by The one-year deadline for seeking revocation of a discharge order is not jurisdictional and may therefore be waived. Weil v. Elliott (In re Elliott), No. 16-55359 (9th Cir. June 14, 2017).
When Edward Elliott filed his chapter 7 bankruptcy petition he failed to mention one important asset: his home. He received a discharge under section 727(a). Fifteen months later, when the trustee discovered the fraudulent nondisclosure, she filed an adversary complaint seeking an order vacating the discharge under section 727(d)(1). Section 727(e)(1) permits a trustee to seek revocation of discharge within one year of the discharge order. Mr. Elliott did not raise the issue of untimeliness in his response to the adversary complaint. The bankruptcy court revoked his discharge. The Bankruptcy Appellate Panel, however, found the one-year filing deadline to be jurisdictional and reversed. Elliott v. Weil (In re Elliott), 529 B.R. 747, 755 (B.A.P. 9th Cir. 2015). On remand, the bankruptcy court dismissed the adversary complaint for lack of jurisdiction. The trustee was permitted direct appeal to the Ninth Circuit.
The Ninth Circuit addressed the difference between a jurisdictional time constraint and a statute of limitations noting that time constraints are considered non-jurisdictional unless Congress indicates otherwise. In this case, Congress gave the courts jurisdiction over revocation of discharge under Title 28 while the time limitation was placed in Title 11 thereby disconnecting the two provisions. The BAP erred in concluding that, under Kontrick v. Ryan, 540 U.S. 443 (2004), because the time limitation was contained in a statute rather than a rule, it was jurisdictional. While Kontrick found a deadline contained in a Rule was non-jurisdictional, it did not determine that all time limitations found in statutory provisions were jurisdictional and, in fact, other deadlines in the Bankruptcy Code have been found to be non-jurisdictional. The court found that, based on these considerations, the statute lacked the necessary indicia of jurisdictional intent.
Because Mr. Elliott waived challenge to the timeliness of the trustee’s motion and did not contest the bankruptcy court’s finding of fraud, the court reversed and remanded with an order to the bankruptcy court to reinstate its original revocation-of-discharge order.
Judge Christen concurred, adding that section 727(e)(1)’s time deadline was not a statute of repose which, like a jurisdictional time bar, would preclude an action after a specified period and not be subject to waiver. The revocation-of-discharge statute is a permissive provision directed toward the trustee rather than toward the powers of the court. Furthermore, statutes of repose are frequently associated with product liability cases and provide for lengthy periods within which a case may be brought. Here, Congress expressly contemplated revocation of discharge, notwithstanding the counter-policy of protecting the debtor’s fresh start, when that fresh start has been acquired by fraud.