In re Jumpp
- Reporters:
- Before:
- De Jesús, Vaughn, Deasy (per curiam)
PER CURIAM.
Veronica T. Jumpp (the “Debtor“) appeals from the bankruptcy court‘s June 23, 2006, order denying the Debtor‘s Motion for Determination and Declaratory Judgment as to Continuation and Existence of the Automatic Stay (“Motion for Determination“) and Motion to Reimpose the Automatic Stay, which had the effect of lifting the automatic stay in favor of Chase Home Finance, LLC (“Chase“). The bankruptcy court held that section 362(c)(3)(A)1 terminates the automatic stay in its entirety, i.e., with regard to the debtor, property of the debtor, and property of the estate. The Debtor argues that section 362(c)(3)(A) does not terminate the stay with regard to property of the estate. For the reasons set forth below, the bankruptcy court‘s order is vacated.
BACKGROUND
The Debtor filed a Chapter 13 petition on May 1, 2006. She had previously been a debtor in a Chapter 13 case, that was dismissed upon the Chapter 13 trustee‘s motion on February 6, 2006. Chase holds a mortgage on the Debtor‘s residence in which the Debtor claims approximately $86,000 in equity exempt under
In her current bankruptcy case, the Debtor filed a Motion to Extend the Automatic Stay on May 30, 2006, twenty-nine days post-petition. See
The Debtor next filed the Motion for Determination wherein she argued the position she currently argues on appeal, that section 362(c)(3)(A) does not terminate the stay with regard to property of the estate. The Debtor also filed a Motion to Reimpose the Automatic Stay, arguing that the court, could use section 105(a) to reimpose the stay.
The bankruptcy court denied both the Motion for Determination and the Motion to Reimpose the Automatic Stay, holding that section 362(c)(3)(A) terminates the automatic stay in its entirety, i.e., with regard to the debtor, the debtor‘s property, and property of the estate. The court also concluded that it could not reimpose the automatic stay under section 105(a).2
JURISDICTION
The bankruptcy appellate panel‘s jurisdiction includes appeals “from final judgments, orders, and decrees.”
STANDARD OF REVIEW
Generally, a bankruptcy court‘s factual findings are reviewed under the clearly erroneous standard and conclusions of law are reviewed de novo. See TI Fed. Credit Union v. DelBonis, 72 F.3d 921, 928 (1st Cir.1995); Western Auto Supply Co. v. Savage Arms, Inc. (In re Savage Indus., Inc.), 43 F.3d 714, 719-20 n. 8 (1st Cir. 1994). The extent to which the automatic stay terminates pursuant to section 362(c)(3)(A) is a question of law that the Panel herein reviews de novo.
DISCUSSION
The question presented on appeal is whether section 362(c)(3)(A) terminates the automatic stay with regard to the debtor, property of the debtor, and property of the estate, or only with regard to the debtor and property of the debtor. The majority of courts that have considered the issue have concluded that the automatic stay does not terminate with respect to property of the estate.3 The court below
Section 362(c)(3) terminates the automatic stay after thirty days for individual debtors who have had a previous bankruptcy case pending within the preceding year:
(3) if a single or joint case is filed by or against debtor who is an individual in a case under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b) —
(A) the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease shall terminate with respect to the debtor on the 30th day after the filing of the later case;
(B) on the motion of a party in interest for continuation of the automatic stay and upon notice and a hearing, the court may extend the stay in particular cases as to any or all creditors (subject to such conditions or limitations as the court may then impose) after notice and a hearing completed before the expiration of the 30-day period only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed; and
(C) for purposes of subparagraph (B), a case is presumptively filed not in good faith (but such presumption may be rebutted by clear and convincing evidence to the contrary) —
(i) as to all creditors, if —
(I) more than 1 previous case under any of chapters 7, 11, and 13 in which the individual was a debtor was pending within the preceding 1-year period;
(II) a previous case under any of chapters 7, 11, and 13 in which the individual was a debtor was dismissed within such 1-year period, after the debtor failed to —
(aa) file or amend the petition or other documents as required by this title or the court without substantial excuse (but mere inadvertence or negligence shall not be a substantial excuse unless the dismissal was caused by the negligence of the debtor‘s attorney);
(bb) provide adequate protection as ordered by the court; or
(cc) perform the terms of a plan confirmed by the court; or
(III) there has not been a substantial change in the financial or personal affairs of the debtor since the dismissal of the next most previous case under chapter 7, 11, or 13 or any other reason to conclude that the later case will be concluded —
(aa) if a case under chapter 7, with a discharge; or
(bb) if a case under chapter 11 or 13, with a confirmed plan that will be fully performed; and
(ii) as to any creditor that commenced an action under subsection (d) in a
previous case in which the individual was a debtor if, as of the date of dismissal of such, case, that action was still pending or had been resolved by terminating, conditioning, or limiting the stay as to actions of such creditor[.]
