The opinion of the court was delivered by: JAMES MORAN, Senior District Judge
MEMORANDUM OPINION AND ORDER
Appellant, Michelle Langel, appeals the denial of her motion by the
United States Bankruptcy Court for the Northern District of Illinois to
have her administrative expense claim be deemed timely filed. We affirm
the bankruptcy court's ruling denying appellant's motion.
Kmart filed for bankruptcy on January 22, 2002. On May 6, 2003, the
bankruptcy court sent notice to Kmart's creditors that requests for
payment of administrative expense claims had to be submitted by June 20,
2003. The notice included a form entitled "Administrative Expense Claim
Request," which creditors were to use to file their claims. The form
stated that it was to be used for claims arising after Kmart filed for
bankruptcy, not before. The form also listed a number of bases for
claims, including "personal Injury/wrongful death." The form made clear
that any request that was not timely filed would be automatically
disallowed without need for the debtor's objection.
On July 3, 2003, appellant submitted an Administrative Expense Claim
Request for an injury incurred on Kmart property on November 9, 2002.
Appellant's request was submitted thirteen days after the bar date for
administrative expense claims. Along with the request, appellant filed a
motion "To Deem Administrative Expense Claim Allowed as Timely." At the
motion hearing, appellant's counsel, Gene Rosen (Rosen), acknowledged
that he had received the administrative claims notice and the
Administrative Expense Claim Request form. He explained that he did not
file his client's claim by June 20, 2003, because he did not realize that
the bar date applied to her tort claim. Rosen professed an unfamiliarity
with administrative claims and bankruptcy law, in general, and admitted
that he failed to carefully read the Administrative Expense Claim
Request, which provided a check box for personal Injury and wrongful
death claims. Rosen argued that his failings constituted excusable
neglect and, therefore, the untimely request should be allowed. He also
maintained that Kmart would suffer no harm if the request, which was
filed less than two weeks late, was permitted. The bankruptcy court
denied appellant's motion, finding that Rosen's actions did not
The parties disagree on the standard of review that we must employ in
this case. A district court reviews a bankruptcy court's findings of fact
for clear error and its conclusions of law de novo. Matter
of Chappell, 984 F.2d 775, 779 (7th Cir. 1993). A bankruptcy court's
determination of excusable neglect is given more deference it is
reviewed for abuse of discretion. Matter of Singson, 41F F.3d
316, 320 (7th Cir. 1994). However, the bankruptcy court
made clear at the motion hearing that it did not reach the question
of excusable neglect The court said, "I do not find that there is any
neglect here. . . . So I don't even have to rise to the level of whether
or not it's excusable or not" Its ruling involves a conclusion of law and
will be reviewed accordingly.
A bankruptcy court may allow for an extension of time to file a proof
of claim when the claimant's delay is due to excusable neglect
Fed.R.Bank. P. 9006(b)(1). The claimant bears the burden of proving excusable
neglect by a fair preponderance of the evidence. Farley v. Ohio
Bureau of Workers' Compensation. 213 B.R. 138, 141 (N.D.Ill. 1997).
In Pioneer Investment Services v. Brunswick Associates.
507 U.S. 380 (1993), the Supreme Court provided guidelines for determining
what constitutes excusable neglect The Court rejected the notion that
excusable neglect required a showing that the claimant's delay was
caused by circumstances beyond his reasonable control Id. at
388. The Court found that neglect retained its ordinary meaning "`to
give little attention or respect' to a matter, or, closer to the point
for our purposes, `to leave undone or unattended to especiall[y]
through carelessness'" Id. citing Webster's Ninth New Collegiate
Dictionary 791 (1983). The Court further stated that Congress clearly
intended for courts to be permitted "to accept late filings caused by
inadvertence, mistake, or carelessness, as well as by intervening
circumstances beyond the party's control." Id. Appellant
explains that her untimely filing was caused by Rosen's failure to
carefully read the forms that he received. This oversight falls within
the ordinary meaning of neglect and qualifies as "inadvertence, mistake,
Ordinarily, if we were to conclude, as a legal issue and as we do, that
the bankruptcy court erred in determining that the conduct was not
neglect, we should reverse and remand
for that court's discretionary determination of whether or not the
neglect was excusable. In the particular circumstances here, we see no
reason to do so. When the bankruptcy court concluded that the conduct was
not neglect, we believe she meant that the failure was beyond neglect.
While that was unduly harsh, it leaves very clear that the court thought
the conduct was inexcusable, and that was a conclusion it could
Just because Rosen's actions meet the Supreme Court's definition of
neglect, they do not necessarily constitute excusable neglect A court
must conduct an equitable inquiry to determine whether neglect is
excusable under Rule 9006(b)(1). Id. at 389. Four factors should
be considered: 1) the danger of prejudice to the debtor; 2) the length of
delay and its potential Impact on judicial proceedings, 3) the reason for
the delay, including whether it was within the reasonable control of the
claimant; and 4) whether the claimant acted in good faith. Id.
at 395 citing In Re Pioneer Investment Services Co.,
943 F.2d 673, 677 (6th Cir. 1991). Though the bankruptcy court did not
pursue this inquiry in reaching its decision on appellant's motion, our
application of the facts to these four factors results In the same
Appellant argues that Kmart will not be prejudiced by permitting her
untimely administrative expense claim because the claim is capped at
$100,000, there are already 4,138 other personal injury claims, and Kmart
was aware of the claim prior to the bar date due to appellant's
negotiations with Kmart's claims adjuster. The relative amount of the
claim and the fact that it is one among thousands of tort claims does not
render it non-prejudicial, see In re Kmart Corp., No.
03-C-96 (N.D.Ill Oct. 27, 2003). However, the fact that Kmart was aware
of the claim through its adjuster, before the bar date, reduces the
danger of prejudice. Kmart contends that prejudice will result if the
claim is allowed, because it will have to expend
resources to determine whether there is a viable claim. Although this is
true, Kmart would have had to expend those same resources if the claim
had been filed on time.
As for the second factor, courts have denied an extension for an
administrative expense claim filed one day late, see In re
Kmart Corp., supra, and have granted an extension for a
claim filed twenty days late, see Pioneer. 507 U.S. at
385. There Is no specific length of time after which a delay would be
inexcusable; rather, the length of the delay must be balanced with the
various other factors. The length of appellant's 13-day delay does not
weigh for or against a finding of excusable neglect The court below,
responsible for the administration of a sprawling bankruptcy proceeding,
is in a far better position than we to assess the prejudicial Impact of
permitting untimely filings on the judicial administration of the case.
The third factor weighs significantly In favor of Kmart The reason for
the untimely filing rests solely with the appellant Rosen has
acknowledged that it was his careless reading of the notice and handling
of the case that led to the untimely claim. In this context, as in
others, the client suffers for the acts and omissions of her attorney.
Pioneer Investment 507 U.S. at 396. In Pioneer
Investment, the Court held that the claimant's late filing was due
to excusable neglect In reaching its decision, the Court gave little
weight to the claimant's attorney's excuses of professional turmoil, but
did emphasize that the bar date was provided in a notice regarding a
creditors' meeting a "peculiar and inconspicuous placement"
Id. at 398. Thus, the delay was due in part to claimant's
attorney, but significant blame could be placed on the ambiguity of the
notice. Such is not the case here. Appellant argues that the notice did
not define its terms, but knowledge of bankruptcy law and an attentive
reading of the forms would have revealed that appellant's claim needed to
be filed by June 20, 2003.
The bankruptcy court denied the motion to deem the claim timely filed.
It was a determination she reasonably could make, and we defer. The
decision of ...