In re SPRING FORD INDUSTRIES, INC., aka Spring Ford Knitting Company, Inc., Chapter 11, Debtor SPRING FORD INDUSTRIES, INC., aka Spring Ford Knitting Company, Inc., Plaintiff, V. FEDERATED MERCHANDISING GROUP, Defendant

Bankruptcy No. 02-15015DWS, Adversary No. 03-0212United States Bankruptcy Court, E.D. Pennsylvania.
March 10, 2004

Paul B. Maschmeyer, Esquire, Camille Spinale, Esquire, CIARDI, MASCHMEYER, KARALIS, P.C., Philadelphia, PA, for Debtor

Charles M. Golden, Esquire, Michael D. Vagnoni, Esquire, OBERMAYER REBMANN MAXWELL HIPPEL LLP, Philadelphia, PA, for Defendant

Dave P. Adams, Esquire, Office of the U.S. Trustee, Philadelphia, PA, for UNITED STATES TRUSTEE

DIANE SIGMUND, Bankruptcy Judge

Before the Court is the Motion to Set Aside Judgment and to Extend Time to File Demand for Trial De Novo (the “Motion”).[1] For the reasons set forth below, the Motion is denied.

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The facts are not disputed. The above captioned adversary proceeding was designated for participation in the mandatory arbitration program administered by the District Court for the Eastern District of Pennsylvania pursuant to Local District Court Rule 53.2 (“Local Rule”). According to the docket of which I take judicial notice, Fed.R.Evid. 201, an arbitration hearing originally scheduled for September 8, 2003 was rescheduled for October 22, 2003 by stipulation of the parties. Doc. No. 8 and 11. The arbitration was held as rescheduled, and an award in the amount of $46,702.37 was entered the same date in favor of Plaintiff. Doc. No. 19. Since no evidence was elicited at the hearing, I am unaware of whether the arbitrators announced their decision at the conclusion of the hearing as they frequently do or merely issued the award later that day. It is undisputed that while the award was docketed, it was never served by mail by the Clerk of the Bankruptcy Court.[2] Attorneys who are registered users of the Court’s electronic case filing system (“ECF”) would receive notice of the entry of the award with a hyperlink to the document. However, the Clerk advises that no electronic notice would have been provided in this case,[3] and the affidavits of all of Defendant’s attorneys verify that none was received. Affidavits of Charles

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M. Golden, Esquire, Michael Vagnoni, Esquire, Tracey Thomas Boland, Esquire and Barry J. Rubenstein, Esquire.

Under Local Rule 53.2(7), any party may demand a trial de novo “within thirty (30) days after the arbitration award is entered on the docket” by serving a written demand upon all counsel of record and depositing a fee with the Clerk of Court No written demand for a tria de novo was made nor fee paid, and I entered judgment in accordance with the arbitrator’s award on December 9, 2003. Defendant’s counsel claims to have become aware of the entry of the award when Plaintiff’s counsel contacted him for payment on or around December 4, 2003.[4] The Motion was filed on December 23, 2003 seeking to set aside the judgment and extend the time to demand a trial de novo.
Plaintiff, not unexpectedly, opposes the request.


Local Rule 53.2(7) provides that a trial de novo must be demanded within thirty days after the award is entered on the docket.[5] Thus, the running of the demand period commences upon entry of the award on the public docket, not its service on the party. There is no dispute that the demand period had expired without a demand being made by

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the Defendant. Defendant appears to assume that lack of service which has been proven requires the relief it seeks for it cites no authority in support of its Motion.[6]

Bankruptcy Rule 9006(b)(1) contemplates the extension of time restrictions for various acts.[7] Under this provision, the court has discretion to extend most time periods “for cause shown.” Where, as here, a party seeks to act after the prescribed time has already expired, an extension may be available only if the failure to act during that period was the result of “excusable neglect.” Presumably if excusable neglect is found for the late filing of the demand for trial de novo, it will also support setting aside the judgment as F.R.Bankr.P. 9024, incorporating Fed.R.Civ.P. 60(b)(1), allows a court to relieve a party from a judgment for excusable neglect. Martas v. Zaro’s Bake Shop,Inc., 2002 WL 126799, at *4 (E.D.N.Y. March 29, 2002) (same standard of “excusable neglect” applies under Rule 60 and Rule 6(b)[8] of the Federal Rules of Civil Procedure).

