In re: Michelle Darlene Wilson ( 2016 )


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  •                                                                 FILED
    MAY 31 2016
    1                         NOT FOR PUBLICATION
    2                                                        SUSAN M. SPRAUL, CLERK
    U.S. BKCY. APP. PANEL
    OF THE NINTH CIRCUIT
    3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
    4                            OF THE NINTH CIRCUIT
    5   In re:                        )      BAP No. NV-14-1589-DFB
    )
    6   MICHELLE DARLENE WILSON,      )
    )      Bk. No. 14-14674-BTB
    7                  Debtor.        )
    ______________________________)
    8                                 )
    MICHELLE DARLENE WILSON,      )      Adv. Proc. No. 14-01120-BTB
    9                                 )
    Appellant,     )
    10                                 )
    v.                            )      M E M O R A N D U M1
    11                                 )
    DESERT REALTY, INC.; EDWARD   )
    12   KANIA; SOUTHERN NEVADA        )
    EVICTION SERVICES,            )
    13                                 )
    Appellees.     )
    14   _____________________________ )
    15            Submitted Without Oral Argument on May 19, 2016
    16                            Filed - May 31, 2016
    17            Appeal from the United States Bankruptcy Court
    for the District of Nevada
    18
    Honorable Bruce T. Beesley, Bankruptcy Judge, Presiding
    19
    20   Appearances:     Appellant Michelle Darlene Wilson, pro se on
    brief; John Wendland of Weil & Drage, APC on brief
    21                    for Appellee Desert Realty, Inc.; Edward D. Kania
    on brief for Appellees Edward D. Kania and
    22                    Southern Nevada Eviction Services.
    23
    24
    25
    26        1
    This disposition is not appropriate for publication.
    27   Although it may be cited for whatever persuasive value it may
    have (see Fed. R. App. P. 32.1), it has no precedential value.
    28   See 9th Cir. BAP Rule 8024-1.
    1   Before:   DUNN, FARIS, and BARASH,2 Bankruptcy Judges.
    2
    3        Michelle Darlene Wilson appeals orders of the bankruptcy
    4   court that dismissed the adversary proceeding Ms. Wilson filed in
    5   her bankruptcy case alleging that Desert Realty, Inc. (“DRI”),
    6   Edward D. Kania, Esq. (“Mr. Kania”), and Southern Nevada Eviction
    7   Services (“SNES”) had violated the stay which arose pursuant to
    8   § 362(l)3 of the Bankruptcy Code.
    9        We AFFIRM.
    10                           I.   FACTUAL BACKGROUND
    11        Ms. Wilson and her sister, Patricia Roberta Lindsey, entered
    12   into a lease agreement with DRI on November 15, 2013, for an
    13   apartment in Las Vegas, Nevada.      After the sisters defaulted in
    14   paying rent under the terms of the lease agreement, DRI commenced
    15   eviction proceedings.
    16        To delay those proceedings, Ms. Lindsey filed a chapter 13
    17   bankruptcy petition on March 5, 2014.     DRI promptly moved for
    18   relief from the § 362 automatic stay against Ms. Lindsey
    19   (“Lindsey MRS”) to continue the eviction proceedings.     After
    20   Ms. Lindsay did not bring the payments due under the lease
    21   current by April 30, 2014, as ordered by the bankruptcy court as
    22   a condition to continuing the automatic stay, an order granting
    23
    2
    24           Hon. Martin R. Barash, United States Bankruptcy Judge for
    the Central District of California, sitting by designation.
    25
    3
    Unless otherwise indicated, all chapter and section
    26   references are to the federal Bankruptcy Code, 11 U.S.C.
    27   §§ 101-1532, and all “Rule” references are to the Federal Rules
    of Bankruptcy Procedure, Rules 1001-9037. All “Civil Rule”
    28   references are to the Federal Rules of Civil Procedure.
    -2-
    1   the Lindsey MRS was entered on June 2, 2014 (“RFS Order”).     DRI
    2   thereafter obtained an order for eviction (“Eviction Order”) in
    3   the state court on June 19, 2014.    The sisters’ appeal of the
    4   Eviction Order was denied on July 8, 2014.    Ms. Wilson filed her
    5   own bankruptcy petition at 3:43 p.m. on July 8, 2014.
