bankruptcy courts are necessarily entrusted
- with broad equitable powers to balance the interests of the affected parties,
- guided by the overriding goal of ensuring the success of the reorganization.
- See NLRB v. Bildisco & Bildisco, 465 U. S. 513, 527-528 (1984). This context ____ ___________________
- suggests that Rule 9006's allowance for late filings due to "excusable neglect"
- entails a correspondingly equitable inquiry.
- The history of the present bankruptcy rules confirms this view. Rule 9006(b)
- is derived from Rule 906(b) of the former bankruptcy rules, which governed
- bankruptcy proceedings under the former Bankruptcy Act. Like Rule 9006(b)(1),
- former Rule 906(b) permitted courts to accept late filings "where the failure to
- act was the result of excusable neglect." The forerunner of Rule 3003(c), which
- now establishes the requirements for filing claims in Chapter 11 cases, was
- former Rule 10-401(b), which established the filing requirements for proofs of
- claim in reorganization cases under Chapter X of the former Act, Chapter 11's
- predecessor. The Advisory Committee Notes accompanying that former rule make
- clear that courts were entrusted with the authority under Rules 10-401(b) and
- 906(b) to accept tardy filings "in accordance with the equities of the
- situation":
-
- "If the court has fixed a bar date for the filing of proofs of claim, it
- may still enlarge that time within the provisions of Bankruptcy Rule 906(b)
- which is 91-1695 - OPINION
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- 10 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
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- made applicable in this subdivision. This policy is in accord with Chapter X
- generally which is to preserve rather than to forfeit rights. In S102 it
- rejects the notion expressed in S57n of the Act that claims must be filed
- within a six-month period to participate in any distribution. Section 224(4)
- of Chapter X of the Act permits distribution to certain creditors even if
- they fail to file claims and S204 fixes a minimum period of 5 years before
- distribution rights under a plan may be forfeited. This approach was
- intentional as expressed in Senate Report 1916 (75th Cong., 3d Sess., April
- 20, 1938):
-
-
- `` `Sections 204 and 205 insure participation in the benefits of the
- reorganization to those who, through inadvertence or otherwise, have failed
- to file their claims or otherwise evidence their interests during the
- pendency of the proceedings.'
- ``This attitude is carried forward in the rules, first by dispensing with
- the need to file proofs of claims and stock interests in most instances
- and, secondly, by permitting enlargement of the fixed bar date in a
- particular case with leave of court and for cause shown in accordance with
- the equities of the situation." Advisory Committee Note accompanying Rule
- 10-401(b), reprinted in 13A J. Moore & L. King, Collier on Bankruptcy,
- (para.)10-401.01, p. 10-401-4 (14th ed. 1977).
-
- This history supports our conclusion that the enlargement of prescribed time
- periods under the "excusable neglect" standard of Rule 9006(b)(1) is not limited
- to situations where the failure to timely file is due to circumstances beyond
- the control of the filer.
- Our view that the phrase "excusable neglect" found in Bankruptcy Rule
- 9006(b)(1) is not limited as petitioner would have it is also strongly supported
- by the Federal Rules of Civil Procedure, which use that phrase in several 91-1695 - OPINION
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- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 11 ____
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- places. Indeed, Rule 9006(b)(1) was patterned after Rule 6(b) of those
- rules. (Ftnote. 5) Under Rule 6(b), where the specified period for the (Ftnote. 5)
- performance of an act has elapsed, a District Court may enlarge the period and
- permit the tardy act where the omission is the "result of excusable
- neglect." (Ftnote. 6) As with Rule 9006(b)(1), there is no indication that (Ftnote. 6)
- anything other than the commonly accepted meaning of the phrase was intended by
- its drafters. It is not surprising, then, that in applying Rule 6(b), the
- courts of appeals have generally recognized that "excusable neglect" may extend
- to inadvertent delays. (Ftnote. 7) Although inadvertence, ignorance of the (Ftnote. 7)
- rules, or mistakes construing the rules do not usually constitute "excusable"
- neglect, it is clear that "excusable neglect" under Rule 6(b) is a somewhat
- "elastic concept" (Ftnote. 8) and is not limited strictly to (Ftnote. 8)
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- 5) See Advisory Committee Note accompanying Rule 9006(b). 5)
- 6) Federal Rule of Civil Procedure 6(b) provides: 6)
- "(b) Enlargement. When by these rules or by a notice given thereunder or by
- order of court an act is required or allowed to be done at or within a specified
- time, the court for cause shown may at any time in its discretion (1) with or
- without motion or notice order the period enlarged if request therefor is made
- before the expiration of the period originally prescribed or as extended by a
- previous order, or (2) upon motion made after the expiration of the specified
- period permit the act to be done where the failure to act was the result of
- excusable neglect; but it may not extend the time for taking any action under
- Rules 50(b) and (c)(2), 52(b), 59(b), (d) and (e), 60(b), and 74(a), except to
- the extent and under the conditions stated in them."