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My research uncovered several Eastern District of Pennsylvania cases presenting the identical motion, i.e., seeking relief from judgment and leave to file a demand for trial de novo out of time under Local Rule 53.2(7). In Argentina v. Mycone Dental SupplyCompany, Inc., 2003 WL 22359658 (E.D. Pa. August 28, 2003), the movant had served its demand on its adversary and proceeded to take discovery as though the demand had been made but inexplicably the court had no record of the demand ever being filed. When it learned that the demand had not been filed it moved promptly by filing the motion which was granted, the court finding that defendant’s belief that it had filed the demand, its service of the demand document on the plaintiffs, its commencement of discovery and its payment of the filing fee warranted relief. Argentina cited to Esteves v. Bondy, 189 F.R.D. 148 (E.D. Pa. 1998), in which the proffered reason for the late filing was counsel’s belief that his client would accept the award, a justification the court found not to constitute excusable neglect for not filing a timely demand. In reaching its conclusion, the Esteves
court relied on the Third Circuit’s definition of what constitutes excusable neglect as set forth in Dominic v. Hess Oil V.I.Corp., 841 F.2d 513, 517 (3d Cir. 1998).[9] Seealso Rush v. Lazaroff, 1992 WL 334035

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(E.D. Pa. Nov. 6, 1992) (one day late filing excused so as to avoid an unjust forfeiture even though excuse was “paltry”); Pizzichil v.Motors Ins.Corp., 90 F.R.D. 119 (E.D. Pa. 1981) (even though mail delay was not a meritorious excuse, demand filed two days late was allowed on equitable grounds). While the facts of these cases are clearly distinguishable, they are useful in demonstrating that the excusable neglect standard is the appropriate touchstone for my analysis. However, its application in the cited cases led to an easier resolution since in each the delay was de minimus.

Closer to the facts at hand is the Martas case decided by the Eastern District of New York adopting the report and recommendations of the magistrate judge. 2002 WL 1267999 supra. Notably the local rule applied in Martas is the same as Local Rule 53.2 at issue in this case,[10] and the factors used to interpret excusable neglect were the factors enunciated by the Third Circuit Court of Appeals inHess Oil, supra and adopted by the District Court of the Eastern District of Pennsylvania in Esteves v. Bond, supra. InMartas, the arbitrator’s award

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was entered on the docket on March 21, 2001. No demand for a tria de novo had been lodged by April 20, 2001, the final date for doing so, and a judgment was entered almost two weeks later on May 2, 2001. Also on May 2, 2001, plaintiffs filed and served a fee application upon defendants, indicating their understanding that a judgment had been entered. Defendant also was served on May 2 with the court’s order setting a briefing schedule on the fee application. On May 18, 2001 defendant submitted a letter, indicating that it always intended to request a trial de novo but it had never received notice from the Clerk of Court that the award had been docketed.

The Martas Court began its analysis as I do with the recognition that the 30 day period is subject to enlargement by the court at its discretion where the failure to act was the result of excusable neglect. Id. at *2-3. See also CNAFinancial Corp. v. Brown, 162 F.3d 1334, 1336 (11th Cir. 1998) (time limit for seeking trial de novo not jurisdictional). Defining the movant’s burden as needing to demonstrate both good faith and a reasonable basis for not acting within the specified period, it concluded that the defendant had failed to present any basis upon which to excuse its failure to make a timely demand. Id. at *4. I quote at some length from the court’s decision since it addresses the precise considerations informing my analysis of these similar facts.

Although defendant relies on lack of notice to excuse its failure to make a timely demand for a new trial, a review of Local Rule 83.10 demonstrates that there is no provision in the Local Rules for service of the notice of the award upon the parties or their counsel. Local Rule 83.10; see also Pizzichil v. Motors Ins. Corp., 90 F.R.D. at 121. Moreover, unlike some statutorily defined time periods which start to run from the date of receipt of notice, . . . under the Local Rule here, “[i]t is the filing of the arbitrators’ award which triggers the running of the time for filing the demand for trial de novo.”

