627 B.R. 663
N.D. Ind.2021Background:
- Lawrence Clark filed a Chapter 13 petition on June 28, 2018 after a prior Chapter (dismissed May 3, 2018) — he is a repeat filer within one year, triggering 11 U.S.C. § 362(c)(3)(A).
- First Financial Bank (FFB) holds a mortgage on Clark’s Merrillville home and had obtained a state-court foreclosure sale that was stayed by the bankruptcy filing.
- The automatic stay went into effect on filing but, absent a motion to continue, § 362(c)(3)(A) causes the stay to terminate 30 days after filing for repeat filers.
- FFB moved for a comfort order under 11 U.S.C. § 362(j) asking the bankruptcy court to confirm the stay had expired so it could proceed with foreclosure.
- The bankruptcy court held the stay terminated as to Clark individually and his property but not as to property of the bankruptcy estate; FFB appealed.
- The district court affirmed, holding § 362(c)(3)(A) unambiguously terminates the stay only with respect to the debtor and the debtor’s property, not estate property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 11 U.S.C. § 362(c)(3)(A) terminates the 30‑day automatic stay entirely (including estate property) or only "with respect to the debtor" (debtor and debtor's property) | The statute is ambiguous; "with respect to the debtor" should not be read to preserve the stay on estate property — Congress intended the stay to terminate in full for repeat filers | The text is plain: "with respect to the debtor" limits termination to the debtor and the debtor’s property; estate property remains protected by the stay | Affirmed: § 362(c)(3)(A) unambiguously terminates the stay only as to the debtor and the debtor’s property, not the bankruptcy estate’s property |
Key Cases Cited
- Rose v. Select Portfolio Servicing, Inc., 945 F.3d 226 (5th Cir. 2019) (adopts majority view that §362(c)(3)(A) terminates stay only as to debtor and debtor’s property)
- In re Smith, 910 F.3d 576 (1st Cir. 2018) (advances minority view that §362(c)(3)(A) is ambiguous and may terminate the entire stay)
- Duncan v. Walker, 533 U.S. 167 (2001) (textualist principle: enforce plain statutory meaning when unambiguous)
- Bostock v. Clayton Cnty., 140 S. Ct. 1731 (2020) (do not use legislative history to manufacture ambiguity when text is clear)
- Lamie v. U.S. Trustee, 540 U.S. 526 (2004) (courts should not rewrite statutes to correct drafting errors)
- Keene Corp. v. United States, 508 U.S. 200 (1993) (different statutory wording in separate provisions presumptively conveys different meanings)