(4)(a)(i) if a single or joint case is filed by or against a debtor who is an individual under this title, and if 2 or more single or joint cases of the debtor were pending within the previous year but were dismissed, other than a case reified under section 707(b), the stay under subsection (a) shall not go into effect upon the filing of the later case[.]
I.
We begin by considering whether section 362(c)(3)(A) is ambiguous. If a Bankruptcy Code provision is unambiguous, the plain language, controls, so long as a literal application of the provision does not produce an absurd result or one that is “demonstrably at odds with the intentions of its drafters.” United States v. Ron Pair. Enters., Inc., 489 U.S. 235, 241, 242, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564; 571, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982)); Lamie v. United States Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004). In our search for ambiguity, we consider “the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997).
The Jupiter court, found the language of section 862(c)(3)(A) ambiguous, reasoning
that the operative and controlling wording in § 362(c)(3)(A) is that the stay under subsection (a) “terminates.” The Court construes the remaining language of “with respect, to the debtor” to define which debtor is effected by the provision, with reference to § 362(c)(3). Thus, in a joint case, a “debtor” may not necessarily mean both debtors if one debtor did not have a case dismissed within the year prior to the current petition date. See; e.g., In re Parker, 336 B.R. 678, 680-81 (Bankr.S.D.N.Y.2006) (holding that the new provisions of § 362(c)(4) does [sic] not affect a cofiling spouse with no prior filings). The Court finds § 362(c)(3)(A) lifts the automatic stay with respect to the category of debtor, defined by § 362(c)(3), including property of the debtor‘s estate.
In re Jupiter, 344 B.R. at 759-60. Other courts have found section 362(c)(3)(A)‘s phrase “terminates with respect to the debtor” to be unambiguous:
Section 362(c)(3)(A) as a whole is not free from ambiguity, but the words, “with respect to the debtor” hi that section are entirely plain; a plain reading of those words make sense and is entirely consistent with other provisions of § 362 and other sections of the Bankruptcy Code. Section 362(c)(3)(A) provides that the stay terminates “with respect to the debtor.” How could that be any clearer?
In re Jones, 339 B.R. at 363. We disagree with Jupiter that the phrase “with respect to the debtor” is any less operative or controlling than the word “terminates.” Viewed in isolation, the language itself is unambiguous.
(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of —
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under, this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;
(2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title;
(3) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate;
(4) any act to create, perfect, or enforce any lien against property of the estate;
(5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title;
(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and
(8) the commencement or continuation of a proceeding before the United States Tax Court concerning a corporate debtor‘s tax liability for a taxable period the bankruptcy court may determine or concerning the tax liability of a debtor who is an individual for a taxable period ending before the date of the order for relief under this title.
Section 521(a)(6), like section 362(c)(3)(A), was added by the Bankruptcy Abuse and Consumer Protection Act of 2005 (“BAPCPA“) and also distinguishes between types of the stay. Judge Votolato:
I feel that in this instance Congress has demonstrated an awareness of the difference between a stay against property of the estate, and a stay against the debtor under § 521(a)(6), which deals with the consequences of a debtor‘s failure
to reaffirm or redeem certain personal property subject to a purchase money security interest. In that instance Congress stated: “If the debtor fails to so act within the 45-day period referred to in paragraph (6), the stay under section 362(a) is terminated with respect to the personal property of the estate or of the debtor which is affected . . .“. 11 U.S.C. § 521(a)(6) . In § 362(c)(3)(A), Congress makes no such distinction and only states: the stay is lifted “with respect to the debtor.”
In re Pope, 351 B.R. at 16; see also In re. Jones, 339 B.R. at 364 (“If Congress had intended that the automatic stay would terminate under § 362(c)(3)(A) as to property of the estate, it would have specifically said so, as it did in § 521(a)(6).“).
Not every court that has considered the matter has found, section 362(c)(3)(A) to be consistent with, its sister subsections. Jupiter concluded that a partial termination of the stay would be inconsistent with section 362(6)(3)(B) and (C), which allows a “party in interest” to file a motion to extend the stay beyond the thirtieth day in the case of a debtor who has had one previous bankruptcy case, pending in the previous year. In re Jupiter, 344 B.R. at 760-61. The Motion must be filed and the hearing held within thirty days of the petition date, and the moving party must demonstrate that the later case was filed in good faith, and, in many cases, the burden of proof required of the moving party is clear and convincing.
