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C Harles A. G Uerriero v. R Amin R Ayhan


September 19, 2011


The opinion of the court was delivered by: Joseph F. Bianco, District Judge:


The instant case is an appeal by Charles where appellees Ramin Rayhan, Esthetic Guerriero (hereinafter "Guerriero" or Procedures of Long Island, LLC, Richard "appellant"), a debtor, from the July 23, 2010 Jarett and Michael Kelly (hereinafter Order ("July Order") of the Honorable Alan "appellees") failed to serve appellant with the

S. Trust, United States Bankruptcy Judge, June Order as it required. denying appellant's motion to dismiss the adversary complaint as untimely. As set forth below, the Court affirms the Appellant, who voluntarily filed for Bankruptcy Court's determination denying bankruptcy pursuant to Chapter 7 of the appellant's motion to dismiss the adversary Bankruptcy Code in the United States complaint. Specifically, the Bankruptcy Bankruptcy Court for the Eastern District of Court's interpretation of its own order- New York ("Bankruptcy Court"), appeals namely, that the grant of the extension of from the judgment of the Bankruptcy Court, time for appellees to file their adversary arguing that: (1) the Bankruptcy Court's proceeding was not contingent upon interpretation in its July Order of its June 2, compliance with the separate "personal 2010 Order ("June Order") was unreasonable service" provision in the same order-is and in contravention of the clear and reasonable, and certainly not an abuse of unambiguous language of that Order; and (2) appellant's due process rights were violated discretion. *fn1 Similarly, appellant's related they sought "to compel compliance with the due process argument has no merit. 2004 order that was served upon the debtor Accordingly, the Bankruptcy Court's Order and to extend the creditor's time to object to is affirmed. discharge and dischargeability." (Id. at 2:6-9.) The Bankruptcy Court first


A. Bankruptcy Proceeding the Court will enter an order directing the debtor to comply

On July 8, 2009 appellant filed a with the 2004 order . . . That voluntary petitioner for bankruptcy under order is going to need to be Chapter 7 of the Bankruptcy Code. (Docket personally served on the 1-30 at 1; Docket 1-10 & 1.) Appellees debtor because if for any requested a number of extensions by which reason he doesn't comply with to object to the dischargeability of appellant's this order I'm assuming I will debt. Central to the dispute at hand is see you all back on a appellee's motion dated April 21, 2010, contempt motion. So I want to requesting an extension of time for the be certain of personal service. creditors to file objections to the discharge of . . . you may now unilaterally appellant's debt. (Docket 1-21.) In that pick the date, time and place motion, appellees also sought an order for both production and compelling appellant to comply with the examination [of the debtor] . . Bankruptcy Court's March 9, 2010 Order . . regarding the production of documents and the examination of appellant under Rule (Id. at 2:19-25, 3:1-8.) With respect to the 2004 of the Federal Rules of Bankruptcy extension request, the Bankruptcy Court Procedure ("2004 Order"). (Id.; see also found that "cause exists to extend . . . [the] Docket 1-23.) request [] through June 21, 2010. . . .

Presumably you all will schedule the 2004

The Bankruptcy Court held a hearing on [production and examination] prior to that appellees' motion on May 25, 2010. time if possible." (Id. at 3:9-13.) (Docket 1-21 (June Order), 1-28 (Hearing Transcript).) Appellant did not appear for the hearing and did not file opposition papers to appellees' motion. (Docket 1-28 at 2:9, 4:20-21.) At the hearing, appellees stated addressed the 2004 Order, stating that

The Bankruptcy Court memorialized its (adversary complaint).) On July 6, 2010 decision in the June Order, which, as noted appellant filed a motion to dismiss the above, was issued on June 2, 2010. The adversary proceeding (Docket 1-30 at 3), Bankruptcy Court "extended through and claiming that the action was time-barred including June 21, 2010" the creditors' time because: (1) service was inappropriately to object to the discharge of appellant's debt. made on appellant's wife where the June (Docket 1-21 & a.) In addition, the June Order never made provisions for "substitute Order stated that: service"; and (2) even if serving appellant's wife was appropriate, she was never served

(b) the Debtor is hereby with the June Order. (Docket 1-10 && 8-9, compelled to comply with the 15.) Appellees opposed appellant's motion, 2004 Order . . . thereby arguing that: (1) the Bankruptcy Court requiring a turnover of granted appellees an extension of time to file documents as set forth in the their adversary proceeding until June 21, 2004 Order . . . .; 2010 and that the mandate to serve appellant was referring to the 2004 Order; and (2) even

(c) the Debtor is hereby if appellees were required to serve appellant, required to appear at the appellant waived or should be equitably offices of [appellees' law estopped from raising the timeliness of the firm] on June 16, 2010 at adversary complaint because he appeared for 12:00 a.m. for an examination his 2004 examination as required by the June pursuant to the 2004 Order Order and did not raise any objections dated March 9, 2010, and regarding service at that time. (Docket 1-14 && 5-7, 9-11.)

