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A secretary’s failure to enter a court deadline in the calendar system of a two-lawyer firm where everyone was seriously distracted at about the same time has cost several malpractice claimants the chance to obtain damages from a bankrupt hospital. The law firm failed to convince the chief Northern District of New York bankruptcy judge, Stephen D. Gerling, that it had met the standard for excusable neglect in missing the deadline. Gerling ruled in In re: Crouse Health, 01-60785-60790, that since the secretary was under the control of the law firm, her oversight is ultimately the firm’s responsibility and is not excusable. The surrounding circumstances, the judge noted, were unusual. One partner, Joseph S. Cote of Syracuse, N.Y., was in China adopting a baby. The other was serving in the military in Iraq. And the secretary went into premature labor as the deadline approached. The matter involves the Chapter 11 bankruptcy reorganization of Crouse Hospital, a major health care provider in central New York. Before adopting a reorganization plan, the court provided an opportunity for those with pre-petition medical malpractice actions to state their claims. Those who did were protected by a special trust fund. The missed deadline, set in September 2003, was Dec. 31, 2003. Seventy-eight days after it was missed, new attorneys moved on behalf of the clients for an extension. Now it has been denied by Gerling. As the deadline approached, Cote’s small law practice was beset with unforeseen distractions. First, he was notified that an adoption application he and his wife submitted had been accepted and that he needed to go to China promptly to adopt the child. He left in September and stayed until late November. Also that fall, Cote’s partner, Theodore Limpert, was activated for reserve duty in Iraq. He did not get home until late December. Finally, Cote’s secretary, Jennifer Daily, went into premature labor in December and did not return until February. Gerling indicated that those events may have been enough to satisfy the test for excusable delay crafted by the U..S. Supreme Court in Pioneer Investor Services Co. v. Brunswick Associates, 507 U.S. 380 (1993). However, he said the deadline date was set well before Daily went into labor, and her failure to note it in the firm’s calendaring system is fatal. “[P]oor office procedures, not unanticipated absences from the office, are at the heart of this matter,” Gerling wrote. “The series of unanticipated events … occurred independent of Daily’s lapse.” In the Pioneer Chapter 11 bankruptcy case, the Supreme Court established a four-part test for excusable delay. Trial courts must consider: � The danger of prejudice to the debtor. � The length of the delay and its impact on proceedings. � The reason for the delay. � Whether the person who missed the deadline was acting in good faith. Gerling said the tardy filings were “moderately prejudicial” in that a delayed filing could have affected the money available to malpractice claimants who met the deadline. He also said the 78-day delay was moderate and that the claimants acted in good faith. What the court could not get past, however, was the reason for the delay and the Northern District’s rather strict stance on delinquent office procedures established in In re O.W. Hubbell & Sons Inc., 180 B.R. 31 (1995) and In re Agway Inc., No. 01-65872 (2003). Gerling said that while the “circumstances surrounding this failure may appear more extenuating” than those in Agway and O.W. Hubbell, “it is plain that procedures in Claimants’ counsel office for this matter were administered with less than the most attentive care.” Further, the court found that “office procedure” was in the control of Cote. “[E]xcusing such an omission would open the door to other tardy filers presenting similar reasons for delay, which would adversely impact the proceedings,” Gerling said. On the motion, David M. Stewart of Byrne, Costello & Pickard in Syracuse appeared for the claimants. John R. Weider of Harter, Secrest & Emery in Rochester represents the debtors.

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