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In Re: Joseph Anthony Ortola v. Deyanira Ortola; Rod

December 16, 2011

IN RE: JOSEPH ANTHONY ORTOLA, DEBTOR. JOSEPH ANTHONY ORTOLA, APPELLANT,
v.
DEYANIRA ORTOLA; ROD DANIELSON, CHAPTER 13 TRUSTEE, APPELLEE.



Appeal from the United States Bankruptcy Court for the Central District of California Honorable Meredith A. Jury, Bankruptcy Judge, Presiding Bk. No. 10-34218-MJ

FILED DEC 16 2011

SUSAN M SPRAUL, CLERK

U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

MEMORANDUM*fn1

Argued and Submitted on November 17, 2011 at Pasadena, California

Before: KIRSCHER, PAPPAS, and HOLLOWELL, Bankruptcy Judges.

1 Appellant, chapter 13*fn2 debtor Dr. Joseph Ortola ("Ortola"), 2 appeals a bankruptcy court order granting a motion for relief 3 from the automatic stay pursuant to § 362(c)(3)(A) ("Stay Relief 4 Order") filed by Ortola's former spouse, appellee Deyanira Ortola 5 ("Deyanira"). We AFFIRM. However, the order contains an error, 6 which counsel for Deyanira acknowledged at oral argument. The 7 order suggests that the stay in Ortola's second chapter 13 case 8 expired on July 30, 2010 - the date he filed the petition. This 9 is incorrect. The stay did not expire until 30 days after the 10 filing date - August 29, 2010.

11 I. FACTUAL AND PROCEDURAL BACKGROUND

12 Ortola filed his first chapter 13 bankruptcy case on May 19, 13 2010. The chapter 13 trustee moved to dismiss for Ortola's 14 failure to provide a copy of his 2009 tax return as required 15 under § 521(e)(2)(A)(I).*fn3 At a June 30, 2010 hearing on the 16 matter, Ortola's counsel stated that he had advised Ortola to 17 provide the tax return to the trustee prior to the § 341 18 creditor's meeting, and he was unsure why Ortola had not 1 complied. The court denied Ortola's request for a 10-day 2 extension and dismissed the case without prejudice. An order 3 dismissing Ortola's first bankruptcy case was entered on July 6, 4 2010.

5 Ortola filed his second chapter 13 bankruptcy case on 6 July 30, 2010. On October 12, 2010, Deyanira moved to confirm 7 termination of the automatic stay under § 362(c)(3) or, 8 alternatively, that no stay was in effect under § 9 362(c)(4)(A)(ii)("Stay Relief Motion"). Deyanira sought stay 10 relief to proceed in state court with pending dissolution 11 proceedings commenced in 2001. According to Deyanira's moving 12 papers, Ortola had filed for divorce in 2001. The case was 13 bifurcated as to marital status and division of property in 2003, 14 and judgment for termination of the marriage was entered at that 15 time. Deyanira contended the stay should be terminated to allow 16 the state court to determine her interest in their community 17 property. She further contended the automatic stay terminated as 18 to Ortola and his estate 30 days after he filed his second 19 chapter 13 case because his first case had been dismissed on 20 July 6, 2010.

21 Ortola opposed the motion, contending that Deyanira was not 22 entitled to relief because she had failed to show why his prior 23 bankruptcy case had been dismissed. Ortola further contended 24 that Deyanira had not shown "cause" for a determination of her 25 interests in what was undividable community property - the 26 building in which Ortola operated his dental practice. In his 27 supporting declaration, Ortola stated that he had dismissed his 28 first chapter 13 case because he did not yet have all the 1 required documents.

2 In her reply, Deyanira explained that Ortola had failed to 3 comply with prior state court orders ordering the sale of their 4 community property, which were issued to satisfy Ortola's 5 domestic support obligations. According to Deyanira, the state 6 court was prepared to issue a ruling granting her exclusive right 7 to sell certain real properties at a July 23, 2010 hearing in the 8 dissolution proceeding, but the matter was continued to September 9 10, 2010. She asserted that Ortola filed his second chapter 13 10 case on July 30 to circumvent entry of the state court orders.

11 Deyanira asked the bankruptcy court to take judicial notice of 12 her recently-filed adversary proceeding against Ortola that 13 sought to have these and other debts declared non-dischargeable.*fn4

14 At a hearing on December 1, 2010, the bankruptcy court 15 denied the Stay Relief Motion without prejudice. Without 16 controlling Ninth Circuit authority on the matter, the court 17 reasoned that under In re Jumpp, a case from the First Circuit 18 BAP, the automatic stay under § 362(c)(3)(A) terminated only as 19 to the debtor and debtor's property, not property of the estate.

20 The court concluded that the issues Deyanira raised in her 21 motion, which were the same issues raised in her adversary 22 complaint, would be better addressed by the bankruptcy court. 23 The court further noted that any orders entered by the state 24 court after July 30, 2010, violated the automatic stay and were 25 void. No order was ever entered on the Stay Relief Motion.

1 Deyanira subsequently filed a motion seeking to dismiss 2 Ortola's second bankruptcy case for exceeding debt limitations 3 under ยง 109(e). A hearing on that matter was held on 4 February 28, 2011. After discussing the pending matters ...


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