Alaska Employment Law

Excusable neglect by attorney:  U. S. Judge Ralph Beistline has affirmed Bankruptcy Judge Donald MacDonald’s denial of a motion to file a late appeal.  Chapter 13 bankrupts had sued mortgagees-in-possession for damages to the premises, and were dissatisfied with the Bankruptcy Court’s judgment.   The bankrupts filed their notice of appeal, and motion for leave to file a late appeal, within the 20-day period that follows the 10-day appeal period in bankruptcy, during which late appeals may be honored upon a showing of excusable neglect. MacDonald found that the bankrupts failed to show excusable neglect.  The bankrupts relied on their attorney’s admitted inexperience with bankruptcy law.  

On appeal, Beistline first rejected the bankrupts’ attempt to rely on two impermissible factors: a) a supposed policy against penalizing a client for the mistakes of an attorney; and  b) the merits of the underlying claim.  

Beistline then looked at the four factors in Pioneer Inv. Svcs. Co. v. Brunswick Assoc. Ltd P’ship, 507 US 380 (1993), and held that MacDonald had not abused his discretion in denying the motion.

Beistline reasoned:

In this case, counsel acknowledging his inexperience in bankruptcy, attempted to consult an experienced bankruptcy attorney, indeed a laudable action on his part. Unfortunately, when he was unable to reach that attorney until after the appeal time had lapsed because of the attorney’s absence, counsel, relying on his assumption that the time to file an appeal was the usual 30 days permitted in civil actions, awaited his return. Inexplicably, notwithstanding the clear inference of his own misgivings concerning that assumption as evidenced by his attempt to contact experienced counsel, counsel did nothing in the interval to ascertain the time within which an appeal was required to be filed. Counsel provided no reason why he could not have consulted the Federal Rules of Bankruptcy Procedure, which are available in the Court’s library in Fairbanks, and the State Court Library, as well as on-line,[fn 22] or even consulted other experienced bankruptcy attorneys.

As was the Ninth Circuit in Pincay and Speiser, had the bankruptcy court decided the other way, this Court might be hard pressed to find any rationale requiring reversal. It may well have even ruled differently. The question, however, is not how this Court may have ruled in this case, or even in like or similar circumstances; the question is whether the bankruptcy court abused its discretion in denying the Dennises leave to file a late appeal. This Court cannot, under the facts and circumstances presented in this case, find that the bankruptcy court abused its discretion.

Footnote 22 reads:

With the plethora of information available without charge on the internet, including official judicial websites, one might properly deem the failure of counsel to check applicable court rules of practice and procedure gross negligence.

Okray v. Dennis, 2009 WL 2448038 (D.Alaska Aug. 7, 2009).  Thomas Wickwire from Fairbanks represented the bankrupts.  Erik Leroy from Anchorage represented the mortgagees.

Attorney fees: U. S. Judge John Sedwick has denied a flight-seeing charter’s motion for attorney fees after it successfully defended itself from the IRS suit for Aviation Fuel Excise taxes.  Sedwick held that the government’s position was “substantially justified” because it relied on the only judicial decision applying the AFE tax to tour operators (though the opinion was distinguishable on the facts) and because the IRS had engaged in substantial communications with the tour operator before filing suit.  Attorney fees in tax litigation are governed by 26 USC § 7430(a).  Northstar Trekking LLC v. U.S., 2009 WL 244997 (D.Alaska Aug. 10, 2009).  H. Clay Keene of Ketchikan represented the tour operator.  DOJ counsel from DC represented the IRS.