    6   The Eviction Order and §§ 362(b)(22) and (l)
    7        To put the facts in proper context, it is necessary to set
    8   forth the statutory provisions that govern the issues before us.
    9        As relevant to this appeal, § 362(a) provides:
    10        Except as provided in subsection (b) of this section, a
    petition filed under section 301 . . . of this
    11        title . . . operates as a stay, applicable to all
    entities, of
    12
    . . . .
    13
    (3) any act to obtain possession of property of the
    14        estate or of property from the estate or to exercise
    control over property of the estate . . . .
    15
    16   (Emphasis added.)
    17   As relevant to this appeal, § 362(b)(22) provides:
    18        The filing of a petition under section 301 . . . of
    this title . . . does not operate as a stay –
    19
    (22) subject to subsection (l), under subsection
    20        (a)(3), of the continuation of any eviction, unlawful
    detainer action, or similar proceeding by a lessor
    21        against a debtor involving residential real property in
    which the debtor resides as a tenant under a lease or
    22        rental agreement and with respect to which the lessor
    has obtained before the date of the filing of the
    23        bankruptcy petition, a judgment of possession of such
    property against the debtor . . . .
    24
    25        As demonstrated below, Ms. Wilson clearly understood that
    26   the Eviction Order, entered well before she filed her bankruptcy
    27   petition, meant that the eviction proceedings were not covered by
    28   the automatic stay unless somehow the terms of § 362(l) became
    -3-
    1   applicable in her case.
    2        Section 362(l) provides:
    3        (1) Except as otherwise provided in this subsection,
    subsection (b)(22) shall apply on the date that is 30 days
    4        after the date on which the bankruptcy petition is filed, if
    the debtor files with the petition and serves upon the
    5        lessor a certification under penalty of perjury that –
    6           (A) under nonbankruptcy law applicable in the
    jurisdiction, there are circumstances under which the debtor
    7        would be permitted to cure the entire monetary default that
    gave rise to the judgment for possession, after that
    8        judgment for possession was entered; and
    9           (B) the debtor (or an adult dependent of the debtor) has
    deposited with the clerk of the court, any rent that would
    10        become due during the 30-day period after the filing of the
    bankruptcy petition.
    11
    (2) If, within the 30-day period after the filing of the
    12        bankruptcy petition, the debtor (or an adult dependent of
    the debtor) complies with paragraph (1) and files with the
    13        court and serves upon the lessor a further certification
    under penalty of perjury that the debtor (or an adult
    14        dependent of the debtor) has cured, under nonbankruptcy law
    applicable in the jurisdiction, the entire monetary default
    15        that gave rise to the judgment under which possession is
    sought by the lessor, subsection (b)(22) shall not apply,
    16        unless ordered to apply by the court under paragraph (3).
    17        (3)(A) If the lessor files an objection to any certification
    filed by the debtor under paragraph (1) or (2), and serves
    18        such objection upon the debtor, the court shall hold a
    hearing within 10 days after the filing and service of such
    19        objection to determine if the certification filed by the
    debtor under paragraph (1) or (2) is true.
    20
    (B) If the court upholds the objection of the lessor
    21        filed under subparagraph (A) -
    22             (I) subsection (b)(22) shall apply immediately and
    relief from the stay provided under subsection (a)(3) shall
    23        not be required to enable the lessor to complete the process
    to recover full possession of the property; and
    24
    (ii) the clerk of the court shall immediately serve
    25        upon the lessor and the debtor a certified copy of the
    court’s order upholding the lessor’s objection.
    26
    (4) If a debtor, in accordance with paragraph   (5), indicates
    27        on the petition that there was a judgment for   possession of
    residential real property in which the debtor   resides and
    28        does not file a certification under paragraph   (1) or (2) --
    -4-
    1           (A) subsection (b)(22) shall apply immediately upon
    failure to file such certification, and relief from the stay
    2        provided under subsection (a)(3) shall not be required to
    enable the lessor to complete the process to recover full
    3        possession of the property; and
    4           (B) the clerk of the court shall immediately serve upon
    the lessor and the debtor a certified copy of the docket
    5        indicating the absence of a filed certification and the
    applicability of the exception to the stay under subsection
    6        (b)(22).
