Vitalich v. Bank of New York MellonVitalich v. Bank of New York Mellon
ORDER AFFIRMING BANKRUPTCY COURT’S ORDER ON MOTION FOR AN ORDER CONFIRMING NO AUTOMATIC STAY IN EF- • FECT I
Debtor/Appellant John Vitalich, proceeding pro se, has appealed an order of
I. BACKGROUND
Vitalieh has filed serial bankruptcy cases and adversary proceedings which have prevented BNY Mellon from foreclosing on the Seaside property for more than eight years. Vitalieh filed the Chapter 11 petition in the current ease on November 6, 2015. Petition, Appellee’s Suppl. Appx. Tab BDE # 1, ECF 27~2.
Vitalieh stated in his motion before the Bankruptcy Court that he had filed a prior Chapter 11 case in August 2015 which had been dismissed in September 2015, less than one year before his filing of the current Chapter 11 case. Motion for an Order to Extend or Impose the Automatic Stay, Appellee’s Suppl. Appx. Tab BDE #21, ECF 27-4. Vitalieh stated that as a result of the prior bankruptcy case, the automatic stay in the present case would terminate on December 6, 2016. Id. He requested that the Bankruptcy Court extend or impose the automatic stay as to all creditors.
On December 8, 2015, BNY Mellon filed a motion seeking confirmation that under § 362(c)(3)(A) the automatic stay had terminated on December 6, 2015, thirty days after the filing of the present bankruptcy ease. Motion for an Order Stating no Automatic Stay in Effect or, Alternatively, for Relief from Automatic Stay and Sanctions against the Debtor, Appellee’s Suppl. Appx. Tab BDE #30, ECF 27-6. BNY Mellon alternatively requested relief from the automatic stay. Id.
On December 31, 2015, the Bankruptcy Court issued the written order that is the subject of the present appeal, titled “Order on Motion for an Order Confirming No Automatic Stay in Effect.” Order on Motion for an Order Confirming No Automatic Stay in Effect, Appellee’s Suppl. Appx. Tab BDE # 39, ECF 27-7. In that order the Bankruptcy Court held that “the automatic stay provisions of 11 U.S.C. § 362 expired on 12/6/15” with respect to BNY Mellon’s interest in the Seaside property, and that BNY Mellon “may complete its foreclosure of said real property and proceed with post-foreclosure remedies, including any unlawful detainer action.” Id. The Bankruptcy Court did not address BNY Mellon’s alternative request for relief from the automatic stay. Id.
Vitalich timely appealed the Bankruptcy Court’s' order and elected to have the appeal heard by the district court rather than the Bankruptcy Appellate Panel. Notice of Appeal and Statement of Election, Appellee’s Suppl. Appx. Tab BDE # 43, ECF 27-8. Both the Bankruptcy Court and this Court denied Vitalich’s motions for a stay pending appeal. Order on Debt- or’s Motion for Stay Pending an Appeal, Appellee’s Suppl. Appx. Tab BDE #77, ECF 27-10; Order Denying Appellant’s Emergency Motion for Stay Pending Appeal, ECF 23. It is unclear whether BNY Mellon has foreclosed on the Seaside property or otherwise acted to enforce its interest in the property. The bankruptcy case is ongoing.
II. ISSUE PRESENTED
The single issue on appeal is whether the Bankruptcy Court erred as a matter of law in holding that the automatic stay expired as to the Seaside property, which is property of the bankruptcy estate, thirty days after the present bankruptcy case was filed. While Vitalich’s prior filings in the Bankruptcy Court reflected a belief that § 362(c)(3)(A) applied to the Seaside property, he now takes the position that § 362(c)(3)(A) terminates the automatic stay only as to the debtor and debtor’s property but not as to property of the estate.
