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

Concurrence — Fernandez

FERNANDEZ, Circuit Judge, 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, *929willful, 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 federal courts do prefer to leave themselves flexibility, and that they are loath to hold that laches does not apply at all. They imagine, nay envision, a whole host of possibilities wherein someone should be protected against dilatory and prejudicial filings. In general, that is unexceptional, and when nothing in particular stands in its way, it is probably even laudable. But something does stand in the way here.

That something is the phrase of art “at any time,” and that makes all the difference ih the world. Here is what the Supreme Court had to say about a statute containing that phrase:

The words which Congress has used are not ambiguous. Section 2255 provides that: “A prisoner in custody under sentence ... claiming the right to be released ... may move the court which imposed the sentence to vacate, set aside or correct the sentence.” The statute further provides: “A motion for such relief may be made at any time.” This latter provision simply means that, as in habeas corpus, there is no statute of limitations, no res judicata, and that the doctrine of laches is inapplicable.

Heflin v. United States, 358 U.S. 415, 420, 79 S.Ct. 451, 454, 3 L.Ed.2d 407 (1959) (Stewart, J., concurring1) (emphasis omitted). That seems plain enough. Of course, a habeas-corpus like statute (which § 2255 is) can be considered unique, and that is underscored by the absence of the possibility of res judicata effect. But that is not the only place where “at any time” has been given a rather restrictive interpretation. In the Lanham Act area it is also been declared thaf’at any time” excludes the use of the defense of laches. See Marshak v. Treadwell, 240 F.3d 184, 193 n. 4 (3d Cir.2001). And to get closer to the heart of the case at hand, the views of bankruptcy judges have, by and large, been the same.

In In re Lyman, 166 B.R. 333, 337 (Bankr.S.D.Ill.1994), for example, the court rejected the debtor’s argument that a dis-chargeability complaint “should be dismissed pursuant to the equitable doctrines of laches or estoppel since plaintiffs did not file their complaint until one year after receiving notice of debtor’s bankruptcy case.” The court did so because Rule 4007(b) expressly states that the complaint can be filed at any time. Id. That is to say, where a debtor has not listed a creditor, he loses the “ ‘jurisdictional and time limit protections’ ” that he would otherwise have. Glosser v. Parrish Real Estate (In re Grant), 160 B.R. 839, 844 (Bankr.S.D.Cal.1993) (citation omitted). Other *930bankruptcy cases are to the same effect. See Moberly v. Johnston (In re Moberly), 266 B.R. 187, 190 (Bankr.N.D.Cal.2001) (Rule 4007(b) complaint can be filed at any time and is not barred by laches. “Equitable principles are not a basis for rulings contrary to the Bankruptcy Code or the Federal Rules of Bankruptcy Procedure.”); see also Irons v. Santiago (In re Santiago), 175 B.R. 48, 52 (B.A.P. 9th Cir.1994).

The good sense in this approach is underscored by the discussion in Beezley v. California Land Title Co. (In re Beezley), 994 F.2d 1433 (9th Cir.1993) (per curiam). There, after a brief meditation on a very closely related area of the law and on congressional purpose, the following appears:”What Congress. deemed a proper balancing of the equities as between debt- or and creditor -with respect to unlisted debts it has enacted in section 523(a)(3) of the Bankruptcy Code. It is not for the courts to restrike that balance according to their own lights.” Id. at 1440 (O’Scann-lain, J., concurring). • That is true here also. Had Congress desired to have the balance struck by § 523(a)(3)(B) and Rule 4007(b) to be affected by our notions of equity as manifested in the doctrine of laches, it could have insisted on language less immune to those notions than “at any time.”

As many a keep defender discovered to his dismay, the strongest fortress can be weakened by those who tunnel under it. I decline Beaty’s invitation to participate in weakening Rule 4007(b)’s donjon.

Thus, I respectfully concur in the result only. ■ . Justice Stewart was joined by four other justices.