Appeal from an order of the District Court for the Southern District of New York, Leonard B. Sand, Judge, denying a motion by appellants for an extension of the time for filing a notice of appeal on the ground of excusable neglect.
Feinberg, Chief Judge, and Friendly and Pratt, Circuit Judges.
This appeal concerns an order of Judge Sand, in the District Court for the Southern District of New York, which denied appellants' motion under F.R.A.P. 4(a)(5) for permission to file an out-of-time appeal on the ground of excusable neglect or, in the alternative, for relief from that order under F.R. Civ. P. 60(b).
The action is an adversary proceeding brought in the Bankruptcy Court for the Southern District of New York by James P. Hassett, the Chapter 11 trustee of OPM Leasing Services, Inc. (appellee), to recover from Far West Federal Savings and Loan, Euramlease, Inc. and Henry L. Bauer as trustee for Euramlease (appellants) certain sums allegedly obtained through fraudulent conveyances, preferences or postpetition transactions. On May 18, 1984, Bankruptcy Judge Lifland filed a 60-page decision and order awarding appellee recovery of various sums totaling approximately $1 million, 40 Bankr. 380; judgment was entered on June 8, 1984, and on June 18 the appellants appealed to the District Court.*fn1 Extensive briefs were filed, and oral argument was heard by Judge Sand on November 21. At the oral argument, Judge Sand granted appellants' motion to enlarge the record on appeal with the consent of appellee. The consent order was entered on November 23, and shortly thereafter appellants' trial counsel*fn2 received a postcard from the clerk's office advising them of this entry. On November 28, notice appeared also in the New York Law Journal, where it was found by a paralegal employed by appellants' trial counsel who had been assigned the responsibility of checking the Law Journal each day for reports of decisions in the firm's pending cases. On December 4, 1984, Judge Sand filed a two-page opinion and order, reported at 44 Bankr. 1023 (S.D.N.Y. 1984). Finding it necessary to discuss only one of the points raised by appellants, he concluded that "this contention as well as the other arguments advanced by appellants must be placed in the context of the true relationships among the parties at the time of the actual and purported transactions," that "these were correctly analyzed and characterized by the court below," and that its rulings should therefore be affirmed. 44 Bankr. at 1023. On the same day there was filed a stipulation and order enlarging the record on appeal to include an additional exhibit. The district court's docket sheet contains entries describing both these orders dated "12-4-84," and the New York Law Journal of December 7, 1984, reported that there were "orders signed" in the case on December 4. It does not appear that either side received a postcard from the clerk's office notifying them of the December 4 affirmance. Judge Sand found, however, that "pursuant to the standard practices in chambers, copies of the Opinion were mailed to the attorneys for all parties . . . ." Counsel for appellee received their copy on December 6; trial counsel for appellants alleged that they never received a copy.
The 30-day period provided in F.R.A.P. 4(a)(1) for the taking of an appeal expired on January 3, 1985, without any appeal having been taken. Cf. F.R.A.P. 26(a). On January 9, appellants' trial counsel hand delivered a letter to Judge Sand, with a copy to opposing counsel, calling attention to a decision rendered by this court on December 20, 1984, which was thought to be relevant. This produced a telephone call from the judge's chambers on January 10 informing trial counsel that the case had been decided on December 4. On January 14, 1985, trial counsel moved under F.R.A.P. 4(a) (5)*fn3 for permission to file an out-of-time notice of appeal. In the alternative, trial counsel requested that the court relieve appellants from the December 4 order under F.R. Civ. P. 60(b) (6) and enter a new order, thus beginning a new 30-day time period for filing a notice of appeal. The motion was argued on January 24, 1985, and denied in an opinion filed January 30, 1985. This appeal followed.
Appellants' case can be summarized as follows: Trial counsel allegedly did not know of the December 4, 1984 order until their letter of January 9, 1985, triggered the telephone call from Judge Sand's chambers on January 10. They assert that no notice of entry was mailed by the Clerk's office as required by F.R. Civ. P. 77(d). This is corroborated by the failure of appellee's counsel to receive any such notice and is explained by an apparent practice whereby Judge Sand's docket clerk would not send notice of entry whenever the Judge's secretary sent copies of the opinion to counsel, as she was instructed to do. Appellants do not dispute that Judge Sand's secretary mailed copies of the opinion to counsel for all parties in this instance, as Judge Sand permissibly found.*fn4 Trial counsel asserted rather that no copy was ever received by them, and the judge, for purposes of decision, assumed this to be true; we shall do the same here. No affidavit was submitted by the paralegal who was in charge of checking the Law Journal in the office of appellant's trial counsel. Appellants' trial counsel averred that the paralegal could not account for having missed the notice published in the Law Journal on December 7. Counsel offered as a possible explanation that the Law Journal of that date contained decisions handed down on December 3, 4 and 5;*fn5 that the December 3 decisions included one by Judge Sand on a different matter; and that, having seen this, the paralegal might not have noticed that in addition to the partial list of decisions of December 3, the Law Journal went on, immediately following, with two columns of December 4 decisions, including four by Judge Sand, and more than a column of December 5 decisions.*fn6 To explain why he failed to check the court's docket sheet or to contact Judge Sand's chambers during this period, counsel suggested that he could not reasonably have anticipated that Judge Sand would decide the case as speedily as he did. Counsel called attention to the length of time the bankruptcy court had taken to decide the case and the length of its opinion; the size of the record and of the briefs;*fn7 the size of the judgment (after interest, more than $1,200,000); the approach of the Thanksgiving, Christmas and New Year holidays; the lack of urgency in deciding the appeal since it had been fully bonded and had been on the district court's docket less than four months; and the presence of what allegedly was an issue of first impression and public importance. For these reasons counsel expected that the case would not be decided until at least after the beginning of the New Year, i.e., five or six weeks after the argument rather than the 13 days it actually took.
Appellee relies in opposition on the principle established by many cases, of which it suffices to cite Lowry v. Long Island R.R., 370 F.2d 911, 912 (2 Cir. 1966), and Fase v. Seafarers Welfare & Pension Plan, 574 F.2d 72, 77 (2 Cir. 1978), and not disputed by appellants, that the standard for review of a district court's refusal to extend the time to take an appeal is "abuse of discretion." See generally 9 Moore's Federal Practice para. 204.13 (2d ed. 1985). Appellee argues that Judge Sand did not abuse his discretion in denying appellants' motion. Appellants' position is not that the district judge abused his discretion but that he declined to exercise it because of an erroneous belief that precedents deprived him of any. They urge that we either grant the requested leave or remand to the district judge to take action free from the trammels he improperly imposed upon himself.
In light of the dispute over what the district judge did, we must analyze his opinion with care. After stating the facts, Judge Sand first addressed appellants' claim that they reasonably did not anticipate a decision by him until some time in 1985. He disposed of this by saying
filing deadlines are intended to present clear lines of demarcation and if a subjective, even if reasonable, estimate of the length of time it would require a court to decide a matter would constitute "excusable neglect," all semblance of certainty would vanish from the rules.
Clearly this was a rejection because the judge considered the argument to be without merit, not because he considered himself to be without power to consider it.
The judge then turned to appellant's argument based on failure to receive notice or a copy of the December 4 order. Quoting the language in F.R. Civ. P. 77(d) that "lack of notice of the entry by the clerk does not affect the time to appeal or relieve or authorize the court to relieve a party for failure to appeal within the time allowed, except as permitted in [F.R.A.P. 4(a)],"*fn8 Judge Sand concluded that
even if we assume, as we do for these purposes despite the substantial evidence to the contrary, that no notice was mailed, this would ...