This Court has jurisdiction to hear appeals “from final judgments, orders, and decrees” of bankruptcy courts. 28 U.S.C. § 158(a)(1). The Ninth Circuit has “adopted a pragmatic approach to finality in bankruptcy.. .[that] emphasizes the need for immediate review, rather than whether the order is technically interlocutory.” In re Rosson,
Neither party addresses the issue of whether the Bankruptcy Court’s Order on Motion for an Order Confirming No Automatic Stay in Effect is a final, appeal-able order, although BNY Mellon asserts conclusorily that this Court has jurisdiction over the appeal pursuant to 28 U.S.C. § 158. The Court has been unable to discover a case specifically addressing the appealability of a bankruptcy court’s order confirming termination of the automatic stay under § 362(c)(3)(A). Unpublished decisions of the Ninth Circuit Bankruptcy Appellate Panel (“BAP”) have treated such orders as appealable without discussion. See, e.g, In re Genaro, Nos. AK-06-1358ZRB, 06-00198,
This Court concludes that .an order confirming termination of the automatic stay under § 362(c)(3)(A) is final and appeal-able, as such an order “resolves and seriously affects substantive rights” and “finally determines the discrete issue to which it is addressed.” See Rosson,
IV. STANDARD OF REVIEW
This Court reviews the Bankruptcy Court’s conclusions of law de novo and findings of fact for clear error. In re Sunnyslope Hous. Ltd. P’ship,
BNY Mellon characterizes the Bankruptcy Court’s Order on Motion for an Order Confirming No Automatic Stay in Effect as “an order granting relief from
V. DISCUSSION
A. Untimeliness of Opening Brief on Appeal
BNY Mellon asserts that Vitalich’s appeal should be dismissed for failure to timely file the opening brief. See Fed. R. Bankr. P. 8018(a)(4) (district court may dismiss appeal for failure to file brief on time). Vitalich filed his opening brief on April 30, 2016, one day beyond the April 29, 2016 deadline set by the Court upon Vitalich’s second request for an extension of time. See Appellant’s Opening Brief, ECF 13; Order Granting Appellant’s Second Request for an Extension of Time to File Opening Brief on Appeal, ECF 12. In light of Vitalich’s pro se status, and absent any demonstrated prejudice to BNY Mellon, the Court declines to dismiss the appeal on this basis.
B. Scope of § 362(c)(3)(A)
The scope of § 362(c)(3)(A) is an open question which has been addressed by two lines of cases. The Ninth Circuit BAP has described those two lines of cases as the “majority” view, under which § 362(c)(3)(A) terminates the automatic stay only with respect to the debtor and debtor’s property but not with respect to property of the estate, and the “minority” view, under which § 362(c)(3)(A) terminates the automatic stay in its entirety, that is, with respect to the debtor, debtor’s property, and property of the estate. See In re Reswick,
Most bankruptcy courts within the Ninth Circuit have followed Resmck in determining that § 362(c)(3)(A) terminates the automatic stay in its entirety. See, e.g., In re Wilson, No. 15-01642-FPC7,
Section 362(c)(3)(A) provides as follows: if a single or joint case is filed by or against a 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.
11 U.S.C. § 362(c)(3)(A) (emphasis added).
1. Principles of Statutory , Construction
“It is well established that when the statute’s language is plain, the sole function of the courts — at least where the disposition required by the text is not absurd — is to enforce it according to its terms.” Lamie v. United States Trustee,
2. Construction of § 362(c)(3)(A)
The majority interpretation concludes that the phrase “with respect to the debt- or” draws an unambiguous distinction between the debtor and debtor’s property on the one hand and the property of the estate on the other. See Reswick,
The minority interpretation acknowledges that the construction urged by the majority is reasonable but concludes that there are other reasonable constructions. See Reswick,
This Court agrees that both the interpretations discussed above are reasonable and thus that the plain reading approach urged by the majority does not resolve the question of how § 362(c)(3)(A) should be construed. “A statute is ambiguous ... if it is subject to more than one reasonable interpretation.” John v. United States,
Section 362(c)(3) and the following section, § 362(c)(4), were added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), which was enacted by Congress “to correct perceived abuses of the bankruptcy system.” Milavetz, Gallop & Milavetz, P.A. v. United States,