- 7) See, e.g., United States v. Borromeo, 945 F. 2d 750, 753-754 (CA4 1991); 7) ____ _ _____________ ________
- Hill v. Marshall, No. 86-3987, 1988 U. S. App. LEXIS 14742, *4 (CA6, Nov. 4,____ ________
- 1988); Dominic v. Hess Oil V. I. Corp., 841 F. 2d 513, 517 (CA3 1988); Sony _______ ____________________ ____
- Corp. v. Elm State Electronics, Inc., 800 F. 2d 317, 319 (CA2 1986); United_____ ___________________________ ______
- States ex rel. Robinson v. Bar Assn. of District of Columbia, 89 U. S. App._______________________ __________________________________
- D. C. 185, 186, 190 F. 2d 664, 665 (1951). But see Hewlett-Packard Co. v. ___________________
- Olympus Corp., 931 F. 2d 1551, 1552-1553 (CA Fed. 1991)._____________
- 8) 4A C. Wright & A. Miller, Federal Practice and Procedure S1165, p. 479 8)
- (2d ed. 1987). 91-1695 - OPINION
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- 12 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
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- omissions caused by circumstances beyond the control of the movant. (Ftnote. 9) (Ftnote. 9)
- The "excusable neglect" standard for allowing late filings is also used
- elsewhere in the Federal Rules of Civil Procedure. When a party should have
- asserted a counterclaim but did not, Rule 13(f) permits the counterclaim to be
- set up by amendment where the omission is due to "oversight, inadvertence, or
- excusable neglect, or when justice requires." In the context of such a
- provision, it is difficult indeed to imagine that "excusable neglect" was
- intended to be limited as petitioner insists it should
- be. (Ftnote. 10) (Ftnote. 10)
- The same is true of Rule 60(b)(1), which permits courts to reopen judgments
- for reasons of "mistake, inadvertence, surprise, or excusable neglect," but only
- on motion made within one year of the judgment. Rule 60(b)(6) goes further,
- however, and empowers the court to reopen a judgment even after one year has
- passed for "any other reason justifying relief from the operation of the judg-
- ment." These provisions are mutually exclusive, and thus a party who failed to
- take timely action due to "excusable neglect" may not seek relief more than a
- year after the
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- ____________________
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- 9) The Courts of Appeals generally have given a similar interpretation to 9)
- "excusable neglect" in the context of Rule 45(b) of the Rules of Criminal
- Procedure, which, like Rule 9006(b), was modeled after Rule 6(b). See, e.g., ____ _
- United States v. Roberts, 978 F. 2d 17, 21-24 (CA1 1992); Warren v. United_____________ _______ ______ ______
- States, 123 U. S. App. D. C. 160, 163, 358 F. 2d 527, 530 (1965); Calland v.______ _______
- United States, 323 F. 2d 405, 407-408 (CA7 1963)._____________
- 10) In assessing what constitutes "excusable neglect" under Rule 13(f), the 10)
- lower courts have looked, inter alia, to the good faith of the claimant, the __________
- extent of the delay, and the danger of prejudice to the opposing party. See,
- e.g., New York Petroleum Corp. v. Ashland Oil, Inc., 757 F. 2d 288, 291 (Temp.____ _ ________________________ _________________
- Ct. Emergency App. 1985); Gaines v. Farese, No. 87-5567, 1990 U. S. App. LEXIS ______ ______
- 18086, *9 (CA6, Oct. 11, 1990); Barrett v. United States Banknote Corp., 1992-2 _______ ____________________________
- Trade Cases (para.)69,956, p. ___ (SDNY 1992); Technographics, Inc. v. Mercer ____________________ ______
- Corp., 142 F. R. D. 429, 430 (MD Pa. 1992). Federal Rule of Bankruptcy_____
- Procedure 7013 contains a similar allowance for late counterclaims brought by a
- trustee or debtor in possession. 91-1695 - OPINION
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- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 13 ____
-
- judgment by resorting to subsection (6). Liljeberg v. Health Services _________ _______________
- Acquisition Corp., 486 U. S. 847, 863, and n. 11 (1988). To justify relief_________________
- under subsection (6), a party must show "extraordinary circumstances" suggesting
