Rinard v. Positive Investments, Inc. (In Re Rinard)
451 B.R. 12
| Bankr. C.D. Cal. | 2011Background
- Debtor Rinard filed a second Chapter 7 case within one year; the prior case was dismissed for late filings.
- Foothill Parcels (1812-1816 W. Foothill, Upland, CA) are assets within the bankruptcy estate and were targeted for foreclosure by Positive Investments, Inc.
- Estate property remains subject to the automatic stay per the movants’ theory and this Court’s pending determination.
- Movants filed a joint emergency motion for a TRO/PI seeking to enjoin foreclosure; a prior stay-extension motion was denied.
- Court finds equity in Foothill Parcels exists for the benefit of the estate and Debtor, and that the Foothill Parcels remain property of the estate as of the petition date.
- Court must resolve whether the automatic stay continues as to estate property under § 362(c)(3)(A) and whether Reswick controls this district’s interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the automatic stay remains as to estate property under § 362(c)(3)(A). | Rinard argues stay terminated only as to debtor, not estate. | Positive Investments argues Reswick requires termination of stay as to estate. | Stay remains in effect as to estate property; Foothill Parcels are estate property. |
| Whether Reswick governs the binding authority on this district. | Reswick is controlling authority on stay termination. | Reswick is non-binding within this district due to BAP and post-BAPCPA changes. | Court rejects Reswick as controlling; BAP decisions are not binding; district has discretion. |
| Whether movants are entitled to TRO/PI. | Violation of stay and likelihood of harm justify injunctive relief. | Equities favor the creditor; foreclosure should proceed if stay is not binding. | TRO/PI granted pending full PI hearing; stay protections apply to estate property. |
| Whether there is irreparable harm and balance of hardships favor movants. | Foreclosure threatens estate value and creditors’ recovery. | Foreclosure would not irreparably harm if equity cushion exists. | Irreparable harm likely; equity cushion favors movants; hardships balance to movants. |
| Whether the Court may rely on § 105(a) to issue injunctions. | Section 105(a) supports staying actions threatening the estate. | ST 105(a) not required if stay remains; TRO insufficient. | Authority under § 105(a) supports TRO/PI alongside Rule 7065 standards. |
Key Cases Cited
- In re Reswick, 446 B.R. 362 (9th Cir. BAP 2011) (debtor-focused stay termination disputed; majority view favors estate Stay)
- In re Holcomb, 380 B.R. 813 (10th Cir. BAP 2008) (plain reading supports stay as to debtor and debtor's property, not estate)
- Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210 (9th Cir. 2002) (affirmative duty to discontinue post-petition collection actions when stay exists)
- In re Windmill Farms, Inc., 70 B.R. 618 (9th Cir. BAP 1987) (early BAP view on precedential value of BAP decisions)
- Bank of Maui v. Estate Analysis, 904 F.2d 470 (9th Cir. 1990) (BAP decisions not binding; appellate authority context)