Henderson v. White (In re Henderson)

• Decision Date: 11 October 2016
• Docket Number: Adversary No. 16-1032 J,No. 7-15-10325 JA,7-15-10325 JA
• Citation: 560 B.R. 365
• Parties: In re: Edward L. Henderson and Andrea L. Henderson, Debtors. Edward L. Henderson and Andrea L. Henderson, Plaintiffs, v. Eric White and Malissa White, Defendants.
• Court: U.S. Bankruptcy Court — District of New Mexico

560 B.R. 365

In re: Edward L. Henderson and Andrea L. Henderson, Debtors.Edward L. Henderson and Andrea L. Henderson, Plaintiffs,

v.Eric White and Malissa White, Defendants.

No. 7-15-10325 JA

Adversary No. 16-1032 J

United States Bankruptcy Court, D. New Mexico.

Signed October 11, 2016

James T. Burns, Albuquerque Business Law, P.C., Albuquerque, NM, for Plaintiffs.

Denise J. Trujillo, Giddens, Gatton & Jacobus, P.C., Albuquerque, NM, for Defendants.

MEMORANDUM OPINION

ROBERT H. JACOBVITZ, United States Bankruptcy Judge

THIS MATTER is before the Court on the Defendants' Motion and Brief in Support of Summary Judgment on Amended Complaint for Violation of the Automatic Stay and Discharge; And Petition for Temporary Restraining Order Injunction, Sanctions, Civil Contempt, and Attorneys['] Fees and Costs for Willful Violation of Discharge Injunction ("Motion for Summary Judgment"). See Docket Nos. 5 and 6. Because the facts not subject to genuine dispute establish that the Plaintiffs entered into the lease underlying their claims in this adversary proceeding after Plaintiffs filed a voluntary Chapter 7 bankruptcy petition, Defendants are entitled to summary judgment determining that Defendants' actions in enforcing the post-petition lease neither violated the automatic stay nor the discharge injunction.

PROCEDURAL HISTORY

This adversary proceeding is the second adversary proceeding Edward L. Henderson and Andrea L. Henderson (together, the Hendersons) have filed against Eric White and Malissa White (together, the Whites) asserting the same claims based on the same underlying facts. See Adversary Proceeding No.15-1076 J ("First Adversary Proceeding"). The Court dismissed the First Adversary Proceeding, without prejudice, due to the Hendersons' failure to timely file an amended complaint. See First Adversary Proceeding—Docket Nos. 13. The Hendersons initiated this adversary proceeding on May 18, 2016 by filing an Amended Complaint for Violation of the Automatic Stay and Discharge; and Petition for Temporary Restraining Order, Injunction, Sanctions, Civil Contempt, and Attorney's Fees and Costs for Willful Violation of Discharge Injunction ("Complaint").See Docket No. 1.

The Whites filed the Motion for Summary Judgment on June 9, 2016. See Docket Nos. 5 and 6. The Hendersons requested an enlargement of the time within which to file a response to the Motion for Summary Judgment. See Docket No. 7. The Whites objected. See Docket No. 9. Following a hearing on the Hendersons' request for enlargement of time, the Court extended the deadline for the Hendersons to file a response to the Motion for Summary Judgment through July 12, 2016. See Docket No. 13. The Hendersons missed the July 12, 2016 deadline. The next day, July 13, 2016, the Hendersons filed a motion requesting a one-day extension of the time to file a response to the pending Motion for Summary Judgment ("Second Extension Motion"). See Docket No. 14. The Hendersons attached to the Second Extension Motion a copy of their proposed response to the Motion for Summary Judgment. The Court denied the Hendersons' Second Extension Motion. See Docket No. 15. The Court further ruled that it would not consider the Hendersons' response in ruling on the Motion for Summary Judgment. Id.

SUMMARY JUDGMENT STANDARDS

Summary judgment can streamline litigation and avoid the unnecessary expense of proceeding to trial. See Farnell v. Albuquerque Publ'g Co., 589 F.2d 497, 502 (10th Cir. 1978) ("[S]ummary judgment is a useful tool which may avoid needless trials.") (citation omitted); Mitchell v. Zia Park, LLC, 842 F.Supp.2d 1316, 1321 (D.N.M. 2012) ("Principal purposes of summary judgment include streamlining litigation and saving needless time and expense by isolating and disposing of purely legal issues and factually unsupported claims and defenses.") (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (remaining citation omitted)). The Court will grant summary judgment in accordance with Fed.R.Civ.P. 56 when the moving party demonstrates that there is no genuine dispute as to a material fact and that the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a), made applicable to adversary proceedings by Fed.R.Bankr.P. 7056. "[A] party seeking summary judgment always bears the initial responsibility of informing the ... court of the basis for its motion, and ... [must] demonstrate the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548.

