          United States Court of Appeals
                        For the First Circuit

Nos. 08-1065, 08-1393

                     COLONIAL SURETY COMPANY,

                         Plaintiff, Appellee,

                                  v.

                             AVI WEIZMAN,

                         Defendant, Appellant.
                               __________

    UNI-CON FLOORS, INC., KATHERINE L. HEBERT, SCOTT HEBERT,
      JOHN A. PACHECO, JAMIE K. PACHECO, KRISTINE WEIZMAN,

                              Defendants.


          APPEALS FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. William G. Young, U.S. District Judge]


                                 Before
                        Boudin, Stahl and Lipez,
                            Circuit Judges.


     John E. Zajac with whom Carmichael & Zajac, P.C. were on brief
for appellant.
     Steven Shane Smith with whom Francis A. Shannon, III and
Shannon Law Associates, Inc. were on brief for appellee.



                              May 6, 2009
          BOUDIN, Circuit Judge.   In January 2007, Colonial Surety

Company ("Colonial") brought suit in federal district court against

Uni-Con Floors, Inc. ("Uni-Con") and its indemnitors.   The latter

promised reimbursement to Colonial for any losses, costs, and

expenses incurred by Colonial on bonding for certain construction

contracts entered into by Uni-Con Floors. Uni-Con defaulted on two

of these contracts, requiring Colonial to pay $813,129.61 to

complete work assured by Colonial bonds.

          One of the indemnitors was Avi Weizman.   Weizman and the

other defendants were defaulted for failure to appear but (for

reasons not here pertinent) the district judge thereafter vacated

the default judgment as to Weizman.      Weizman in turn defended

against Colonial's claim on the ground that he had not signed the

indemnity contract (instead, his wife had signed for him) and,

alternatively, that any liability of his was discharged as a result

of his own bankruptcy discharge in 2006.

          After a two-day bench trial, the district court rejected

these defenses and found Weizman liable to Colonial based on the

bonded contracts that Uni-Con Floors had failed to complete.   The

court ruled that even though Weizman's signature on the 1998

indemnity agreement had been affixed by his wife, Weizman had

thereafter become liable under the agreement by signing a separate

indemnification agreement in 2005 which incorporated the 1998




                               -2-
agreement by cross-reference. Weizman's arguments on appeal do not

challenge this latter ruling.

          Instead, Weizman's appeal is based on his defense that

any such liability to Colonial was expunged by Weizman's discharge

in bankruptcy.   Weizman had filed for chapter 7 bankruptcy in

October 2005 and had been discharged in April 2006, but he did not

list Colonial as a creditor and his schedule of debts had not

mentioned indemnity obligations.1       The district court found that

Colonial's indemnity claims against Weizman did not exist at the

time of the bankruptcy proceeding and so were not discharged.

          In the district court, Weizman argued that the underlying

obligation created by the 1998 indemnification agreement, to which

he became a party in 2005, did exist at the time of bankruptcy and

could therefore be discharged. Under Weizman's theory, it mattered

not that Uni-Con's defaults on the two projects (which occurred in

September 2006) came after his bankruptcy discharge.     The district

court, focusing on the claims triggered by the defaults, was not

persuaded.

          Following the district court's decision on liability,

Weizman filed a Rule 59 motion asking the court to reconsider, in

part based upon a new argument.    Specifically, Weizman argued that


     1
      The terms "listed" and "scheduled" refer to a debtor's
obligations under 11 U.S.C. § 521 (2006) to "list" creditors and
"schedule" liabilities and assets.     On the bankruptcy forms,
schedules D-F call for a debtor to list creditors and the details
of each debt.

                                  -3-
his   filing    for    bankruptcy   was    itself    a     breach   of   the   1998

indemnification agreement, which made bankruptcy of an indemnitor

an act of default; and to this extent Colonial had a matured claim

against Weizman for breach of the indemnification agreement once he

filed his bankruptcy petition in 2005.              The district court denied

that motion without further discussion.

           One other aspect of the district court proceedings bears

mention. Colonial contended in the district court that Weizman, in

listing his assets in the bankruptcy proceeding, had not disclosed

that he owned 1,000 shares of stock in a sister company of Uni-Con

Floors.    Weizman's seeming position is that the shares were not

shown to have any value, but the district court expressly found the

omission fraudulent; it so advised the bankruptcy court.