    7        (5)(A) Where a judgment for possession of residential
    property in which the debtor resides as a tenant under a
    8        lease or rental agreement has been obtained by the lessor,
    the debtor shall so indicate on the bankruptcy petition and
    9        shall provide the name and address of the lessor that
    obtained that pre-petition judgment on the petition and on
    10        any certification filed under this subsection.
    11           (B) The form of certification filed with the petition, as
    specified in this subsection, shall provide for the debtor
    12        to certify, and the debtor shall certify –
    13             (I) whether a judgment for possession of residential
    rental housing in which the debtor resides has been obtained
    14        against the debtor before the date of the filing of the
    petition; and
    15
    (ii) whether the debtor is claiming under paragraph (1)
    16        that under nonbankruptcy law applicable in the jurisdiction,
    there are circumstances under which the debtor would be
    17        permitted to cure the entire monetary default that gave rise
    to the judgment for possession, after that judgment of
    18        possession was entered, and has made the appropriate deposit
    with the court.
    19
    (C) The standard forms (electronic and otherwise) used in
    20        a bankruptcy proceeding shall be amended to reflect the
    requirements of this subsection.
    21
    (D) The clerk of the court shall arrange for the prompt
    22        transmittal of the rent deposited in accordance with
    paragraph (1)(B) to the lessor.
    23
    24   Section 362(l) proceedings.
    25        Again, Ms. Wilson filed her bankruptcy petition on July 8,
    26   2014.   The following day, July 9, 2014, Ms. Wilson filed an
    27   amended petition (“Amended Petition”).   The Amended Petition was
    28   necessary, as stated by Ms. Wilson under penalty of perjury,
    -5-
    1   because Ms. Wilson had failed to mark the “Certification by a
    2   Debtor Who Resides As a Tenant of Residential Property”
    3   (“Certification”) that appears at the bottom of page 2 of
    4   Official Form 1 in effect on the petition date.   Ms. Wilson
    5   checked each box of the Certification, thus representing under
    6   penalty of perjury:
    7   – that DRI had a judgment against her for possession of her
    8   residence;
    9   – that under applicable nonbankruptcy law there were
    10   circumstances under which she would be permitted to cure the
    11   entire monetary default that gave rise to the judgment for
    12   possession, after the judgment for possession was entered; and
    13   – that she was including with the Amended Petition the deposit
    14   with the bankruptcy court of any rent that would become due
    15   during the 30-day period after the filing of the petition.
    16        Also on July 9, 2014, Ms. Wilson tendered to the clerk
    17   (“Clerk”) of the bankruptcy court a money order payable to DRI in
    18   the amount of $700.00.   The Clerk promptly served on DRI its
    19   “Clerk’s Acceptance and Transmittal of Rent Deposit”
    20   (“Transmittal”) together with the money order.    The Transmittal
    21   states:
    22        The debtor in the above captioned case filed a petition
    in this court on July 8, 2014. The debtor asserts an
    23        exception to the limitation of the automatic stay under
    [§ 362(l)(1)], and a right to cure the pre-petition
    24        judgment under non-bankruptcy law.
    25        Pursuant to [[§ 362(l)(1)(B)], the clerk has accepted
    from the debtor a deposit of rent in the amount of
    26        $700.00 which represents the rent that becomes due
    during the 30-day period after the filing of the
    27        bankruptcy petition. The clerk hereby transmits, by
    certified mail, the rent deposit to [DRI].
