631 B.R. 899
9th Cir. BAP2021Background
- Parties divorced in 2017; marital settlement required Perryman to sign a promissory note and deed of trust to secure a $29,000 equalization payment to Dal Poggetto.
- Dal Poggetto filed a Request for Order on March 26, 2019 (to have the clerk effect execution of the instruments and seek sanctions/fees). Hearing initially set for May 6, 2019.
- Perryman filed chapter 13 on April 18, 2019; Dal Poggetto received notice of the bankruptcy and the automatic stay.
- The Request for Order was repeatedly continued (May 6, 2019 → Nov. 4, 2019 → May 26, 2020 → Nov. 16, 2020 → Dec. 16, 2020); on Dec. 16 counsel requested another continuance to June 17, 2021 pending the bankruptcy outcome.
- Perryman moved in bankruptcy court for contempt, alleging the continuances/attendance amounted to willful violations of the automatic stay under § 362(a); he claimed about $1,400 in fees. The bankruptcy court denied the motion as meritless; Perryman appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether requests for continuances and attendance at status hearings in a prepetition state-court Request for Order violated the automatic stay | Perryman: continuances amounted to continued prosecution/collection of a prepetition claim in violation of § 362(a)(1) and (5), causing fees | Dal Poggetto: continuances/status hearings merely preserve the status quo while the bankruptcy proceeds; no substantive relief sought, so no stay violation | Court: Affirmed — continuances/status hearings to monitor or await bankruptcy developments do not constitute continuation/prosecution in violation of § 362(a); no willful stay violation found |
Key Cases Cited
- First Nat'l Bank of Anchorage v. Roach, 660 F.2d 1316 (9th Cir. 1981) (postponement/rescheduling of a prepetition foreclosure sale preserves status quo and does not violate the automatic stay)
- Mason-McDuffie Mortg. Corp. v. Peters, 101 F.3d 618 (9th Cir. 1996) (extends Roach to postconfirmation postponements of foreclosure sales)
- Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210 (9th Cir. 2002) (postpetition continuation of a collection action must be discontinued or stayed; failure to do so can be a willful stay violation)
- Mwangi v. Wells Fargo Bank, N.A., 764 F.3d 1168 (9th Cir. 2014) (standards for reviewing alleged stay violations)
- In re Welsch, 602 B.R. 682 (Bankr. N.D. Ill. 2019) (continuances in prepetition domestic-relations proceedings do not violate the automatic stay)
- In re Cobb, 88 B.R. 119 (Bankr. W.D. Tex. 1988) (status hearings that do not move the case forward do not violate the automatic stay)