           However, the district court did not rest its rejection of

Weizman's bankruptcy discharge defense on the supposed fraud.

Presumably,     the     district     court     believed      (correctly)       that

invalidating a discharge for fraud is a matter for the bankruptcy

court, 11 U.S.C. § 727(d); by contrast, Weizman's defense in the

district   court      necessarily    called    on    the    district     court   to

determine whether the discharge encompassed the claims on which

Colonial sued.

           In    due    course,    the   district    court    entered     a    final

judgment in the amount of $813,179.61 jointly and severally against

all of the defendants on the indemnity contract, representing the


                                         -4-
costs to complete contractually promised work at the two projects.

Weizman has now appealed to this court, pressing anew his argument

that the bankruptcy discharge bars the present judgment against

him.       Colonial contends that this argument is partly forfeited but

that in any event Weizman's failure to list Colonial as a creditor

in the bankruptcy court means that such an obligation is not

discharged.2

               We begin with the district court's ruling that the

discharge did not include Colonial's claims against Weizman because

they had not arisen at the time of the bankruptcy: in a nut shell,

that an April 2006 discharge could not wipe out Colonial's claims,

which arose only with the September 2006 project defaults by Uni-

Con.        But   the    Colonial    claims   rest   upon   the   indemnification

agreement that itself was made before the bankruptcy filing and it

is   his     obligation     under    the   agreement    that   Weizman   says   was

discharged.

               The      Bankruptcy    Code    defines   "claim[s]"--which       are

potentially subject to discharge in the bankruptcy proceeding--to

include rights to payment that are inter alia "fixed, contingent,

matured, unmatured, disputed, [and] undisputed," 11 U.S.C. § 101(5)



       2
      As already noted, only after trial did Weizman argue for the
first time that his own bankruptcy filing breached the
indemnification agreement. We agree that the argument was forfeited
and do not address it further. See Daigle v. Me. Med. Ctr., Inc.,
14 F.3d 684, 687-88 (1st Cir. 1994); Federal Deposit Ins. Corp. v.
World Univ., Inc., 978 F.2d 10, 16 (1st Cir. 1992).

                                           -5-
(2006). Weizman's best argument is that the indemnification itself

was a contingent claim against Weizman that might be deemed to

mature if and as Uni-Con defaulted on bonded projects.

            In his support, case law holds that the "claim" language

is to be read very broadly and can include claims that are

uncertain and difficult to estimate.                 Maynard v. Elliott, 283 U.S.

273, 275-78 (1931); In re THC Financial Corp., 686 F.2d 799, 802-03

(9th Cir. 1982).             Seemingly Congress in adopting this language

meant to leave phrasing that had been read more grudgingly to

disallow discharge of claims that had been doubtful or speculative

at the time of bankruptcy.             See S. Rep. No. 95-989, 95th Cong., 2d

Sess. (1978); H.R. Rep. No. 595, 95th Cong., 1st Sess. (1977),

reprinted in 1978 U.S.C.C.A.N. 5787.

            Although Weizman and others liable on the indemnification

agreement were obligated under the agreement from the outset, it

would    seem    hard    to    value    a    claim   under    the   indemnification

agreement prior to Uni-Con's defaults. And, if the primary purpose

of   a   claim   is     to    allow    the    creditor   to   participate   in   the

distribution of assets of the estate, one blanches at the notion

that a claim could be discharged even though it was too speculative

to be valued and so to share in the bankrupt's assets.

            However, some of the decisions--including one of our own-

-treat contingent claims as intrinsically dischargeable under the

present statute, saying that the court must just make the best



                                             -6-
estimate it can as to the present value of the claim.            In re

Hemingway Transp., Inc., 954 F.2d 1, 8 (1st Cir. 1992).      One of the

treatises discusses indemnity contracts not yet triggered by a

default as posing a difficult issue but assumes that estimation is

the answer.    3 Collier on Bankruptcy, ¶ 51.11, at 51-25 (15th ed.

2009).

            Accordingly, we think that under Hemingway Weizman's

position is correct and that Colonial's claims rested on an earlier

obligation that comprised a contingent claim capable of being

discharged by his later bankruptcy.    Technically, the discharge is

of a "debt," 11 U.S.C. § 523(a) (2006), rather than a          "claim"

(which is what the debtor must list); but the code's definition of

debt and associated case law indicate that the two concepts are to

be read together.    See 11 U.S.C. § 101(12) (2006).

