KAY WOODS, Bankruptcy Judge.
This cause is before the Court on 2
The First Motion was noticed for hearing to be held on November 30, 2017. Although the Second Motion also was accompanied by a notice, which set a hearing date of December 14, 2017, because the Second Motion did not substantively change the relief requested in the First Motion, the Court set the Second Motion for hearing on November 30, 2017. After 12:00 p.m. on November 29, 2017, the Debtor filed Motion for Continuance ("Motion to Continue") (Doc. 28) in which he sought to continue the hearing on the Second Motion until December 14, 2017 because the Debtor and Nationstar were "working out the final terms of the Agreed Order to be submitted to the Court." (Mot. to Continue at 1.)
This Court has jurisdiction pursuant to 28 U.S.C. § 1334 and General Order No. 2012-7 entered in this district pursuant to 28 U.S.C. § 157(a). Venue in this Court is proper pursuant to 28 U.S.C. §§ 1391(b), 1408, and 1409. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). The following constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052.
The Debtor filed a voluntary petition pursuant to chapter 13 of Title 11 on September 27, 2017 ("Filing Date"). The Debtor filed a prior chapter 13 case, denominated Case No. 16-42106 ("Prior Case"), on November 16, 2016. The Court dismissed the Prior Case on December 16, 2016. Thus, the Debtor was a debtor in a chapter 13 case that was pending and dismissed within the one-year period preceding the Filing Date.
The Debtor filed the First Motion 37 days after the Filing Date. The Debtor noticed the First Motion for a hearing to be held on November 30, 2017.
Section 362 of the Bankruptcy Code provides for imposition of an automatic stay when a debtor files for bankruptcy protection. As set forth in subsection (c)(3), however, this stay is not unlimited in all circumstances. If a debtor had a prior chapter 7, 11, or 13 case that was pending in the one-year period prior to the date the debtor files the second petition — and the prior case was dismissed — then the automatic stay terminates on the 30th day after the debtor files the second bankruptcy petition. The court may extend the stay if notice is given and a hearing held before the 30-day stay terminates.
11 U.S.C. § 362(c)(3) (2017) (emphasis added).
Section 362(c)(3) is applicable here because the Debtor is an individual in a case under chapter 13 and his Prior Case was pending and dismissed within the one-year period preceding the Filing Date. Because the Debtor did not file the First Motion until 37 days after the Filing Date, for obvious reasons, the Court was precluded from holding and completing a hearing "before the expiration of the 30-day period" in which the automatic stay was in effect.
Pursuant to the express terms of § 362(c)(3)(A) and (B), the automatic stay terminated on the 30th day following the Filing Date by operation of law.
In re Garrett, 357 B.R. 128, 131 (Bankr. C.D. Ill. 2006) (citations omitted); see also In re Moon, 339 B.R. 668, 670 (Bankr. N.D. Ohio 2016) ("As set forth in § 362(c)(3)(B), the Court may extend the automatic stay only after notice and a hearing completed before the expiration of the thirty day period after the filing of the later case. If the notice and hearing are not completed within this period, the automatic stay terminates by operation of § 362(c)(3)(A).")
The automatic stay terminated prior to the Debtor filing the First Motion pursuant to 11 U.S.C. § 362(c)(3)(A). Because the automatic stay terminated prior to the Debtor filing the First Motion, the Court cannot extend the automatic stay. To the extent the Second Motion seeks relief pursuant to § 362(c)(3)(B), it will be denied.
The Debtor did not address the timing of his request for extension of the stay in the First Motion. Nationstar brought this timing deficiency to the Debtor's attention in its Response. "Debtor did not file his herein Motion for an Order Imposing the Automatic stay until November 3, 2017 which was after the [sic] thirty (30) days of filing." (Resp. ¶ 6.) In an apparent attempt to address the late filing of the First Motion, the Debtor filed the Second Motion.
In the Second Motion, the Debtor states, "Furthermore since the Motion to extend the stay has been filed outside the thirty (30) day time frame set forth in the code [sic], the Debtor is seeking either an extension of the stay and/or the imposition of the stay by the Court." (Second Mot. ¶ 5.) In the alternative of the Court "extending" the automatic stay, the Debtor asks this Court to "impose" the automatic stay. The automatic stay is statutory and is governed by the express terms of 11 U.S.C. § 362. Because the Court cannot "impose" the stay in contravention of § 362, it appears the Debtor is actually requesting the Court to impose an entirely new and different stay. The Debtor cites no authority for imposition of a stay for the duration of a chapter 13 case outside the context of § 362.
The only possible authority for the Court to impose a stay under these circumstances would be 11 U.S.C. § 105(a), which provides:
11 U.S.C. § 105(a) (2017).
At least two bankruptcy courts have granted relief to debtors who missed the 30-day statutory deadline in § 362(c)(3)(B). See In re Franzese, No. 07-14518, 2007 WL 2083650 (Bankr. S.D. Fla. July 19, 2007); and In re Whitaker, 341 B.R. 336 (Bankr. S.D. Ga. 2006).
