United States Trustee v. Brutsche

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
IVAN C. BRUTSCHE,
Debtor. 	No. 7-11-14145 TS
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 13-1009 T
IVAN C. BRUTSCHE,
Defendant.
MEMORANDUM OPINION
This matter is before the Court on defendant’s motion to dismiss the
adversary proceeding because it was not filed timely. 	For the reasons set forth
below, the Court finds that the Motion is not well taken and should be denied.
I. 	FACTS
1. 	Debtor filed this chapter 7 bankruptcy case on September 19, 2011.
2. 	Debtor’s discharge was granted on January 17, 2012, pursuant to a
Court order entitled Discharge of Debtor, doc. 14.
3. 	On January 17, 2013, the United States Trustee for the District of
New Mexico (“U.S. Trustee”) filed a Complaint Seeking Revocation of Debtor’s
Discharge Under 11 U.S.C. § 727 (“Complaint”), commencing this adversary
proceeding.
4. 	In the Complaint, the U.S. Trustee alleges that debtor’s discharge
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should be revoked pursuant to 11 U.S.C. § 727(d)(1), which requires the court to
revoke a discharge if “such discharge was obtained through the fraud of the
debtor, and the requesting party did not know of such fraud until after the
granting of such discharge.”
5. 	Defendant filed his Motion to Dismiss on March 18, 2013, doc. 7.
6. 	U.S. Trustee filed an Objection to Motion to Dismiss Adversary
Proceeding on April 3, 2013, doc. 8.
II. 	DISCUSSION
11 U.S.C. § 727(e)(3) provides:
The trustee, a creditor, or the United States trustee may request a
revocation of a discharge—
(1) under subsection (d)(1) of this section within one year after such
discharge is granted . . . .
Here, the Complaint was either timely filed or filed one day late, depending
on how the one-year limitation period is calculated.
There are two main methods of computing the last day in a one-year
limitation period, the “calendar method” and the “anniversary method.” 	See
United States v. Marcello, 212 F.3d 1005, 1008-09 (7th Cir. 2000), cert. denied,
531 U.S. 878 (2000). Under the calendar method, the day of the triggering event
at issue (e.g. entry of a discharge order) is counted as the first day of the
limitation period, causing the one-year (in this case) period to end on the
preceding day of the following year. Marcello, 212 F.3d at 1008-09. Thus, if the
triggering event occurred December 31 of a given year, a one-year limitation
period calculated using the calendar method would expire December 30 of the
next year. 	See United States v. Simmonds, 111 F.3d 737 (10 th Cir. 1997)
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(overruled on this issue by Hurst). 	See generally the cases cited in Marcello as
using the calendar method, 212 F.3d at 1009.
Using the calendar method, the last day for the U.S. Trustee to have filed
the complaint in this case would have been January 16, 2013, and the Complaint
would have been untimely.
The alternative method of calculation is the “anniversary method.” 	Using
this method, the day of the triggering event is not counted, so in the case of a
one-year limitation period, the first anniversary of the triggering event date is the
deadline. Marcello, 212 F.3d at 1009. 	Using the example from above, the one-
year limitation period would end December 31 of the following year, rather than
December 30.
The anniversary method is derived in large part from Federal Rule of Civil
Procedure 6(a)(1). Marcello, 212 F.3d at 1009. FRCP 6(a) states in part:
(a) Computing Time. 	The following rules apply in computing any
time period specified in these rules, in any local rule or court order,
or in any statute that does not specify a method of computing time.
(1) Period stated in days or a longer unit
When the period is stated in hours:
(A) exclude the day of the event that triggers the period;
(B) count every day, including intermediate Saturdays,
Sundays, and legal holidays; and
(C) include the last day of the period, but if the last day is
a 	Saturday, 	Sunday, 	or 	legal 	holiday, 	the 	period
continues to run until the end or the next day that is
not a Saturday, Sunday, or legal holiday.1
In Marcello, the Seventh Circuit adopted the anniversary method because,
inter 	alia, 	it 	is 	“clear 	and 	predictable 	and 	therefore 	easier 	for 	litigants 	to
1 The language of Bankruptcy Rule 9006(a)(1) is identical.
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remember, for lawyers to put in their tickler files, and for court to administer. . . .”
212 F.3d at 1010.
The Tenth Circuit addressed the alternative calculation methods in a non-
bankruptcy context in United States v. Hurst, 322 F.3d 1256 (10 th Circuit 2003).
In Hurst the Tenth Circuit discussed how to calculate the one-year limitation
period set forth in 28 U.S.C. § 2255, ¶6 2 for federal prisoners seeking habeas
relief. 	After reviewing the circuit case law and analyzing the issue, the Tenth
Circuit 	agreed 	with 	the 	analysis 	in 	Marcello 	and 	adopted 	the 	“anniversary
method” for calculating the relevant deadline. 	Reversing the district court, the
Tenth Circuit held that a habeas petition received on May 17, 2000 was timely
based on a May 17, 1999 triggering event (the 90th day after denial of the
prisoner’s petition for rehearing).
The Tenth Circuit also applied the anniversary method to another federal
limitations period. 	See Williams v. Shields, 77 Fed. Appx. 501, 503 (10th Cir.