            Still, not all dischargeable debts are then discharged,

and we agree with Colonial that Weizman's discharge in bankruptcy

did not include the claim or claims at issue here.             Section

523(a)(3)(A) of the bankruptcy code precludes discharge of a debt

if it was

            neither listed nor scheduled under section
            521(1) of this title, with the name, if known
            to the debtor, of the creditor to whom such
            debt is owed, in time to permit . . . timely
            filing of a proof of claim, unless such
            creditor had notice or actual knowledge of the
            case in time for such timely filing.3

     3
     Subsection (A), in words omitted from the quotation, applies
this restriction to most debts including those at issue here;

                                 -7-
This language, as we read it, provides what one might expect to be

the general rule: that if the debtor fails to list a supposed

creditor's claim--meaning that the creditor will not be notified of

the opportunity to participate in the proceeding (and the creditor

does not otherwise happen to know of the bankruptcy), the debt is

not discharged.

               Conceivably (Weizman so argues in this case) a debtor

might    not    realize    that    contingent    contractual        obligation    to

indemnify constitutes a claim or debt that could be discharged.

But, as between the debtor who knows what contracts he has signed

and the creditor ignorant of the bankruptcy filing, surely the

debtor is best suited to identify those from whom it desires a

discharge so they can be provided with notice.                This, we think, is

the plain message of section 523(a)(3).

               Colonial says that this outcome is compelled because

otherwise       the   bankruptcy    code      would   deny    the    creditor     an

opportunity to be heard before being deprived of its property. See

Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314

(1950).   Because we think that section 523(a)(3) makes listing (or

actual    notice      or   knowledge)   a     condition      of    discharge,    the

constitutional claim need not be considered.                      This is so even

though our reading is not universally shared.



subsection (B) applies a somewhat similar rule to debts, primarily
related to deliberate wrongdoing, not captured by the general rule
under subsection (A). 11 U.S.C. § 523(a)(3).

                                        -8-
                  In a leading decision by a highly respected judge, the

Ninth Circuit has construed section 523(a)(3) not to apply to so-

called no asset bankruptcies, which is what Weizman claims his

proceeding to have been.            See In re Beezley, 994 F.2d 1433, 1435-37

(9th       Cir.    1993)     (O'Scannlain,   J.,    concurring).4     A   no    asset

bankruptcy is one in which the bankrupt claims in his filing that

he has no assets to distribute to ordinary creditors.                          As the

Administrative Office explains:

                  If all the debtor's assets are exempt or
                  subject to valid liens, the trustee will
                  normally file a "no asset" report with the
                  court, and there will be no distribution to
                  unsecured creditors. Most chapter 7 cases
                  involving individual debtors are no asset
                  cases.

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics.html.

                  Although    chapter   7    does   not   distinguish     no    asset

bankruptcies, the bankruptcy courts do curtail proceedings in no

asset cases and may choose not to fix a bar date for submitting

claims.       E.g., In re Walendy, 118 B.R. 774, 775 (Bkrtcy C.D. Cal.

1990).       The creditors may be notified that the debtor purports to

have no assets and that they need not file claims.                  Fed. R. Bankr.

Proc. 2002(e).             Yet a creditor, if notified, could appear to

contend that the debtor does have assets.


       4
      Beezley itself was a short per curiam opinion but in In re
Nielsen, 383 F.3d 922, 925 (9th Cir. 2004), a full panel ruled that
"the reasoning in [Beezley] was set out in a concurrence rather
than in the terse per curiam opinion. We follow the holding of
that opinion and adopt the reasoning of the concurrence.").

                                            -9-
           Section 523(a)((3) uses the phrase     "in time to permit .

.   . timely filing of a proof of claim," and Beezley reasoned that

the no-notice/no discharge provision does not apply to no asset

cases because no bar date is ever established and therefore no

filing of a claim is ever rendered untimely.          With respect, we

think that the statute aims to assure creditor notice before

discharge and the idea that "timely filing" remains available after

the bankruptcy proceeding closed is surely not what Congress had in

mind.   The history of the provision bears this out.

