Gonsalves v. Belice (In re Belice)

Summarized by Hale Lake , Hinshaw & Culbertson, LLP
13 years 4 months ago

Citation:

Gonsalves v. Belice (In re Belice), BAP No. 11-048, MB 12-005, (B.A.P. 1st Cir. Oct. 15, 2012)

Tag(s):

Ruling:

The Bankruptcy Appellate Panel of First Circuit reversed and remanded the matter back to the bankruptcy court as the dismissal of the adversary proceeding seeking a determination on the dischargeability of the debt owed to the plaintiff, Sandon Gonsalves (“Plaintiff”) was beyond the scope of the B.A.P.’s prior remand to the bankruptcy court and was also legal error. The B.A.P. determined that because the adversary proceeding from which the Plaintiff appealed from was previously remanded by the B.A.P. for consideration of the merits of a Section 523(a)(3) claim, the parties, on remand, may not raise issues that it could and should have litigated in the original appeal. Therefore, the B.A.P. found that the new argument advanced by the debtor, Abel Belice (the “Debtor”), that the Plaintiff’s Section 523(a)(3) claim should be dismissed as untimely should not have been entertained by the bankruptcy court as it not only violated the letter of the remand but also was contrary to the law of the case. The B.A.P. remanded the matter, again, to the bankruptcy court to determine only the merits of Plaintiff’s Section 523(a)(3) claim and the factual underpinnings of the allegations made by Plaintiff concerning the sufficient of notice of the Debtor’s bankruptcy case.

Procedural context:

The Debtor filed a petition under Chapter 7 in March 2008. The Debtor included the Plaintiff as a creditor in his Chapter 7 case and provided the Plaintiff’s last known address and also misspelled the Plaintiff’s first and last names. The Debtor was granted his discharge on June 27, 2008. On July 30, 2009, the Plaintiff filed an adversary proceeding seeking a revocation of the Debtor’s discharge under Section 727, or, alternatively, that his claim survived the Debtor’s discharge under Section 523 as he never received the bankruptcy court’s notices due to the misspelling of his name and the addressed provided for him by the Debtor. The Debtor moved to dismiss on the basis that the Plaintiff had notice of his bankruptcy filing and that his complaint was untimely, which was granted by the bankruptcy court. On appeal to the B.A.P., the B.A.P. affirmed the bankruptcy court’s decision that the Section 727 claim was time-barred pursuant to Section 727(e)(1) as it was commenced more than a year after the Debtor was granted his discharge, but held that the address used by the Debtor for the Plaintiff was not reasonably calculated to provide notice and as such, the complaint presented a plausible claim for relief under Section 523(a)(3). The B.A.P. remanded the matter back to the bankruptcy court for consideration of the request for relief under Section 523(a)(3). On remand, the Debtor filed another motion to dismiss, this time arguing that the Section 523 count was time-barred as it was not filed within one year of his discharge. Despite the Plaintiff filing his opposition to the motion to dismiss with the bankruptcy court, the bankruptcy court granted the motion at oral argument stating that it had not heard from the Plaintiff. The Plaintiff appealed and also moved for relief from the judgment because he had timely filed an opposition. Pending before the B.A.P. on this second appeal was consideration of the dismissal of the Section 523 claim as time-barred and the bankruptcy court’s denial of Plaintiff’s motion under Rule 60(a) and 60(b). In this second appeal, the B.A.P. reversed the bankruptcy court and remanded the matter, again, for determination of the merits of the Section 523(a)(3) claim.

Facts:

The Debtor, who was the landlord of the Plaintiff, filed a petition under Chapter 7 in March 2008. The Plaintiff, who had obtained a state court judgment against the Debtor in 2006, was incarcerated at the time the Debtor filed for bankruptcy. The Debtor included the Plaintiff as a creditor in his Chapter 7 case and provided the address of 26 George Street, New Bedford, MA, which was the same address of the Debtor and indeed the same address of the Plaintiff prior to his incarceration. The Debtor also misspelled the Plaintiff’s first and last names. As a result, all notices in the Chapter 7 case were sent by the bankruptcy court to the George Street address, including the bar date for filing claims. The Debtor was granted his discharge on June 27, 2008. The Plaintiff who alleged that he only received notice of the Chapter 7 case on May 18, 2009, after commencing a collection action in state court, commenced an adversary proceeding to revoke the Debtor’s discharge or alternatively to determine the dischargeability of his state court judgment against the Debtor, argued that but for the lack of notice, he would have participated in the bankruptcy case and further that the Debtor knew of his incarceration and that he was not living at the George Street address at the time the Debtor filed for bankruptcy.

Judge(s):

Haines

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