In re Mitrany, Case No. 08-40034-ess (Bankr. E.D.N.Y. 5/16/2008)
| Decision Date | 16 May 2008 |
| Docket Number | Case No. 08-40034-ess. |
| Parties | In re: SION LESLIE MITRANY, Chapter 13, Debtor. |
| Court | U.S. Bankruptcy Court — Eastern District of New York |
David Berger, Esq., Tenenbaum & Berger, L.L.P., Brooklyn, New York, Attorney for Movant Aydenmaya Realty, LLC.
Sion Leslie Mitrany, Debtor, pro se.
Before the Court is the motion of Aydenmaya Realty, LLC (the" Movant") for relief from the automatic stay pursuant to Section 362 of Title 11 of the United States Code (the "Bankruptcy Code") in the above-captioned bankruptcy case.
This Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 1334(b), 157(b)(1), and 157(b)(2)(G).
On January 3, 2008 (the "Petition Date"), Sion Leslie Mitrany, the debtor in the above-captioned case (the "Debtor") filed a petition for relief under Chapter 13 of the Bankruptcy Code. Docket No. 1. On February 6, 2008, the Movant filed a motion seeking an order granting the Movant relief from the automatic stay pursuant to Section 362(d) of the Bankruptcy Code with respect to the property at 153 Garfield Place, Apartment 2R, Brooklyn, NY 11215 (the "Premises") (the "Stay Relief Motion"). Docket No. 18.
On February 6, 2008, the Movant also filed an Affirmation in Support of Motion for Vacatur of Automatic Stay, sworn to on February 4, 2008 (the "Affirmation in Support"), and an Affidavit in Support of Motion for Vacatur of Automatic Stay, sworn to on January 30, 2008 (the "Affidavit in Support"). Docket No. 18. The Affirmation in Support states that, among other things, the Movant's interest in the Premises is not adequately protected because the Movant "is responsible for paying the mortgage, taxes and insurance upon the Premises, yet does not derive any income therefrom." Affirmation in Support ¶ 18. The Affirmation in Support also states that "the Debtor's skeleton petition is a bad faith filing" and that "[a] warrant of eviction has already issued thereby terminating any possessory interest the Debtor may have had in the Premises . . . ." Affirmation in Support ¶¶ 16, 21. The Affidavit in Support states that, among other things, the Movant's predecessor in interest, 153 Garfield Place, Inc. ("153 Garfield"), "elected to exercise its right to terminate Debtor's license and served Debtor with a Ten Day Notice to Quit on or about March 21, 2007." Affidavit in Support ¶ 4. The Affidavit in Support further states that "Aydenmaya Realty is responsible for mortgage and insurance payments as well as maintenance costs on the Premises, but [the] Debtor has been living there rent free." Affidavit in Support ¶ 12.
The record shows that on February 26, 2008, a hearing was held on the Stay Relief Motion at which the Debtor and counsel for the Movant appeared and were heard. Docket Entry dated February 26, 2008. On March 25, 2008, the Movant's attorney filed a Consent to Change Attorneys, dated March 17, 2008, which indicated that Tenenbaum & Berger, L.L.P. would replace Wenig, Saltiel & Green, L.L.P., and be substituted as the Movant's attorneys of record in this case. Docket No. 29. On April 1, 2008, a hearing was held on the Stay Relief Motion, at which the Debtor appeared and was heard, and the Movant did not appear. Docket Entry dated April 1, 2008. On April 29, 2008, a hearing was held on the Stay Relief Motion, at which counsel for the Movant appeared and was heard, the Debtor did not appear, and the Court granted the Stay Relief Motion. Docket Entry dated April 29, 2008.
Separately, the record shows that on March 14, 2008, the Chapter 13 Trustee (the "Trustee") moved to dismiss the case on grounds that the Debtor had not complied with Section 521(a)(1) of the Bankruptcy Code and Interim Bankruptcy Rule 1007(b)(1), the Debtor had not filed a Chapter 13 plan pursuant to Section 1321 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3015(b), and the Debtor had not provided the Trustee with disclosure documentation as required by the Eastern District of New York Local Bankruptcy Rule 2003-1 (the "Motion to Dismiss"). Docket No. 26. On February 27, 2008, the Court issued an Order to Show Cause why the Debtor's bankruptcy case should not be dismissed for failure to file the schedules and statements required by Section 521(a)(1) of the Bankruptcy Code and Interim Bankruptcy Rule 1007(b)(1) (the "February 27 Order to Show Cause"). Docket No. 25.