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Pizzichil v. Motors Ins. Corp., 90 F.R.D. at 121.
Rule 77 of the Federal Rules of Civil Procedure requires the clerk of court “[i]mmediately upon the entry of an order or judgment” to serve notice of the entry upon each party by mail. Fed.R.Civ.P. 77(d). The Rule explicitly states, however, “lack of notice of the entry by the clerk does not affect the time to appeal or relieve or authorize the court to relieve a party for failure to appeal within the time allowed.” (Id.) The Second Circuit has consistently held that “the mere failure of the clerk to give the parties notification that judgment has been entered does not provide grounds for a finding of excusable neglect nor warrant an extension of time to appeal.” [citations omitted].
Indeed, the courts have generally required “a showing that counsel has diligently attempted to discharge the duty implicit in Fed.R.Civ.P. 77(d) by making inquiries to discover the status of the case.” [other citations omitted]. As the court noted in Mennen Co. v. Gillette Co., “it is customarily the duty of trial counsel to monitor the docket and to advise himself when the court enters an order against which he wishes to protest.” 719 F.2d at 570 (citations omitted). “In sum, a party must show an affirmative if ultimately fruitless effort to track the progress of its litigation, not merely an acceptable excuse for failure to do.”
Nowhere in its submissions in this case has defendant explained why it was unable to check the docket sheet of the Court to determine if the award had been entered, [citation omitted], nor does defendant explain why it had reason to believe that the award would not be entered promptly so as to justify a failure to inquire for 45 days. Moreover, there has been no showing in this case of any action on the part of the court or its officers to mislead defendant or impede its ability to ascertain the status of the case, [citation omitted]. Certainly, plaintiffs’ counsel was aware of the filing of the award, the date by which the time to request a new trial was to expire, and the entry of the judgment.
Furthermore, even after learning of the entry of judgment, defendant did not promptly move for relief. Not only was there a failure to check with the Clerk of Court to determine if the award had been entered, but once counsel discovered that judgment had been entered, he nevertheless waited, by his own admission, for at least one week before sending a short letter to the Court requesting a trial de novo. Since that time, defendant has never filed a Rule 60(b) motion, nor has it deposited with the Clerk of Court the amount equal to the arbitration fees as provided in Local Rule 83.10(h)(4), as a condition for

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proceeding with a trial de novo,
Unlike some cases where an extension of the time to file has been granted in part because the delay was negligible, see, e.g., Pizzichil v. Motors Ins. Corp., 90 F.R.D. at 121-22 (delay of two days); Wolfsohn v. Raab, 11 F.R.D. 254, 255
(E.D. Pa. 1951) (delay of one day); but see Bazaar v. Peck, 1996 WL 755404, at *1 (denying extension where delay of three days), here, the delay between the expiration of the date for filing the request for trial de novo and defendants’ letter requesting relief was just two days short of a month. This additional delay, coupled with counsel’s lack of diligence in monitoring the docket, does not merit an exercise of the court’s discretion to extend the time to request a new trial.

Id. at *4-5. In short, the Court concluded that the fact that counsel did not receive notice of the docketing of the award, did not constitute a basis for finding excusable neglect under either Rule 60 or Rule 6(b) where counsel apparently failed to check the docket and then failed for over a week to seek relief from the Court after learning of the entry of the judgment. The motion for leave to file a request for a trial de novo was accordingly denied.

The circumstances presented here offer an equally uncompelling basis to grant relief. The award was issued the same day as the arbitration, October 22, 2003 consistent with the requirement that the award be filed “promptly” after the trial is concluded. Rule 52.3(6). Whether it was announced by the arbitrators at the end of the hearing is unknown but it was entered on the docket on October 27, 2003. On November 14 and 19, approximately three weeks after the arbitration hearing, the Defendant, by its own admission offered counter intuitively in support of the Motion, pressed certain pre-arbitration discovery requests of the Plaintiffs. Rubenstein Affidavit ¶ 11-13.[11] I infer from the post-arbitration pursuit of

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unanswered discovery that Defendant most likely knew it had not prevailed at the hearing yet it took no action to demand a trial de novo or even check to see if the award had been docketed.

Defendant first learned of the entry of the award on December 4, 2003 when Plaintiff sent a letter requesting payment. Id. ¶ 14. Defendant still did not check the docket. Had it done so, it would have learned that the judgment had not yet been entered. Thus, Defendant had the ability but did nothing to attempt to foreclose that result. Consequently, the judgment was entered pursuant to the Local Rule on December 11, 2003, two weeks after the demand bar date. It was not until December 23, 2003, almost three weeks after it learned that the award was issued and that a judgment would be entered as a matter of course that Defendant filed the Motion. It is that laxity that most undermines the merits of the Motion.

