In re Yoder Co.
758 F.2d 1114 (1985)
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Rule of Law:
Under Federal Rule of Evidence 301, the presumption that a properly mailed item was received by the addressee is a rebuttable 'bursting bubble' presumption, which is completely eliminated from the case once the opposing party introduces evidence of non-receipt.
Facts:
- Mark S. Bratton had a pending products liability lawsuit against the Yoder Company for the loss of four fingers.
- In 1981, Yoder filed for Chapter 11 bankruptcy protection.
- Yoder listed Bratton’s claim as a 'contingent, unliquidated and disputed' claim on its schedule of assets and liabilities.
- Yoder's employees prepared address labels for all listed creditors, including one for Bratton's attorney, A.T. Ornstein, to be used for mailing notice of the bar date (the deadline for filing claims).
- Ornstein testified under oath that he never received the notice of the bar date.
- Attorneys for two other products liability claimants also represented that they had not received the notice.
- Bratton filed his proof of claim approximately eight months after the court-ordered bar date had passed.
Procedural Posture:
- Yoder filed a petition for Chapter 11 bankruptcy in the U.S. Bankruptcy Court.
- The Bankruptcy Court established July 13, 1981, as the bar date for creditors to file proofs of claim.
- Bratton filed his proof of claim on March 15, 1982, after the bar date.
- Yoder applied to the Bankruptcy Court for an order to expunge (disallow) Bratton's late claim.
- After a hearing, the Bankruptcy Court found that notice had been sent and there was no excusable neglect for the late filing, and it issued an order barring Bratton's claim.
- Bratton, as appellant, appealed the Bankruptcy Court's order to the U.S. District Court.
- The District Court affirmed the Bankruptcy Court's decision, finding the presumption of receipt had not been rebutted.
- Bratton, as appellant, then appealed to the U.S. Court of Appeals for the Sixth Circuit against Yoder, the appellee.
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Issue:
Under Federal Rule of Evidence 301, does the legal presumption that a properly mailed notice was received by the addressee retain any evidentiary weight after the addressee introduces testimony of non-receipt?
Opinions:
Majority - Cornelia G. Kennedy
No. A presumption under Federal Rule of Evidence 301 has no probative effect once it is rebutted. The court adopted the 'bursting bubble' theory, holding that once evidence sufficient to support a finding of the nonexistence of the presumed fact is introduced, the presumption completely vanishes. Here, Bratton's attorney's testimony of non-receipt was sufficient to rebut the presumption of receipt. The lower court therefore erred by continuing to treat the presumption as evidence. The court found that Federal Rule of Evidence 301 embodies the Thayer or 'bursting bubble' theory, meaning the presumption only shifts the burden of producing evidence, not the burden of persuasion. Once Ornstein testified he did not receive the notice, the presumption disappeared, and the Bankruptcy Court should have weighed the evidence—the testimony of Yoder's mailing procedure against the direct testimony of non-receipt from Ornstein and circumstantial evidence of non-receipt from other claimants—without giving any evidentiary weight to the presumption itself.
Analysis:
This decision solidifies the Sixth Circuit's adoption of the 'bursting bubble' theory for presumptions under Federal Rule of Evidence 301. It clarifies that a presumption is not evidence in itself but merely a procedural tool to shift the burden of production. By holding that testimony of non-receipt is sufficient to rebut the presumption of receipt, the case makes it easier for parties claiming non-receipt of notice to get their evidence considered on its merits. This holding has significant implications for bankruptcy and other administrative proceedings where notice by mail is standard procedure, as it prevents courts from automatically favoring the party that mailed a notice over credible testimony of non-receipt.
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