Kochetov v. California Employment Development Department (In re Kochetov)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
9 years 11 months ago

Citation:

In re Kochetov, No. SC-15-1034-FJuKi (9th Cir. B.A.P. Mar. 25, 2016).

Tag(s):

Ruling:

A bankruptcy court may not decline to reopen a closed chapter 7 case due to the passage of time. Not-for-publication memorandum.

Procedural context:

On October 19, 1995, debtor commenced a no-asset chapter 7 case. She received her discharge, and the case was closed in early 1996. On November 21, 2014, debtor moved to reopen her case to address debt-collection efforts by the California Employment Development Department, and she simultaneously commenced an adversary proceeding to request a determination that the department’s claimed debt for unpaid unemployment taxes had been discharged. The department opposed the motion to reopen based on the passage of time since the discharge. The bankruptcy court denied the motion to reopen. Debtor appealed, and the BAP reversed.

Facts:

The passage of time cannot serve as a basis to deny a motion to reopen. It is inappropriate for a bankruptcy court to consider substantive issues on a motion to reopen. Reopening a closed case is a ministerial act that functions primarily to enable the file to be managed by the clerk as an active matter and, by itself, lacks independent legal significance and determines nothing with respect to the merits of the case. The question of laches is not properly before the court in connection with a motion to reopen. The application of laches to bar a debtor’s effort to enforce the discharge improperly creates a time limit on a right that Congress made perpetual.

Judge(s):

Robert J. Faris, Meredith A. Jury, and Ralph B. Kirscher, Bankruptcy Appellate Panel Judges.

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