           The   original   1898   Bankruptcy   Act   provided   that   a

discharge was barred for debts that "have not been duly scheduled

in time for proof and allowance" unless the creditor had notice or

actual knowledge of the bankruptcy, section 17(a)(3); and the

slightly more permissive present language ("neither listed or

scheduled . . . in time to permit . . . timely filing of a proof of

claim") was substituted in the 1978 Bankruptcy Code for a narrow

and specific purpose, namely, to "overrule" a 1904 Supreme Court

decision, Birkett v. Columbia Bank, 195 U.S. 345 (1904). H.R. Rep.

No. 95-595 (1977), reprinted in 1978 U.S.C.C.A.N 5963.

           Birkett dealt with an unusual case where a creditor was

not listed, a discharge was granted and in the relatively brief

period between the discharge and the full distribution of assets,

the creditor learned of the bankruptcy--and did so in time that a

proof of claim could have been filed entitling the creditor to



                                   -10-
participate in the estate.     Even so, the Supreme Court held that

the 1898 language ("not been duly scheduled") governed and the

debtor was unprotected by the discharge. Birkett, 195 U.S. at 350.

The 1978 Bankruptcy Code substitution was apparently meant only to

undo this overly-rigid reading.

          Even so, the Ninth Circuit reading has been followed,

usually without much analysis, by other circuits; stress is usually

placed on the absence of prejudice and on remedies available to the

un-notified creditor if the debtor acted with fraudulent intent or

if unlisted assets held are later discovered.5     By contrast, the

Seventh Circuit took a different approach--broadly consistent with

our view--in which it assumed that an unlisted debt was not

discharged.    In re Stark, 717 F.2d 322 (7th Cir. 1983).

          In Stark, the holding was that that a no asset debtor

could, long after the discharge, ask the bankruptcy court to reopen

the proceeding to list belatedly a creditor who was innocently

omitted and who would have received no benefit from notice.   717 F.

2d at 324.     But such a course properly leaves the burden on the

debtor to show that the law and equities justify this relief--

absent which the debt will remain undischarged.

              Weizman was free to seek that relief and started down

that path; he did file a motion in the bankruptcy court, after the


     5
      In re Madaj, 149 F.3d 467, 470 (6th Cir. 1998); Judd v.
Wolfe, 78 F.3d 110, 111 (3d Cir. 1996); Stone v. Caplan, 10 F.3d
285, 291 n.13 (5th Cir. 1994).

                                 -11-
present district court litigation began, seeking to list his

obligation to Colonial and so obtain the benefit of the discharge

despite the lack of original notice.   But he thereafter withdrew

the request, possibly not caring to face the charge (endorsed by

the district judge) of fraudulent concealment of assets in the

original bankruptcy.

          Nothing in the language or history of the 1978 revision

of section 523(a)(3) indicates that Congress aimed to carve out no

asset bankruptcies from what we perceive to be a general rule that

listing the creditor is a condition of discharge.   The qualifying

phrase about timely filing recognizes that notice may be given late

in the bankruptcy-proceeding day but still in time for the creditor

to participate in the bankruptcy proceeding. Here, the bankruptcy

proceeding was completed with no notice to Colonial.

          That the debtor claims to have no distributable assets

might make one think that the creditor is not harmed by the lack of

notice and so the Ninth Circuit reading is just a shortcut to a no

harm, no foul outcome.   But no asset claims are easy to make; a

creditor might want notice precisely to argue that there are assets

even though the debtor asserts otherwise.    Colonial also argues

that notice would have permitted it to take earlier action against

other indemnitors to protect itself.

          It is true that an unnotified creditor is not entirely

helpless even after the bankruptcy proceeding is long over: the



                               -12-
discovery of overlooked assets and the opportunity to prove fraud

can be grounds for reopening the bankruptcy.   But so, too, can a

debtor move to reopen to list a debt where the failure to give

notice was innocent and can be shown to have caused no harm;

consistent with Stark, we conclude that in such a case the debtor

would be entitled to such relief.    Yet the burden of doing so is

fairly upon the debtor who failed to give notice--or so Congress

seems to have thought.

          But it is not merely a matter of burdens.   Beezley means

that the un-notified creditor gets protection only if limited

specified grounds can be established; by contrast, a debtor who

moves to reopen to list a debt long after discharge surely must

show that the omission was innocent and, even so, can probably be

countered by anything that makes it inequitable to grant such

relief.   As between Beezley and Stark, we think that the latter

best fulfills the aim of Congress.

          Affirmed.




                              -13-