    28
    -6-
    1   DRI filed its response (“Response”) to the Transmittal on
    2   July 28, 2014, asserting that because Ms. Wilson did not tender
    3   the full 30 days’ rent, which was $2,5344 pursuant to the terms
    4   of the lease, a copy of which was attached to the Response,
    5   Ms. Wilson had not complied with the requirements of § 362(l)(1).
    6        The bankruptcy court scheduled a hearing (Ҥ 362(l)
    7   Hearing”) on the Response.   The § 362(l) Hearing was held on
    8   August 6, 2014.5   At the § 362(l) Hearing, Ms. Wilson argued
    9   that (1) the Eviction Order was void because DRI had not obtained
    10   relief from the § 1301 co-debtor stay as to Ms. Wilson in
    11   Ms. Lindsey’s bankruptcy case, and (2) Ms. Wilson had tendered
    12   the full amount of “her portion” of the lease payment for the
    13   next 30 days.   The bankruptcy court clarified for Ms. Wilson that
    14   the full amount of the lease payment, or $2,534, was required to
    15   be paid to receive the protections of § 362(l).   On September 8,
    16   2014, the bankruptcy court entered its order (“§ 362(l) Order”)
    17   with respect to the Certification and the Response.   The § 362(l)
    18   Order required Ms. Wilson (and/or Ms. Lindsey) to pay to DRI in
    19
    20        4
    The monthly rent was $2,500; there was also an obligation
    to pay $34 each month for utilities.
    21
    5
    22           On August 5, 2014, the day before the § 362(l) Hearing,
    Ms. Wilson filed a second certification stating “Debtor under
    23   penalty of perjury has cured, under non-bankruptcy law applicable
    in the jurisdiction, the entire monetary default that gave rise
    24
    to the judgment under which possession is sought by the lessor,
    25   [sic] subsection (b)(22) shall not apply, unless ordered to apply
    by the Court under paragraph (3).” (Emphasis added.) This
    26   second certification was not discussed at the § 362(l) Hearing.
    27   In any event, there is no dispute that Ms. Wilson had not cured
    the underlying default at the time she filed it or at any time
    28   thereafter.
    -7-
    1   certified funds (1) $2,534.00 for the August 2014 lease payment
    2   on or before August 11, 2014, and (2) the monthly lease payment
    3   of $2,534.00 on or before the 5th day of each month thereafter.
    4   If DRI did not receive the lease payments as specified, the
    5   § 362(l) Order provided that the bankruptcy court would
    6   immediately lift any and all stays relating to Ms. Wilson and
    7   Ms. Lindsey in both bankruptcy cases and permit DRI to go forward
    8   with all available remedies to take possession of the leased
    9   property.    When Ms. Wilson or her sister failed to pay the
    10   December 2014 rent by December 5, 2014, as required by the
    11   § 362(l) Order, the bankruptcy court entered its “Amended
    12   Supplemental Ex Parte Order” (“Stay Relief Order”), which granted
    13   relief from all stays as described in the § 362(l) Order.6
    14   Adversary Proceeding
    15        In the meantime, despite Ms. Wilson’s Certification under
    16   § 362(l) in her bankruptcy case, on July 18, 2014, DRI,
    17   Mr. Kania, and SNES filed a motion (“Enforcement Motion”) in
    18   state court for an expedited hearing to enforce the Eviction
    19   Order.    Ms. Wilson was then served with a Notice to Appear in
    20   state court on July 29, 2014 with respect to the Enforcement
    21   Motion.
    22        On July 29, 2014, Ms. Wilson initiated in her bankruptcy
    23   case an adversary proceeding (“Adversary Proceeding”) against
    24   DRI, Mr. Kania, and SNES, by filing a complaint (“Complaint”) in
    25
    26        6
    Ms. Wilson appealed the Stay Relief Order. On May 1,
    27   2015, our Motions Panel dismissed that appeal, BAP No. 14-1592,
    on Ms. Wilson’s motion, on the basis that she had been evicted,
    28   and the appeal therefore was moot.
    -8-
    1   which she asserted that the actions taken with respect to the
    2   Enforcement Motion constituted “willful, intentional, gross and
    3   flagrant violations of the provisions of [§§ 362 and 1301].”
    4   Ms. Wilson alleged that she suffered significant emotional harm
    5   as a result of the willful violation of the automatic stay, for
    6   which she sought compensatory and punitive damages in an
    7   unspecified amount.    (The cover sheet to the Adversary Proceeding
    8   reflects that the demand amount was “$75,000 actual and punitive
    9   damages and costs.”)
