479 B.R. 597
Bankr. N.D. Ala.2012Background
- Debtor has filed three bankruptcy cases in three years, with Rose Acceptance, Inc. involved in all of them.
- May 24, 2012, the Court issued an order lifting the automatic stay as to Rose Acceptance in part, with conditions to cure arrears and fund the plan.
- Debtor failed to make the mortgage payments and cure the defaults; foreclosure dates were set and continued.
- Debtor filed a motion to dismiss (May 23, 2012) and the case was subsequently dismissed earlier in the history, affecting stay status.
- Debtor’s current arrears are approximately $11,847; plan payments would need to be about $707 per month to cure arrears and fund ongoing payments, with evidence of ongoing mortgage payments to Rose Acceptance.
- Court considers relief under Rule 60(b)(6) to vacate or modify the May 24, 2012 order, finding extraordinary circumstances and balancing equity with creditor protection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 60(b)(6) relief from the stay order is warranted | Rose Acceptance argues extraordinary circumstances exist due to changed circumstances since lift. | Debtor argues relief would undermine finality and creditor protections. | Yes; exceptional circumstances exist and relief from the May 24 order is warranted. |
| Whether injunctive relief should issue to prevent foreclosure | Rose Acceptance supports an injunction pending a final hearing to protect its interest. | Debtor contends foreclosure should proceed if relief is denied. | Yes; four-factor test satisfied; injunction against foreclosure issued pending further proceedings. |
| Whether a temporary restraining order (TRO) should be issued or rule on it despite notice | Rule 65 relief can be sought without security and TRO/PI procedure applies. | Notice issues and procedural posture may limit TRO grant. | Court did not rule on TRO due to notice requirements; proceeding continued under Rule 65/7065 framework. |
| What rules govern the relief and proper procedural vehicle for relief from stay | Rule 60(b)(6) applied via 9024/60(b) motions to vacate the order lifting stay. | Debtor challenges use of Rule 60(b) in lieu of adversary proceeding under Rule 7001. | Rule 60(b)(6) relief available; contested matter under 9014 governs, not adversary proceeding, allowing motion-based relief. |
Key Cases Cited
- In re Hughes, 873 F.2d 262 (11th Cir.1989) (equity in bankruptcy and appellate view on Rule 60(b)(6))
- Hertz Corp. v. Alamo Rent-A-Car, Inc., 16 F.3d 1126 (11th Cir.1994) (Rule 60(b)(6) reserved for genuine injustice; cautions against using it to circumvent finality)
- Cavaliere v. Allstate Ins. Co., 996 F.2d 1111 (11th Cir.1993) (Rule 60(b)(6) is extraordinary, requiring exceptional circumstances)
- In re Fonner, 262 B.R. 350 (Bankr.W.D.Pa.2001) (Rule 60(b)(6) relief appropriate to accomplish justice; exceptional circumstances standard)
- In re Gledhill, 76 F.3d 1070 (10th Cir.1996) (distinguishes Rule 60(b) relief from adversary procedures for stay-related relief)
- Seven Elves, Inc. v. Eskenazi, 635 F.2d 396 (5th Cir.1981) (factors for evaluating Rule 60(b) motions and finality considerations)
- Rice v. Ford Motor Co., 88 F.3d 914 (11th Cir.1996) (adopts Rule 60(b) principles in related context)