Robert Lee Miller

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UNITED STATES BANKRUPTCY COURT SE. _ x
SOUTHERN DISTRICT OF OHIO Hid,
EASTERN DIVISION “pie
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I : Case No. 04-64527 CER,
nre : ase NO. - Bp “4
Robert Lee Miller, : Chapter 7
Debtor. : (Judge Caldwell)

ORDER DENYING OBJECTION TO DISCHARGE OF CHEUGH &
SCHLEGEL, INC. AND WITHHOLDING DISCHARGE PENDING
PROOF OF NOTICE

On December 20, 2004, a letter that was described as an “Objection to Discharge”
was filed by Cheugh & Schlegel, Inc. (“Creditor”). A response was filed on behalf of
Robert Lee Miller (“Debtor”) on March 29, 2005. The Court has concluded that the
purported Objection to Discharge should be denied, because the Creditor failed to satisfy
the timely filing requirements of Rule 4004(a) of the Federal Rules of Bankruptcy
Procedure. Furthermore, the Court does not have sufficient information to apply the
doctrine of equitable tolling. A brief history will illustrate the bases for this decision.

The Debtor filed a chapter 7 petition on September 14, 2004. The Debtor listed the
Creditor on his Schedules and Verification of Creditor Matrix, utilizing a Henderson Road
address, in Columbus, Ohio. On September 17, 2004, the Court issued a notice setting the
Section 341 Meeting of Creditors for October 18,2004. The deadline for filing complaints

objecting to discharge or for the determination of dischargeability of debts was December

17, 2004. On November 3, 2004, a Notice of Rescheduled Meeting of Creditors was filed

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on behalf of the Debtor. The 341 meeting was continued to November 29, 2004. It does
not appear, however, that all creditors were given notice of the continued meeting.

On December 17, 2004, the Creditor addressed a letter to the Court that purported
to object to the Debtor’s discharge. The Court received the letter on December 20, 2004,
and docketed it as an Objection to Discharge on December 29, 2004. It is not clear from
the letter however, whether the Creditor intended to proceed under Section 523 or 727 of
the United States Bankruptcy Code.

In the December 17, 2004, letter, the Creditor asserted that the Debtor’s former
company owed $7,137.00 for two construction projects that the Creditor performed for the
Debtor, and for materials the Creditor provided for a third project during 2003. The Creditor
alleged that the Debtor submitted false documents to the owners of the construction projects
stating that the subcontractors and material men were paid. Furthermore, the Creditor
maintained that it forfeited mechanic’s lien rights, after multiple contacts with the Debtor
regarding payment. It is alleged that the Debtor requested that the Creditor refrain from
filing liens that could jeopardize his ability to receive payment.

On February 22, 2005, a hearing was held on the Creditor’s Objection, with Marshall
D. Cohen, appearing as counsel for the Debtor, and John B. Hubbard, Vice-President of
Cheugh & Schiegel, Inc., appearing for the Creditor. The Court took the matter under

advisement. On March 1, 2005, the Court entered a Scheduling Order for the parties to file

post-hearing memoranda within thirty days, on the issue of whether the Creditor was time

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barred to oppose the Debtor’s discharge. The Court also advised that the Creditor could
obtain counsel to assist in the preparation of a memorandum.

On March 29, 2005, the Debtor filed a Response, pursuant to the terms of the
Scheduling Order. The Debtor asserted that the Creditor’s Objection to Discharge should
be dismissed, because the Creditor failed to timely file a complaint objecting to discharge,
or move the Court for an extension, pursuant to Rule 4004(a) and (b) of the Federal Rules
of Bankruptcy Procedure. Moreover, the Debtor asserted that the Creditor’s claim that it
misunderstood the filing deadline, did not satisfy the test for equitable tolling. The Creditor
did not file a post-hearing memorandum.

Based upon a review of the pleadings, the Court concludes that the Creditor’s
purported Objection to Discharge is denied, because the Creditor has not satisfied the timely
filing requirements of Rule 4004(a) of the Federal Rules of Bankruptcy Procedure, or
established the elements of the doctrine of equitable tolling.

Rule 4004(a) of the Federal Rules of Bankruptcy Procedure, provides that, “[i]n a
chapter 7 liquidation case a complaint objecting to the debtor’s discharge under § 727(a) of
the Code shall be filed no later than 60 days after the first date set for the meeting of
creditors under § 341(a).” (emphasis added). Rule 4004(b) of the Federal Rules of

Bankruptcy Procedure, provides for an extension of time to file a complaint objecting to

discharge, for cause, when the motion is filed before time has expired.

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The Supreme Court has held that Rule 4004 is not jurisdictional. Kontrick v. Ryan,

540 U.S. 443, 447 (2004). The Sixth Circuit has held that under certain circumstances, a

creditor’s untimely challenge may be equitably tolled. Nardei_v. Maughan (In _re

Maughan), 340 F.3d 337, 344 (6th Cir. 2004). The burden, however, is on the claimant, “to
plead and prove facts supporting equitable avoidance of a timeliness defense.” Hampton v.
Caldera, 58 Fed. Appx. 158, 160 (6th Cir. 2003).

In Maughan, the Sixth Circuit considered five factors to determine whether the
doctrine of equitable tolling should apply to a creditor’s untimely discharge challenge.
Maughan, 340 F.3d at 344. The five factors include: (1) lack of actual notice of the filing
requirement; (2) lack of constructive knowledge of the filing requirement; (3) diligence in
pursuing one’s rights; (4) absence of prejudice to the defendant; and (5) a plaintiff's
reasonableness in remaining ignorant of the notice requirement.

The Creditor did not file a post-hearing memorandum or obtain counsel. On this

basis the Court does not have sufficient information to apply the doctrine of equitable

tolling. Accordingly, the Creditor’s Objection to Discharge is denied as untimely.

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It is further ordered, however, that a discharge shall not be issued until the Debtor

provides proof that all creditors were given notice of the continued meeting of creditors.

IT IS SO ORDERED.

Date;_ “Hh 25 | (? {h GIT

Charlés M. Caldwell
United States Bankruptcy Judge

Copies to:
Alexander G. Barkan

Robert Lee Miller John B. Hubbard Assistant U.S. Trustee
2706 Waldon Bluff Court Vice President Office of the U.S. Trustee
Grove City, Ohio 43123 Cheugh & Schlegel, Inc. 170 North High Street
Debtor 611 East Weber Road Suite 200

Columbus, Ohio 43211 Columbus, Ohio 43215

Creditor

| Marshall D. Cohen, Esq. Amy L. Bostic, Esq.

1299 Olentangy River Road 341 South Third Street
2™ Floor, Suite C Suite 11
Columbus, Ohio 43212 Columbus, Ohio 43215
Attorney for Debtor Chapter 7 Trustee