EDGARDO RAMOS, District Judge.
This is an appeal from an April 15, 2014 Order of the Bankruptcy Court (Grossman, J.), which vacated the automatic stay imposed under 11 U.S.C. § 362(a) as to a debtor's interest in a rented apartment in order to allow his landlord to "enforce[] . . . its rights in, and remedies in and to," that property. Bankr. Doc. 119 at 1 (Order).
On July 18, 2012, Gregory Papadopoulos ("Papadopoulos") filed for voluntary relief under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. § 701 et seq., in the United States Bankruptcy Court for the Southern District of New York. See In re Papadopoulos, No. 12-13125 (JLG) (Bankr. S.D.N.Y. 2012); Bankr. Doc. 1. Papadopoulos is "a prolific filer in the courthouses of this Circuit," and is subject to a "filing ban" in the Southern District. Papadopoulos v. Gazes, No. 14 Civ. 3713 (KPF), 2014 WL 3928940, at *1 (S.D.N.Y. Aug. 12, 2014).
Several months before Papadopoulos filed his Chapter 7 petition, on January 18, 2012, he entered into a non-rent stabilized residential lease with I.S.T.A. Management Co. ("I.S.T.A.") to rent an apartment at 210 East 68th Street in Manhattan (the "Property"). See Bankr. Doc. 101-1 at 1; Bankr. Doc. 119 at 1. When Papadopoulos filed for bankruptcy in July of that same year, he was current on his rental payments. Tr. 2:14-17.
On February 21, 2014, after learning of the ongoing bankruptcy proceedings, I.S.T.A. moved in Bankruptcy Court for an order, pursuant to 11 U.S.C. § 362(d), directing Papadopoulos to pay his outstanding post-petition rent or, alternatively, lifting the automatic stay so that I.S.T.A. could seek relief in Civil Court. Id. at 1. The Chapter 7 Trustee, Ian J. Gazes, filed a Statement of No Objection to I.S.T.A.'s motion on March 10, 2014. Bankr. Doc. 109. Papadopoulos objected, claiming, inter alia, that I.S.T.A.'s calculations were inaccurate, that I.S.T.A. was "defrauding" the Court, and that I.S.T.A. had insufficiently supported its request for relief. See Bankr. Doc. 112 at 3-5.
A hearing was held on March 18, 2014, at which Papadopoulos first argued that he did not owe I.S.T.A. any money because a substantial security deposit had been applied to his rent, Tr. 7:1-3, but then acknowledged that he was "probably a month" behind. Id. 10:1-10. I.S.T.A. claimed that Papadopoulos was actually three or four months behind and provided a rent schedule documenting his outstanding payments. See id. 10:3; Bankr. Doc. 101-2. Additionally, I.S.T.A. explained that it is their practice to "hold" each security deposit until the end of a lease and only then apply it to rent or damages. Tr. 7:17-23.
During the hearing, Judge Robert E. Grossman informed Papadopoulos that he had a legal obligation to pay all rent incurred since the time of his bankruptcy filing, regardless of what had transpired before that point. Id. 5:18-20. Concluding, based on I.S.T.A.'s statements and documentation, that Papadopoulos had seemingly failed to pay more than $12,000 in postpetition rent, Judge Grossman found that he had "no alternative but to let [I.S.T.A.] go to Landlord and Tenant Court," id. 5:18-22, and had to grant I.S.T.A.'s motion "as a matter of law" unless Papadopoulos was "prepared to cut them a check [that day] for all that [he] owe[d] them." Id. 6:21-24. To the extent that Papadopoulos sought to challenge I.S.T.A.'s demand for payment, Judge Grossman declared that the proper forum for any such defenses and counterclaims would be New York State Civil Court. Id. 11:7-21.
On April 15, 2014, Judge Grossman issued a one-page order granting I.S.T.A.'s motion to lift the automatic stay. Bankr. Doc. 119. Papadopoulos filed his motion for leave to appeal on April 24, 2014. Bankr. Doc. 120. That motion is unopposed.
