In Re Thomas R. Beaty and Nancy Z. Beaty, Debtors, Thomas R. Beaty v. David Selinger

Opinion by Judge WILLIAM A. FLETCHER; Concurrence by Judge FERNANDEZ.

OPINION

We are presented in this case with a question of first impression: does the doctrine of laches apply to nondischargeability complaints brought under 11 U.S.C. § 523 (a)(3)(B) and Federal Rule of Bankruptcy Procedure 4007(b)? When unscheduled creditor David Selinger sought a determination of the dischargeability of his state court default judgment against Chapter 7 debtor Thomas Beaty, the bankruptcy court granted summary judgment in Beaty’s favor based on his affirmative defense of laches. On appeal, the bankruptcy appellate panel (“BAP”) reversed on the ground that laches is never available as an affirmative defense in a § 523(a)(3)(B) action. For the reasons discussed below, we disagree with the BAP’s holding that lach-es is never available. However, because Beaty is unable to establish the elements of a laches defense in this case, we hold that the BAP was correct in reversing the grant of summary judgment in his favor.

I

The relevant facts are not in dispute. In September 1991, Thomas and Nancy *918 Beaty filed a Chapter 7 bankruptcy petition. Nine months earlier, in January 1991, David Selinger…

concurring:

I concur in the result because I agree that laches does not bar Selinger’s complaint to determine the dischargeability of his judgment against Beaty for fraudulent, *929 willful, and malicious conduct which injured Selinger.

If laches were an available defense, it is not shown here, as is demonstrated in part IV of the majority opinion. Where I differ from the majority is that I do not think that laches is ever available in an action of this type. I will adumbrate my reasons, which can be stated rather succinctly.

In this case, Beaty failed to list Selinger as a creditor on his bankruptcy schedules, and Selinger did not have knowledge of the case soon enough to file a timely proof of claim and a request for a determination of dischargeability. Moreover, Selinger’s debt allegedly falls within the exceptions to discharge set forth in 11 U.S.C. § 523 (a)(2), (4) or (6). Therefore, under 11 U.S.C. § 523 (a)(3)(B) the discharge of Beaty under 11 U.S.C. § 727 did not discharge Selinger’s debt, and under the bankruptcy rules Selinger’s complaint could “be filed at any time.” Fed. R. Bankr.P. 4007(b). In my view, “at any time” means just that.

I recognize, of course, that…

306 F.3d 914 In re Thomas R. BEATY and Nancy Z. Beaty, Debtors, Thomas R. Beaty, Appellant, v. David Selinger, Appellee. No. 01-56576. United States Court of Appeals, Ninth Circuit. Argued and Submitted June 6, 2002. Filed September 26, 2002. COPYRIGHT MATERIAL OMITTED Thomas B. Gorrill, San Diego, CA, for debtors-appellants Thomas R. Beaty and Nancy Z. Beaty. David Selinger, Oceanside, CA, in Pro Se, for the appellee. Appeal from the Ninth Circuit Bankruptcy Appellate Panel; Russell, Klein and Ryan, Bankruptcy Judges, Presiding. BAP No. SC-00-01566-RyKR. Before FERNANDEZ, WARDLAW and W. FLETCHER, Circuit Judges. Opinion by Judge WILLIAM A. FLETCHER; Concurrence by Judge FERNANDEZ. OPINION WILLIAM A. FLETCHER, Circuit Judge. 1 We are presented in this case with a question of first impression: does the doctrine of laches apply to nondischargeability complaints brought under 11 U.S.C. § 523 (a)(3)(B) and Federal Rule of Bankruptcy Procedure 4007(b)? When unscheduled creditor David Selinger sought a determination of the dischargeability of his state court default judgment against Chapter 7 debtor Thomas Beaty, the bankruptcy court granted summary judgment in Beaty's favor based…