Earner v. Saxon Mortgage Serv. Inc, 09-60394

Citation597 F.3d 651
Decision Date15 February 2010
Docket NumberNo. 09-60394,09-60394
PartiesNancy Earner, Appellant, v. Saxon Mortgage Services, Inc., Servicer for Deutsche Trust Company, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

In the Matter of Nancy BARNER, Debtor.

Summary Calendar.

D.L. Jones, Jr., Jackson, MS, for Barner.

George Dewey Hembree, III, Stephen Thomas Masley, McGlinchey Stafford P.L.L.C., Jackson, MS, for Saxon Mort Services, Inc.

Appeal from the United States District Court for the Southern District of Mississippi.

Before JONES, Chief Judge, and GARZA and BENAVIDES, Circuit Judges.

PER CURIAM:

Appellee Saxon Mortgage SeiTices, Inc. ("Saxon"), conducted a foreclosure sale of Appellant Nancy Barner's ("Barner") principal residence a day after her bankruptcy filing and subsequently moved for a determination that the automatic stay was not in effect at the time of the sale. The bankruptcy court, citing an order issued in Barner's previous bankruptcy, granted the motion and the district court affirmed. Barner appeals, arguing that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") precludes application of the prior order. Because no provision of BAPCPA affected the continued vitality of pre-BAPCPA orders, we AFFIRM.

I. BACKGROUND

Barner filed her first bankruptcy case under Chapter 7 of the Bankruptcy Code on October 18, 2004. At the time Deutsche Bank Trust owned a deed of trust secured by Barner's principal residence and serviced by Saxon. On December 14, 2004, the bankruptcy court entered an order ("2004 order") lifting the automatic stay as it applied to Barner's residence. Barner's case was subsequently dismissed.

On February 1, 2007, one day before the scheduled foreclosure sale of her residence, Barner filed a second bankruptcy petition, this time under Chapter 13. Saxon proceeded with the sale and, on June 27, filed a motion seeking a determination that the automatic stay was not in effect as to the residence at the time of the sale. After a hearing on the merits, the bankruptcy court ruled that the stay was not ineffect because of the 2004 order. The court relied on Jefferson v. Mississippi Gulf Coast YMCA, Inc., 73 B.R. 179, 182 (S.D.Miss.1986), which held that the automatic stay does not bar foreclosure proceedings "where an Order... was entered lifting the stay... in a previous bankruptcy involving the same debtors, the same creditors and the same property." The court therefore issued an order stating that the sale was not a violation of the automatic stay.

Barner appealed that order, and the district court affirmed. She now appeals to this court.

II. DISCUSSION

"We review a district court's affirmance of a bankruptcy court decision by applying the same standard of review to the bankruptcy court decision that the district court applied." In re Martinez, 564 F.3d 719, 726 (5th Cir.2009). We therefore review factual findings for clear error and conclusions of law de novo. Id.

Barner raises three issues on appeal that provisions of BAPCPA, which became effective before her second filing, prohibited enforcement of the order from her prior bankruptcy; that BAPCPA effectively overruled Jefferson v. Mississippi Gulf Coast YMCA, Inc., supra; and that the Federal Rules of Bankruptcy Procedure required Saxon to bring an adversary proceeding to determine whether the automatic stay was in effect at the time of the foreclosure sale. Neither party challenges Jefferson's holding under pre-BAPCA law, which would be an issue of first impression before this court. Therefore, we do not address it.

Barner argues first that 11 U.S.C. §§ 362(d)(4) and (b)(20) prohibit enforcement of the 2004 order lifting the automatic stay as to her residence. Subsection (d)(4) provides that the bankruptcy court may grant relief from the automatic stay as to real property when it finds that the filing of the bankruptcy petition was "part of a scheme to delay, hinder, and defraud creditors" that involved multiple bankruptcy filings affecting the real property. 11 U.S.C. § 362(d)(4)(B). Orders granted under (d)(4) "shall be binding in any other case under this title purporting to affect such real property filed not later than 2 years after the date of the entry of such order by the court."

Subsection (b)(20), in turn, is the exception to the automatic stay allowing for enforcement of (d)(4) orders from prior cases. It too provides that such a (d)(4) order may be enforced for 2 years after the date of its entry.

That the order lifting the automatic stay was entered prior to the effective date of BAPCPA relieves it from compliance with § 362(d)(4). That provision did not exist, in any form, at the time the order was entered, and BAPCPA, which added the provision, stated clearly that its provisions were not to apply retroactively to cases filed before its effective date. Pub.L. No. 109-8 § 1501(b)(1). Barner's first bankruptcy was such a case, and so § 362(d)(4) is irrelevant to orders issued in that case.

Because the 2004 order was not entered under subsection (d)(4), the limitation of subsection (b)(20), which provides that (d)(4) orders may suspend the automatic stay for no longer than two years after their entry, is also inapplicable. The provision applies exclusively to an "order under subsection (d)(4) as to such real property in any prior case under this title." Not being a (d)(4) order, the 2004 order is unaffected by subsection (b)(20).

Barner's second argument is that BAPCPA implicitly overturned Jefferson with respect to in rem orders issued before it became effective. Jefferson heldthat "principles of res judicata or collateral estoppel" allowed the application of an order under (pre-BAPCPA) § 362(d) suspending the automatic stay in a subsequent bankruptcy case "involving the same debtors, the same creditors and the same property." 73 B.R. at 182 (internal citations omitted). The law, at the time, allowed entry of an order providing relief from the automatic stay with respect to property "for cause,...

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