587 B.R. 829
Bankr. D. Vt.2018Background
- Debtor Robert Goodrich filed a chapter 13 petition on November 23, 2017, within one year of a prior chapter 13 dismissal; creditor Jennifer Soutar moved to confirm the automatic stay had expired after 30 days under 11 U.S.C. § 362(c)(3)(A).
- This is Goodrich's third chapter 13 filing in three years; the second case had been dismissed and the creditor had commenced foreclosure after that dismissal.
- The court had earlier interpreted § 362(c)(3)(A) in In re McFeeley (Majority Approach) to mean the stay terminates after 30 days only "with respect to the debtor" and the debtor’s non‑estate property, leaving estate property protected.
- Movant urged the court to adopt In re Bender’s narrower test (stay terminates only where a creditor had commenced prepetition formal proceedings) and to declare the stay expired; debtor and trustee urged retention of McFeeley.
- After reconsideration, the court overruled its prior McFeeley position, rejected Bender, and adopted the Minority Approach: when a second case is filed within one year, the automatic stay terminates in its entirety after 30 days unless the debtor or party in interest obtains an extension by showing the later case was filed in good faith.
- Because the debtor reasonably relied on McFeeley, the court gave him 30 days from entry of the decision to move for continuation of the stay under § 362(c)(3)(B); the court deferred deciding whether the stay already expired pending that period/hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court should reconsider its McFeeley interpretation of § 362(c)(3)(A) | Soutar: yes; subsequent authority and Supreme Court BAPCPA guidance warrant reconsideration | Goodrich/Trustee: no; McFeeley provided longstanding, controlling district precedent and certainty | Court granted reconsideration; found cause to revisit McFeeley |
| Proper method to interpret BAPCPA § 362(c)(3)(A) | Soutar: interpret text; adopt Bender’s reading favoring creditors who acted prepetition | Goodrich/Trustee: interpret as in McFeeley (Majority Approach) protecting estate property | Court followed Supreme Court guideposts: plain meaning, context, congressional purpose; considered legislative history when helpful |
| Which substantive interpretation governs: Majority, Minority, or Bender approach | Soutar urged Bender (terminate only as to property that was subject to prepetition formal action) | Goodrich/Trustee urged Majority (terminate only as to debtor/non‑estate property) | Court rejected Bender and Majority; adopted Minority Approach — stay terminates in its entirety after 30 days unless good‑faith showing is made |
| Effect on this case and remedial relief | Soutar sought declaration stay had expired and permission to proceed with foreclosure | Goodrich argued McFeeley protected estate property and relied on that precedent | Court deferred ruling on expiration; afforded debtor 30 days to move to extend stay under § 362(c)(3)(B) and reserved decision until hearing or expiration of that period |
Key Cases Cited
- In re McFeeley, 362 B.R. 121 (Bankr. D. Vt. 2007) (prior district precedent interpreting § 362(c)(3)(A) under the Majority Approach)
- In re Bender, 562 B.R. 578 (Bankr. E.D.N.Y. 2016) (narrow interpretation limiting termination to property that was subject to prepetition formal action)
- In re Reswick, 446 B.R. 362 (9th Cir. BAP 2011) (articulates Minority Approach and contextual arguments supporting full termination)
- Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229 (2010) (Supreme Court BAPCPA interpretive guidance; plain‑meaning and context analysis)
- Ransom v. FIA Card Servs., N.A., 562 U.S. 61 (2011) (Supreme Court guidance on consulting legislative history and congressional purpose for BAPCPA provisions)