GREGORY M. SLEET, District Judge.
This appeal arises from the Chapter 7 case of pro se appellant Earl Strong, in which he was denied a discharge.
On January 13, 2017, Appellant filed a voluntary petition under chapter 7 of the Bankruptcy Code. (Bankr. D.I. 1). The record reflects that Appellant's initial schedules and statement of financial affairs filed under 11 U.S.C. § 521(a)(1)(B) stated that he: (i) owned no real property; (ii) received no rental income; (iii) transferred real property (the "Property") worth $190,000 to his wife for no consideration on March 3, 2016; (iv) owed an unsecured judgment to Wells Fargo Bank, N.A. ("Wells Fargo"); and (v) owned one vehicle and two bank accounts. (Bankr. D.I. 10 & 16). Appellant later amended his schedules to claim an exemption on the Property, despite stating he did not own it. (Bankr. D.I. 15). On January 24, 2017, the Bankruptcy Court Clerk issued a notice that the § 341(a) meeting would be held on February 22, 2017 and setting April 24, 2017, as the deadline for filing a complaint objecting to discharge under 11 U.S.C. § 727(a). (Bankr. D.I. 14).
On February 9, 2017, Wells Fargo moved to lift the automatic stay with respect to the Property. (Bankr. D.I. 21). Wells Fargo claimed to hold a mortgage and note on the Property, and sought stay relief "to exercise its non-bankruptcy rights and remedies" against the Property in state court. Id. In response, Appellant filed documents stating that the Property was "not in my Name," was "in Wife name the in Tenancy in Entirety Rules," and was "my Wife Lillie Home also, Deeds in her Name." (Bankr. D.I. 23, 24, 29). Appellant then amended his schedules to reflect an ownership interest in the Property as "Tenancy by the entireties" and to disclose another vehicle and bank account. (Bankr. D.I. 36, 43).
On April 6, 2017, the Trustee filed the first Extension Motion seeking to extend the time to file a complaint objecting to Appellant's discharge under § 727 until July 24 (in the motion) or July 27 (in the proposed order). (Bankr. D.I. 45). The Trustee sought to extend not only his time, but also that of the UST and creditors. (See id. & 45-2 (proposed order)). The Trustee noted that the meeting of creditors had not yet been concluded, that motion practice between Wells Fargo and Appellant was ongoing, and that these facts affected the determination of whether a complaint objecting to discharge was warranted. (Id. at 1-2)
On May 11 and 17, 2017, the Bankruptcy Court held hearings on several matters, including Trustee's Extension Motion and Wells Fargo's stay relief motion. (See Bankr. D.I. 61, 64). Trustee argued that the requested extension was warranted because, until the discrepancy regarding Appellant's ownership or transfer of the Property was resolved, a question remained as to whether he had made knowing and fraudulent false oaths for purposes of § 727(a)(4) on his schedules and statement of financial affairs, and whether his transfer of the Property to his wife had been made with the intent to hinder, delay, or defraud creditors or the Case Trustee for purposes of § 727(a)(2)(A). (5/17/17 Hr'g. Tr. at 51:14-52:22). The Bankruptcy Court took the matters under advisement. (Id. at 54:9-11). The Bankruptcy Court ultimately granted Wells Fargo's stay relief motion on August 18, 2017, finding that Appellant's arguments had been rejected by the Delaware state courts. (Bankr. D.I. 72).
On June 16, 2017 — prior to the extended deadline requested by the Trustee's — the UST filed a complaint objecting to Appellant's discharge pursuant to §§ 727(a)(2) and (a)(4). (See Adv. D.I. 1). The complaint was based on Appellant's testimony at the § 341(a) meeting that he had transferred his interest in the Property to his wife for no consideration during the year preceding his bankruptcy petition; and also on the bank accounts, at least one vehicle, and rental income which were not disclosed in the initial schedules filed in support of Appellant's bankruptcy petition. (Id., ¶¶ 17 & 54). The complaint further sought to deny Appellant's discharge under § 727(a)(4) on the basis of false oaths in Appellant's schedules and statement of financial affairs and in his testimony at the § 341 meeting, including false statements regarding his residence, his ownership of the Property, his ownership of an undisclosed vehicle and bank account, and receipt of undisclosed rental income. (Id., ¶¶ 15, 17, 20, 22, 23, 43, 44 & 57).
On June 20, 2017, Appellant filed a motion to dismiss the UST's complaint, and, thereafter, an amended version of same. (Adv. D.I. 6, 7). Appellant argued that the complaint was filed after the Bankruptcy Rule 4004(a) 60-day deadline and that the Trustee's Extension Motion did not extend the deadline for the UST because it too was filed after the deadline (as calculated by Appellant).