    10   DRI’s Motion to Dismiss
    11        On August 28, 2014, DRI filed its motion to dismiss the
    12   Complaint (“DRI Dismissal Motion”) pursuant to Civil
    13   Rule 12(b)(6) for failure to state a claim upon which relief
    14   could be granted.   DRI asserted that Ms. Wilson never had a right
    15   to seek a temporary stay under § 362(l), because under Nevada
    16   law, she was not permitted to cure the monetary default
    17   underlying the Eviction Order and because she did not tender
    18   30 days’ rent.   DRI further asserted that even if its actions
    19   with respect to the Enforcement Motion violated the temporary
    20   stay available through § 362(l), Ms. Wilson had not suffered any
    21   prejudice or damages where she continued to enjoy the use of the
    22   property without fully compensating DRI for that use.7    The DRI
    23   Dismissal Motion was set for hearing to be held October 14, 2014.
    24   The deadline for Ms. Wilson to respond to the DRI Dismissal
    25   Motion was September 30, 2014.
    26
    7
    27           The hearing on the Eviction Motion took place on July 29,
    2014 as scheduled. The state court entered a further Eviction
    28   Order, but stayed the order until 5:00 p.m. August 11, 2014.
    -9-
    1        Ms. Wilson filed her “answer” to the DRI Dismissal Motion on
    2   October 2, 2014, and appears to have attempted to postpone
    3   resolution of the DRI Dismissal Motion by scheduling her answer
    4   for hearing on November 25, 2014.      The “answer” complains only
    5   that DRI did not comply with Local Rule 5004(a), (b) and (c),
    6   which deprived her of her due process rights.
    7        DRI filed its reply to Ms. Wilson’s “answer” on October 7,
    8   2014, pointing out that it was untimely and failed to oppose the
    9   DRI Dismissal Motion substantively.
    10        At the October 14, 2014 hearing on the DRI Dismissal Motion,
    11   at which Ms. Wilson appeared, the bankruptcy court granted the
    12   DRI Dismissal Motion.   Fundamental to the issues Ms. Wilson
    13   asserts in this appeal, the bankruptcy court ruled that the
    14   § 1301 codebtor stay Ms. Wilson had in her sister’s bankruptcy
    15   case terminated on June 2, 2014, when the order was entered in
    16   Ms. Lindsey’s case granting relief from the automatic stay to DRI
    17   to continue eviction proceedings.      Because there was no active
    18   codebtor stay when the Eviction Order was entered, it was a valid
    19   order entered prepetition [with respect to Ms. Wilson’s
    20   bankruptcy case] as to which applicable nonbankruptcy law did not
    21   afford a right to cure.   The order (“DRI Dismissal Order”) was
    22   entered December 23, 2014.   The DRI Dismissal Order recited that
    23   Ms. Wilson’s “answer” was untimely, that the bankruptcy court
    24   previously had determined in an adversary proceeding Ms. Wilson
    25   had filed in Ms. Lindsey’s bankruptcy case that § 1301 did not
    26   provide Ms. Wilson with a stay beyond June 2, 2014, that would
    27   render the Eviction Order void, and that Ms. Wilson had filed
    28   multiple bankruptcy cases since 1993 and, in Case No. 12-18817,
    -10-
    1   had been found by the bankruptcy court to be a serial filer.       The
    2   DRI Dismissal Order granted the DRI Dismissal Motion and
    3   dismissed the Adversary Proceeding but used an incorrect case
    4   number to do so.   Ms. Wilson timely appealed the DRI Dismissal
    5   Order.
    6   Kania/SNES Motion to Dismiss
    7        On August 28, 2014, Mr. Kania (on behalf of himself and
    8   SNES) also filed a motion to dismiss the Complaint (“Kania
    9   Dismissal Motion”) pursuant to Civil Rule 12(b)(6) for failure to
    10   state a claim upon which relief could be granted.      Mr. Kania
    11   asserted that Ms. Wilson was abusing the bankruptcy system where
    12   she had filed bankruptcy twelve times since 1993, and that
    13   Ms. Wilson never had a right to seek a temporary stay under
    14   § 362(l) because under Nevada law she was not permitted to cure
    15   the monetary default underlying the Eviction Order and because
    16   she did not tender 30 days’ rent.      In defense of his own
    17   behavior, Mr. Kania asserted that the actions undertaken in the
    18   state court did not violate any stay because they were
    19   ministerial.   Finally, Mr. Kania asserted that even if the
    20   actions did violate a stay in Ms. Wilson’s bankruptcy case, she
    21   had not incurred damages as a matter of law.
