In re Goodrich, Case # 17-10500

CourtUnited States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court —District of Vermont
Writing for the CourtColleen A. Brown, United States Bankruptcy Judge
Citation587 B.R. 829
Parties IN RE: Robert GOODRICH, Debtor.
Decision Date20 July 2018
Docket NumberCase # 17-10500

587 B.R. 829

IN RE: Robert GOODRICH, Debtor.

Case # 17-10500

United States Bankruptcy Court, D. Vermont.

Signed July 20, 2018


587 B.R. 831

Rebecca Rice, Esq., Cohen & Rice, Rutland, Vermont, For the Debtor

Jan M. Sensenich, Esq., Office of the Chapter 13 Trustee, Norwich, Vermont, As the Standing Trustee

Heather Z. Cooper, Esq., Facey Goss & McPhee, P.C., Rutland, Vermont, For Jennifer Soutar

MEMORANDUM OF DECISION

GRANTING MOTION FOR RECONSIDERATION OF THIS COURT'S INTERPRETATION OF § 362(C)(3)(A), DENYING MOTION TO ADOPT LIMITED INTERPRETATION OF THAT STATUTE, AND DEFERRING DETERMINATION OF WHETHER STAY HAS EXPIRED IN THIS CASE

Colleen A. Brown, United States Bankruptcy Judge

587 B.R. 832

Jennifer Soutar, a creditor in this case, filed a motion asking the Court to reconsider and change its interpretation of the scope of property the automatic stay covers when a debtor files a second bankruptcy case within a one-year period, and declare that the automatic stay was no longer in effect in this case. Ms. Soutar (the "Movant") urges the Court to apply the rationale of In re Bender, 562 B.R. 578 (Bankr. E.D.N.Y. 2016) (hereafter Bender ), rather than follow the rationale it articulated in its prior decision, In re McFeeley, 362 B.R. 121 (Bankr. D. Vt. 2007) (hereafter, " McFeeley").

There is no dispute Robert Goodrich filed this chapter 13 bankruptcy case within one year of the date this Court dismissed his prior chapter 13 case. Since this is his second chapter 13 case within one year, Mr. Goodrich (the "Debtor") is subject to § 362(c)(3)(A) of the Bankruptcy Code,1 under which the automatic stay generally available to debtors throughout the entire bankruptcy case may instead be limited to 30 days.

After examining and reassessing the position this Court took in McFeeley, and considering the Supreme Court decisions interpreting BAPCPA provisions, and case law and scholarly articles addressing § 362(c)(3)(A), issued since McFeeley, the Court concludes there is cause to reconsider and change its position. Therefore, for the reasons set forth below, the Court grants the first request in the Movant's motion by reconsidering and changing the position it took in McFeeley.

The Court denies the Movant's second request, to adopt the interpretation of § 362(c)(3)(A) set out in Bender, and instead, adopts what is known as the "Minority Approach," holding that when a debtor files a second bankruptcy case within one year of his or her prior bankruptcy case being dismissed, the automatic stay terminates, in its entirety, 30 days after the filing of the second petition unless, within that initial 30-day period, the debtor or a party in interest proves the debtor filed the second bankruptcy case in good faith.

Since the Court is altering its position, upon which the Debtor reasonably relied, the 30-day period for the Debtor to establish he filed this case in good faith commences upon entry of this memorandum of decision. Therefore, the Court defers ruling on the Movant's request for a declaration as to whether the stay expired until after the Debtor has had an opportunity to exercise his rights during this period.

I. JURISDICTION

The Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Order of Reference entered on June 22, 2012. The Court declares the Movant's requests for confirmation of stay termination and reconsideration of the Court's interpretation of § 362(c)(3)(A), and the Debtor's opposition to those requests, constitute a core proceeding for purposes of

587 B.R. 833

28 U.S.C. § 157(b)(2)(A) & (G), over which this Court has constitutional authority to enter a final judgment.

II. LEGAL QUESTIONS PRESENTED

This contested matter presents four legal issues: First, has the Movant demonstrated cause for this Court to reconsider its interpretation of § 362(c)(3)(A), as set out in McFeeley? If so, what is the proper technique for interpreting a BAPCPA provision? Third, which interpretation of § 362(c)(3)(A) best aligns with the Supreme Court's guidance? Fourth, what impact do these determinations have on the Debtor in this case?

