Frank's Oilfield Service, Inc.

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
FRANK=S OILFIELD SERVICE, INC.,
Debtor. 	No. 11-06-10826 TF
MEMORANDUM OPINION
This matter is before the Court on the Chapter 11 Trustee’s (the “Trustee’s”)
Motion to Approve Settlement of Claims (New Mexico Litigation with Elm Ridge
Exploration), 	filed 	November 	13, 	2012, 	doc. 	404 	(the 	“Settlement 	Motion”); 	the
objection thereto filed by A&J Well Service (A&J”) on December 7, 2012, doc. 409 (the
“Objection”); and Jesus Villalobos (“Villalobos”) Joinder in the Ojection [sic] of A & J
Well Service, Inc. to Motion to Approve Settlement of Claims (New Mexico Litigation
with Elm Ridge Exploration) filed March 19, 2012, doc. 435 (the “Joinder”). 	The
Trustee asks the Court to, inter alia, strike the Joinder as untimely.1 Villalobos argues
that the Joinder should be considered to the same extent as a timely filed objection. The
matter has been briefed by the parties. Being sufficiently advised, the Court finds that the
Joinder should be stricken as untimely.
I. 	FACTS
1. 	On 	November 	13, 	2012, 	the 	Trustee 	filed 	the 	Settlement 	Motion,
commencing this contested matter.
1 This request is made in the Trustee’s Brief in Opposition to Joinder Filed by Jesus Villalobos,
filed April 4, 2013, doc. 443, and Chapter 11 Trustee’s Response Brief in Opposition to Joinder
Filed by Jesus Villalobos, filed April 15, 2012, doc. 446. Villalobos’ position in support of the
Joinder was set out in his Brief in Support of Objection to Motion to Approve Settlement of
Claims by Joinder, filed April 4, 2013, doc. 442, and Reply to the Trustee’s Brief in Opposition to
the Joinder Filed by Jesus Villalobos, filed April 15, 2013, doc. 447.
Case 06-10826-t11 Doc 450 Filed 08/09/13 Entered 08/09/13 14:21:57 Page 1 of 7

-2-
2. 	On the same date, the Trustee gave notice of a 21-day deadline to object to
the Settlement Motion (the “21-day Notice”).
3. 	Adding three days for mailing (pursuant to Bankruptcy Rule 9006(f)), the
last day to object to the Settlement Motion was December 7, 2012.
4. 	Jesus Villalobos (“Villalobos”) timely received the 21-day Notice at the
following address:
Jesus Villalobos
c/o Frank’s Oilfield Service, Inc.
P.O. Box 5073
Farmington, NM 87499
5. 	On December 7, 2012, A&J filed the Objection.
6. 	Villalobos is affiliated with A&J.2
7. 	Villalobos and A&J have the same counsel in this contested matter.
8. 	On December 24, 2012, the Trustee moved to strike the Objection, arguing
that A&J lacked standing.
9. 	On March 19, 2013, Villalobos filed the Joinder, which states in full:
NOW COMES Jesus Villalobus [sic], in his capacity as the holder of stock
of the above-captioned Debtor (“Villalobus”) [sic] and joins in the
Objection of A&J Well Service, Inc. to Motion to Approve Settlement of
Claims (New Mexico Litigation with Elm Ridge Exploration) (Doc. #
409), for the reasons stated therein.
10. 	On April 3, 2013, the Court granted the Trustee’s motion to strike the
Objection, ruling that A&J did not have standing because it will receive the same
2 Notice of Transfer of Claim Other than For Security, doc. 407, p. 2; Notice of Transfer of Claim
Other than For Security, doc. 413, p. 2.
Case 06-10826-t11 Doc 450 Filed 08/09/13 Entered 08/09/13 14:21:57 Page 2 of 7

