651 B.R. 445
8th Cir. BAP2023Background
- On October 12, 2022, Timothy Michael Davies filed a Chapter 13 petition.
- Davies had two or more prior bankruptcy cases dismissed within the preceding year, implicating 11 U.S.C. § 362(c)(4)(A)(i) (automatic stay does not arise by operation of law).
- Davies filed a timely motion under § 362(c)(4)(B) seeking the court to impose the automatic stay; the standing trustee opposed the motion.
- The bankruptcy court denied Davies’s motion to impose the stay.
- Davies appealed the denial. While that appeal was pending, the bankruptcy case was dismissed on May 19, 2023 (and no appeal was taken from the dismissal order).
- The appellate panel concluded it could not provide effective relief because the underlying bankruptcy case had been dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the automatic stay should be imposed under 11 U.S.C. § 362(c)(4)(B) | Davies: timely moved; court should exercise discretion to impose stay | Trustee: §362(c)(4)(A)(i) prevents automatic stay; oppose imposition | Bankruptcy court denied motion; appeal was later dismissed for lack of jurisdiction (mootness) |
| Whether the appeal remained justiciable after dismissal of the bankruptcy case | Davies: merits remain and relief could be granted | Trustee/Respondent: dismissal eliminates live case or controversy; appeal is moot | Appellate court held the appeal is constitutionally moot and dismissed for lack of jurisdiction |
Key Cases Cited
- Marshall v. McCarty (In re Marshall), 613 B.R. 458 (B.A.P. 8th Cir. 2020) (courts have duty to examine jurisdiction and mootness)
- Hickman v. State of Missouri, 144 F.3d 1141 (8th Cir. 1998) (federal courts limited to actual cases or controversies)
- Williams v. CitiFinancial Mortgage Co. (In re Williams), 256 B.R. 885 (B.A.P. 8th Cir. 2001) (appeal must be dismissed when no effectual relief is possible)
- Tigue v. Sosne (In re Tigue), 363 B.R. 67 (B.A.P. 8th Cir. 2007) (mootness doctrine discussion in bankruptcy appeals)
- FishDish, LLP v. VeroBlue Farms USA, Inc. (In re VeroBlue Farms USA, Inc.), 6 F.4th 880 (8th Cir. 2021) (equitable/prudential mootness may apply in bankruptcy appeals)
- Olive St. Inv., Inc. v. Howard Sav. Bank, 972 F.2d 214 (8th Cir. 1992) (dismissal of bankruptcy proceeding ends debtor's right to automatic stay)