Section 362(c)(4)(A)(i) is a new Code section that is similar in nature, to section 362(c)(3)(A) but contains distinctly different language. Whereas section 362(c)(3)(A) limits the automatic stay for debtors who have had one previous bankruptcy case; pending in the preceding year, section 362(c)(4)(A)(i) applies to debtors who have had two or more prior cases pending in the previous year. With respect to_ debtors with two or more prior cases, section 362(c)(4)(A)(i) clearly provides that “the stay under subsection (a) shall not go into effect upon the filing of the later case.”
Upon consideration of the language — “with respect to the debtor” — and the context in which that language is found, the Panel disagrees with the court below and concludes that this portion of section 362(c)(3)(A) is unambiguous. See In re Jumpp, 344 B.R. at 26 (finding the language of section 362(c)(3)(A) to be “less than clear” and proceeding to consider legislative history). In the face of an unambiguous statute, the Panel need not consider the statute‘s legislative history.4
II.
Having found the plain language to be unambiguous, we turn to whether a literal application of section 362(c)(3)(A) would produce an absurd result or one that is “demonstrably at odds with the intentions of its drafters.” United States v. Ron Pair Enters., Inc., 489 U.S. at 242, 109 S.Ct. 1026 (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982)); Lamie v. United States Trustee, 540 U.S. at 534, 124 S.Ct. 1023. The Jupiter court concluded that a partial termination of the stay would frustrate Congress‘s intention “to close `loopholes and incentives that allow and — sometimes — even encourage opportunistic personal filings and abuse.‘” In re Jupiter, 344 B.R. at 761 (quoting H.R.Rep. No. 109-31(I), at 5 (2005), as reprinted in 2005 U.S.C.C.A.N. 88-92). Jupiter continued by stating that “[a partial termination] is demonstrably at odds with Congress‘s intent to deter bad faith. [and] successive filings.” Id. at 762; see also In re Jumpp, 344 B.R. at 26-27 (“The thrust of amended section 362 is to burden the so-called `repeat filer’ with demonstrating why the automatic stay should be extended.“).
The Panel disagrees with Jupiter that a partial termination of the stay would fail to discourage abusive filings. Lifting the stay with respect to the debtor and property of the debtor does penalize the debtor and does provide potential options to creditors.
Given the wording and categorization found in section 362(a), termination of the stay with respect to the debtor means that: suits against the debtor can commence or continue postpetition because section 362(a)(1) is no longer applicable; judgments may” be enforced against the debtor, in spite of section 362(a)(2); collection actions may proceed against the debtor despite section 362(a)(6); and liens against the debtor‘s property may be created, perfected and enforced regardless of section 362(a)(5).
In re Williams, 346 B.R. at 367. Also, a landlord can bring an eviction action against a debtor “with respect to” a lease. In re Gillcrese, 346 B.R. at 377 (citing
The court below concluded that, despite the language difference between sections 362(c)(3)(A) and 362(c)(4)(A)(i), Congress did not intend to give two-time filers “significantly greater protection [under section 362(c)(3)(A)] than a debtor [under section 362(c)(4)(A)(i)] who is filing her third petition.” In re Jumpp, 344 B.R. at 27. The court reasoned that Congress instead intended that two-time filers get thirty-days protection from the stay, and then the en tire stay terminates, and three-time filers would get no stay, at all. “It is the number of filings that is the critical, distinction Congress was asking courts to make, not the extent to, which the automatic stay applies.” Id. While a complete termination of the automatic stay would also have made sense, that is not what the statute provides. Section 362(c)(3)(A) provides for a partial termination of the stay, which, although a lesser penalty than complete termination, nonetheless discourages abusive filings and, therefore, is a result that is neither absurd nor demonstrably at odds with the intention of the drafters.
With regard to the Debtor‘s residence, the automatic stay remains in effect to the extent that the residence is property of the bankruptcy estate. Because the automatic, stay never lapsed with respect to property of the estate, it is unnecessary for the Panel to consider issues regarding extensions of the stay. Therefore, we decline to comment on the thirty-day timing provision of section 362(c)(3)(B) and the bankruptcy court‘s conclusion that it lacked the power under section 105(a) to extend the automatic stay.
CONCLUSION
For the foregoing reasons, the bankruptcy court‘s order denying the Debtor‘s Motion for Determination and Motion to Reimpose the Automatic Stay is VACATED.