652 B.R. 577
Bankr. S.D.N.Y.2023Background
- Debtor Francisco Procel filed a Chapter 13 petition on May 2, 2023, the same day a foreclosure sale on his investment property was scheduled.
- Debtor used the Court’s Pro Se Upload Tool and has a receipt/screenshot showing an upload time of 1:12 p.m.; the foreclosure sale concluded at 2:05 p.m.
- The Clerk’s Office ECF timestamp (derived from an automated email) showed 2:25 p.m.; Nationstar relied on that time and moved for a declaration that the automatic stay did not apply.
- At an initial hearing the Court relied on the ECF timestamp and granted Nationstar’s motion; the Court then investigated the Court’s filing process and obtained a Clerk’s Office memo explaining an automated workflow that causes a 25-minute-after-the-hour timestamp.
- The Court held an Order to Show Cause and reheard the matter, concluding the upload/receipt time, not the automated ECF timestamp, better reflects when the petition was placed in the clerk’s constructive possession.
- The Court altered its prior judgment, determining the petition was filed at the upload time and the automatic stay was in effect at the time of the foreclosure sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When is a petition "filed" for §301 purposes? | Upload time (1:12 pm) when petition was placed in clerk's constructive possession. | Clerk/creditor: the Clerk's ECF/email timestamp (2:25 pm) is the filing time. | Filing time is the upload/receipt time; petition deemed filed at 1:12 pm. |
| Does the timestamp presumption favor the Clerk's time and can it be rebutted? | Debtor produced receipt/screenshot showing earlier upload to rebut the presumption. | Clerk/creditor relied on the official timestamp presumption. | The timestamp creates a rebuttable presumption; credible evidence (receipt/screenshot and process explanation) rebuts it. |
| Did the automatic stay apply to bar the foreclosure sale? | Because petition was filed at upload, the stay was triggered before the 2:05 pm sale. | Because official ECF time post-dated the sale, no stay existed at sale time. | The stay was in effect at the time of sale; prior judgment amended to reflect that. |
| May the Court alter its earlier ruling under Rule 59(e)? | Debtor sought correction of an overlooked timing issue to prevent manifest injustice. | Initial ruling was based on available ECF timestamp. | Court may alter sua sponte under Rule 59(e) for clear error/manifest injustice and did so here. |
Key Cases Cited
- In re Schleier, 290 B.R. 45 (Bankr. S.D.N.Y. 2003) (time-stamp on petition creates a rebuttable presumption as to filing time)
- In re Sands, 328 B.R. 614 (Bankr. N.D.N.Y. 2005) (petition filed when placed in clerk’s actual or constructive possession)
- In re Brown, 311 B.R. 721 (Bankr. W.D. Pa. 2004) (filing occurs when petition is first handed to clerk, not when subsequently processed)
- Cintron v. Union Pac. R.R., 813 F.2d 917 (9th Cir. 1987) (papers are filed when placed in clerk’s possession)
- In re Manzueta, 620 B.R. 195 (Bankr. D. Mass. 2020) (internal clerk records can rebut timestamp presumption)