    22        Ms. Wilson filed her “answer” to the Kania Dismissal Motion
    23   on October 2, 2014.   The “answer” complains that Mr. Kania and
    24   SNES did not comply with Local Rules 5004(a), (b) and (c),
    25   7005(a), 7010(a) and (b), 7056 and 9014(b)(1), all of which
    26   deprived her of her due process rights.
    27        Mr. Kania filed his reply to Ms. Wilson’s “answer” on
    28   October 6, 2014, pointing out that it was untimely and failed to
    -11-
    1   oppose the motion substantively.
    2        Although it does not appear that the Kania Dismissal Motion
    3   ever was set for hearing, Mr. Kania appeared and argued at the
    4   October 14, 2014 Hearing.    After ruling on the DRI Dismissal
    5   Motion, the bankruptcy court stated that “the individual case and
    6   the case against the company are the same.     I’m dismissing those
    7   also.    I’m granting the [Kania Dismissal Motion] for the same
    8   reasons I’m granting the [DRI Dismissal Motion].”
    9        The bankruptcy court entered its order (“Kania Dismissal
    10   Order”) granting the Kania Dismissal Motion and dismissed the
    11   Adversary Proceeding, but again used an incorrect case number to
    12   do so.    Ms. Wilson timely appealed the Kania Dismissal Order.
    13   Proceedings on Remand
    14        DRI filed an emergency motion in the appeal on January 27,
    15   2015, seeking remand to return to the bankruptcy court to correct
    16   the DRI Dismissal Order, both as to the incorrect case number,
    17   and to include its holding, inadvertently omitted, that the
    18   temporary stay under § 362(l) was not applicable and therefore
    19   not violated.    Our motions panel granted a limited remand on
    20   February 4, 2015 to allow the bankruptcy court “to rule on a
    21   motion to amend or correct the [DRI Dismissal Order] to whatever
    22   extent the bankruptcy court sees fit.”
    23        An amended order (“Amended DRI Dismissal Order”) granting
    24   the DRI Dismissal Motion was entered on January 5, 2016 and is
    25   now the order on appeal as to DRI.8     The Amended Dismissal Order
    26
    8
    27           It does not appear that Mr. Kania took any action to
    correct the Kania Dismissal Order which contained the same flaws
    28                                                      (continued...)
    -12-
    1   now includes the following finding: “DRI did not violate the
    2   thirty (30) day temporary stay under [§ 362(l)] as the [Eviction
    3   Order] had been entered in favor of DRI prior to Wilson’s filing
    4   bankruptcy and Wilson, under Nevada law, had no circumstances or
    5   mechanism to cure said judgment.          See In re Jackson,
    6   No. 13-21676, 
    2013 WL 3956994
    (Bankr. D. Colo. July 30, 2013);
    7   see also Nev. R. Stat. § 40.253.”
    8        As did the DRI Dismissal Order, the Amended DRI Dismissal
    9   Order denied Ms. Wilson’s oral motion for stay pending appeal.
    10        This panel was advised through pleadings filed by Ms. Wilson
    11   in another appeal that she was evicted on January 12, 2015.       In
    12   addition, on January 27, 2016, the bankruptcy court dismissed
    13   Ms. Wilson’s bankruptcy case because she had failed to obtain
    14   confirmation of any of the nine plans she had proposed.        At that
    15   time, her bankruptcy case had been pending more than nineteen
    16   months.
    17                            II.    JURISDICTION
    18        The bankruptcy court had jurisdiction under 28 U.S.C.
    19   §§ 1334 and 157(b)(2)(G).      We have jurisdiction under 28 U.S.C.
    20   § 158.
    21                               III.     ISSUES
    22        1)   Whether the Bankruptcy Court erred when it determined
    23   that Ms. Wilson was not entitled to the benefit of the § 362(l)
    24   temporary stay.
    25        2)   Whether Ms. Wilson’s due process rights were violated by
    26
    27        8
    (...continued)
    28   as the DRI Dismissal Order.