Section 362(d)(1) of the Bankruptcy Code directs courts to grant relief from the automatic stay "for cause, including the lack of adequate protection of an interest in property of such party in interest. . . ." 11 U.S.C. § 362(d)(1). "The term `cause' is not defined in the Bankruptcy Code, and whether cause exists should be determined on a case by case basis." Manhattan King David Rest. Inc. v. Levine, 163 B.R. 36, 40 (S.D.N.Y. 1993) (citing In re Sonnax Industries, 907 F.2d 1280, 1286 (2d Cir.1990)). However, courts have concluded that a debtor's "failure to pay post-petition rent may . . . serve as grounds for lifting the automatic stay." In re Mad Lo Lo LLC, No. 09-11911 (MG), 2009 WL 2902567, at *4 (Bankr. S.D.N.Y. May 28, 2009) (citing In re Taylor, No. 97 Civ. 5967 (HB), 1997 WL 642559, at *1 (S.D.N.Y. Oct. 16, 1997)).
The Second Circuit Court of Appeals has outlined a set of twelve factors that may be relevant in a court's determination of whether there is "cause" to grant relief from an automatic stay in order to permit a party to commence or continue litigation in another forum.
Sonnax, 907 F.2d at 1286. However, "[o]nly those factors relevant to a particular case need be considered, and the Court need not assign them equal weight." In re Touloumis, 170 B.R. 825, 828 (Bankr. S.D.N.Y. 1994) (citations omitted).
Typically, a district court will review a bankruptcy court's discretionary decision to lift an automatic stay using an "abuse of discretion" standard." In re Bogdanovich, No. 00 Civ. 2266 (JGK), 2000 WL 1708163, at *4 (S.D.N.Y. Nov. 14, 2000) (citing In re Boodrow, 126 F.3d 43, 47 (2d Cir. 1997); Sonnax, 907 F.2d at 1286). "A bankruptcy court abuses its discretion when it bases its decision on an erroneous view of the law or clearly erroneous factual findings." In re Watkins, No. 06 Civ. 1341 (DGT), 2008 WL 708413, at *2 (E.D.N.Y. Mar. 14, 2008). In this case, it is unnecessary for the Court to consider whether the Bankruptcy Court abused its discretion or properly lifted the automatic stay in order to permit I.S.T.A. to proceed with its action in Civil Court, because Papadopoulos' appeal is moot.
"It is well-established that an appeal is rendered moot if the appellate court is unable to grant any effective relief." Id. at *2 (quoting In re Baker, 339 B.R. 298, 302 (E.D.N.Y. 2005)). Courts have dismissed as moot bankruptcy appeals where the debtor's primary reason for contesting the lifting of an automatic stay is to delay or stop state-court eviction proceedings once the stay has been lifted and the debtor has been evicted. Id. (citing In re Gucci, 105 F.3d 837, 839-40 (2d Cir.1997); In re Baker, 339 B.R. at 302-304)).
Here, Papadopoulos himself acknowledges the mootness of his appeal with regard to his effort to avoid eviction, as he has already been evicted. See Doc. 5 at 1 ("[T]his matter is now moot as debtor was thrown out in the street during pendancy [sic] and had to rent a room in Queens."). Yet Papadopoulos argues that this Court should still reverse the judgment of the Bankruptcy Court in order to prevent I.S.T.A. from pursuing collection of approximately $9,000 in past due post-petition rent, claiming that such collection would "prejudice the rights of existing priority creditors," including his ex-wife, to whom $1,200,000 in maintenance and child support is due. Id. at 1, 3. He therefore asks this Court to remand this matter to the Bankruptcy Court "with instructions to reinstate the stay with regard to collections and list I.S.T.A. Management as a general creditor whose claims are subject to the final discharge or a dismissal." Id. at 3.
However, even if Papadopoulos' appeal were not moot, his portrayal of the relationship between the bankruptcy proceedings and I.S.T.A.'s state court action against him—the status of which is unknown to this Court beyond the fact of Papadopoulos' eviction—is incorrect. That action involves "a private dispute between the debtor and landlord," which "will not interfere with the administration and ultimate closing of the bankruptcy case, or prejudice the debtor's creditors." In re Henderson, 245 B.R. 449, 455 (Bankr. S.D.N.Y. 2000); see also Touloumis, 170 B.R. at 828 (observing that a Chapter 7 debtor's lease "lack[ed] any connection with [his] bankruptcy case" and that even pre-petition eviction proceedings in state court would "have no prejudice on . . . the interests of either the creditors or the trustee") (citing Sonnax, 907 F.2d at 1286). Therefore, assuming arguendo, that Papadopoulos' appeal is not moot with regard to I.S.T.A.'s ability to collect past-due rent from Papadopoulos in the state court action, this Court cannot conclude that the Bankruptcy Court abused its discretion by lifting the automatic stay.