On April 28, 2008, a hearing was held on the Motion to Dismiss, at which the Debtor did not appear, and the Court granted the Motion to Dismiss and directed the Trustee to settle a proposed order of dismissal on 30 days' notice, which was served on the Debtor and the Movant, among others. Docket Entry dated April 28, 2008. On May 8, 2008, the Trustee filed a Notice of Settlement of Proposed Order Dismissing Case (the "Trustee's Settled Proposed Order"). Docket No. 34. At the April 28, 2008, hearing, Steven Balamut ("Balamut") appeared and stated that he previously owned the Premises, that over a year ago, he allowed the Debtor to reside at the Premises on a temporary basis, that he subsequently asked the Debtor to leave, and that the Debtor refused to leave the Premises. See Docket Entry dated April 28, 2008. Balamut further stated that he has since sold the building, but that the Debtor continues to live at the Premises, without a lease or other basis for his occupancy, without paying for the use of the Premises, and without entering into any agreement to purchase the Premises. Id.
On April 29, 2008, a hearing was held on the February 27 Order to Show Cause at which the Movant appeared and was heard and the Debtor did not appear. Docket Entry dated April 29, 2008. As of that date, the Debtor had not cured the deficiencies noted in the record, including that the Debtor had not complied with Section 521(a)(1) of the Bankruptcy Code and Interim Bankruptcy Rule 1007(b)(1), the Debtor had not filed a Chapter 13 plan pursuant to Section 1321 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3015(b), and the Debtor had not provided the Trustee with disclosure documentation as required by the Eastern District of New York Local Bankruptcy Rule 2003-1, and on May 13, 2008, the Court issued a Final Order to Show Cause why the Debtor's bankruptcy case should not be dismissed for each of the deficiencies noted in the record (the "Final Order to Show Cause"). Docket No. 35.
The Brooklyn Center for Psychotherapy sent a letter dated April 24, 2008, to the Court on the Debtor's behalf. Docket No. 36. Jordan S. Yasgur, who is identified as a creditor in the Debtor's petition, sent a letter dated April 25, 2008, to the Court on the Debtor's behalf. Docket No. 37. See Petition, Verification of Creditor Matrix/List of Creditors; Docket No. 28 (Affidavit Pursuant to Local Rule 1009-1(a)). The Debtor sent a letter dated April 28, 2008, to the Court. Docket No. 38. On May 13, 2008, the Court issued an Order directing the Clerk's Office to file the letters from the Brooklyn Center for Psychotherapy, Jordan S. Yasgur, and the Debtor under seal. Final Order to Show Cause at 3.
The filing of a bankruptcy petition under any chapter of the Bankruptcy Code triggers a stay of "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate" and "any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title." 11 U.S.C. §§ 362(a)(3), (a)(6).
The automatic stay is a fundamental debtor protection designed to promote equal treatment among creditors and to provide the debtor with a breathing spell from the financial pressures which drove the debtor into bankruptcy. Eastern Refractories Co. v. Forty Eight Insulations Inc., 157 F.3d 169, 172 (2d Cir. 1998). Notwithstanding this statutory protection, the court may modify the automatic stay for cause, including lack of adequate protection. 11 U.S.C. § 362(d)(1). In order to lift the stay on this basis, the burden is on the movant to make an initial showing of cause. Sonnax Industries, Inc. v. Tri Component Products Corp. (In re Sonnax Industries, Inc.), 907 F.2d 1280, 1285 (2d Cir. 1990). Where such a prima facie case has not been made, the court should deny relief. In re Sonnax Industries, Inc., 907 F.2d at 1285.
Grounds for Relief from the Automatic Stay — Section 362(d)(1)
Section 362(d)(1) of the Bankruptcy Code provides that "on request of a party in interest and after notice and a hearing, the court shall grant relief from the stay . . . (1) for cause, including the lack of adequate protection of an interest in property of such party in interest . . . ." 11 U.S.C. § 362(d)(1). Section 362 of the Bankruptcy Code does not describe the boundaries of "adequate protection," but Section 361 provides examples of what may constitute adequate protection. 11 U.S.C. § 361. See In re P.J. Clarke's Restaurant Corp., 265 B.R. 392, 404 (Bankr. S.D.N.Y. 2001). These examples include "periodic cash payments" to protect against any decrease in the value of a party's interest in property. 11 U.S.C. § 361(1). Several courts have held that "a Landlord's right to timely payment of post-petition rent is an interest in property entitled to adequate protection." In re P.J. Clarke's Restaurant Corp., 265 B.R. at 404 (citing cases). See Oligbo v. Louis (In re Oligbo), 328 B.R. 619, 651 (Bankr. E.D.N.Y. 2005).
Here, the record shows that the Debtor has not paid the Movant for his use and occupancy of the premises. Affirmation in Support ¶ 18; Affidavit in Support ¶ 12. The record also shows that the Movant is incurring costs with respect to the Premises without receiving payments from the Debtor. Affirmation in Support ¶ 18; Affidavit in Support ¶ 12.
For all of these reasons, and based on the entire record, the Court concludes that under Section 362(d)...
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