Understand the complexities and nuances of the Bankruptcy Code to better advise clients and prepare for court.
By Diane Davis
July 18 — A creditor failed to rebut the presumption that it received notice of a debtor's Chapter 7 bankruptcy petition and, thus, a district court in Michigan won't reopen the case ( Citizens Ins. Co. v. Harris, 2016 BL 224834, E.D. Mich., No. 16-CV-10428, 7/13/16 ).
Judge George Caram Steeh of the U.S. District Court for the Eastern District of Michigan concluded that a simple affidavit from creditor's counsel that he didn't receive notice of the debtor's bankruptcy filing didn't rebut by clear and convincing evidence a rebuttable presumption of receipt.
Debtor Teressa Harris filed a Chapter 7 petition and listed Citizens Insurance Co. as an unsecured creditor. In Chapter 7 bankruptcy, a debtor's nonexempt assets are liquidated by a trustee, and the proceeds are distributed to creditors.
The Bankruptcy Noticing Center issued a certificate certifying, under penalty of perjury, that it had sent notice to Citizens at the address of Citizens' counsel.
The bankruptcy court granted the debtor a discharge. Citizens alleged that the debt wasn't dischargeable and moved to reopen the Chapter 7 case. Citizens' counsel, Grant O. Jaskulski, submitted an affidavit stating that he never received any notifications regarding the bankruptcy proceedings from the court.
The bankruptcy court found that counsel's mere affidavit was insufficient to overcome the rebuttable presumption of receipt.
On appeal, Citizens relied on Bratton v. Yoder Co. (In re Yoder Co.), 758 F.2d 1114 (6th Cir. 1985), which found that an affidavit, standing alone, may be enough to overcome the presumption of receipt.
The court distinguished Yoder in that there is no dispute that Citizens was listed on the creditor matrix that the Bankruptcy Noticing Center used to issue notices and there is proof that the notice was mailed to the correct listed address at the law firm. Counsel's affidavit merely establishes that he didn't receive notice of the bankruptcy case but doesn't rebut the presumption that his law firm received the notice, the court said.
Grant O. Jaskulski, Hewson and Van Hellemnt, P.C., Oak Park, Mich., represented appellant Citizens Insurance Company; appellee/debtor Teressa Ann Harris, Detroit, represented herself, pro se; Charles L. Wells, III, Auburn Hills, Mich., represented himself as trustee/interested party.
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