Laurel Valley Dev., LLC v. Parker (In re Parker)

• Citation: 624 B.R. 222
• Decision Date: 04 January 2021
• Docket Number: Bankruptcy No. 19-23484-JAD
• Parties: IN RE: Pamela C. PARKER, Debtor. Laurel Valley Development, LLC, Movant, v. Pamela C. Parker, and Ronda J. Winnecour, Chapter 13 Trustee, Respondent.
• Court: United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Western District of Pennsylvania

624 B.R. 222

IN RE: Pamela C. PARKER, Debtor.Laurel Valley Development, LLC, Movant,

v.Pamela C. Parker, and Ronda J. Winnecour, Chapter 13 Trustee, Respondent.

Bankruptcy No. 19-23484-JAD

United States Bankruptcy Court, W.D. Pennsylvania.

Date: January 4, 2021

Michael S. Geisler, Pittsburgh, PA, for Debtor.

MEMORANDUM OPINION

The Honorable Jeffery A. Deller, United States Bankruptcy Judge

The matter before the Court is a Motion for Relief From Stay filed by Laurel Valley Development, LLC ("Laurel"). The Motion for Relief From Stay is a core proceeding over which this Court has the requisite subject-matter jurisdiction to enter final judgment. See 28 U.S.C. §§ 157(b)(1), 157(b)(2)(A), 157(b)(2)(G), 157(b)(2)(O), and 1334(b). For the reasons which are set forth below, the Court shall enter an order granting the relief requested by the Motion for Relief From Stay.

I.

The gist of the motion is that Laurel purchased real property located at 214 Ridgefield Drive, Greensburg, PA 15601 at a judicial sale on October 7, 2019, and Ms. Pamela C. Parker (the "Debtor") avers that the sale was ineffective because the property was arguably subject to a retroactive application of the automatic stay of 11 U.S.C. § 362(a) when it was sold. See In re Ward, 837 F.2d 124, 126 (3rd Cir.1988) (sheriff's sale conducted in violation of the stay is "void and without effect", citing Kalb v. Feuerstein, 308 U.S. 433, 438–40, 60 S.Ct. 343, 346, 84 L.Ed. 370 (1940) ); Maritime Elec. Co., Inc. v. United Jersey Bank (In re Maritime Elec. Co.), 959 F.2d 1194, 1206 (3rd Cir. 1992) (actions in violation of the automatic stay are void ab initio , citing Kalb, supra. and Ward, supra. ); but see In re Siciliano, 13 F.3d 748 (3rd Cir. 1994) (holding that use of the word "anulling" in 11 U.S.C. § 362(d) indicates a legislative intent to apply certain types of relief retrospectively and validate proceedings that would otherwise be void ab initio ).

The facts of this case are uncontested and this matter has been presented to the Court by way of a Joint Stipulation of Facts, see ECF No. 86, and by the Court taking judicial notice of the Court's docket and the admissions on file. Oneida Motor Freight, Inc. v. United Jersey Bank (In re Oneida Motor Freight, Inc.), 848 F.2d 414, 416 n. 3 (3rd Cir.1988) (the historical record was sufficiently well developed to allow the bankruptcy court to draw the conclusions and inferences necessary to decide the contested matter); Nantucket Investors II v. California Fed. Bank (In re Indian Palms Assoc. Ltd.), 61 F.3d 197, 205 (3rd Cir. 1995) (in a contested matter the bankruptcy court may take judicial notice of documents in the court's file confirming facts not in genuine dispute; or may take judicial notice to confirm that a specific document was filed, that a party took a certain position, that certain judicial findings were made or that a party made certain admissions).

The docket and stipulated facts reflect that the Debtor filed a voluntary petition for relief under chapter 13 of the Bankruptcy Code on September 2, 2019. At the time she filed her bankruptcy case, the Debtor did not file all of the documents that she was required to file under applicable law, including: 11 U.S.C. §§ 521 and 1321 (setting forth duties of a debtor, including the duty to file a chapter 13 plan and associated paperwork), and Rules 1007 and 3015(b) of the Federal Rules of Bankruptcy Procedure (setting forth time periods for a debtor to comply with section 521 of the Bankruptcy Code ).

Local Bankruptcy Rule 1017-2, which augments Federal Rule of Bankruptcy Procedure 1017 governing dismissal of cases, sets forth the consequences for a debtor's failure to file all of the documents necessary to prosecute a chapter 13 case in this District. See W.PA. LBR 1017-2. Local Bankruptcy Rule 1017-2 states as follows:

(a) The Clerk shall serve electronically upon debtor's counsel, or by postal mail if the debtor is not represented by counsel, a Notice of Deficient Filing if the debtor fails to file all of the documents necessary to initiate the case as required by the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, these Local Bankruptcy Rules, and/or any order of this Court.

(b) Pursuant to the United States trustee's motion to dismiss, as authorized by General Order #91-1, the Notice of Deficient Filing will identify the filing deficiencies and set forth a date for dismissal of the case.

(c) At any time before the date set for entry of an order of dismissal, the debtor:

(1) may file a motion requesting a hearing at which debtor shall show cause why the case should not be dismissed for deficiencies; or

(2) may file a motion and proposed order seeking an extension of time to comply with the Notice of Deficient Filing.