For the reasons stated above, the appeal is DENIED and the judgment of the Bankruptcy Court is AFFIRMED. The Clerk of the Court is respectfully directed to terminate the appeal, Doc. 2, to mail a copy of this Opinion and Order to Appellant, and to close this case. Furthermore, the Court certifies, pursuant to 28 U.S.C. § 1915(a)(3), that any appeal from this Opinion and Order would not be taken in good faith; therefore, in forma pauperis status is denied for purposes of an appeal. See Coppedge v. United States, 369 U.S. 438, 444-45 (1962).
It is SO ORDERED.
TRANSCRIPT OF HEARING ON MOTION FILED BY ITSA MANAGEMENT TO VACATE AUTOMATIC STAY BEFORE THE HONORABLE ROBERT E. GROSSMAN, UNITED STATES BANKRUPTCY JUDGE
Proceedings recorded by electronic sound recording; transcript produced by transcription service.
THE COURT: Okay, appearances, please?
MR. MORACO: Robert F. Moraco, M-O-R-A-C-O. I am admitted, and I am of counsel to Lawrence P. Wolf, the Movant.
MR. PAPADOPOULOS: And Greg Papadopoulos, Debtor in this case.
THE COURT: What we have on today is a motion for the landlord to either have you pay him or for me to lift the stay so you can go back and fight in L&T Court.
Is that correct?
MR. MORACO: Yes, Your Honor. I'm going to be very brief.
The Petition in bankruptcy was filed in July of 2012.
At that time, Mr. Papadopoulos did not owe us any money.
The landlord says he never received notice of this proceeding.
After it was filed, Mr. Papadopoulos had a credit in his favor, August 1, but thereafter he began not to pay his rent.
Since we were not aware of the — since my client tells me they were not aware of the existence of this proceeding, they proceeded in Landlord & Tenant Court against Mr. Papadopoulos.
He informed us recently that there was a bankruptcy proceeding and a stay. We immediately informed the Civil Court that the proceeding is stayed. Mr. Wolf made this motion.
THE COURT: Did he have a security up with your client?
MR. MORACO: I am uncertain, Your Honor. I am uncertain. It's a non-regulated, non-stabilized lease, and he probably did.
But I would respectfully point out that all of the money that he owes us is post-petition.
THE COURT: How much does he owe you postpetition?
MR. MORACO: It's in the papers. $12,000.00 or $13,000.00 we claim. He may dispute it.
THE COURT: What's his monthly rent?
MR. MORACO: I think $3,750.00 less a credit.
THE COURT: Credit for?
MR. MORACO: Sometimes because they are in the habit of covering themselves on stabilized leases, when the market drops, by saying "the real rent is X but I'm providing you with a credit." They sometimes do it with non-stabilized leases.
It makes no sense, but it's $3,750.00 less $1,250.00, so it could be $2,700.00.
THE COURT: So he hasn't paid for four months, I gather?
MR. MORACO: No, he started not paying in August of 2012, I believe, and he has missed —
THE COURT: So why wouldn't he owe more than $13,000.00?
MR. MORACO: $2,500.00 a month. The rent is —
THE COURT: No, $3,700.00 a month you just said
MR. MORACO: No, it's attached — I'm sorry, it's attached — the rent printout is attached to the tables, and I have it on my phone.
THE COURT: Okay, but you're saying he hasn't paid any rent.
MR. MORACO: No, I didn't say that. I said he began missing payments immediately after he filed.
THE COURT: So some months he paid and some months he didn't pay?
MR. MORACO: I have the schedule on my phone. I shut it off because, you know, — I can answer that question directly.
THE COURT: All right, why don't you find out.
Mr. Papadopoulos?
MR. PAPADOPOULOS: I can answer some of those questions, Your Honor. I'm more familiar.