III. FACTUAL BACKGROUND

The relevant facts are not in dispute. On August 25, 2000, the Movant made a loan to the Debtor, secured by a mortgage on the Debtor's real property in Groton, Vermont, and the Debtor had not paid that loan as of the date he filed the instant bankruptcy case. See claim # 6-2. This is the third chapter 13 bankruptcy case the Debtor has filed in the past three years. The Debtor first filed a petition for relief under chapter 13 of the Bankruptcy Code in June of 2015 (case # 15-10287); the Court dismissed that case, on the Movant's motion, on September 22, 2015. The Debtor filed his second chapter 13 bankruptcy petition (case # 15-11033) on November 6, 2015; the Court dismissed that case on August 25, 2017, after the Debtor failed to comply with the terms of a conditional order of dismissal. Following the dismissal of the second case, the Movant commenced a foreclosure action (doc. # 17).2 On November 23, 2017, approximately three months after the Court dismissed his prior case, the Debtor filed the instant chapter 13 case (case # 17-10500).

On December 21, 2017, 31 days after the Debtor filed the instant bankruptcy case, the Movant requested an order confirming the automatic stay had expired (doc. # 13, the "Motion"). On January 5, 2018, the Debtor filed a response, acknowledging he had a chapter 13 case pending within the last year and that the automatic stay terminated by operation of law after 30 days, but only to the extent set forth in McFeeley, i.e. only as to acts against him or his property (doc. # 16, the "Response"). On January 11, 2018, the Movant filed a reply, asking the Court to declare the automatic stay does not apply to her claim, to change its interpretation of § 362(c)(3)(A) (the "Controlling Statute"), and to adopt the rationale of In re Bender, 562 B.R. 578 (Bankr. E.D.N.Y. 2016) in construing that statute (doc # 18, the "Reply").

After holding a hearing on the Motion on January 21, 2018, the Court entered a scheduling order (doc. # 19), granting the Debtor, Movant, and Chapter 13 Trustee (the "Parties") an opportunity to file memoranda of law addressing two legal issues: whether there was cause for this Court to reconsider the position it took in McFeeley, and if so, whether it should apply Bender in determining the extent to which the automatic stay is limited in this case. The scheduling order stated that if the Court modified its interpretation of the Controlling Statute, it would grant the Debtor a reasonable period of time to seek an extension of the stay and present evidence that he filed this case in good faith as to the Movant. The Parties filed the supplemental documents (doc. ## 23, 24, 25) and the Court then took the matter under advisement.

587 B.R. 834

IV. DISCUSSION

A. Three Interpretations of § 362(c)(3)(A)

The Parties ask the Court to determine the scope of the stay in a second chapter 13 bankruptcy case filed within one year of the date the Court dismissed a prior chapter 13 case, after the second case has been pending 30 days.

Congress added § 362(c)(3)(A) to the Bankruptcy Code to address the extent of the stay in repeat filer cases as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8 § 302 ("BAPCA"). In context, it reads as follows:

(c) Except as provided in subsections (d), (e), (f), and (h) of this section--

(1) the stay of an act against property of the estate under subsection (a) of this section continues until such property is no longer property of the estate;

(2) the stay of any other act under subsection (a) of this section continues until the earliest of –

(A) the time the case is closed;

(B) the time the case is dismissed; or

(C) if the case is a case under chapter 7 of this title concerning an individual or a case under chapter 9, 11, 12, or 13 of this title, the time a discharge is granted or denied;

(3) if a single or joint case is filed by or against a debtor who is an individual in a case under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b) –

(A) the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease shall terminate with respect to the debtor on the 30th day after the filing of the later case;