See W.PA. LBR 1017-2.

When the Debtor filed her bankruptcy case, it was a "bare bones filing" in that virtually all of the requisite documents were not filed with the petition on September 2, 2019. See ECF No. 1. The docket entry at the commencement of the Debtor's case even states as follows:

Chapter 13 Voluntary Petition. Fee Amount $0.00 Filed by Pamela C. Parker Government Proof of Claim due by 03/2/2020. Chapter 13 Plan due 09/16/2019. Declaration Re: Electronic Filing due 09/16/2019. Proofs of Claims due by 11/12/2019. Atty Disclosure Statement due 09/16/2019. Certificate of Credit Counseling due by 09/16/2019. Certificate of Exigent Circumstances due by 09/16/2019. Declaration of Schedules due 09/16/2019. Employee Income Record or a statement that there is no record due by 09/16/2019. Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period Form 122C-1 Due 09/16/2019 Schedules A-J due 09/16/2019. Statement of Financial Affairs due 09/16/2019. Summary of schedules due 09/16/2019. Informational Notice Required by 342b due by 09/16/2019. Means Test Calculation Form 122C-2 Due: 09/16/2019. Incomplete Filings due by 09/16/2019. (Geisler, Michael) (Entered: 09/02/2019)

See ECF No. 1.

As required by Local Bankruptcy Rule 1017-2(a), the Clerk's Office transmitted to counsel for the Debtor an electronic notice of deficiency dated September 3, 2019 which stated as follows:

Pursuant to Local Rule 1017-2, the United States Trustee is deemed to have filed a Motion To Dismiss this case, and that Motion will be deemed GRANTED, if any deadline set forth in the first docket entry is not met.

See ECF No. 6.

Parenthetically, the Court notes that these requirements and this process are of no surprise to the Debtor and her counsel, since the Debtor filed three prior bankruptcy cases in this District. See Bankruptcy No. 10-20016-JKF, Bankruptcy No. 13-22818-JAD, and Bankruptcy No. 18-20005-JAD. All of these previous cases were commenced as "bare bones filings," and each of them were ultimately dismissed due to chapter 13 plan payment defaults.

With respect to the case sub judice , the Debtor was required to complete her deficient filings by September 16, 2019 or face dismissal of her bankruptcy case. The record reflects that the Debtor was unable to remedy the deficient filings by September 16, 2019, and was granted an additional 10 days (i.e., until September 26, 2019) to file the requisite documents. See ECF No. 13.

On September 26, 2019, the Debtor partially remedied her delinquent documents. That is, despite having been afforded an additional 10 days to complete her filings, she still had not filed her chapter 13 repayment plan and declaration of electronic filing. Moreover, no further motion was filed on behalf of the Debtor requesting more time to cure these deficiencies and no explanation has been provided to date stating why the documents were not timely filed in the first instance.

The record also reflects that when Debtor's counsel electronically filed the less than complete set of documents on behalf of the Debtor on September 26, 2019, counsel selected the wrong descriptive entry to be placed on the docket. That is, counsel's electronic docket entry improperly stated "Petition Completed," which was flagged by a corrective entry issued by the Clerk's Office on September 30, 2019 at 9:44 a.m. stating: "CORRECTIVE ENTRY: THE CHAPTER 13 PLAN AND DECLARATION RE: ELECTRONIC FILING WERE DUE 9/26/2019." See ECF No. 21. The corrective entry was automatically transmitted to counsel for the Debtor, see id., and the bankruptcy case was dismissed without prejudice on October 1, 2019. See ECF No. 22; see also 11 U.S.C. § 1307(c) (authorizes the court to dismiss a chapter 13 case when there is "unreasonable delay that is prejudicial to creditors," or for "failure to file a plan timely," or for "failure to commence making timely payments").¹

On October 2, 2019, Debtor's counsel filed the declaration of electronic filing, see ECF No. 25, but filed neither a chapter 13 plan nor a motion seeking to reinstate the case. Nor did the Debtor, through legal counsel, file a motion to stay the effectiveness of the order for dismissal.

Section 362(c)(2) provides that:

[The Automatic stay] continues until the earliest of –

(A) the time the case is closed;

(B) the time the case is dismissed ; or

(C) ... the time a discharge is granted or denied [in an individual case under chapters 7, or in any case by any debtor under chapters 9, 11, 12 or 13.]

See 11 U.S.C. § 362(c)(2) (emphasis added); see also In re Taylor, 81 F.3d 20, 23 (3rd Cir. 1996) (stay is in effect until the case is closed, dismissed or the debtor receives a discharge) and Montelione v. Fed. Nat'l Mortg. Assoc., 183 F. App'x 200, 201 (3rd Cir. 2006) (quoting Barbieri v. RAJ Acquisition Corp. (In re Barbieri), 199 F.3d 616, 621 (2nd Cir. 1999) and noting that "dismissal results in the debtor forfeiting protections afforded by the automatic stay")(non-precedential opinion).

After section 362(c)(2)(B)'s statutory dissolution of the stay on October 1, 2019, the Court of Common Pleas of Westmoreland County conducted a judicial sale of the Debtor's real property on October 7, 2019. At the...