- that the party is faultless in the delay. See ibid.; Ackermann v. United _____ _________ ______
- States, 340 U. S. 193, 197-200 (1950); Klapprott v. United States, 335 U. S.______ _________ _____________
- 601, 613-614 (1949). If a party is partly to blame for the delay, relief must
- be sought within one year under subsection (1) and the party's neglect must be
- excusable. In Klapprott, for example, the petitioner had been effectively _________
- prevented from taking a timely appeal of a judgment by incarceration, ill
- health, and other factors beyond his reasonable control. Four years after a
- default judgment had been entered against him, he sought to reopen the matter
- under Rule 60(b) and was permitted to do so. As explained by Justice Black:
-
- "It is contended that the one-year limitation [of subsection (1)] bars
- petitioner on the premise that the petition to set aside the judgment showed,
- at most, nothing but `excusable neglect.' And of course, the one-year
- limitation would control if no more than `neglect' was disclosed by the
- petition. In that event the petitioner could not avail himself of the broad
- `any other reason' clause of 60(b). But petitioner's allegations set up an
- extraordinary situation which cannot fairly or logically be classified as
- mere `neglect' on his part. The undenied facts set out in the petition
- reveal far more than a failure to defend . . . due to inadvertence,
- indifference, or careless disregard of consequences." 335 U. S., at 613.
-
- Justice Frankfurter, although dissenting on other grounds, agreed that
- Klapprott's allegations of inability to comply with earlier deadlines took his _________
- case outside the scope of "excusable neglect" "because `neglect' in the context
- of its subject matter carries the idea of negligence and not 91-1695 - OPINION
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- 14 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
-
- merely of non-action." Id., at 630. ___
- Thus, at least for purposes of Rule 60(b), "excusable neglect" is understood
- to encompass situations in which the failure to comply with a filing deadline is
- attributable to negligence. Because of the language and structure of Rule
- 60(b), a party's failure to file on time for reasons beyond his or her control
- is not considered to constitute "neglect." See Klapprott, _________
- supra. (Ftnote. 11) This latter result, however, would not obtain under (Ftnote. 11)_____
- Bankruptcy Rule 9006(b)(1). Had respondents here been prevented from complying
- with the bar date by an act of God or some other circumstance beyond their
- control, the Bankruptcy Court plainly would have been permitted to find "excus-
- able neglect." At the same time, reading Rule 9006(b)(1) inflexibly to exclude
- every instance of an inadvertent or negligent omission would ignore the most
- natural meaning of the word "neglect" and would be at odds with the accepted
- meaning of that word in analogous contexts. (Ftnote. 12) (Ftnote. 12)
-
- B
- This leaves, of course, the Rule's requirement that the party's neglect of the
- bar date be "excusable." It is this requirement that we believe will deter
- creditors or other
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- ____________________
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- 11) A similar, but even more explicit, dichotomy can be found in a former 11)
- rule of the Circuit Court of Appeals for the Second Circuit governing the late
- filing of appeals. That rule permitted late filings "`upon a showing . . . (a)
- that the delay has been due to cause beyond the control of the moving party or
- (b) that the delay has been due to circumstances which shall be deemed to be
- merely excusable neglect . . . .'" Rule 15(2), U. S. C. C. A., Second Circuit,
- quoted in Pyramid Motor Corp. v. Ispass, 330 U. S. 695, 703, n. 10 (1947). ___________________ ______
- Although the meaning given "excusable neglect" for purposes of this rule
- obviously is not controlling for purposes of Rule 9006(b)(1), it does suggest
- that the meaning of "excusable neglect" urged by petitioner is far from natural.