    -13-
    1   the bankruptcy court’s dispositions of the DRI Dismissal Motion
    2   and the Kania Dismissal Motion.9
    3                         IV.   STANDARDS OF REVIEW
    4        Application of basic rules of procedure and construction of
    5   the Bankruptcy Code present questions of law that we review de
    6   novo.    All Points Capital Corp. v. Meyer (In re Meyer), 
    373 B.R. 7
      84, 87 (9th Cir. BAP 2007).    De novo review requires that “we
    8   consider a matter anew, as if no decision had been rendered
    9   previously.”    Mele v. Mele (In re Mele), 
    501 B.R. 357
    , 362 (9th
    10   Cir. BAP 2013).
    11        Assertions of violation of due process are reviewed de novo.
    12   In re Victoria Station, 
    875 F.2d 1380
    , 1382 (9th Cir. 1989).
    13        We may affirm a decision of the bankruptcy court on any
    14   basis supported by the record.     Hooks v. Kitsap Tenant Support
    15   Services, Inc., 
    816 F.3d 550
    , 554 (9th Cir. 2016); ASARCO, LLC v.
    16
    17
    9
    Ms. Wilson asserts that the bankruptcy court further
    18   erred as follows:
    19   1. In granting the Kania Dismissal Motion and the DRI Dismissal
    Motion.
    20   2. In ruling that her “answers” were untimely.
    3. In determining that the § 1301 codebtor stay is designed only
    21   for the protection of the debtor and is merely incidental to the
    22   codebtor.
    4. In determining that the § 1301 codebtor stay available to
    23   Ms. Wilson in Ms. Lindsey’s bankruptcy case terminated on June 2,
    2014, with the result that the Eviction Order was not entered in
    24
    violation of the § 1301 codebtor stay.
    25   5. In determining that Ms. Wilson previously had been found to
    be a serial filer.
    26   6. In entering the Kania Dismissal Order despite the Kania
    27   parties’ failure to follow the local rules.
    We have distilled the issues before us to the two listed
    28   above necessary to the disposition of this appeal.
    -14-
    1   Union Pac. R.R. Co., 
    765 F.3d 999
    , 1004 (9th Cir. 2014);     Shanks
    2   v. Dressel, 
    540 F.3d 1082
    , 1086 (9th Cir. 2008).
    3                             V.   DISCUSSION
    4   Ms. Wilson Was Not Entitled to a Temporary Stay Under § 362(l)
    5        Section 362(l)(1)(B) required that Ms. Wilson certify on her
    6   petition that she had deposited with the Clerk any rent that
    7   would become due during the 30-day period after the filing of the
    8   petition.   DRI established that Ms. Wilson’s Certification under
    9   § 362(l)(1)(B) was patently false, where she deposited only $700
    10   of the $2,534 rent due under the lease.     Because the requirements
    11   of both § 362(l)(1)(A) and (B) must be met, as evidenced by use
    12   of the conjunction “and” between them, Ms. Wilson’s failure to
    13   tender the required deposit to the bankruptcy court with her
    14   Amended Petition is fatal to any claim that the eviction
    15   proceedings were stayed under § 362(l).     In re Jackson,
    16   No. 13-21676, 
    2013 WL 3956994
    (Bankr. D. Colo. July 30, 2013).
    17        Further, Ms. Wilson asserted, unsuccessfully, in both the
    18   state court and in her adversary proceeding in her sister
    19   Ms. Lindsey’s bankruptcy case that the § 1301 codebtor stay
    20   applied to void the Eviction Order.10   However, in her Amended
    21
    10
    22           At the October 2, 2014 hearing in Ms. Wilson’s adversary
    proceeding filed in Ms. Lindsey’s bankruptcy case, the bankruptcy
    23   court stated that the RFS Order entered June 2, 2014, dealt with
    the co-debtor stay where the issue had been raised at the hearing
    24
    and where the RFS Order provided that DRI could go to state court
    25   and exercise all remedies it had. In light of the apparent
    uncertainty regarding the state of the co-debtor stay, however,
    26   the bankruptcy court ruled that “to the extent I did not lift the
    27   stay as to the co-debtor stay, I am retroactively, to the day of
    the hearing, doing that in the interest of equity, which I’m
    28                                                      (continued...)
    -15-
    1   Petition, Ms. Wilson certified under penalty of perjury both that
    2   under applicable nonbankruptcy law, she would be permitted to
    3   cure the monetary defaults under her lease and that she had
    4   deposited with the bankruptcy court “any rent that would become
    5   due during the 30-day period after the filing of [her] petition.”
