Diane C. Weil, Chapter 7 Trustee, Plaintiff-Appellant,
Edward E. Elliott, Defendant-Appellee.
and Submitted May 9, 2017 Pasadena, California
from the United States Bankruptcy Court No. 1:11-bk-23855-VK
for the Central District of California Victoria S. Kaufman,
Bankruptcy Judge, Presiding
Nowlan Tedford IV (argued) and Aaron E. de Leest, Danning
Gill Diamond & Kollitz LLP, Los Angeles, California, for
Edward Smyth (argued), SW Smyth LLP, Los Angeles, California,
Before: J. Clifford Wallace, Morgan Christen, and Paul J.
Watford, Circuit Judges.
panel reversed the bankruptcy court's judgment dismissing
a chapter 7 bankruptcy trustee's adversary proceeding
seeking revocation under 11 U.S.C. § 727(d) of a
debtor's discharge on the ground that the discharge was
obtained by fraud.
bankruptcy court granted summary judgment to the trustee and
revoked the discharge. The Bankruptcy Appellate Panel vacated
the bankruptcy court's judgment on the ground that the
trustee did not file her request for revocation of discharge
within the one-year time limit imposed by § 727(e)(1),
and so the bankruptcy court lacked subject matter
jurisdiction to revoke the discharge. On remand, the
bankruptcy court entered a new judgment dismissing the
adversary proceeding for lack of jurisdiction.
panel held that the one-year filing deadline imposed by
§ 727(e)(1) is not a jurisdictional constraint, but
rather is a statute of limitations. The panel held that the
debtor forfeited the affirmative defense of the
non-jurisdictional time bar by failing to raise it in the
bankruptcy court. The panel reversed the bankruptcy
court's judgment and remanded with instructions for the
bankruptcy court to reinstate the part of its earlier
judgment revoking the debtor's discharge.
Judge Christen agreed with the majority's judgment and
reasoning in holding that § 727(e)(1) is a waivable and
non-jurisdictional time bar. Judge Christen wrote to further
explain her conclusion that § 727(e)(1) is a statute of
limitations, rather than a non-waivable statute of repose.
WATFORD, Circuit Judge.
debtor in this case, Edward Elliott, filed a Chapter 7
bankruptcy petition that fraudulently omitted a key asset:
his own home. No one discovered the fraud while his
bankruptcy case remained pending, and he eventually received
a discharge of his debts under 11 U.S.C. § 727(a).
Months later, the Chapter 7 trustee learned of the fraud. She
filed an adversary proceeding against Elliott in which she
requested, among other relief, a revocation of his discharge
under 11 U.S.C. § 727(d). As relevant here, §
727(d) provides that, upon the trustee's request,
"the court shall revoke a discharge granted under
subsection (a) of this section if . . . such discharge was
obtained through the fraud of the debtor, and the requesting
party did not know of such fraud until after the granting of
such discharge." 11 U.S.C. § 727(d)(1).
727(e)(1) sets the filing deadline for seeking relief under
§ 727(d)(1). It provides that "[t]he trustee, a
creditor, or the United States trustee may request a
revocation of a discharge . . . under subsection (d)(1) of
this section within one year after such discharge is
granted." 11 U.S.C. § 727(e)(1). The trustee does
not dispute that she filed her request for revocation of
Elliott's discharge more than one year (roughly 15
months) after the discharge was granted. ...