- 12) See also United States v. Boyle, 469 U. S. 241, 245, n. 3 (1985) 12) _____________ _____
- ("neglect" as used in statute governing late filing of tax returns "impl[ies]
- carelessness"). 91-1695 - OPINION
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- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 15 ____
-
- parties from freely ignoring court-ordered deadlines in the hopes of winning a
- permissive reprieve under Rule 9006(b)(1). With regard to determining whether a
- party's neglect of a deadline is excusable, we are in substantial agreement with
- the factors identified by the Court of Appeals. Because Congress has provided
- no other guideposts for determining what sorts of neglect will be considered
- "excusable," we conclude that the determination is at bottom an equitable one,
- taking account of all relevant circumstances surrounding the party's
- omission. (Ftnote. 13) These include, as the Court of Appeals found, the danger (Ftnote. 13)
- 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. See 943 F. 2d, at 677. (Ftnote. 14) (Ftnote. 14)
-
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- ____________________
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- 13) The dissent discerns in Lujan v. National Wildlife Federation, 497 13) _____ ____________________________
- U. S. 871 (1990), an indication that the factors relevant to this inquiry extend
- no further than the movant's culpability and the reason for the delay, see post, ____
- at 3. We cannot agree. Lujan held that a district court did not abuse its _____
- discretion in declining to permit a late filing under Rule 6(b) of the Civil
- Rules on grounds of excusable neglect. 497 U. S., at 897-898. The Court did
- not, however, define ``excusable neglect'' or even decide whether that standard
- could have been met on the facts of that case.
- 14) The dissent would permit judges to take account of the full range of 14)
- equitable considerations only if they have first made a threshold determination
- that the movant is ``sufficiently blameless'' in the delay, see post, at 2. The ____
- dissent believes that this formulation of the Rule's requirements would bring
- needed clarity to the Rule's application and save judicial resources. See post, ____
- at 10. But narrowing the range of factors to be considered in making the
- ``excusable neglect'' determination will not eliminate disputes over how the
- remaining factors should be applied in any given case. For purposes of the
- present case at least, the dissent appears willing to draw a line between
- ordinary negligence and partial ``indifference'' to deadlines, see ibid., but _____
- parties with valuable interests at stake will no doubt find this distinction
- susceptible of litigation. The only reliable means of eliminating the
- ``indeterminacy'' the dissent finds so troubling would be to adopt a bright-line
- rule of the sort embraced by some Courts of Appeals, erecting a rigid barrier
- against late filings attributable in any degree to the movant's negligence. As
- we have suggested, however, such a construction is irreconcilable with our cases
- assigning a more flexible meaning to ``excusable neglect.'' Faced with a choice _______
- between our own precedent and Black's Law Dictionary, we adhere to the former. 91-1695 - OPINION
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- 16 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
-
- There is one aspect of the Court of Appeals' analysis, however, with which we
- disagree. The Court of Appeals suggested that it would be inappropriate to
- penalize respondents for the omissions of their attorney, reasoning that "the
- ultimate responsibility of filing the . . . proof[s] of clai[m] rested with
- [respondents'] counsel." Ibid. The court also appeared to focus its analysis _____
- on whether respondents did all they reasonably could in policing the conduct of
- their attorney, rather than on whether their attorney, as respondents' agent,
- did all he reasonably could to comply with the court-ordered bar date. In this,
- the court erred.
- In other contexts, we have held that clients must be held accountable for the
- acts and omissions of their attorneys. In Link v. Wabash R. Co., 370 U. S. 626 ____ _____________
- (1962), we held that a client may be made to suffer the consequence of dismissal
- of its lawsuit because of its attorney's failure to attend a scheduled pretrial
- conference. In so concluding, we found "no merit to the contention that
- dismissal of petitioner's claim because of his counsel's unexcused conduct
- imposes an unjust penalty on the client." Id., at 633. To the contrary, the ___
- Court wrote:
-
- "Petitioner voluntarily chose this attorney as his representative in the
- action, and he cannot now avoid the consequences of the acts or omissions of
- this freely selected agent. Any other notion would be wholly inconsistent
- with our system of representative litigation, in which each party is deemed
- bound by the acts of his lawyer-agent and is considered to have 91-1695 - OPINION
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- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 17 ____
-
- `notice of all facts, notice of which can be charged upon the attorney.'"
