United States District Court, N.D. California, San Jose Division
ORDER AFFIRMING BANKRUPTCY COURT’S ORDER ON
MOTION FOR AN ORDER CONFIRMING NO AUTOMATIC STAY IN
EFFECT
BETH
LABSON FREEMAN United States District Judge.
Debtor/Appellant
John Vitalich, proceeding pro se, has appealed an order of
the Bankruptcy Court holding that the automatic stay
terminated on December 6, 2015 with respect to the interest
of Appellee BNY Mellon[1] in certain property of the bankruptcy
estate, specifically, a parcel of real property located in
Seaside, California (“the Seaside property”). The
appeal turns on the question of whether the Bankruptcy Court
properly applied 11 U.S.C. § 362(c)(3)(A) to terminate
the automatic stay not only as to the debtor and the
debtor’s property, but also as to the property of the
bankruptcy estate. For the reasons discussed below, the
Bankruptcy Court’s order is AFFIRMED.
I.
BACKGROUND
Vitalich
has filed serial bankruptcy cases and adversary proceedings
which have prevented BNY Mellon from foreclosing on the
Seaside property for more than eight years. Vitalich filed
the Chapter 11 petition in the current case on November 6,
2015. Petition, Appellee’s Suppl. Appx. Tab BDE #1, ECF
27-2.[2] On December 1, 2015, Vitalich filed a
“Motion for an Order to Extend or Impose the Automatic
Stay in Pursuant to 11 U.S.C. § 362(c)(3) [or (4)],
” stating that absent further order of the Bankruptcy
Court, the automatic stay would terminate on December 6,
2015. Motion for an Order to Extend or Impose the Automatic
Stay, Appellee’s Suppl. Appx. Tab BDE #21, ECF 27-4.
The statute referenced in the caption of Vitalich’s
motion, 11 U.S.C. § 362(c)(3), provides in relevant part
that when a debtor files a second bankruptcy case within one
year after dismissal of an earlier bankruptcy case, the
automatic stay “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). Upon the motion
of any party in interest, and if notice is given and a
hearing held before expiration of the thirty-day period, the
court may extend the stay as to any or all creditors if the
moving party demonstrates that the filing of the later case
is in good faith as to the creditors to be stayed. 11 U.S.C.
§ 362(c)(3)(B).[3]
Vitalich
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. Vitalich 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. Id.
The Bankruptcy Court denied Vitalich’s motion and his
subsequent motion for reconsideration of that ruling. BR
Docket, Appellee’s Suppl. Appx. Tab BDE DKT, ECF 27-1.
Both the initial ruling and the denial of reconsideration
were made orally on the record without written order.
Id.
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 case. 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 Debtor’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.[4]
III.
JURISDICTION
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, 545 F.3d 764, 769 (9th Cir. 2008)
(internal quotation marks and citation omitted) (alterations
in original). “[A] bankruptcy court order is considered
to be final and thus appealable where it 1) resolves and
seriously affects substantive rights and 2) finally
determines the discrete issue to which it is
addressed.” Id. (internal quotation marks and
citation omitted) (alterations in original).
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, appealable 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-06-1358-ZRB,
06-00198, 2007 WL 7535064 (9th Cir. BAP 2007). A published
decision of the Ninth Circuit BAP addressed the proper
interpretation of § 362(c)(3)(A) on appeal, but in the
context of an appeal from the bankruptcy court’s order
denying the debtor’s motion for damages for violation
of the automatic stay, not in the context of a freestanding
order confirming termination of the automatic stay. See
In re Reswick, 446 B.R. 362 (9th Cir. BAP 2011).
This
Court concludes that an order confirming termination of the
automatic stay under § 362(c)(3)(A) is final and
appealable, as such an order “resolves and seriously
affects substantive rights” and “finally
determines the discrete issue to which it is
addressed.” See Rosson, 545 F.3d at 769. This
conclusion is consistent with the cases cited above, and with
Ninth Circuit cases holding that “[o]rders granting or
denying relief from the automatic stay are deemed to be final
orders.” In re Nat’l Envtl. Waste Corp.,
129 F.3d 1052, 1054 (9th Cir. 1997). While the Bankruptcy
Court’s order in this case did not grant or deny relief
from the automatic stay, but rather confirmed its termination
as a matter of law, the issues are so closely related that
this Court is of the view that the Ninth Circuit likewise
would conclude that orders confirming termination of the
automatic stay under § 362(c)(3)(A) are final and
appealable.
IV.
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