THE COURT: What is your monthly rent?
MR. PAPADOPOULOS: The monthly rent is $3,000.00. What he didn't tell you is that —
THE COURT: All right, —
MR. PAPADOPOULOS: — there's a three month security deposit.
THE COURT: All right, hold on. Hold on. Hold on. We'll get there. We'll get there.
You filed bankruptcy in 2012, correct?
MR. PAPADOPOULOS: I signed the lease with them the beginning of '12.
THE COURT: This is going to work better if you listen to my question and answer it.
MR. PAPADOPOULOS: Yes.
THE COURT: You filed bankruptcy in 2012, is that correct?
MR. PAPADOPOULOS: The middle of 2012, yes.
THE COURT: Okay. Since that point, forget what happened before, since that point, you need to pay the rent every month. That's under the law.
If you're not, then I have no alternative but to let them go to Landlord & Tenant Court.
That doesn't mean in L&T Court they're going to make you pay. You can have whatever defenses you have over there.
The only issue is whether I prevent them from going, since you filed in L&T Court an action against them, and they have an action against you. That's where you should be, not here.
MR. PAPADOPOULOS: It's much more complicated as what it appears.
THE COURT: Not really. Either you pay every month, or you don't. If you don't, it's a lease, and on an administrative basis you must pay.
I'm not arguing what you owed them, if anything, before. That's a different question. But you have to keep your landlord current while you're in bankruptcy.
Now, if you believe you have a defense to that, you're free to raise that in State Court. I'm not precluding that. I'm just saying my jurisdiction to keep you guys at bay here, is limited by the fact that you haven't paid.
Whatever the defenses you have, you can — that you don't owe them the money, whatever they may be, an L&T Judge over in State Court in New York will listen to those defenses over the next millennium that it takes over there.
I'm just saying I can't — the relief they've requested, as a matter of law, I have to grant unless you're prepared to cut them a check today for all that you owe them, but I don't think you are. I'm not saying you should, but you're not prepared to do that, are you?
MR. PAPADOPOULOS: I don't owe them the money. It's that simple. They have a security deposit, Your Honor, a substantial security deposit.
THE COURT: You have —
MR. PAPADOPOULOS: And I've got extensive —
THE COURT: I'll find out. Let's find out.
MR. PAPADOPOULOS: Okay. Would you —
THE COURT: Hold it, hold it. He says you have a security deposit that you've applied to his rent, and therefore he doesn't owe you any money.
MR. PAPADOPOULOS: Many more.
MR. MORACO: Security deposit started — (Long pause)
MR. MORACO: This is rent $3,000.00. It's normally listed on the Schedule when it's held, and I don't see it in front of me.
It is entirely possible that he had — I don't see a security deposit listed. It's entirely possible that he has a security deposit, but —
THE COURT: And is it possible it has been applied?
MR. MORACO: No. No, no. We hold them until the end of the lease and apply to rent or to damages.
THE COURT: So, sir, you're telling me that if Mr. Papadopoulos, whatever the security deposit he put up, still exists in your client's hands and is not applied to rent? So he owes the money, but your security deposit is there, it's an asset that you own?
MR. PAPADOPOULOS: Correct.
THE COURT: Excuse me?
MR. PAPADOPOULOS: That's correct.
THE COURT: Okay. So you've got to pay them.
MR. PAPADOPOULOS: There's a minimal amount of —Your Honor, if I may be heard, I've done some extensive research on the subject. I went to the law library, I pulled cases, —
THE COURT: Mr. Papadopoulos, —
MR. PAPADOPOULOS: — they don't really —
THE COURT: — you can go to the mountain itself.
MR. PAPADOPOULOS: I'm sorry?
THE COURT: You can go anyplace you want. The simple answer here is, this is a simple question of law.
MR. PAPADOPOULOS: Okay.
THE COURT: I've read your papers. And, by the way, the next pleading you file that misspells bankruptcy, we're going to have a problem.
Now, you may think it's funny, but you're not going to find me funny.
MR. PAPADOPOULOS: Okay.
THE COURT: We got that?
MR. PAPADOPOULOS: Yes. Will you allow me to argue as to my findings?
THE COURT: I'll let you argue, but I'm telling you —
MR. PAPADOPOULOS: Okay.
