Neglecting A Deadline May Be Excusable

• Published date: 24 March 2022
• Subject Matter: Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy, Trials & Appeals & Compensation
• Law Firm: Cullen and Dykman
• Author: Mr Michael Traison and Amanda A. Tersigni

In prior client alerts, we have explained to non-lawyers the dual nature of our judicial system as both courts of law and equity.¹ The origin of this duality dates back to chancery courts in the middle ages where the church presided over certain matters. In some states, the distinction is still preserved while, for the most part, the two concepts of "law" and "equity" are merged into a unitary court system in the federal and state structures. When sitting as a court of law, a judge may look to equitable doctrines when mistakes in procedure are made to afford the opportunity for a just result.

Generally, filing deadlines must be strictly observed. However, on occasion, the failure to adhere to a deadline may be excused.² It is key for clients to appreciate the importance of deadlines that are statutorily guided or set by the courts. However, it is also important to recognize that if one misses a deadline, it may or may not be fatal.

In the state and federal court systems, including bankruptcy courts, failure to follow deadlines may arise in the context of filing claims, appeals, and a host of other pleadings and responses. Because courts prefer to hear matters on their merits, defaults are abhorred and normally, procedural deficiencies are secondary to decisions on the merits. See Rodriguez v. Village Green Realty, Inc., 788 F.3d 31, 47 (2d Cir. 2015) (citing Cargill, Inc. v. Sears Petroleum & Transp. Corp., 334 F. Supp. 2d 197, 247 (N.D.N.Y. 2004) ("Because of the preference to have issues and claims decided on their merits, rather than on the basis of a procedural shortcoming, the exclusion of otherwise relevant evidence on technical grounds is generally not favored..")).

Courts may consider factors relating to procedure and the interests of relevant parties when deciding whether the procedural deficiency of neglecting a deadline is excusable or whether it is so unforgivable that the court must give it more credence than waiting to hear the case on its merits.

Recent decisions highlight considerations of excusable neglect. In In re Westinghouse Elec. Co., LLC, Case No. 17-10751, 2022 WL 467797 (Bankr. S.D.N.Y. Feb. 15, 2022), the creditor moved the court for an order seeking relief from the administrative bar date and granting him permission to file a tardy administrative expense claim. This motion was filed more than three years after the deadline set by the court for filing administrative claims and more than two years after the creditor was notified...