Memphis Bank & Trust Co. v. Brooks, Bankruptcy No. 80-2489.
| Decision Date | 21 January 1981 |
| Docket Number | Bankruptcy No. 80-2489. |
| Citation | 10 BR 306 |
| Parties | MEMPHIS BANK & TRUST COMPANY, Appellant, v. Odell BROOKS, Jr., Appellee. |
| Court | U.S. District Court — Western District of Tennessee |
Gary L. Jewel, Staff Atty., Memphis, Tenn., for appellant.
Edwin C. Lenow, Memphis, Tenn., for appellee.
This case involves an appeal from an Order of the Bankruptcy Court for the Western District of Tennessee, the Honorable William B. Leffler, denying appellant bank relief from an automatic stay imposed by the filing of appellee's Chapter 13 bankruptcy petition. Oral argument was heard in this case on January 9, 1981, and careful consideration has been given to the record in this cause.
On April 21, 1980, appellee-debtor Odell Brooks filed a Chapter 13 petition for bankruptcy. At the time of the filing, the debtor owed appellant bank $3,882.00, secured by a 1978 Ford LTD automobile. On May 6, 1980, the bank filed a "Motion for Adequate Protection," claiming that the debtor was in default on his loan. The relief requested was impoundment of the vehicle or evidence of insurance on the vehicle.
On July 9, 1980 (more than thirty days after the bank made its motion for adequate protection), the bank sought a Writ of Possession in state court, the Court of General Sessions of Shelby County, wherein the bank's motion was granted. At a hearing on July 17, 1980, initiated by the debtor, the Bankruptcy Court ordered the bank to return the car to the debtor, deeming the automatic stay to be in effect. It was the Bankruptcy Court's position that since the bank had not filed a formal complaint requesting relief from the stay, the thirty-day hearing termination provisions were never set into motion. The bank then filed this appeal.
When a petition in bankruptcy is filed such as in the case at bar, an automatic stay is put into effect by operation of 11 U.S.C. § 362. The obvious purpose of the stay is to prevent prejudicial dismembership of the debtor's property prior to determination of the case by the Bankruptcy Court. Section 362(d) states the grounds by which a creditor may seek relief from the stay. It provides:
Once a request for relief has been made § 362(e) provides that the stay will terminate within thirty (30) days, unless the court, after notice and hearing, orders the stay to be continued.
Appellant, Memphis Bank & Trust Company's argument on appeal is that the Bankruptcy Court erred in holding that a formal complaint was necessary to a request for relief. The Bankruptcy Court's rationale for holding that a complaint was necessary was that since the new Code does not specifically state what form the request for relief must take, the rules used under the old Code would be employed to the extent that they are not inconsistent with the new Code. The Bankruptcy Court then held that the old rule requiring a complaint in such cases would be the proper form of a request for relief under the new Code.
Pleadings and motions need to be properly captioned so that the Court's attention will be drawn to those matters requiring expedited action, and this need may be more acute in the bankruptcy courts, where time is of the essence and extraordinary relief the rule rather than the exception. The plain language of § 362 requires, however, only a "request" to start the running of the thirty-day period. The request must be in a form that gives notice that a request for relief from the stay is being made. In this case, the Court holds that such a request was made.
Section 362(d) provides only three grounds for granting the request for relief. The first of these grounds is "the lack of adequate protection." Clearly, the bank's "Motion for Adequate Protection" was identifiable with § 362 for this reason, and therefore was in fact a request for relief from the stay. Although the motion did not request a lifting of the stay itself, it did request a modification of the stay to protect collateral from destruction. Therefore, the Court holds that the bank's motion for adequate protection was a request for relief from the stay within the meaning of § 362(d).
The ruling made, however, does...
To continue reading
Request your trial