THE COURT: — if you do that again, it's going to — you're not going to like it.
MR. PAPADOPOULOS: Okay.
THE COURT: Don't do it.
MR. PAPADOPOULOS: Okay. I'm native Greek and English is not my native language.
THE COURT: There's an expression — I grew up in the Bronx, okay?
MR. PAPADOPOULOS: I'm sorry?
THE COURT: I grew up in the Bronx in the middle of New York City.
MR. PAPADOPOULOS: Okay.
THE COURT: There's an expression: Baloney. You know exactly what you're doing. Don't do it again.
MR. PAPADOPOULOS: Okay. I use a word in —
THE COURT: Well, I'll use words, too. My words will affect you.
MR. PAPADOPOULOS: I'm sorry?
THE COURT: How much does he owes you guy?
MR. MORACO: He does know. Mr. Papadopoulos, without your credits, how many months are you behind?
MR. PAPADOPOULOS: It's probably right now —
MR. MORACO: Four? Three or four?
MR. PAPADOPOULOS: — a month. A month. Probably a month.
THE COURT: Okay. That's $3,000.00. You're going to give him a check today for $3,000.00?
MR. PAPADOPOULOS: Well, I don't have it with me. I'll have to see if I can raise it. Obviously I didn't come here with a checkbook.
MR. MORACO: It's all post-petition, Your Honor. He owed us no money when he filed. This is all postpetition.
THE COURT: But nobody can tell me what he owes. He's admitted he owes something, and he's got to pay that.
MR. MORACO: We have a rent schedule attached to the moving papers.
THE COURT: Just give me two minutes of your argument. Tell me why I don't lift the stay.
MR. PAPADOPOULOS: First of all, the rent —
THE COURT: As a matter of law, tell me why the Debtor's failure to pay post-petition payments doesn't automatically require me to lift the stay.
MR. PAPADOPOULOS: Okay.
THE COURT: Just explain that to me.
MR. PAPADOPOULOS: There is at least five cases that I came across. Two of them — two of the cases were decided in this Court just Judge Bernstein and one by Judge Gropper.
Judge Gropper went through some extensive analysis.
THE COURT: Okay, sir, you owe $12,397.97 in postpetition rent.
MR. PAPADOPOULOS: I do not.
THE COURT: I don't know whether you do or you don't.
MR. PAPADOPOULOS: Okay.
THE COURT: But the landlord argues you do, and I'm telling you to go to State Court. Go to State Court and fight with him. Do anything you want over there. Keep him at bay for a million years. I don't care.
But it's not here anymore. Your case remains here, the bankruptcy case remains, they have a right to go to State Court.
I've read your cases that have nothing to do-post-petition rents must be paid.
MR. PAPADOPOULOS: Okay.
THE COURT: You owe the money.
MR. PAPADOPOULOS: Have you had a chance to review the cases I cited?
THE COURT: Yes, I read them. I understand them. I used to argue them.
MR. PAPADOPOULOS: Okay.
THE COURT: I have people who have argued these things. There is no argument.
MR. PAPADOPOULOS: Okay.
THE COURT: There's one case where a judge found that the person was basically a paraplegic and had to be given time to find a new place. You are neither.
MR. PAPADOPOULOS: I am. Yes, sir.
THE COURT: No, I don't think you're a paraplegic.
MR. PAPADOPOULOS: Not paraplegic, but I have a severe hip injury.
THE COURT: Well, find a place with an elevator.
MR. PAPADOPOULOS: I'm sorry?
THE COURT: Find another place with an elevator.
MR. PAPADOPOULOS: I cannot do that overnight.
THE COURT: You're not going to be forced to do anything overnight. You know how long it's going to take them in L&T Court, knowing you?
MR. PAPADOPOULOS: I'm well familiar.
THE COURT: Okay. I know you are.
MR. PAPADOPOULOS: I've very experienced in litigation, Your Honor.
THE COURT: Sir, I have a hundred percent confidence in you. I would probably retain you in L&T Court to represent me if I wanted to not get thrown out of a building.
MR. PAPADOPOULOS: I can't, I don't have —
THE COURT: He's buying himself a wonderful exercise fighting you in front of a nice judge down on Center Street, or wherever they are now. I haven't been there in years, and I know I'm not capable of going there. It's its own world. You're aware of it, you understand it.