(d) personal service of this

Order on the Debtor is to be On July 23, 2010, the Bankruptcy Court effectuated on or before June denied appellant's motion to dismiss the 10, 2010. adversary proceeding as timely. (Docket 1-3.) The Bankruptcy Court stated that the (Docket 1-21 && b-d.) An affidavit of June Order "contained several service filed with the Bankruptcy Court non-interdependent decretal paragraphs to indicated that the June Order was served in address the various forms of relief sought in person on June 9, 2010 on Frances Guerriero, the Motion . . . . " and indicated that, "as appellant's wife, at her home address. correctly stated by [appellees], the provision (Docket 1-12.) The Order was also served regarding service of the Order related to the by mail to appellant's home address on June mode of service for the 2004 Order, and not 11, 2010. (Id.) related to the relief extending time; therefore, the adversary [complaint] was timely filed on On June 21, 2010 appellees filed an June 21, 2010." (Id. at 2.) In addition, the adversary complaint against the debtor Bankruptcy Court concluded that it "makes challenging the dischargeability of his debt. no determination as to the efficacy of service (Docket 1-30 at 2 (docket sheet); id. 1-4 of the Order as the issue of the Debtor's compliance with the 2004 Order is not bankruptcy court's interpretation of its own presently before the Court." (Id. at 3.) order is given deference on appeal and is Appellant now appeals from this July Order. reviewed for abuse of discretion. See, e.g., In re The 1031 Tax Grp., LLC, No. 10 Civ.

B. Procedural History 2799 (RJH), 2011 WL 1158445, at *1 (S.D.N.Y. Mar. 29, 2011) (citing Deep v. Appellant filed a notice of appeal on Copyright Creditors, 122 F. App'x 530, 531 October 1, 2010, and filed his brief on April (2d Cir. 2004) and Casse v. Key Bank Nat'l 22, 2011. Appellees filed their opposition Ass'n, 198 F.3d 327, 333 (2d Cir. 1999)); see brief on June 10, 2011. Appellant did not also In re Resource Tech. Corp., 624 F.3d file a reply, which was due by June 27, 2011. 376, 386 (7th Cir. 2010) ("We owe The Court has fully considered the substantial deference to the bankruptcy submissions and arguments of the parties. court's interpretation of its own orders and will not overturn that interpretation unless we


are convinced that it amounts to an abuse of discretion."); JCB, Inc. v. Union Planters

Rule 8013 of the Federal Rules of Bank, N.A., 539 F.3d 862, 869 (8th Cir. 2008)Bankruptcy Procedure provides that a ("While we normally review a bankruptcy reviewing court may "affirm, modify, or court's legal conclusions de novo, its reverse a bankruptcy judge's judgment, interpretation of the confirmed plan is order, or decree," or it may remand with entitled to deference as an interpretation of instructions for further proceedings. See its own order and should be reviewed under Fed. R. Bankr. P. 8013. the abuse of discretion standard." (quotation marks and citations omitted)).

The Court will review the Bankruptcy Court's legal conclusions de novo and its III. DISCUSSION factual findings for clear error. See Denton v. Hyman (In re Hyman), 502 F.3d 61, 65 (2d Appellant appeals the Bankruptcy Cir. 2007); see also Lubow Mach. Co. v. Court's July Order denying his motion to Bayshore Wire Prods. (In re Bayshore Wire dismiss the adversary complaint. Appellant Prods.), 209 F.3d 100, 103 (2d Cir. 2000) argues that the adversary complaint was not ("Like the District Court, we review the timely filed because the extension of time on Bankruptcy Court's findings of fact for clear which appellees rely---granted in the June error, . . . its conclusions of law de novo, . . . Order---was predicated on personal service of its decision to award costs, attorney's fees, the June Order on appellant by a specific and damages for abuse of discretion." date, as that Order allegedly required. (internal citations omitted)); accord Shugrue Appellant contends that the Bankruptcy v. Air Line Pilots Ass'n, Int' l (In re Court's interpretation of the June Order as Ionosphere Clubs),922 F.2d 984, 988-89 (2d not requiring such service was inconsistent Cir. 1990) (citations omitted). with its plain language. (Appellant's Br. at 8-10.) Appellant further argues that he "was

Moreover, as discussed infra, a deprived of his procedural due process of law as guaranteed to him by the Fourteenth June Order itself. (Appellees' Br. at 5-8.) Amendment" because he was "not provided Appellees assert, in the alternative, that with notice that the Appellees' time to appellant waived, or should be equitably commence" the adversary proceeding was estopped from making, the argument that he extended despite the "express and was not properly served where appellant unambiguous terms" of the June Order. (Id. appeared for his 2004 examination on the at 12.) date and time designated by the June Order without at that time raising any issues Appellees counter that no such service regarding service or timeliness of the was required and that the June Order adversary complaint. (Id. at 9-10.) mandated service of the 2004 Order, not the

