573 B.R. 298
Bankr. D. Me.2017Background
- Debtor Leland S. Smith, Jr. filed a prior Chapter 13 in Dec. 2014 that was dismissed in Nov. 2016 for failure to make plan payments; he filed a new Chapter 13 on Dec. 28, 2016.
- No party moved to extend the automatic stay under 11 U.S.C. § 362(c)(3)(B), so the stay terminated under § 362(c)(3)(A) on the 30th day (Jan. 27, 2017).
- Maine Bureau of Revenue Services timely filed a proof of claim and sought a § 362(j) order confirming the extent of stay termination under § 362(c)(3)(A).
- The confirmed Chapter 13 plan provided that estate property would remain estate property notwithstanding § 1327(b), but reserved the § 362(c)(3)(A) termination question.
- The core dispute: whether § 362(c)(3)(A)’s 30‑day termination removes the protections of § 362(a) as to (a) the debtor personally and the debtor’s non‑estate property only (majority view), or (b) the debtor and all of the debtor’s property including estate property (minority view advanced by the court).
Issues
| Issue | Smith's Argument | Maine Revenue's Argument | Held |
|---|---|---|---|
| Scope of stay termination under § 362(c)(3)(A) | Termination applies only to the debtor personally and the debtor’s non‑estate property; estate property remains protected | Termination applies to the debtor and all of the debtor’s property, including estate property | The stay terminated as to the debtor and all of his property, including property of the estate |
| Who may seek clarification/extension under § 362(j)/(c)(3)(B) | Implicitly: limited need because estate property remains stayed | Creditors are proper parties in interest to seek confirmation/extension; § 362(c)(3)(B) contemplates party‑in‑interest motions | Creditors (parties in interest) can seek orders under § 362(j) and § 362(c)(3)(B); provision makes sense only if estate property can be affected |
| Interpretation of phrase "with respect to the debtor" | Read to limit termination to only certain categories of property (debtor’s non‑estate property) | Read to identify which debtor (repeat filer) is affected in joint cases and to allow termination of stay as to estate property | Phrase construed to identify the repeat‑filing debtor and to permit termination of § 362(a) protections as to that debtor and all of that debtor’s property, including estate property |
| Role of § 362(c)(3)(B) extension standard | Minority view: extension standard consistent with protecting estate property | Majority view undermines purpose of § 362(c)(3)(B) and its party‑in‑interest mechanism | Reading § 362(c)(3)(A) as terminating protection for estate property gives effect to § 362(c)(3)(B) and the good‑faith extension framework |
Key Cases Cited
- United Sav. Ass’n of Tex. v. Timbers of Inwood Forest Assocs., 484 U.S. 365 (1988) (statutory construction is a holistic endeavor)
- Robinson v. Shell Oil Co., 519 U.S. 337 (1997) (plainness/ambiguity determined by text and context)
- Midlantic Nat’l Bank v. N.J. Dep’t of Envtl. Prot., 474 U.S. 494 (1986) (automatic stay is a fundamental debtor protection)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014) (zone‑of‑interests standing analysis for statutory causes of action)
- In re Daniel, 404 B.R. 318 (Bankr. N.D. Ill. 2009) (comprehensive analysis concluding stay terminates as to debtor and estate property)
- In re Reswick, 446 B.R. 362 (9th Cir. BAP 2011) (supports termination as to estate property and discusses § 362(c)(3)(B) implications)
- In re Jumpp, 356 B.R. 789 (1st Cir. BAP 2006) (majority view: termination limited to debtor and non‑estate property)