I'm going to give you the opportunity to play with this gentleman over in that play pen. Not here. It has nothing to do with the rest of your case.
MR. PAPADOPOULOS: Well, I'm sorry, Your Honor, but research seems to indicate that most of the cases such relief is denied. I've cited five cases, they were all denied.
There are abuses of the system. What you might be thinking is there are certain abuses. What typically happens in bankruptcy, somebody falls behind, they get a judgment in State Court, and the next thing the debtor files a bare bones bankruptcy.
THE COURT: Sir, I understand that.
MR. PAPADOPOULOS: It's a case.
THE COURT: There are thousands every day around the country.
MR. PAPADOPOULOS: It's not an abusive case.
THE COURT: Of cases, a landlord gets orders up to an order of eviction. If he has an order of eviction, a bankruptcy doesn't help you. He gets a judgment, gets whatever, and they know somebody then files and they've got to go through a whole process in the Bankruptcy Court, and then they've got to start again in State Court.
That's where we are. You didn't pay postpetition. You have to pay post-petition. I'm not throwing you out of your house, nobody is coming this afternoon — to my knowledge can come this afternoon. They have to go and get an order of eviction, which they haven't gotten.
You're going to fight it. It will be what it will be. Nobody is precluding you. You'll have a — you're very well versed in what happens over there. I'm not making any substantive ruling at all. I'm not hurting you.
MR. PAPADOPOULOS: I have limitations. I have severe disabilities, physical, I was even diagnosed with mental disabilities, you know. I have —
THE COURT: Tell that to the L&T Court.
MR. PAPADOPOULOS: — I have suffered —
THE COURT: Tell that to the L&T Court.
MR. PAPADOPOULOS: — Your Honor, do you realize what they did? I'm sure you know by know that I'm a well known whistle blower of —
THE COURT: Sir, I've read your pleadings. I know that in — there are a lot of allegations. I'm not dealing with any substantive issue now. All I'm dealing with is a motion to lift the stay because the Debtor didn't pay.
I'm not saying you're a good guy, I'm not saying you're a bad guy.
MR. PAPADOPOULOS: Well, —
THE COURT: I'm just doing what the law requires me to do.
MR. PAPADOPOULOS: — let me just argue my position to what your views appear to be, okay?
The issues are federal in nature, okay? His client stabbed me three doors away from the former U.S. Attorney General. Mr. Michael —
THE COURT: At least you're well protected.
MR. PAPADOPOULOS: I'm sorry?
THE COURT: You're well protected.
MR. PAPADOPOULOS: Your Honor, I have 18 years history dealing with FBI corruption.
THE COURT: Move. Why do you want to stay there? Move.
MR. PAPADOPOULOS: I would like to move.
THE COURT: So move.
MR. PAPADOPOULOS: I can't while in bankruptcy. cannot go sign a contract.
THE COURT: No, no, you get another apartment and you want to lease it, put it in front of me.
MR. PAPADOPOULOS: I'm sorry?
THE COURT: If you find another apartment that somebody will rent to you and you think you need me to sign off on that, let me take a look at it. I'll get you into another — I'll let you go to another place. They will let you go to another place, too.
MR. PAPADOPOULOS: These are my efforts to find another apartment.
THE COURT: I'm not the one who just said you want to go to another place, you did.
MR. PAPADOPOULOS: This are my unpaid medical bills after living in that apartment. Unpaid medical bills, okay? Injuries suffered, harassment, vandalism, one after the other.
THE COURT: You have the full right. If you want to sue him, sue him.
MR. PAPADOPOULOS: Your Honor, you might not be familiar with how the City works, but one landlord can easily insure that nobody rents you an apartment.
THE COURT: Okay, guys, here's where we are. There's a motion to lift stay. The Court is going to grant that motion.
Please submit the order, and thank you very much.
MR. MORACO: That you, Your Honor.
THE COURT: Court is adjourned.
MR. PAPADOPOULOS: Oh, may I leave some papers for you?
(Time noted: 12:31 p.m.)
I, Randel Raison, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above-entitled matter, to the best of my ability.