After full consideration of appellant's its own order, and the court's interpretation of claims and a thorough examination of the its order will not be disturbed absent a clear record below, the Court affirms the July abuse of discretion." Truskoski v. ESPN, Order of the Bankruptcy Court in its entirety. Inc., 60 F.3d 74, 77 (2d Cir. 1995) (quotation Specifically, the Court concludes that the marks and citations omitted) (collecting Bankruptcy Court's interpretation of its June cases). Cf. Harvis Tvien & Beck P.C. v. Order was not an abuse of discretion based Fed. Home Loan Mortg. Corp. (In re on the record where the Bankruptcy Court Blackwood Associates, L.P.), 153 F.3d 61, 66 determined that the extension of time granted (2d Cir. 1998) ("The fundamental principle to appellees was not contingent upon service underlying our holding in Truskoski is the of the June Order.*fn1 truism that the draftsman of a document is uniquely situated to understand the intended As the Second Circuit has emphasized, meaning of that document. In this case, this "[i]t is peculiarly within the province of the principle does not apply. The bankruptcy district court . . . to determine the meaning of court did not draft the Stipulation, it merely approved the Stipulation as it was required to hearing. The last two provisions of that In addition, the transcript of the March Order are critical here and state as follows: 25, 2010 hearing, which concerned the very motion addressed by the Bankruptcy Court in

(c) the Debtor is hereby its June Order, supports the Bankruptcy required to appear at the Court's interpretation. The transcript offices of [appellees' law suggests that the Bankruptcy Court intended firm] . . . for an examination the service provision in its June Order to pursuant to the 2004 Order entail the service of the 2004 Order, not the dated March 9, 2010, and June Order. The Bankruptcy Court stated:

(d) personal service of this the Court will enter an order Order on the Debtor is to be directing the debtor to comply effectuated on or before June with the 2004 order . . . 10, 2010. That order is going to need to be personally served on (Docket 1-21 && c-d (emphasis added).) the debtor because if for any While the reference to "this Order" in reason he doesn't comply with provision (d) requiring personal service is this order I'm assuming I will somewhat ambiguous, it is consistent with see you all back on a the Bankruptcy Court's interpretation that contempt motion. So I want to "this Order" is referring the 2004 Order be certain of personal service. mentioned in the preceding sentence, in provision (c). Thus, the language of the (Docket 1-28 at 2:19-25, 3:1-8 (emphasis June Order is itself consistent with the added).) This statement is consistent with Bankruptcy Court's interpretation, which is a the Bankruptcy Court's interpretation of the reasonable one. See, e.g., Brady v. service clause in the June Order as mandating Mcallister (In re James A. Brady), 101 F.3d service of the 2004 Order. The Bankruptcy 1165, 1169 (6th Cir. 1996) ("Although the Court never mentioned at the hearing service order and the trustee's motion are somewhat of its June Order so as to notify appellant of ambiguous, they are able to bear the the extension of time granted to appellees, interpretation of the Bankruptcy Court. . . nor was any mention made of making the [and] [w]e therefore decline to contradict the extension contingent on service of the June Bankruptcy Court's interpretation of its own Order on appellant.*fn2

order."). Furthermore, as the Bankruptcy Court pointed out in its July Order, the June Order contained several non-interdependent


In short, the Bankruptcy Court's interpretation of its own order-namely, that the extension of time granted to appellees in For the foregoing reasons, the Court the June Order to file their adversary affirms the Bankruptcy Court's July Order proceeding was not contingent upon the denying appellant's motion to dismiss the "personal service" provision in that June adversary complaint. The Clerk of Court Order (which, in any event, related to the shall enter judgment and close this case. 2004 order)-is reasonable and is supported by the language of the June Order, as well as SO ORDERED. the context in which it was issued.

In sum, this Court concludes that the __________________ Bankruptcy Court's interpretation of its June JOSEPH F. BIANCO 2010 Order was not an abuse of discretion United States District Judge and is consistent with the record. Moreover, as noted supra, this Court would reach the Dated: September 19, 2011 same conclusion even under a de novo Central Islip, New York standard of review, rather than the abuse of discretion standard.*fn3 * * *

The attorney for Appellant is: Fred S. Kantrow, Esq., Law Offices of Avrum J. Rosen, PLLC, 38 New Street, Huntington, New York, 11743. The attorney for Appellees is: Kenneth A. Reynolds, Esq., McBreen & Kopko, 500 North Broadway, Suite 129, Jericho, New York 11783.

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