In re Rugroden, 481 B.R. 69

Background

IRS pre-petition seizure and sale of Rugroden’s two parcels to Harvey (Carnelian Bay and Groveland) in 2010; Rugroden filed Chapter 13 on April 12, 2011, triggering automatic stay.
Redemption rights under 26 U.S.C. §6337(180-day) existed for both properties after sale, with dates running through April 2011 and May 2011 respectively.
Redemption periods extended by 11 U.S.C. §108(b) to June 11, 2011, after petition, with ties to §6338(b) governing deed issuance.
Deeds to Harvey were executed June 15, 2011 without explicit relief from stay from the bankruptcy court.
Rugroden sought sanctions under 11 U.S.C. §362(k) for alleged stay violations and relief from stay nunc pro tunc; the court held hearings and denied sanctions and relief as moot.
Court’s key factual posture: Rugroden retained title to the properties until deeds issued; the court analyzed whether the deeds violated the stay and whether acts were ministerial.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Rugroden had an estate property interest in the real properties after sale	Rugroden owned the properties (title) and held redemption rights that were property of the estate.	The IRS conveyed Harvey ownership at sale; redemption rights were extinguished prior to any stay issues.	Rugroden had ownership interest in the properties at petition filing, making them estate property.
Whether the 180-day redemption period was tolled by the bankruptcy stay	§108(b) tolls redemption; §362 stay may toll or extend rights.	§108(b) governs redemption extensions; §362 does not toll post-petition redemption periods.	§108(b) extensions apply; redemption periods extended to June 11, 2011 and then expired.
Whether the IRS’s June 15, 2011 deed issuances violated the automatic stay	Issuance of deeds during redemption period violated stay and harmed the estate.	Deeds were ministerial acts after redemption expired; not stay-violative.	Deeds were ministerial after expiration of the extended redemption periods; no stay violation.
Whether sanctions under §362(k) or nunc pro tunc relief are warranted	Violations occurred; sanctions and relief necessary.	No willful stay violation; no basis for relief from stay nunc pro tunc.	Motion for sanctions denied; Motion for relief from stay denied as moot.

Key Cases Cited

Hamblen v. Federal Savings & Loan Ins. Corp. (In re Thomas J. Grosso Investment, Inc.), 457 F.2d 168 (9th Cir. 1972) (tolling redemption periods under stay provisions not applicable; §11(e) predecessor to §108(b) not controlling here)
Farmer, 81 B.R. 857 (Bankr.E.D. Pa. 1988) (§108(b) extension; majority rule tolling redemption via §362 not adopted)
In re Frazer, 377 B.R. 621 (9th Cir. BAP 2007) (§1322(b) cure trumping §108(b) in Chapter 13 where applicable)
In re Rudolph, 166 B.R. 440 (D. Or. 1994) (analysis of redemption periods and §1322 timing in Chapter 13)
In re Braker, 125 B.R. 798 (9th Cir. BAP 1991) ( §1322(b) may not apply when a pre-petition foreclosure exists; timing impacts cure rights)
In re Liddle, 75 B.R. 41 (Bankr. D. Mont. 1987) (discussion of redemption and tolling principles in bankruptcy)
In re Gonzalez, 456 B.R. 429 (Bankr.C.D. Cal. 2011) (court’s view on ministerial vs. discretionary acts in deed execution)
In re Cooke, 127 B.R. 784 (Bankr. W.D.N.C. 1991) (ministerial acts after redemption period)
In re Martinson, 26 B.R. 648 (D.N.D. 1983) (pre-petition foreclosure context; execution of deed post-redemption)
In re Sapphire Investments?, 19 B.R. 492 (Bankr. D. Ariz. 1982) (early view cited on redemption extension)
In re Williams, 323 B.R. 691 (9th Cir. BAP 2005) (adversary proceedings under Rule 7001 for contempt)
United States v. Whiting Pools, Inc., 462 U.S. 198 (1983) (ownership transfer timing at tax sales; real property distinctions)
Gonzalez, 456 B.R. 429 (Bankr.C.D. Cal. 2011) (discussion on substance vs. ministerial acts)