I agree with the Martas court that where a party knows that a ruling is imminent, as here because the arbitrators are required to rule promptly, and where a filing period

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commences on docketing, not service, it has a duty to periodically check the court docket. This step could not be easier given the availability of such information to both local and general counsel through PACER and this Court’s web site. However, I note that the cases that Martas relies upon as authority that lack of service does not constituted excusable neglect where the docket would have revealed the entry of the order arise in the context of late-filed appeals. While Defendant has not suggested as much, I nonetheless question whether relief from the finality of an appeal may not require a higher threshold of excusable neglect than relief from the finality of an arbitration award where the party has not had a trial presided over by a judicial officer. Were failure to check the docket for the award the sole evidence of Defendant’s neglect, I might consider exercising my discretion to allow the late-filed demand. However, Defendant continued to take no action to make a demand even after it knew the award was entered. After December 4th, lack of service by the Court simply was no longer the reason for Defendant’s failure to demand the trial de novo. Upon receipt of the letter from Plaintiffs’ counsel, a check of the docket would have revealed that no judgment had been entered. All that was necessary was a written notification of such demand and the entry of the judgment might have been prevented. In this case Defendant had a two week grace period beyond the 30 days and still did nothing. Instead Defendant waited three more weeks to present this Motion.[12]
As the Martas court stated, this additional delay and the lack

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of diligence in monitoring the docket simply do not support a finding that Defendant’s neglect was excusable.

As noted above, considerations of “prejudice to the [nonmovant], the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith” inform the court’s excusable neglect analysis. Cendant.233 F.3d at 195 (quoting Pioneer. 507 U.S. at 395, 113 S.Ct. at 1489). While I have no basis to doubt the Defendant’s good faith, delay in this case also militates against Defendant. This is a Chapter 11 case, the plan of reorganization of which was confirmed on November 26, 2002. The award is an asset of the estate that will be distributed to creditors under the plan. Unlike the facts of Pioneer, which concerned the late filing of a proof of claim in the beginning stages of a Chapter 11 case, Debtor’s case here is coming to a close, making delay relevant to all parties affected by the bankruptcy. See Pioneer, 507 U.S. at 384, Thus, there is some prejudice to the Debtor occasioned by Defendant’s inaction. However, it is the absence of even minimal efforts by Defendant to investigate and take action as required by the rules of Court to protect its interests that supports this result.

Considering the totality of the circumstances, all of thePioneer factors militate against allowing Defendant’s demand for trial de novo at this point. Defendant has failed to meet its burden to show justification for extension by demonstrating that its failure to act was by reason of “excusable neglect.” SeeJones v. Chemtetron Corp., 212 F.3d 199, 205 (3d Cir. 2000). Absent finding excusable neglect, this court lacks discretion to extend the thirty day

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time period of Local Rule 53.2(7) for such filing. See
Bankr. R. 9006(b)(1). Defendant’s motion is therefore denied.

An Order consistent with this Memorandum Opinion shall be entered.

ORDER AND NOW, this 10th day of March 2004, upon consideration of the Motion to Set Aside Judgment and to Extend Time to File Demand for Trial De Novo (the “Motion”), after notice and hearing, and for the reasons set forth in the accompanying Memorandum Opinion;

It is hereby ORDERED that the Motion is DENIED.

[1] The Motion was accompanied by a motion to reopen the adversary case to consider the Motion as the adversary case had been closed upon entry of the judgment. That motion was granted by order dated January 27, 2004.
[2] At my direction, the Clerk investigated the handling of this document and reported that while docketed, the award was never served.
[3] The Clerk’s explanation is that the attorney of record in this matter, Charles Golden, Esquire, is not a registered ECF user so no electronic service was provided. He would have to have received mail service to have received the award. In opposition to the Motion, Plaintiff’s counsel points out that Golden’s associate Michael Vagnoni, Esquire is a registered filing user. Since Mr. Vagnoni is apparently a registered e-filer, I don’t know why mail, not electronic notice, was provided to him. (Perhaps this an issue he may wish to pursue with the Clerk). However, the certificate of service of the judgment thatwas served evidences that electronic notice is not being provided in this adversary to any party. Doc. No. 12.
[4] Presumably counsel was anticipating that a judgment would be entered as a matter of course (it had not at that point) as no tria de novo had been demanded and thirty days had passed since the award was entered.
[5] Federal statute provides the authority for Local Rule 53.2 which sets out the arbitration process for the Eastern District of Pennsylvania. 28 U.S.C. § 650 et. seq. The statutory provision referring to trial de novo states that “[w]ithin 30 days after the filing of an arbitration award with a district court . . . any party may file a written demand for a trial de novo. . . .” 28 U.S.C. § 657(c)(1).
[6] Thus, service and notice therefrom was the focus of the arguments made at the hearing. Given the consequence of this Motion to Defendant, one would have thought that legal research would have been undertaken and a legal memorandum would have accompanied its request. In its absence, and given the possible outcome, I have surveyed the cases, in particular in this district, presenting a similar motion.
[7] Rule 9006(b)(1) provides general rules for enlargement of time periods as follows:

Except as provided in paragraphs (2) and (3) of this subdivision [not relevant here], when an act is required or allowed to be done at or within a specified period by these rules or by a notice given thereunder or by order of court, the court for cause shown may at any time in its discretion (1) with or without motion or notice order the period enlarged if the request therefore is made before the expiration of the period originally prescribed or as extended by a previous order or (2) on motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect.

Bankr. R. 9006(b)(1).

[8] Fed.R.Civ.P. 6(b) is analogous to F.R.Bankr.P. 9006.
[9] Those factors included:

“1) whether the inadvertence reflected professional incompetence such as ignorance of rules of procedure, 2) whether an asserted inadvertence reflects an easily manufactured excuse incapable of verification by the court, 3) counsel’s failure to provide for a readily foreseeable consequence, 4) a complete lack of diligence or 5) whether the inadvertence resulted despite counsel’s substantial good faith efforts towards compliance;” and whether the enlargement of time will prejudice the opposing party.

841 F.2d at 517 (citations omitted).

The Circuit’s decision in Hess Oil post-dates the decision of the United States Supreme Court in Pioneer Inv. Services v. BrunswickAssocs. Ltd. Partnership, 507 U.S. 380, 113 S.Ct. 1489 (1993), which in the context of a late filed proof of claim, formulated the prevailing excusable neglect standard. See In re O’BrienEnvironmental Energy, Inc., 188 F.3d 116, 125 (3d Cir. 1999)(Pioneer analysis applicable to determinations of excusable neglect under Rule 60(b)). As the Court was aware of Pioneer when it decided Hess Oil. I conclude that the case has continued vitality. This conclusion is supported by a footnote in In reCendant Corp. Prides Litigation, 233 F.3d 188, 196 (3d Cir. 2000) which suggests that the additional elements of the Hess Oil test are subsumed in the Pioneer factors. Id. at 195 n. 8.

[10] Like Rule 53.2, it was promulgated pursuant to the authority contained in 28 U.S.C. § 651 (a). It states that “within 30 days after the arbitration award is entered on the docket, any party may demand in writing a trial de novo in the district court.” Local Rule 83.10(h)(1). Also like Rule 53.2 it provides that the arbitration award shall be filed promptly after the hearing is concluded and shall be entered as a judgment of the court after the 30 day period has expired unless a request for trial de novo is made. Local Rule 83.10(g)(1).
[11] Defendant’s argument is that its active pursuit of discovery post-arbitration evidences its intention to proceed to trial and not to accept the arbitrator’s award. However, Rubenstein’s letter dated November 19th following his unanswered telephone call on November 14th does not recognize that an arbitration has occurred. He is merely following up on interrogatories served on October 1 and three weeks overdue. Curiously he states that he does not want to burden the Court with discovery issues “at this early stage in the litigation” when the case has already been tried. Id. Exhibit 1. This exhibit standing alone raises more questions than provides answers. Plaintiff’s counsel did not return the November 14 telephone call nor answer the November 19 letter until December 4 when she contacted Defendant’s counsel, presumably having awaited the entry of the judgment and now seeking payment of the award. In the absence of a more enlightening evidentiary record and being supplied with legal authority for treating these contacts as the equivalent of a demand for a tria de novo, I have no basis to accept Defendant’s implicit position that I ignore the requirements of the Local Rule that a written demand for a trial de novo be served. Thus, the record here is distinguishable from Argentina, supra where the pursuit of discovery in combination with the preparation and service of a demand, payment of the filing fee and prompt action in filing a motion for relief was found to be excusable neglect.
[12] This resulted in a lapse of nearly another 30 days from the time the period to file for trial de novo expired to the time when the Motion was filed. As the period began on October 27, 2003 when the award was entered on the docket, the 30-day period expired on November 26, 2003. Local Rule 53.2(7)(A). Twenty-seven days elapsed from that date until the Motion was filed.

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