- Id., at 633-634 (quoting Smith v. Ayer, 101 U. S. 320, 326 (1880)). ___ _____ ____
-
- This principle also underlay our decision in United States v. Boyle, 469 U. S. _____________ _____
- 241 (1985), that a client could be penalized for counsel's tardy filing of a tax
- return. This principle applies with equal force here and requires that
- respondents be held accountable for the acts and omissions of their chosen
- counsel. Consequently, in determining whether respondents' failure to file
- their proofs of claim prior to the bar date was excusable, the proper focus is
- upon whether the neglect of respondents and their counsel was excusable. _________________
- III
- Although the Court of Appeals in this case erred in not attributing to
- respondents the fault of their counsel, we conclude that its result was correct
- nonetheless. First, petitioner does not challenge the findings made below
- concerning the respondents' good faith and the absence of any danger of
- prejudice to the debtor or of disruption to efficient judicial administration
- posed by the late filings. Nor would we be inclined in any event to unsettle
- factual findings entered by a Bankruptcy Court and affirmed by both the District
- Court and Court of Appeals. See Goodman v. Lukens Steel Co., 482 U. S. 656, 665 _______ ________________
- (1987). Indeed, in this case, the Bankruptcy Court took judicial notice of the
- fact that the debtor's second amended plan of reorganization, offered after this
- litigation was well underway, takes account of respondents' claims. App.
- 168a-169a. As the Court of Appeals found, the lack of any prejudice to the
- debtor or to the interests of efficient judicial administration, combined with
- the good faith of respondents and their counsel, weigh strongly in favor of
- permitting the tardy claim.
- In assessing the culpability of respondents' counsel, we give little weight to
- the fact that counsel was experiencing 91-1695 - OPINION
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- 18 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
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- upheaval in his law practice at the time of the bar date. We do, however,
- consider significant that the notice of the bar date provided by the Bankruptcy
- Court in this case was outside the ordinary course in bankruptcy cases. As the
- Court of Appeals noted, ordinarily the bar date in a bankruptcy case should be
- prominently announced and accompanied by an explanation of its significance.
- See 943 F. 2d, at 678. We agree with the court that the "peculiar and
- inconspicuous placement of the bar date in a notice regarding a creditors[']
- meeting," without any indication of the significance of the bar date, left a
- "dramatic ambiguity" in the notification. Ibid. (Ftnote. 15) This is not to (Ftnote. 15) _____
- say, of course, that respondents' counsel was not remiss in failing to apprehend
- the notice. To be sure, were there any evidence of prejudice to petitioner or
- to judicial administration in this case, or any indication at all of bad faith,
- we could not say that the Bankruptcy Court abused its discretion in declining to
- find the neglect to be "excusable." In the absence of such a showing, however,
- we conclude that the unusual form of notice employed in this case requires a
- finding that the neglect of respondents' counsel was, under all the circum-
- stances, "excusable."
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- ____________________
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- 15) Indeed, one commentator has warned expressly of the deficiency in the 15)
- method of notification employed by the Bankruptcy Court here: "Prior to the
- adoption of the present bankruptcy rules some bankruptcy courts placed a time to
- close the receipt of claims in chapter 11 in the notice sent to the listed
- creditors for the first meeting of creditors. This practice should be strongly
- discouraged. It conflicts with some of the factual circumstances giving rise to
- a claim in chapter 11 and can ambush unwitting creditors. Since creditors are
- notorious for failing to read all of the boilerplate language in the xeroxed
- form distributed as the notice of the first meeting of creditors, counsel for
- creditors will be wise to double check and ask for a prompt receipt of the
- notice from the client or examine the notice on file in the particular
- bankruptcy case." R. Aaron, Bankruptcy Law Fundamentals S 8.02[7], p. 8-21
- (rev. ed. 1991). 91-1695 - OPINION
-
- PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 19 ____
-
- For these reasons, the judgment of the Court of Appeals is
- Affirmed. _________