(B) on the motion of a party in interest for continuation of the automatic stay and upon notice and a hearing, the court may extend the stay in particular cases as to any or all creditors (subject to such conditions or limitations as the court may then impose) after notice and a hearing completed before the expiration of the 30-day period only if the party in
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10 practice notes
  • Hilbertz v. City of New York, 520815/2017
    • United States
    • United States State Supreme Court (New York)
    • April 11, 2019
    ...a particular reading of the statute will produce ‘absurdities’ or ‘senseless results' not intended by’ the legislature. In re Goodrich , 587 B.R. 829, 841 (U.S. Bank. Ct., Vt. 2018). Thus, a statute should not only be read in the context of the entire statutory structure, but absurd results......
  • In re Goodrich, Case # 17-10500
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — District of Connecticut
    • September 24, 2018
    ...the Court changed its position regarding the scope of stay termination in repeat filer cases, under § 362(c)(3)(A). See In re Goodrich, 587 B.R. 829 (Bankr. D. Vt. 2018). Unlike the other two occasions, where the facts and circumstances weighed decisively for or against the debtor,2 the Mot......
  • In re Dev, CASE NO. 18-00677-5-DMW
    • United States
    • U.S. Bankruptcy Court — Eastern District of North Carolina
    • October 26, 2018
    ...property of the estate, and instead held that the stay terminates in its entirety 30 days after an order for relief. In re Goodrich , 587 B.R. 829 (Bankr. D. Vt. 2018), abrogating In re McFeeley , 362 B.R. 121 (Bankr. D. Vt. 2007). Judge Brown based her ruling in part on an extensive analys......
  • In re Dev, CASE NO. 18-00677-5-DMW
    • United States
    • U.S. Bankruptcy Court — Eastern District of North Carolina
    • October 19, 2018
    ...property of the estate, and instead held that the stay terminates in its entirety 30 days after an order for relief. In re Goodrich, 587 B.R. 829 (Bankr. D.Page 17 Vt. 2018), abrogating In re McFeeley, 362 B.R. 121 (Bankr. D. Vt. 2007). Judge Brown based her ruling in part on an extensive a......
  • Request a trial to view additional results
10 cases
  • Hilbertz v. City of New York, 520815/2017
    • United States
    • United States State Supreme Court (New York)
    • April 11, 2019
    ...a particular reading of the statute will produce ‘absurdities’ or ‘senseless results' not intended by’ the legislature. In re Goodrich , 587 B.R. 829, 841 (U.S. Bank. Ct., Vt. 2018). Thus, a statute should not only be read in the context of the entire statutory structure, but absurd results......
  • In re Goodrich, Case # 17-10500
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — District of Connecticut
    • September 24, 2018
    ...the Court changed its position regarding the scope of stay termination in repeat filer cases, under § 362(c)(3)(A). See In re Goodrich, 587 B.R. 829 (Bankr. D. Vt. 2018). Unlike the other two occasions, where the facts and circumstances weighed decisively for or against the debtor,2 the Mot......
  • In re Dev, CASE NO. 18-00677-5-DMW
    • United States
    • U.S. Bankruptcy Court — Eastern District of North Carolina
    • October 26, 2018
    ...property of the estate, and instead held that the stay terminates in its entirety 30 days after an order for relief. In re Goodrich , 587 B.R. 829 (Bankr. D. Vt. 2018), abrogating In re McFeeley , 362 B.R. 121 (Bankr. D. Vt. 2007). Judge Brown based her ruling in part on an extensive analys......
  • In re Dev, CASE NO. 18-00677-5-DMW
    • United States
    • U.S. Bankruptcy Court — Eastern District of North Carolina
    • October 19, 2018
    ...property of the estate, and instead held that the stay terminates in its entirety 30 days after an order for relief. In re Goodrich, 587 B.R. 829 (Bankr. D.Page 17 Vt. 2018), abrogating In re McFeeley, 362 B.R. 121 (Bankr. D. Vt. 2007). Judge Brown based her ruling in part on an extensive a......
  • Request a trial to view additional results

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