At a pre-trial conference held on July 27, 2017, the Bankruptcy Court directed the UST to file a brief regarding the timeliness of the complaint. (See Adv. D.I. 8). Appellant's primary argument was that the Bankruptcy Rule 4004(a) 60-day objection period began January 24 (the date the notice of the meeting of creditors was mailed), not February 22 (the first date for which the meeting of creditors was scheduled). (See Adv. D.I. 16). The UST's brief argued that the Bankruptcy Rule 4004(a) 60-day objection period actually runs from the "first date set for the meeting of creditors" not the mailing date of the notice of the meeting of creditors. (Adv. D.I. 18). As the original deadline was April 24, 2017, the Trustee's Extension Motion, filed on April 6, 2017, was timely. (Id.) The UST further argued that the complaint was timely because: (i) the Trustee had not yet concluded the meeting of creditors, so Del. Bankr. L.R. 4004-1
The Bankruptcy Court held a hearing on August 23, 2017, at which it found that Trustee had timely filed his first extension motion, and had carried his burden under Bankruptcy Rule 4004(b)(1) to show cause for the extension.
On September 5, 2017, Appellant filed a notice of appeal attaching the order granting the Trustee's second extension motion. (See Bankr. D.I. 81). Based on the wording of this notice and a subsequent "Notice to Amend Appellant Appeal" (D.I. 3), it is clear that Appellant appeals the determination that the UST's complaint was timely filed. Appellant moved to stay the order pending appeal (D.I. 6, 11) and moved to disqualify the bankruptcy judge assigned to his Chapter 7 case (D.I. 7), which this court denied. (D.I. 14, 15). The Bankruptcy Court conducted a trial on December 11, 2017, and, based on the uncontroverted evidence presented at trial, the Bankruptcy Court entered an order denying discharge (Adv. D.I. 54). Appellant did not appear, and the Bankruptcy Court denied the request for a continuance Appellant made that morning by telephone. (Bankr. D.I. 117, 12/11/17 Hr'g. Tr. at 3:7-13 & 26:10-21). The Bankruptcy Court admitted evidence proffered by the UST regarding another fraudulent transfer of the Property to Appellant's wife in October 2017 (during the pendency of the Chapter 7 case and the adversary proceeding). (Id. at 7:15-8:13, 15:2-25, 17:10-20:21, 21:20-23:3-24). The Bankruptcy Court held that Appellant had transferred the Property "for the purpose of delaying, hindering, and frustrating the debtor's creditors" for purposes of § 727(a)(2). (Id. at 27:8-14). The Bankruptcy Court further held that Appellant "made false or incomplete statements repeatedly . . . while under oath" for purposes of § 727(a)(4). (Id. at 27:15-19). As a result, the Bankruptcy Court denied Appellant's discharge under §§ 727(a)(2) and (4). (Id. at 28:3-7). On December 14, 2017, the Bankruptcy Court entered a judgment in favor of the UST. (Adv. D.I. 54). The record reflects that Appellant did not appeal the order denying discharge.
The court reviews the Bankruptcy Court's findings of fact for clear error and exercises plenary review over questions of law. See Am. Flint Glass Workers Union v. Anchor Resolution Corp., 197 F.3d 76, 80 (3d Cir. 1999). The determination of whether cause exists to extend the time to object to a debtor's discharge is reviewed for abuse of discretion. In re Auld, 561 B.R. 512, 516, 522 (B.A.P. 10th Cir. 2017) (denial of motion to extend reviewed for abuse of discretion). A court abuses its discretion when it "bases its opinion on a clearly erroneous finding of fact, an erroneous legal conclusion, or an improper application of law to fact." In re Prosser, 777 F.3d 154, 161 (3d Cir. 2015) (internal quotation omitted). The determination of whether the complaint objecting to discharge was timely under Bankruptcy Rule 4004 — the basis of Appellant's motion to dismiss — is a question of law reviewed de novo. In re Cortes, 125 B.R. 418, 419 (E.D. Pa. 1991).
The UST argues that this Court lacks jurisdiction over this appeal because the Orders are interlocutory and cannot be appealed of right. (D.I. 17 at 9). Federal district courts have jurisdiction to hear appeals "from final judgments, orders, and decrees" entered by bankruptcy judges. See 28 U.S.C. § 158(a)(1). Here, the notice of appeal concerned the decisions made at the August 23, 2017 hearing, which granted the Extension Motions and denied Appellant's motion to dismiss. (See 8/23/17 Hr'g. Tr. (granting Extension Motions and setting trial date); Adv. D.I. 49 (denying motion to dismiss for the reasons set forth on the record at the August 23, 2017 hearing)). These orders are interlocutory. See Catlin v. United States, 324 U.S. 229, 236 (1945) ("[D]enial of a motion to dismiss, even when the motion is based on jurisdictional grounds, is not immediately reviewable."); In re Aucoin, 35 F.3d 167, 169-70 (5th Cir. 1994) (holding that an order granting a motion to extend the time to file a complaint objecting to discharge under § 727(a) is interlocutory). The court agrees that because the Orders are not final orders, they are not appealable as of right. See Fed. R. Bankr. P. 8003.
