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HENDERSON v. DISCOVER FINANCIAL SERVICES

United States District Court, N.D. Illinois, Eastern Division


October 22, 2004.

YOLANDA HENDERSON, Appellant-Debtor,
v.
DISCOVER FINANCIAL SERVICES, ECAST SETTLEMENT CORP., APOLLO CASUALTY CO., Appellee-Claimants.

The opinion of the court was delivered by: JAMES ZAGEL, District Judge

MEMORANDUM OPINION AND ORDER

This matter is before me on Appellant's appeal from Bankruptcy Judge Jack B. Schmetterer's order of October 20, 2003 denying Appellant's motion to disallow Appellees' proof of claims. A federal district court has jurisdiction, pursuant to 28 U.S.C. ยง 158, to hear appeals from the bankruptcy court. On the appeal, the district court reviews the bankruptcy court's factual findings under the clearly erroneous standard and reviews the bankruptcy court's legal findings under the de novo standard. In re A-1 Paving and Contracting, Inc., 116 F.3d 242, 243 (7th Cir. 1997).

Appellant appeared before Judge Schmetterer, on October 20, 2003, to argue that Appellees' claims should be disallowed for failure to comply with Fed.R. Bank. P. 3001(c). Rule 3001(c) states that "when a claim . . . is based on a writing, the original or a duplicate shall be filed with the proof of claim." Fed.R. Bank. P. 3001(c). Judge Schmetterer found that Rule 3001(c) did not require evidence of the underlying agreements between the debtor and her creditors be attached to the claim but, instead, need only be produced during discovery. Judge Schmetterer based his ruling, at least in part, on the Seventh Circuit's decision in In re Stoecker, 5 F.3d 1022 (7th Cir. 1993). In Stoecker, the Court found that meritorious claims should not be disallowed for failure to strictly comply with Rule 3001(c), which, in the Court's opinion, amounted to an easily curable and harmless error. Id. at 1028. The Court also noted that amendment could be made at any time so long as the other creditors were not prejudiced. Id.

  In light of Stoecker, I must agree with Judge Schmetterer that disallowing the Appellees' meritorious claims is inappropriate. However, it is still unclear to me whether production of the underlying evidence during discovery is sufficient to satisfy the requirement of Rule 3001(c) or whether an amendment is required. Thus, I am remanding the case for resolution on the issue of amendment.

  This case is REMANDED for further proceedings consistent with this opinion.

20041022

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