In re Whitaker, 341 B.R. at 342. The Whitaker court also noted that the Whitakers could not take advantage of § 362(c)(4)(B) — which is limited to multiple repeat filers — since the Whitakers had only one prior case pending in the year prior to filing their bankruptcy petition. Finding that the debtors had overcome the presumption of a bad faith filing and that no party had objected or filed a response to the motion, the court stated:
Id. at 346-47 (n.37-38 omitted).
The majority of courts, however, have held that § 105(a) does not provide the authority to re-impose a stay if the automatic stay cannot be continued pursuant to § 362(c)(3)(B). See In re Jumpp, 344 B.R. 21, 27 (Bankr. D. Mass. 2006) ("Although the Court is sympathetic to the plight of each of the above Debtors, having concluded that § 362(c)(3)(A) terminates the automatic stay on the 30th days [sic] after each of the Debtors filed her second bankruptcy petition, the Court cannot use its general equitable powers under § 105(a) to impose a stay Congress has declared must terminate if the requirements of § 362(c)(3) are not met."); and In re Garrett, 357 B.R. 128, 131 (Bankr. C.D. Ill 2006) (agreeing with the decision of In re Jumpp, "[T]he [Jumpp] Court could not use its general equitable powers under 11 U.S.C. § 105(a) to impose a stay Congress has declared must terminate if the requirements of § 362(c)(3) are not met.").
The bankruptcy court in In re Martinez, 515 B.R. 383 (Bankr. S.D. Fla. 2014) held that § 105(a) could not be used to re-impose the stay once it had expired pursuant to § 362(c)(3)(A). The bankruptcy court held that the Supreme Court's decision in Law v. Siegel, 134 S.Ct. 1188 (2014), prohibited it from invoking § 105(a) to extend or impose the automatic stay once the stay has terminated under § 362(c)(3).
In re Martinez, 515 B.R. at 386 (citing Law v. Siegel, 134 S. Ct. at 1194). The bankruptcy court held:
Id.
This Court agrees with the Martinez court that the Supreme Court's holding in Law v. Siegel precludes invocation of § 105(a) to override the specific terms of § 362(c)(3). Here, the Debtor failed to file the First Motion — let alone the Second Motion — prior to termination of the automatic stay pursuant to § 362(c)(3)(A). This Court cannot use its equitable powers in § 105(a) to change that result. Thus, to the extent the Debtor seeks relief under § 105(a) of the Bankruptcy Code, the Second Motion will be denied.
The Court will address two last points. First, the Debtor argues that the Court should impose the stay because "no creditors objected" to his First Motion and he "is funding his plan." (Second Mot. ¶ 5.) The Debtor is incorrect in stating that no creditor objected to the First Motion. He ignores the Response, which Nationstar filed approximately half an hour before the Debtor amended the First Motion. It is apparent the Debtor filed the Second Motion to specifically address the timing deficiency of the First Motion, which was raised by Nationstar in the Response. However, even if no creditor had objected to the First Motion, that would not provide a basis to impose a stay. Because the First Motion, on its face, could not comply with the statutory requirement of § 362(c)(3)(B) for continuation of the automatic stay, no creditor was required to oppose the motion.
The second point is the Debtor's statement in the Motion to Continue that the he and Nationstar were working on the terms of a proposed agreed order. As set forth above, the automatic stay is a creature of statute; the Debtor and Nationstar have no ability to agree to the extension or continuation of the automatic stay. Pursuant to the terms of 11 U.S.C. § 362, the automatic stay is either in effect or it is not. Even more significantly, the parties have no ability to require the Court to exercise its discretion to impose a stay. Any consideration of a proposed agreed order to resolve the Second Motion would be a useless act.
To the extent the Second Motion seeks relief pursuant to 11 U.S.C. §§ 362(c)(3)(B) and/or 105, the Second Motion will be denied. Moreover, the Court will deny the Motion to Continue.
The Court need not address whether the Debtor can overcome the presumption in § 362(c)(3)(C) that the second bankruptcy petition was not filed in good faith because, for the reasons set forth above, the Court cannot extend or impose the automatic stay.
An appropriate order will follow.
This cause is before the Court on 2
For the reasons set forth in the Court's Memorandum Opinion Regarding (i) Second Amended Motion to Extend the Automatic Stay; and (ii) Motion to Continue entered on this date, the Court hereby finds that (i) the automatic stay in 11 U.S.C. § 362 terminated prior to the date the Debtor filed the First Motion; (ii) the automatic stay cannot be extended pursuant to § 362(c)(3)(B); (iii) the Court cannot use its equitable powers pursuant to § 105(a) to override the specific terms of § 362(c)(3) to extend or impose the automatic stay; and (iv) any consideration of a proposed agreed order to resolve the Second Motion would be a useless act.
As a consequence, the Court hereby denies (i) the Second Motion; and (ii) the Motion to Continue.