2003) (calculated the limitation period to bring claims under 42 U.S.C. §§ 1983,
1985, and 1988 using the anniversary method). 	See also Colonial Savings, F.A.
v. Public Service Employees Credit Union, 2009 WL 3158164, at *2 (D. Colo.
2009) (citing Hurst and FRCP 6(a)(1), the district court held that 	the 60-day
limitations period in 12 U.S.C. § 1787(b)(6) starts on the day after the notice of
claim disallowance, not the date of the notice).
The rationale supporting use of the anniversary method was discussed in
Patterson v. Stewart, 251 F.3d 1243, 1246 (9th Cir. 2001):
2 Now found in 28 U.S.C. § 2244(d)(1).
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Rule 	6(a) 	is 	widely 	applied 	to 	federal 	limitations 	periods. 	The
Supreme 	Court 	has 	held 	that 	because 	Rule 	6(a) 	had 	the
concurrence of Congress, it can apply to “any applicable statute” in
the absence of contrary policy expressed in the statute. Union Nat'l
Bank v. Lamb, 337 U.S. 38, 40-41, 69 S. Ct. 911, 93 L. Ed. 1190
(1949).
This quotation from Patterson was cited with approval by the Tenth Circuit in
Hurst.
One bankruptcy court has addressed an issue similar to the one before
the Court. 	In In re Runkle, 333 B.R. 734 (Bankr. D. Md. 2005), Judge Paul
Mannes considered whether a § 727(d)(1) complaint to revoke the discharge was
filed timely. The issue arose because the U.S. Trustee relied upon 9006(a)(1)(C)
to file the complaint on Monday, January 10, 2005, even though the one-year
anniversary of the discharge was Sunday, January 9, 2004. 	The debtor argued
that the U.S. Trustee’s complaint was not timely because “the limitations period
provided 	for 	in 	Section 	727(e)(1) 	cannot 	be 	extended 	by 	Bankruptcy 	Rule
9006(a).” 333 B.R. at 736. The court analyzed the argument in some detail, and
reviewed cases on both sides of the issue. The Court then discussed the Fourth
Circuit case of Wirtz v. Peninsula Shipbuilders Assn., 382 F.2d 237, 241 (4 th Cir.
1967). 	In Wirtz, the Fourth Circuit addressed the district court’s dismissal of the
Secretary of Labor’s complaint against a labor union for violating the Labor
Management Reporting and Disclosure Action of 1959, 29 U.S.C. § 481. 	The
court held:
[w]e are of the opinion that the computation of the 60 day time limit
of section 402(b) in the manner prescribed by Rule 6(a) is both
consistent with the express language and purpose of the rule and in
accord with the provisions of the Landrum-Griffin Act[.]
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382 F.2d at 241.
Judge Mannes held that “[w]hile the Fourth Circuit has not addressed this
issue in the bankruptcy context, the court is convinced that it would adhere to the
rationale of the Peninsula case.” 333 B.R. at 738.
The Court is in a similar position to one faced by Judge Mannes: the Hurst
decision is binding precedent. 3 Section 727(e)(3) “does not specify a method of
computing time.” 	Rule 9006(a). 4 Therefore, it is clear that Rule 9006(a)(1) and
Hurst 	require 	the 	one-year 	limitation 	period 	to 	be 	calculated 	using 	the
anniversary method.
Using the anniversary method, the U.S. Trustee’s complaint was timely
filed, on the last day of the one-year limitation period.
III. 	CONCLUSION
Defendant’s motion to dismiss the adversary proceeding will be denied
because the U.S. Trustee’s complaint was filed within the one-year limitation
period set forth in 11 U.S.C. § 727(e)(1), calculated using Bankruptcy Rule
3 Judge Mannes stated he would have ruled otherwise had he been “writing on a
clean slate.” 	333 B.R. at 739. 	This Court is not as reluctant to apply Rule
9006(a)(1) 	to 	statutory 	limitations 	periods. 	As 	shown 	by 	the 	circuit 	court
decisions in Hurst, Marcello, Peninsula, and Patterson, and by the Supreme
Court 	in 	Lamb, 	using 	Rule 	6(a) 	to 	calculate 	statutory 	deadlines 	has 	been
approved by Congress (see 28 U.S.C. § 2075) and provides a method of
calculation that is time-honored, clear, and predictable. 	See also U.S. v. Inn
Foods, Inc., 383 F.3d 1319, 1323 (D.C. Cir. 2004); Lattimore v. Dubois, 311 F.3d
46, 54 (1st Cir. 2002), cert. denied, 538 U.S. 966 (2002); Mickens v. U.S., 148
F.3d 145, 148 (2d Cir. 1998); Flanagan v. Johnson, 154 F.3d 196, 202 (5th Cir.
1998); Bronaugh v. Ohio, 235 F.3d 280, 284 (6th Cir. 2000).
4 If anything, the language of §727(e)(3) supports use of the anniversary
method, since it sets the deadline of one year “after such discharge is granted.”
This language states or implies that the one-year period should not start on the
discharge date.
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9006(a)(1) and Hurst’s “anniversary method.” A separate order will be entered.
______________________________
Honorable David T. Thuma
United States Bankruptcy Judge
Date entered on docket: May 8, 2013.
Copies to:
Leonard Martinez-Metzgar
P.O. Box 608
Albuquerque, NM 87103
Michael Daniels
P.O. Box 1640
Albuquerque, NM 87103
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