In Re The Yoder Company

758 F.2d 1114 (6th Cir. 1985)

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Nature of the Case

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Facts

In 1981, Yoder (D) filed a petition requesting relief under Chapter 11 of the Bankruptcy Code. P's products liability suit against D was pending in a Michigan state court. P's claim was listed as a 'contingent, unliquidated and disputed' claim. The Bankruptcy Court issued an order setting July 13, 1981, as the last date for creditors to file proofs of claim. P filed a proof of claim eight months after the bar date. D motioned for an order expunging the claim. D claimed excusable neglect in that he had not received the bar date notice. A notice had been mailed to the address of P’s attorney, but P’s attorney testified that he did not receive it. The Bankruptcy Court heard evidence concerning the procedure used to mail notices. An employee of D testified that he supervised a procedure through which an address label was prepared for each creditor listed in D's amended schedule of assets and liabilities and that the employee and an accountant proofread the address labels to make sure that all listed creditors were included. The address labels and corresponding notices were taken to the clerk of the Bankruptcy Court. Using labels and envelopes it received from the Bankruptcy Court, a Letter Service then prepared and mailed the notices. No record of the address labels actually prepared was kept by D, the Bankruptcy Court clerk, or the Letter Service; and neither the clerk's office nor the Letter Service checked the labels against any list of creditors. D's name and address did not appear on the matrix of creditors that was filed earlier with the Bankruptcy Court. The Bankruptcy Court found that there was a presumption that a properly addressed mailing was received by P’s attorney. The Court did not discuss its reasons for this finding or explain how it weighed the evidence, although the evidence concerning mailing was far from undisputed. The court ruled against P. P appealed.