Kontrick v. Ryan
540 U.S. 443 (2004)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A deadline for filing an objection to a debtor's discharge in bankruptcy, as prescribed by the Federal Rules of Bankruptcy Procedure, is a non-jurisdictional, claim-processing rule. Consequently, the defense that an objection is untimely is forfeited if not raised before the court adjudicates the merits of the objection.
Facts:
- Dr. Andrew J. Kontrick filed a Chapter 7 bankruptcy petition.
- Dr. Robert A. Ryan, a major creditor and Kontrick's former business associate, opposed the discharge of Kontrick's debts.
- Ryan alleged that Kontrick had engaged in fraudulent transfers to his wife's bank account to shield assets from creditors.
- Specifically, Kontrick had removed his own name from a joint family checking account but continued to deposit his salary checks into it.
- These deposits continued into the one-year period preceding the bankruptcy filing, and Kontrick's wife used the funds to pay family expenses.
Procedural Posture:
- Dr. Ryan, a creditor, filed a complaint in Bankruptcy Court objecting to Dr. Kontrick's discharge.
- After the court-approved deadline had passed, Ryan filed an amended complaint adding a new 'family-account' claim without seeking a further extension of time.
- Kontrick answered the amended complaint but did not raise the defense that the new claim was untimely.
- After discovery, the Bankruptcy Court granted summary judgment for Ryan on the 'family-account' claim, denying Kontrick's discharge.
- Kontrick then filed a motion for reconsideration, arguing for the first time that the Bankruptcy Court lacked 'jurisdiction' over the claim because it was filed outside the deadline set by Bankruptcy Rule 4004.
- The Bankruptcy Court denied the motion, holding that the time limit was not jurisdictional and that Kontrick had forfeited the defense by failing to raise it earlier.
- Kontrick (as appellant) appealed to the U.S. District Court, which affirmed the Bankruptcy Court's decision.
- Kontrick (as appellant) then appealed to the U.S. Court of Appeals for the Seventh Circuit, which affirmed the District Court's judgment.
- The U.S. Supreme Court granted Kontrick's petition for a writ of certiorari to resolve a circuit split on the issue.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a debtor forfeit the right to rely on the time limitation in Bankruptcy Rule 4004 if the debtor fails to raise the issue before the bankruptcy court reaches the merits of a creditor's objection to discharge?
Opinions:
Majority - Justice Ginsburg
Yes. A debtor forfeits the right to rely on the time limitation in Bankruptcy Rule 4004 if the defense is not raised before the court reaches a decision on the merits of the creditor's objection. The Court clarified the distinction between jurisdictional rules, which are created by Congress and determine a court's authority to hear a case, and claim-processing rules, which are court-prescribed rules for the orderly progression of litigation. Jurisdictional defects can be raised at any time, but claim-processing rules, even if mandatory and inflexible, can be forfeited if not timely asserted. Rule 4004's filing deadline is a claim-processing rule that provides an affirmative defense of untimeliness. Like other affirmative defenses, it must be raised in a responsive pleading or it is lost. To allow a litigant to wait until after an unfavorable merits decision to raise such a procedural defect would undermine judicial efficiency and the finality of judgments.
Analysis:
This decision provides critical clarity on the difference between jurisdictional rules and non-jurisdictional claim-processing rules, discouraging the imprecise use of the term 'jurisdictional.' It establishes that even mandatory time limits set by court rules are subject to forfeiture, reinforcing the principle that parties must timely assert their defenses or lose them. The ruling promotes judicial efficiency by preventing litigants from 'sandbagging'—withholding a procedural objection until after receiving an adverse ruling on the merits. This holding will likely influence how courts treat similar filing deadlines across various areas of federal practice, emphasizing procedural diligence.
Unlock the full brief for Kontrick v. Ryan