Witkowski v. Knight (Witkowski)
523 B.R. 291
1st Cir. BAP2014Background
- Debtor and husband executed a $212,000 promissory note to Knight secured by a mortgage on real property in Rhode Island.
- Debtor and husband failed to make payments, maintain insurance, or pay taxes, prompting Knight to begin foreclosure proceedings.
- Knight postponed and continued foreclosures across multiple bankruptcy filings by Debtor or co-debtor; Debtor filed a second Chapter 13 on Jan 28, 2014.
- Debtor filed a Sanctions Motion alleging automatic-stay violations due to continued foreclosure actions and sought damages and an injunction.
- Bankruptcy court denied sanctions, concluding continuation and advertising did not violate the stay and citing Jumpp and related authority; Debtor timely appealed.
- Panel affirmed, holding that § 362(c)(3)(A) terminates stay only as to the debtor and her property, not as to property of the estate; continued postponements did not violate the stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of §362(c)(3)(A) termination of the stay | Debtor argues broader stay scope against property | Knight argues stay ends entirely after 30 days | Stay terminates only as to debtor and debtor's property; estate property remains protected |
| Whether foreclosure postponements violated the automatic stay | Debtor contends continued postponements/advertising harmed her and violated stay | Knight contends postponements preserved status quo and did not violate stay | Continuations and related advertising did not violate §362(a)(1) and were within permissible post-petition activity |
Key Cases Cited
- In re Jumpp, 356 B.R. 789 (1st Cir. BAP 2006) (holds stay terminates only as to debtor and debtor's property under §362(c)(3)(A))
- In re Roach, 660 F.2d 1316 (9th Cir. 1981) (postponement notices do not violate stay; maintain status quo)
- Taylor v. Slick, 178 F.3d 698 (3d Cir. 1999) (continuation of a sheriffs sale does not violate stay; preserves status quo)
- In re de Jesus Saez, 721 F.2d 848 (1st Cir. 1983) (similar reasoning on stay continuation and lack of harassment)
- In re Hart, 246 B.R. 740 (Bankr. D. Mass. 2000) (postponement of foreclosure may be allowed; not per se harassment)
- In re Roche, 228 B.R. 102 (Bankr. M.D. Pa. 1998) (postponement/continuation of sale during pendency does not violate stay)