The court has discretion to hear appeals from interlocutory orders. Although Appellant did not file a motion for leave to appeal the interlocutory Orders as required by Bankruptcy Rule 8004(a)(2)), the court may choose to treat Appellant's notice of appeal as a motion for leave to appeal. See Fed. R. Bankr. P. 8004(d). Because Appellant proceeds pro se, the court chooses to treat Appellant's notice of appeal as a motion for leave to appeal. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) ("A document filed pro se is to be liberally construed.") (internal quotation marks omitted). In determining whether interlocutory appeal is appropriate, this court has found the standard articulated in 28 U.S.C. § 1292(b) to be instructive. See In re AE Liquidation, Inc., 451 B.R. 343, 346 (D. Del. 2011). Under § 1292(b), an interlocutory appeal is appropriate "when the order at issue (1) involves a controlling question of law upon which there is (2) substantial grounds for difference of opinion as to its correctness, and (3) if appealed immediately, may materially advance the ultimate termination of the litigation." Id. Review of an interlocutory order is limited to cases where the appellant shows "exceptional circumstances" justifying review. Id.
Here, there are simply no grounds for a difference of opinion as to whether the Extension Motions and complaint were timely, and an appeal of the interlocutory Orders would not materially advance the ultimate termination of litigation that already has concluded with a judgment against Appellant that he chose not to appeal. Thus, there is no basis under § 1292(b) for the court to hear an interlocutory appeal of the Orders. In light of the foregoing, the court must dismiss the appeal for lack of jurisdiction.
Alternatively, even if the court were to reach the merits, the court would affirm the Orders. First and foremost, it appears that, under the Bankruptcy Court's local rules, the complaint was timely even in absence of the Extension Motions. Local Rule 4004-1 provides that where, as here, "the [§] 341 meeting of creditors is continued or rescheduled, the time to file a complaint objecting to discharge" is extended to 28 days after the § 341 meeting of creditors is finally concluded. Del. Bankr. L.R. 4004-1. As the meeting of creditors was still pending on June 16, 2017, the time to file a complaint had not expired when the UST filed the complaint.
Second, the Extension Motions were timely.
Third, the record supports the Bankruptcy Court's determination that there was cause to extend. The determination of whether cause exists under Bankruptcy Rule 4004(b) to grant a timely motion to extend the time for objecting to discharge is left to the bankruptcy court's discretion. See Auld, 561 B.R. at 515-16, 522. In considering cause, courts evaluate: (1) whether the creditor had sufficient notice of the deadline; (2) the complexity of the case; (3) whether the creditor exercised diligence; (4) whether the debtor refused in bad faith to cooperate with the creditor; and (5) the possibility that proceeding in another forum will result in collateral estoppel of the relevant issues. See In re Nowinski, 291 B.R. 302, 306 (Bankr. S.D.N.Y. Apr. 8, 2003) (citing cases in support of each factor); see also Link v. Mauz (In re Mauz), 513 B.R. 273, 280-281 (Bankr. M.D. Pa. 2014). Here, Trustee alleged, in his motions and in oral argument, that an extension was warranted because the meeting of creditors had not been concluded and the discrepancy regarding Appellant's ownership or transfer of the Property had to be resolved before the Bankruptcy Court could determine whether Appellant had made fraudulent false oaths under § 727(a)(4) and a fraudulent transfer under § 727(a)(2). (See Bankr. D.I. 45; 5/17/17 Hr'g. Tr. at 51:14-52:22). The UST added that an extension was warranted due to delays resulting from Appellant's lack of candor and cooperation and cited numerous examples from the course of the case.
Finally, the court finds no error in the Bankruptcy Court's conclusion that the UST was entitled to benefit of the extension granted to the Trustee. Appellant argues that the Trustee's Extension Motions did not extend the UST's time to file a complaint objecting to discharge, and the complaint was untimely because the UST did not file his own extension motion. (D.I. 16 at 6-7). The Court must reject this argument. Trustee's Extension Motions sought to extend not only his time, but also that of the creditors and the UST. (Bankr. D.I. 45, 69). Bankruptcy Rule 4004(b)(1) allows the Bankruptcy Court to extend the time to file a complaint objecting to discharge — not just the moving party's time. Fed. R. Bankr. P. 4004(b)(1). The Bankruptcy Code and Rules do not prohibit one party from extending the deadline for others. See e.g., In re Demos, 57 F.3d 1037, 1039-40 (11th Cir. 1995) (holding that a creditor that did not file an extension motion may rely on the trustee's extension motion that clearly extended the time of all creditors). Further, as the UST points out, courts have held that a Bankruptcy Rule 4004(b) motion filed by a chapter 7 trustee also serves to extend the UST's deadline based on their unity of interests and identity. See, e.g., In re Cooper, 302 B.R. 633, 637 (Bankr. N.D. Iowa 2003); In re Parker, 186 B.R. 208, 210 (Bankr. E.D. Va. 1995). The Court finds no error in the Bankruptcy Court's decision.
For the foregoing reasons, the appeal is dismissed, or, alternatively, the Orders are affirmed. A separate order shall issue.