It appears inconsistent with this scheme of deterrence to permit a repeat filer falling within § 362(c)(3)(A) to retain the protection of the automatic stay for property of the bankruptcy estate, which as a practical matter usually consists of all significant assets. The Reswick court observed that such an interpretation “would provide no meaningful relief to creditors in chapter 13 cases, where repeat filings are most prevalent.” Reswick,
As discussed above, the majority view is that the text of the statute is so plain that no consideration of legislative history or purpose is required. However, to the extent that the cases adopting the majority view take up those issues, they conclude
Having considered the language of the statute itself, the statutory structure, the legislative intent, the cases articulating both the majority and minority views, and in particular the Ninth Circuit BAP’s lengthy and well-reasoned opinion discussing all of the above, this Court concludes that § 362(c)(3)(A) terminates the automatic stay entirely and not only with respect to the debtor and the debtor’s property. Accordingly, this Court concludes that the Bankruptcy Court did not err jn entering its Order on Motion for an Order Confirming No Automatic Stay in Effect,
C. BNY Mellon’s Alternative Request for Relief from Stay
BNY Mellon argues that regardless of the correct interpretation of § 362(c)(3)(A), this Court may affirm the Bankruptcy’s Court’s Order on Motion for an Order Confirming No Automatic Stay in Effect on the alternative ground that the Bankruptcy Court could have granted BNY Mellon discretionary relief from the automatic stay. BNY Mellon relies on Keniston v. Roberts,
BNY Mellon’s reliance on Keniston and Leptich is misplaced. In Keniston, the Ninth Circuit concluded that the district court had erred in dismissing the case for lack of jurisdiction but went on to determine whether dismissal could be upheld on a different legal ground, failure to state a claim upon which relief can be granted. Keniston,
Accordingly, this Court concludes that BNY Mellon’s alternative request for relief from stay does not provide a basis for affirming the Bankruptcy Court’s order. However, as discussed above, the Court affirms the Bankruptcy Court’s order on the basis that the Bankruptcy Court correctly interpreted § 362(c)(3)(A).
YI. ORDER
The Bankruptcy Court’s Order on Motion for an Order Confirming No Automatic Stay in Effect is AFFIRMED. The Clerk of the Court shall close the file.
Notes
. For the sake of convenience, the Court uses the shortened name "BNY Mellon" to refer to Appellee The Bank of New York Mellon, fita Bank of New York, as Trustee, on behalf of the registered holders of Alternative Loan Trust 200'6-OC3, Mortgage Pass-Through Certificates, Series 2006-OC3, its assignees and/or successors, by and through its servicing agent Select Portfolio Servicing, Inc,
. Appellee’s Supplemental Appendix uses tabs keyed to the bankruptcy docket. Thus Vita-lich’s Chapter 11 petition, the first document filed in the bankruptcy case, is identified by a tab marked "BDE # 1,” which stands for "Bankruptcy Docket Entry No. 1.”
.Vitalich’s motion referenced not only § 362(c)(3), discussed above, but also § 362(c)(4). However, § 362(c)(4) provides in relevant part that when a debtor files a bankruptcy case within one year after dismissal of two or more earlier bankruptcy cases, the automatic stay "shall not go into effect upon the filing of the later case,” 11 U.S.C. § 362(c)(4)(A). Vitalich’s motion stated expressly that he had only one bankruptcy case pending in- the one-year period before filing the present case, rendering § 362(c)(4) inapplicable.
. Vitalich’s briefing identifies a number of other issues that he appears to believe are encompassed by his appeal, including whether BNY Mellon has legal standing to seek relief from the automatic stay, foreclose on the Seaside property, and institute unlawful detainer proceedings. Vitalich also asserts that the Bankruptcy Court erred in denying his motion to extend or impose the automatic stay and his motion for reconsideration of the Bankruptcy Court's ruling. Those issues are outside the scope of the appeal, which is limited to the Bankruptcy Court’s Order on Motion for an Order Confirming No Automatic Stay in Effect, Bankruptcy Docket Entry 39. See Notice of Appeal and Statement of Election, Appellee's Suppl. Appx. BDE # 43, ECF 27-8.
. In this particular case, it makes no practical difference which standard of review is applied. As discussed below, this Court affirms the Bankruptcy Court’s order under the de novo standard, and thus would affirm under the more deferential abuse of discretion standard as well.