Wilson v. Desert Realty, Inc. (In re Lindsey)

BAP Nos. NV-14-1583-KiDJu & NV-15-1071-KiDJu (BAP 9th Cir. Mar. 21, 2016)
BAP for 9th Circuit reversed and remanded two orders of the bankruptcy court (D. Nev.) (a) dismissing debtor's complaint against a landlord for alleged violation of the codebtor stay under s 1301 and (b) awarding landlord its attorney's fees and costs in defending against the complaint. Notwithstanding the serial filer's history of delay tactics, and failure to timely file a written opposition, the BAP ruled the bankruptcy court improperly converted the landlord's Rule 12 dismissal motion to a motion for summary judgment without giving the pro se debtor adequate notice or opportunity to respond. Further, the BAP ruled the bankruptcy court abused its discretion in awarding fees and costs to the landlord by failing to identify the basis for the fee award. To the extent the bankruptcy court dismissed and awarded fees and costs based on the debtor's serial filings, doing so was improper given the failure to give debtor adequate notice or an opportunity to respond to the issue.
Procedural context:
Chapter 13 debtor filed suit against landlord for intentionally violating co-debtor stay in sister's chapter 13 case. Bankruptcy court converted landlord's motion to dismiss case to summary judgment motion, and granted motion, entering judgment dismissing suit. Bankruptcy court also granted landlord's motion for fees and costs. Debtor appealed to BAP for 9th Circuit.
"Wilson" filed twelve bankruptcies since 1993. In 2013, Wilson and sister "Lindsey" entered into lease with landlord for an apartment in Las Vegas. After sisters defaulted, landlord proceeded with eviction proceedings. Lindsey commenced skeletal chapter 13 case to stay eviction. Landlord moved for relief from stay, but only sought relief from stay against Lindsey. Lindsey opposed the motion, including raising the failure to seek co-debtor relief from stay against sister Wilson. Court entered conditional order that upon Lindsey's failure to pay pending month's rent by end of the month, landlord could obtain relief from stay against Lindsey. Lindsey failed to pay rent, landlord obtained order for relief from stay, and proceeded with eviction proceeding. Sisters appeared at eviction proceeding, asserting the co-debtor stay as a defense. The state court entered the eviction for the landlord. Wilson then filed chapter 13 to stay eviction. Wilson also filed suit against landlord in Lindsey's chapter 13 case seeking damages for willful violation of the co-debtor stay. The landlord moved to dismiss the complaint under Rule 12(b)(6). Wilson filed an untimely objection the day before hearing on the motion. At the hearing, the court denied Wilson's opportunity to speak in opposition to the motion. The court considered landlord's evidence outside the pleadings--Wilson's serial filings--in considering the dismissal. In granting the motion to dismiss, and the motion for fees and costs, the court referenced Wilson's serial filings, and awarded landlord approximately $8,500 in fees and costs, which included significant write downs from fees actually incurred.
Kirscher, Dunn, Jury

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