-3-
dividend from the bankruptcy estate, whether or not the Settlement Motion is granted,
and thus has no economic stake in the outcome.
II. 	DISCUSSION
The issue before the Court is whether the Joinder should be stricken as untimely,
and/or because it joined an objection that was stricken by the Court.
A. 	The Joinder Was Filed 102 Days Late. 	When a debtor or trustee seeks
approval of a compromise, it is done by motion. Bankruptcy Rule 9019. Following the
rule, the Trustee filed the Settlement Motion, thus commencing a “contested matter” as
defined by Bankruptcy Rule 9014. Pursuant to Bankruptcy Rule 2002(a)(3), the Trustee
was required to, and did, give parties in interest notice of his proposed settlement, with
the required 21-day objection deadline.
If a party in interest files and serves an objection within the deadline, the Court
sets the matter for hearing. 	New Mexico Local Bankruptcy Rule 9013-1.1(c)(1)(A).
Otherwise, the movant
shall promptly submit to the court a proposed form of order, reciting the
notice given and the date of expiration of the time to object, in lieu of the
default procedure set forth in Fed. R. Bankr. P. 7055.
New Mexico Local Bankruptcy Rule 9013-1.1(c)(1). 	The Court’s local rules treat the
submission and entry of an order granting a motion, if no objections are timely filed, as
akin to entry of a default judgment. See generally In re Meyer, 373 B.R. 84, 96 (9th Cir.
BAP 2007) (in a concurring and dissenting opinion, Judge Montali stated that a negative
notice system in contested matters, such as the one used in New Mexico, substitutes for
the two-step process required under in Fed.R.Civ.P. 55).
Case 06-10826-t11 Doc 450 Filed 08/09/13 Entered 08/09/13 14:21:57 Page 3 of 7

-4-
The deadline to object to the Settlement Motion was December 7, 2012. 	A&J
filed its objection on the last day. 	The Joinder, however, was not filed until 102 days
after the objection deadline.
Villalobos neither asked the Court to excuse its late-filed Joinder, nor sought to
provide evidence of good cause for missing the objection deadline by more than three
months. Villalobos does not contend that he did not receive the 21-day Notice. There is
nothing in the current record indicating “cause” for Villalobos’ extremely late filing.
Because of this, the Court will not consider whether to grant Villalobos relief from the
natural consequences of a late-filed objection. 	Cf. In re Gutierrez, 2012 WL 5355964
(Bankr. D.N.M. 2012) (court granted a motion to allow creditor additional time to
respond to Chapter 13 trustee’s notice of final cure payment, given under Bankruptcy
Rule 3002.1(i)).
B. 	Calling the Late-Filed Objection a “Joinder” Does Not Cure the Default.
Although Villalobos’ filing is entitled a “Joinder, it really isn’t. In contested matters, the
joinder rules of civil procedure3 do not apply. 	Bankruptcy Rule 9014(c); In re Downey
Regional Medical Center Hosp., Inc., 441 B.R. 120 (9 th Cir. BAP 2010) (acknowledging
that Fed.R. Civ. P. 19 does not apply in contested matters); In re Fort Wayne Foundry
Corp., 2009 WL 2524493, at *2 (Bankr. N.D. Ind. 2009) (logistical problems trying to
identify and satisfy all of the different notice and hearing requirements for multiple
parties are what prompted the decision not to allow joinder of claims in contested
matters). Thus, Villalobos’ Joinder does not function in the sense normally used in civil
3 i.e., Fed.R.Civ.P. 18 (Joinder of Claims); 19 (Required Joinder of Parties); and 20 (Permissive
Joinder of Parties).
Case 06-10826-t11 Doc 450 Filed 08/09/13 Entered 08/09/13 14:21:57 Page 4 of 7

-5-
litigation. 	Instead, to “join” in a contested matter filing means nothing more than to
agree with the position taken by the party being joined. By his Joinder, Villalobos agreed
with and adopted the positions taken by A&J in its Objection.4
Villalobos could not cure the extreme tardiness of his objection by “joining” a
timely-filed objection. 	If that stratagem worked, there could be no late filings in any
contested matters as long as there was one timely filing. For example, in In re Andrews,
2008 WL 8013406, at *2 (Bankr. S.D. Cal. 2008), the Court said when addressing a late-
filed “joinder”:
The Court can discern from the joinder no reason justifying acceptance of
this pleading given the delay in its filing and no reason to justify any
continuance 	of 	the 	hearing 	in 	connection 	therewith. 	… 	[I]t 	is 	not
unreasonable 	for 	consequences 	to 	follow 	a 	delay 	that 	is 	totally
unexplained, apparently unjustified, and almost two-weeks long. 	As a
result, the Debtors' joinder was and is stricken.
The 102-day delay in this contested matter is nearly eight times longer than the delay
addressed in Andrews.
The Court’s ruling does not hinge upon the fact that the Objection was stricken
for A&J’s lack of standing. 	Villalobos apparently does have standing to object to the
Settlement Motion. Had the Joinder been timely filed, the Court would have considered
it, since it essentially incorporates by reference the arguments made in the Objection, and
the only reason the Objection was stricken was A&J’s lack of standing.
C. 	The 	Court 	Does 	Not 	Need 	to 	Make 	Findings 	About 	the 	Proposed
Settlement. 	Because the Settlement Motion will be deemed to be uncontested once the
4 Even if Fed.R.Civ.P. 20 did apply, the Court would deny Villalobos’ joinder request as
untimely. 	See e.g. French v. Sellers, 2007 WL 788863, at *1 (M.D. Ga. 2007) (district court
denied Rule 20 joinder motion as untimely, when filed after discovery had closed).
Case 06-10826-t11 Doc 450 Filed 08/09/13 Entered 08/09/13 14:21:57 Page 5 of 7

