Leafty v. Aussie Sonoran Capital, LLC (In re Leafty)

Summarized by Hilda Montes de Oca , U.S. Bankruptcy Court, Central District of California
13 years 4 months ago

Citation:

Leafty v. Aussie Sonoran Capital, LLC (In re Leafty), Case No. AZ-11-1491-JuBrD (B.A.P. 9th Cir. Oct. 10, 2012)

Tag(s):

Ruling:

The Bankruptcy Appellate Panel for the Ninth Circuit (the “BAP”) held that the bankruptcy court did not abuse its discretion when the court dismissed the debtor's second case because she was ineligible to be a debtor under 11 U.S.C. § 109(g)(2) and entered an order confirming that a trustee’s sale of the debtor’s residence was not stayed by the filing of the debtor’s second petition.

Procedural context:

Appeal from the bankruptcy court for the District of Arizona (1) dismissing the debtor’s second case for ineligibility under 11 U.S.C. § 109(g)(2); (2) entering an order that confirmed that the second case did not stay a trustee’s sale that occurred post-petition; and (3) denying the debtor’s motion for reconsideration, reviewed for abuse of discretion.

Facts:

The debtor filed a chapter 13 petition after communications regarding an alleged modification of the note on her principal residence broke down. The secured creditor moved for relief from the automatic stay on debtor's residence. The bankruptcy court granted the motion over debtor's objection. The successor to the secured creditor noticed a trustee's sale. On the morning of the trustee's sale date, the debtor filed a request for dismissal of her bankruptcy, filed a second bankruptcy case and faxed a copy of the petition to creditor counsel's office. The trustee's sale was held in before the creditor's counsel received notice of debtor's second bankruptcy. The creditor then moved to dismiss debtor's second bankruptcy case, to confirm the prior order terminating the stay, or in the alternative, to terminate the stay and/or deny extension of the stay, based on §§ 109(g) and 362(c) and (d). The debtor maintained that the foreclosure sale was in violation of the stay. The bankruptcy court granted the creditor’s motion and confirmed that the trustee's sale was not stayed by the filing of the second petition The bankruptcy court subsequently entered an order dismissing the debtor’s second case because the debtor was ineligible for chapter 13 relief pursuant to § 109(g)(2) due to the fact that she had a case pending in the last 180 days and had voluntarily dismissed her case following the filing of a request for relief from the automatic stay. The debtor then moved for relief from the orders under Civil Rule 60(b)(1) and (6). The bankruptcy court found that § 109(g)(2) was clear that the debtor was not eligible due to her prior case and the proceedings therein, and there was no change in the debtor's circumstances that would warrant the discretionary suspension of the bar to refiling. The court entered the order denying debtor's motion.

Judge(s):

Hon. Meredith A. Jury; Julia W. Brand and Randall L. Dunn (U.S. Bankruptcy Appellate Panel, Ninth Circuit, J. Brand, Bankruptcy Judge for the Central District of California, sitting by designation). Appeal from a ruling by Hon. Redfield T. Baum (Bankruptcy Court Judge for the District of Arizona)

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!