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Buffalo Bankruptcy Court To Allow Limited Default Motions

The bankruptcy court for the Western District of New York is organized in two separate divisions: Rochester and Buffalo. The judges in each division determine their own court practice for the scheduling of motions, such as motions to remove a lien against the debtor's house or a motion to approve the sale of a bankruptcy asset. Most motions require a written application and a hearing before the bankruptcy judge assigned to the case.

When the previous bankruptcy judge in Rochester, the Hon. John C. Ninfo II, took the bench in 1992, he recognized that most of the motions in bankruptcy were routine and uncontested. The Motion hearing calendar was full of cases where nobody appeared in opposition. Judge Ninfo started a procedure known as the "default motion" calendar. When a "default" motion is filed, the notice of motion sets up a time, date and place for a hearing on the motion, but then says that no hearing will actually be held unless some party opposes the motion or otherwise requests a hearing ahead of time. If there is no opposition, the attorney who has made the motion does not have to go to court on the hearing date, saving time and money for routine motions.

From the beginning, these default motions were only allowed in the Rochester Division; in Buffalo cases attorneys still had to appear on all motions even if there was no opposition. That appears to be changing, at least a little.

Attorneys in the Rochester Division (which includes motions heard in Watkins Glen, NY) generally loved default motions; it saved a trip to downtown Rochester or the Schuyler County (Watkins Glen) Courthouse for approval of routine uncontested motions. With fewer and fewer attorneys having offices in the "Four Corners" of Downtown Rochester, trips to the courthouse were a significant burden.

Another advantage of the default motions was that the motions that were being heard by the court were the ones that were actually being opposed. Court time was being used more efficiently.

But apparently the two bankruptcy judges in Buffalo did not view default motions as the best practice. In their view, shared with the attorneys attending the Western New York Bankruptcy Conference in Batavia last May, default motions took much more time for the court to review. Without an appearance before the judge by the attorney making the motion, the judge and his law clerk would have to spend much more time reviewing each motion, to make sure all the legal standards were met. A motion was not automatically granted just because no other party objected; the judge must independently determine that the party making the motion is entitled to have their motion granted.

In any case, default motions have been used extensively in Rochester and not at all in Buffalo. That may be changing, at least a little bit. In a notice form the Bankruptcy Court Clerk dated September 14, 2012, a limited default practice will be allowed in Buffalo (and the satellite motion locations of Batavia, Mayville, Niagara Falls and Olean, where the Buffalo bankruptcy judges also hear motions).

First, two motions may be made "ex parte", that is, without a hearing or notice to any other party: 1) an application to reopen a chapter 7 case for any reason other than to add an asset or creditor, and 2) an application to approve a mortgage modification agreement.

Secondly, three types of motions now may be submitted "on the papers". For these motions, the notice served on other parties must still list a time and date for a hearing, but the notice may request that the motion be decided "on the papers" if thgat request is noted conspicuously on the Notice of Motion. These three "on the papers" motions are 1) debtor motion to avoid a judicial lien (unless the judgement creditor is a natural person); 2) creditor motion to lift the automatic stay as to property the debtor has filed a statement of intention to surrender the asset back to the secured creditor and 3) creditor motion to lift the automatic stay as to property the debtor, in a chapter 13 case, has listed as being surrendered to the secured creditor in the debtor's chapter 13 plan.

If a motion is filed "on the papers", the attorney who is making the motion is required to check the online docket prior to the hearing date and time to see if opposing papers have been filed; if so, the motion attorney should either appear and argue the motion at the originally-scheduled hearing date or arrange with the opposing party for an adjourned hearing date.

The clerk's notice of September 14 does not specify the wording of the "on the papers" notice, nor how soon before the hearing date and time the moving attorney needs to check the docket to see if opposition has been filed. In contrast, the Rochester default motion practice has very specific requirements for time of service of the motion, time of service and filing for opposition papers, and wording of the "default notice." Also, default motions in Rochester often must include a mandatory "cover sheet", summarizing the relief reqauested in the motion (examples: lift stay cover sheet and asset abandonment cover sheet.)

My suspicion is that this is an exploratory move toward default motions; that based on the outcome of this process, the Buffalo judges may expand it, or, if unsatisfactory, reduce or eliminate it.

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Peter R. Scribner, Esq | 1110 Park Avenue | Rochester, New York 14610
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