Even if the non-moving party does not file a response, the Court must satisfy itself that the movant's properly supported facts entitle the movant to judgment as a matter of law before the Court will grant summary judgment. See Reed v. Bennett, 312 F.3d 1190, 1194–95 (10th Cir. 2002) (explaining that the burden on the non-moving party to respond to a motion for summary judgment arises only if the motion is properly supported, and stating further, that "[i]f the nonmoving party fails to respond, the district court may not grant the motion [for summary judgment] without first examining the moving party's submission to determine if it has met its initial burden of demonstrating that no material issues of fact remain for trial and the moving party is entitled to judgment as a matter of law."). In evaluating a request for summary judgment, the Court will consider the factual record and make all reasonable inferences therefrom in the light most favorable to the non-moving party. Wolf v. Prudential Ins. Co. of America , 50 F.3d 793, 796 (10th Cir. 1995) (summary judgment requires the Court to " ‘examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment.’ ") (quoting Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc. , 912 F.2d 1238, 1241 (10th Cir. 1990) ).

FACTS NOT SUBJECT TO GENUINE DISPUTE

The following facts are not subject to genuine dispute:

1. The Hendersons filed a voluntary petition under Chapter 7 of the Bankruptcy Code on February 13, 2015 as Case No. 7–15–10325 JA (the "Chapter 7 Case").

2. Schedule G—Executory Contracts and Unexpired Leases filed in the Hendersons' Chapter 7 Case on March 15, 2015 identifies a commercial lease with Sedona LLC.

3. The Hendersons did not list a lease with the Whites on Schedule G.

4. The Hendersons never amended Schedule G to add any other leases.

5. The Whites leased to the Hendersons certain real property located at 5 Teypana Dr., Tijeras, New Mexico 87059 (the "Property").

6. On February 13, 2012, the Whites and the Hendersons entered into a one-year lease agreement for the Property.

7. On February 13, 2013, the Whites and the Hendersons entered into another one-year lease agreement for the Property.

8. On March 6, 2015, the Whites and the Hendersons entered into a written lease agreement for the Property entitled, "Extension of Lease Agreement." See Motion for Summary Judgment—Exhibit D.

9. The Extension of Lease Agreement provides:

Extension of Lease Agreement made by and between Eric & Malissa White, (Landlord), and Ed & Andrea Henderson, (Tenant), relative to a certain lease agreement for premises known as:

5 Teypana Dr.

Tijeras, Bernalillo NM 87059

Dated: March 6, 2015 (year).

Exhibit D.

10. The Extension of Lease Agreement further provides that it extends the term of a lease dated March 6, 2015 for a three-month period commencing April 15, 2015 and terminating on July 15, 2015, "with no further right of renewal or extension beyond said termination date." Id.

11. The rent under the Extension of Lease Agreement is $2,200 per month, "payable in advance." Id.12. The Hendersons and the Whites signed the Extension of Lease Agreement on March 6, 2015. Id.

13. The Hendersons did not pay rent to the Whites under the Extension of Lease Agreement for the month of July 2015.

14. On July 21, 2015, the Whites filed a pro se civil complaint in Bernalillo County Metropolitan Court against the Hendersons for nonpayment of rent (the "Metro-Court Action")

15. The Whites amended their complaint in the Metro-Court Action on August 19, 2015.

16. The Hendersons filed the First Adversary Proceeding on October 21, 2015.

17. The Court entered an order in the First Adversary Proceeding which provided, in part:

If the Lease was entered into post-petition, the Whites may proceed in the State Court action to enforce their rights under the Lease without the need to seek and obtain stay relief in this Court.

See Order on Emergency Motion to Enforce the Automatic Stay and Discharge; Petition for Temporary Restraining Order, Injunction, Sanctions, Civil Contempt, and Attorney's Fees and Costs for Willful Violation of Discharge Injunction—Exhibit E.

18. On November 9, 2015, the Metropolitan Court Judge entered an order in the Metro-Court Action determining that the automatic stay did not apply. See Order on Motion for determination that Automatic Bankruptcy Stay Does Not Apply—Exhibit F.

DISCUSSION

Upon the filing of a voluntary petition for relief, 11 U.S.C. § 362(a) operates as a self-executing, automatic stay. See 11 U.S.C. § 362(a) ("a petition filed under section 301 ... of this title ... operates as a stay ..."); In re Gruntz, 202 F.3d 1074, 1081 (9th Cir. 2000) ("The automatic stay is self-executing, effective upon the filing of the bankruptcy petition.") (citations omitted).¹ Its scope is very broad,² and includes the stay of any "action or proceeding against the debtor that ... could have been commenced before the commencement of the case[,]" and "any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case." 11 U.S.C. § 362(a)(1) and (6). But the language of § 362(a) prohibits only proceedings and collection efforts that affect property of the bankruptcy estate or that attempt to collect pre-petition debts. In re Baetz, 493 B.R. 228, 235 (Bankr.D.Colo. 2013) ("The language of 362(a), however, prohibits only proceedings and...