-6-
Joinder is stricken, the Court will enter an order granting the Settlement Motion without
further order or hearing. 	New Mexico Local Bankruptcy Rule 9013-1.1(c)(1). 	There is
no need to make findings of fact or conclusions of law. 	Id. 	See also Fed.R.Civ.P.
52(a)(1) (requiring the Court to find facts and state conclusions “in an action tried on the
facts ….” 	Entry of an order granting the Settlement Motion will be treated as the
equivalent of a default judgment, so no such findings and/or conclusions are required.
See e.g., Foxtrap, Inc. v. Foxtrap, Inc., 671 F.2d 636, 639 (D.C. Cir. 1982) (with a default
judgment, court need not render findings and conclusions on portion of the case not “tried
upon the facts”); Brown v. Kenron Aluminum & Glass Corp., 477 F.2d 526, 531 (8th Cir.
1973) (same); Adriana Intern. Corp. v. Thoeren, 913 F.2d 1406, 1414 (9 th Cir. 1990),
cert. denied, 498 U.S. 1109 (1991) (same); Northern California-Northern Nevada Sound
and Communications Employee Ben. Trust Funds v. Spartan Engineering, Inc., 2008 WL
2951905, at *1 (N.D. Cal. 2008) (same).
Villalobos’ reliance on In re Wiley, 2010 WL 964082 (Bankr. D.N.M. 2010), and
In re Kopexa Realty Venture Co., 213 B.R. 1020, 1023-24 (10 th Cir. BAP 1997), is
misplaced. Those cases dealt with court approval of proposed B.R. 9019 settlements that
had been properly and timely objected to. Here, by contrast, the objection (Joinder) was
very late and consequently will be stricken. 	The Court will treat the matter as
uncontested. 	In such cases the Wiley/Kopexa standards do not apply. 	Instead, as
discussed above, the default judgment standards apply, where the allegations in the
Settlement Motion are deemed admitted. 	See Brown, 477 F.2d at 531 (“The allegations
of the complaint except as to the amount of damages are taken as true”). 	See also
Case 06-10826-t11 Doc 450 Filed 08/09/13 Entered 08/09/13 14:21:57 Page 6 of 7

-7-
Trustees of the I.B.E.W. Local 405 Health & Welfare Fund v. Tichy Elec. Co., Inc., 2008
WL 154641, at *4 (N.D. Iowa 2008) (quoting Brown); Cedar Rapids Lodge & Suites,
LLC v. JFS Development, Inc., 2012 WL 5269015, at *1 (N.D. Iowa 2012) (when a
defendant is in default, facts alleged in the complaint are taken as true); Everyday
Learning Corp. v. Larson, 242 F.3d 815, 818 (8th Cir.2001) (same).
III. 	CONCLUSION
The Court will treat the Joinder as a very untimely objection, and will strike it.
To do otherwise would mean that objections deadlines in this district would have little or
no meaning, a rule that would substantially disrupt the administration of New Mexico
bankruptcy cases. The Court will enter a separate order striking the Joinder. The Trustee
should submit promptly a form of order granting the Settlement Motion.
____________________________________
DAVID T. THUMA
United States Bankruptcy Judge
Entered on docket: August 9, 2013.
Copies to:
William F. Davis
6709 Academy NE, Ste. A
Albuquerque, NM 87109
Patrick W. Carothers
Leech, Tishman, Fuscaldo & Lampl, LLC
525 William Penn Place, 30 th Floor
Pittsburgh, PA, 15219
Case 06-10826-t11 Doc 450 Filed 08/09/13 Entered 08/09/13 14:21:57 Page 7 of 7