Behrens v. U.S. Bank National Association (In re Behrens)

Citation:
In Re Behrens, 8th Cir. B.A.P. (13-6032), November 26, 2013
Tag(s):
Ruling:
The 8th Cir. Bankruptcy Appellate Panel affirmed the bankruptcy court's order granting the secured creditor relief from the automatic stay to complete its foreclosure proceedings.
Procedural context:
On March 14, 2013, the Debtor filed a voluntary petition for relief under Chapter 11 of the United States Code (the “Bankruptcy Code”). The Debtor’s March, 2013 filing (the “Debtor’s 2013 Case”) was the fourth out of five bankruptcy filings by the Debtor and his wife. The first three cases filed by the Debtor or his wife (one Chapter 7 case and two Chapter 13 cases) were dismissed. The Debtor filed the fourth case, the Debtor’s 2013 Case, which is the case in which the order was entered that is the subject of this appeal. The Debtor originally filed the Debtor’s 2013 Case under Chapter 11. The Chapter 11 case was dismissed, but the dismissal was subsequently vacated and the reinstated case was converted to Chapter 7. After the Debtor’s 2013 Case was dismissed, and before it was reinstated and converted to Chapter 7, the Property was sold to the Creditor at a foreclosure sale held on May 10, 2013. Unbeknownst to the Creditor and to the Sheriff’s Department, the Debtor’s wife had filed her own bankruptcy case (the fifth filing) minutes prior to the May 10, 2013 foreclosure sale by the Sheriff. The fifth case, a Chapter 7 case filed by the Debtor’s wife, was ultimately dismissed after the bankruptcy court entered the order that is the subject of this appeal. In the Debtor’s wife’s bankruptcy case, the bankruptcy court scheduled a hearing for May 28, 2013, on a motion to compel filed by the Debtor’s wife. The motion to compel asked for an order voiding the foreclosure sale as being in violation of the automatic stay, and requiring the relevant parties to act in accordance with the stay. The Creditor filed an objection to the Debtor’s wife’s motion to compel, and it also filed in the Debtor’s wife’s case a separate motion to annul or terminate the stay, seeking to validate the May 10, 2013 foreclosure sale and allow the Sheriff’s Deed to the Property to be recorded. wife’s case. The court ordered that, under Bankruptcy Code § 362(d)(4), the automatic stay in the Debtor’s wife’s case was annulled to validate the May 10, 2013 foreclosure sale, and terminated to allow the Creditor to record the Sheriff’s Deed. The Debtor's appealed the court's order.
Facts:
In June, 2009, the Creditor commenced a foreclosure proceeding against the Debtor's Property. Since February, 2009, the Debtor and his wife did not make a single mortgage payment to the Creditor. Starting in November, 2009, the Creditor’s foreclosure proceeding was stayed and recommenced at various points in time due to bankruptcy filings by the Debtor or his wife. The first three cases filed by the Debtor or his wife (one Chapter 7 case and two Chapter 13 cases) were dismissed. The Debtor filed the fourth case, the Debtor’s 2013 Case, which is the case in which the order, granting the creditor's motion for relief from the automatic stay, was entered that is the subject of this appeal. The Debtor originally filed the Debtor’s 2013 Case under Chapter 11. The Chapter 11 case was dismissed, but the dismissal was subsequently vacated and the reinstated case was converted to Chapter 7. After the Debtor’s 2013 Case was dismissed, and before it was reinstated and converted to Chapter 7, the Property was sold to the Creditor at a foreclosure sale held on May 10, 2013. Unbeknownst to the Creditor and to the Sheriff’s Department, the Debtor’s wife had filed her own bankruptcy case (the fifth filing) minutes prior to the May 10, 2013 foreclosure sale by the Sheriff. The fifth case, a Chapter 7 case filed by the Debtor’s wife, was ultimately dismissed after the bankruptcy court entered the order that is the subject of this appeal. The Debtor's wife filed a motion to compel to void the May 10th, 2013 foreclosure sale as it violated the automatic stay. The Creditor filed an objection to the Debtor’s wife’s motion to compel, and it also filed in the Debtor’s wife’s case a separate motion to annul or terminate the stay, seeking to validate the May 10, 2013 foreclosure sale and allow the Sheriff’s Deed to the Property to be recorded.
Judge(s):
Chief Judge Schermer, Federman and Shodeen

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