    6   Because she never fulfilled the rental deposit requirement of her
    7   certification, we do not consider her co-debtor stay argument
    8   with respect to her further certification that she had a right to
    9   cure the lease rent defaults.
    10   Dismissal Under Civil Rule 12(b)(6) Was Appropriate
    11        Ms. Wilson was evicted from her residence after this appeal
    12   was commenced.    Her Complaint sought damages for violation of the
    13   stay she believed arose under § 362(l).    However, as discussed
    14   above, Ms. Wilson never satisfied the requirements for § 362(l)
    15   to apply and counter the effects of § 362(b)(22).
    16   Section 362(b)(22) operated to allow appellees to continue with
    17   their eviction efforts postpetition without obtaining relief from
    18   stay.     With the Complaint premised on the application of § 362(l)
    19   to cause a stay to arise, it consequently failed to state a claim
    20   upon which relief could be granted, and the bankruptcy court did
    21   not err in dismissing the Complaint under Civil Rule 12(b)(6),
    22   applicable in adversary proceedings before the bankruptcy court
    23   under Rule 7012(b).11
    24
    10
    25         (...continued)
    allowed to do under appropriate case law.”    We express no opinion
    26   as to the propriety of these rulings.
    27        11
    While we do not reach the merits of Ms. Wilson’s
    28                                                         (continued...)
    -16-
    1   Alleged Lack of Due Process
    2        Ms. Wilson argues that the bankruptcy court’s dismissal of
    3   her Complaint violated her due process rights in light of
    4   appellees’ violations of various local rules of the bankruptcy
    5   court in noticing the DRI Dismissal Motion and the Kania
    6   Dismissal Motion.   “The due process requirements for notice are
    7   relatively minimal; they merely require notice ‘reasonably
    8   calculated, under all the circumstances, to apprise interested
    9   parties of the pendency of the action and afford them an
    10   opportunity to present their objections.’”   Keys v. 701 Mariposa
    11   Project, LLC (In re 701 Mariposa Project, LLC), 
    514 B.R. 10
    , 15
    12   (9th Cir. BAP 2014), quoting Mullane v. Cent. Hanover Bank &
    13   Trust Co., 
    339 U.S. 306
    , 314 (1950).
    14        Ms. Wilson raises a number of alleged violations of the
    15   bankruptcy court’s local rules by the appellees in providing her
    16   with notice and scheduling the hearing at which the bankruptcy
    17   court considered the DRI Dismissal Motion and the Kania Dismissal
    18   Motion.   However, the record is clear that Ms. Wilson had notice
    19   of the motions weeks in advance of the hearing and that she
    20   attended the hearing, and she does not argue otherwise.    Her
    21   responses to the motions were filed late, and Ms. Wilson did not
    22   raise any substantive arguments in opposition to the motions in
    23
    24        11
    (...continued)
    25   Complaint, we note that Ms. Wilson failed to quantify any
    component of her damages claim either in the allegations of her
    26   Complaint or in its prayer. The record establishes that through
    27   her actions and the actions of her sister, Ms. Wilson received
    the benefit of continued possession of the leased premises
    28   postpetition for at least six months.
    -17-
    1   either response.   The bankruptcy court refused to consider her
    2   late responses, but ultimately, we do not perceive any violation
    3   of Ms. Wilson’s due process rights with respect to the
    4   proceedings that resulted in the dismissal of her Complaint.     See
    5   generally United Student Aid Funds, Inc. v. Espinosa, 
    559 U.S. 6
      260, 272 (2010).   Accordingly, Ms. Wilson’s due process arguments
    7   lack merit.
    8                             VI.   CONCLUSION
    9        The bankruptcy court did not err when it determined that
    10   Ms. Wilson was not entitled to the benefit of the § 362(l)
    11   temporary stay by the terms of the statute.   Accordingly, the
    12   bankruptcy court did not err in dismissing her Complaint for
    13   failure to state a claim upon which relief could be granted.
    14        We AFFIRM.
    15
    16
    17
    18
    19
    20
    21
    22
    23
    24
    25
    26
    27
    28
    -18-
    

Document Info

Docket Number: NV-14-1589-DFB

Filed Date: 5/31/2016

Precedential Status: Non-Precedential

Modified Date: 4/18/2021