Unipac Service Corp v. Harris ( 1997 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
In Re: GEORGE W. HARRIS, III,
Debtor.
UNIPAC SERVICE CORPORATION; TEXAS
GUARANTEED STUDENT LOAN,
Plaintiffs-Appellees,
No. 96-2505
v.
GEORGE W. HARRIS, III,
Defendant-Appellant,
v.
ROY V. CREASY, Trustee,
Party in Interest.
Appeal from the United States District Court
for the Western District of Virginia, at Roanoke.
Jackson L. Kiser, Senior District Judge.
(CA-96-662-R, BK-93-2118-HPR-7, AP-95-25)
Submitted: October 14, 1997
Decided: November 17, 1997
Before HAMILTON and WILLIAMS, Circuit Judges, and
BUTZNER, Senior Circuit Judge.
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Vacated and remanded by unpublished per curiam opinion.
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COUNSEL
George W. Harris, III, Appellant Pro Se. Seth Eli Twery, HUFF,
POOLE & MAHONEY, P.C., Lynchburg, Virginia; UNIPAC SER-
VICE CORPORATION, Denver, Colorado, for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
George W. Harris, III appeals from the district court's orders (1)
summarily reversing the bankruptcy court's order determining that his
student loan was dischargeable under the "undue hardship" provision
of 11 U.S.C. § 523(a)(8)(B) (1994), because he failed to file an appel-
lee's brief, and (2) denying his motion for reconsideration. Because
we find that the district court erred in reversing the bankruptcy court's
decision, we vacate and remand for further proceedings consistent
with this opinion.
Harris filed a petition in bankruptcy under Chapter 7 in 1993.
Included among his debts was a $50,000 student loan, which is the
subject of this appeal. Citing Harris' drug addiction, criminal convic-
tions, and the suspension of his right to practice law in Virginia, the
bankruptcy court determined that Harris proved that repaying the loan
would impose an "undue hardship" on Harris and his dependents and
that his student loan was, therefore, dischargeable under
§ 523(a)(8)(B). The creditor, Texas Guaranteed Student Loan Corp.,
appealed to the district court.
The district court issued a form notice to Harris notifying him that
"The appellee shall serve and file his brief within fifteen (15) days
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after service of the brief of appellant." The notice contained no warn-
ing concerning the effect of failing to file a brief.*
Harris failed to file a brief and, on September 24, 1996, without
any prior notice to Harris, the district court "deem[ed] the errors
assigned by the appellant to have been confessed by the appellee,"
and reversed the bankruptcy court's order declaring the debt dis-
chargeable. Harris filed a "Motion to Rehear" stating that he had been
unable to prepare an adequate brief because he could not afford a
transcript and that, due to his long commute (150 miles round-trip,
daily), he had been unable to review the transcript which was filed in
the district court. The district court denied the motion. Harris appeals.
Bankruptcy Rule 8009 sets the time limits for filing briefs in
appeals from bankruptcy court to the district court. Adherence to Rule
8009 is non-jurisdictional. See Balaber-Strauss v. Reichard (In re
Tampa Chain Co.), 835 F.2d 54, 55 (2d Cir. 1987); see also Bankr.
R. 8001(a) (providing that an appellant's failure"to take any step
other than the timely filing of a notice of appeal does not affect the
validity of the appeal, but is ground only for such action as the district
court . . . deems appropriate, which may include dismissal of the
appeal"). Bankruptcy Rule 8009(a)(2) provides that the appellee must
serve and file a brief within fifteen days after service of the brief of
the appellant. The Bankruptcy Rules do not provide a sanction for
violation of Rule 8009(a)(2). By comparison, the Federal Rules of
Appellate Procedure provide only that the consequence of an appel-
lee's failure to file a brief is that the "appellee will not be heard at oral
argument except by permission of the court." Fed. R. App. P. 31(c).
The majority of cases interpreting Rule 8009 involve dismissal of
an appeal due to an appellant's, rather than an appellee's, failure to
file a brief. Because summary reversal of the bankruptcy court is the
equivalent sanction for an appellee's failure to file a brief as is dis-
missal of an appeal for an appellant's failure to file a brief, the district
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*The district court's order refers to "a letter of August 26, 1996, that
the case would be disposed of without [Harris'] brief if he failed to file
a brief by August 30, 1996." However, the letter is not contained in the
record, and there is no entry in the docket showing that the letter was
sent.
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court must meet, at a minimum, the rules governing the latter sanc-
tion.
To determine whether to dismiss a bankruptcy appeal for an appel-
lant's failure to timely file a brief, the district court must exercise its
discretion under Bankruptcy Rule 8001(a). Resolution Trust Corp. v.
SPR Corp. (In re SPR Corp.), 45 F.3d 70, 74 (4th Cir. 1995). In
applying Rule 8001(a), the district court must take one of the four
steps outlined in Serra Builders, Inc. v. John Hanson Savs. Bank FSB
(In re Serra Builders, Inc.), 970 F.2d 1309 (4th Cir. 1992). Specifi-
cally, the court must: "(1) make a finding of bad faith or negligence;
(2) give the appellant notice and an opportunity to explain the delay;
(3) consider whether the delay had any possible prejudicial effect on
the other parties; or (4) indicate that it considered the impact of the
sanction and available alternatives." Id. at 1311. Proper application of
the Serra Builders test requires the court to consider and balance all
relevant factors. See In re SPR Corp., 45 F.3d at 74; see also
McGahren v. First Citizens Bank & Trust Co. (In re Weiss), 111 F.3d
1159, 1173 (4th Cir. 1997) (applying test) petition for cert. filed, 66
USLW 3171 (Aug. 18, 1997) (No. 97-366).
Here, the district court did not examine Harris' failure to make this
non-jurisdictional filing in light of Rule 8001(a) and the balancing test
set forth in Serra Builders and explained in SPR Corp.
Accordingly, we vacate the district court's orders reversing the
bankruptcy court's order and denying Harris' motion for reconsidera-
tion and remand this case to the district court for further proceedings
consistent with this opinion. We dispense with oral argument because
the facts and legal contentions are adequately presented in the materi-
als before the court and argument would not aid the decisional pro-
cess.
VACATED AND REMANDED
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