In Re: Snyder , 292 F. App'x 191 ( 2008 )

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
9-17-2008
In Re: Snyder
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-4066
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 06-4066
___________
IN RE: SHANNI SNYDER,
Appellant
____________________________________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil Action No. 06-cv-00398)
District Judge: Honorable Donetta W. Ambrose
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
August 1, 2008
Before: RENDELL, JORDAN and VAN ANTWERPEN, Circuit Judges
(Opinion filed: September 17, 2008)
___________
OPINION
___________
PER CURIAM
Shanni Snyder appeals from the order of the United States District Court for the
Western District of Pennsylvania, heard on appeal from the order issued by the United
States Bankruptcy Court for the Western District of Pennsylvania and affirming the same.
The facts are well-known to the parties, so we will not recount them here at length. In
summary, Snyder, along with her siblings Mark Snyder, Kash Snyder, and Scott Snyder
shared ownership of a number of properties located in Allegheny and Westmoreland
Counties. Mortgage foreclosure actions regarding those properties commenced in July
2003 in Allegheny County and in October 2003 in Westmoreland County. Snyder filed a
Chapter 13 bankruptcy petition on November 17, 2003. On November 24, 2003, default
judgment was entered in the mortgage foreclosure action in Allegheny County, and on
December 12, 2003, default judgment was entered in the mortgage foreclosure action in
Westmoreland County. Ultimately, Shanni Snyder’s bankruptcy petition was dismissed in
July 2004, due to her failure to file notice of a financing commitment and amended plan.
The Allegheny County properties were sold at a sheriff’s sale on January 14, 2005; those
properties were then sold to third parties in June 2005 and September 2005.
Meanwhile, her siblings also filed a number of their own individual bankruptcy
petitions after foreclosure proceedings were initiated; none of the bankruptcy cases
proceeded beyond preliminary stages. The bankruptcy filings included three petitions
filed by Mark Snyder and one petition filed by Kash Snyder. Notably, in Kash Snyder’s
case, the Bankruptcy Court granted in rem relief from the automatic stay in January 2005
so that foreclosure on the Allegheny County properties could proceed.
In December 2005, Snyder filed a motion to reopen her bankruptcy petition so that
she could pursue an adversary complaint to declare void the state court default judgments
entered in the mortgage foreclosure actions. She argued that the judgments were void
because they were obtained during the pendency of the automatic stay in her bankruptcy
case. In addition to damages and other relief, she sought to have the effects of the sales
reversed. After a hearing on February 15, 2006, the Bankruptcy Court granted Snyder’s
motion in part and denied it in part, referring to the reasoning on the record. The motion
was denied regarding the attempt to pursue an adversary action, and was granted to
retroactively annul the automatic stay to declare that the sheriff’s sale of the Allegheny
County properties was not in violation of the automatic stay.1 The Bankruptcy Court
further noted that it would not permit Snyder to commence an adversary action as a
litigation strategy, and it again closed the matter with its order.
The District Court affirmed the Bankruptcy Court’s decision, determining that the
Bankruptcy Court did not abuse its discretion in granting relief from the automatic stay
and in denying reopening of the bankruptcy case for pursuing the adversary action. The
District Court also denied Snyder’s motion for reconsideration. This appeal followed.
We have jurisdiction under 28 U.S.C. § 158(d) and 28 U.S.C. § 1291.2 We undertake
plenary review of the District Court’s decision acting as an appellate court of a
bankruptcy matter. In re Myers, 491 F.3d 120, 124 (3d Cir. 2007). In reviewing the
Bankruptcy Court’s decision, we exercise the same standard of review as the District
Court. See id. at 125. That is, we review the Bankruptcy Court’s legal determinations de
1
Specifically, the order provides in pertinent part: “. . . the stay is annulled
retroactively so that the sheriff’s sale of the properties at [the street addresses of the five
Allegheny County properties] is declared to be not in violation of the automatic stay, for
the reasons expressed on the record this date. No adversary action is permitted at this
time. . . .” In Re: Shanni Snyder, No. 03-34365 (Bankr. W.D. Pa. Feb. 16, 2006).
2
Initially, it appeared that this Court lacked appellate jurisdiction due to an
untimely notice of appeal. However, Snyder filed in District Court a motion under
Federal Rule of Appellate Procedure 4(a)(5) to extend the time to file an appeal. The
District Court granted the motion on September 29, 2006. In light of this order, we are
satisfied that we have appellate jurisdiction.
novo, its factual findings for clear error, and its discretionary determinations for abuse of
discretion. See Reconstituted Comm. of Unsecured Creditors of the United Healthcare
Sys., Inc., v. State of N.J. Dept. of Labor (In re United Healthcare Sys., Inc.), 396 F.3d
247, 249 (3d Cir. 2005). As pertinent to this appeal, we review for abuse of discretion the
decision to annul the automatic stay. See In re Myers, 491 F.3d at 128.3
As noted by the appellees, the appeal centers on whether the Bankruptcy Court
abused its discretion in annulling the stay. The Bankruptcy Code allows for relief from
an automatic stay in a number of ways, including “terminating, annulling, modifying or
conditioning” the stay. See 11 U.S.C. § 362(d). By virtue of the term “annulling” being
present in the statute, courts are empowered to grant retroactive relief, such as ratifying
violations of the automatic stay that otherwise would be void. See In re Myers, 491 F.3d
at 127-28; In re Siciliano, 13 F.3d 748, 750-51 (3d Cir. 1994). We have observed a
number of pertinent factors in determining whether the Bankruptcy Court abused its
discretion in annulling a stay, including (1) whether the creditor was aware of the
bankruptcy filing or encouraged violation of the stay; (2) whether the debtor is guilty of
inequitable, unreasonable, or dishonest conduct; and (3) whether the creditor would suffer
prejudice. See In re Myers, 491 F.3d at 129. We also have noted that the Bankruptcy
3
Although neither party raises the issue, we note that Snyder’s motion to “reopen”
her bankruptcy case might be construed more accurately as a motion to vacate the
dismissal of her case, as the matter was never “closed” under 11 U.S.C. § 350(a). See In
re Income Property Builders, Inc., 699 F.2d 963, 965 (9th Cir. 1982). However, we
observe that a motion filed pursuant to Federal Rule of Bankruptcy Procedure 9024,
which incorporates Federal Rule of Civil Procedure 60(b), may provide the vehicle for
nullification of the dismissal order.
Court has a wide latitude to balance the equities when granting relief from the automatic
stay. See id., 491 F.3d at 130.
Applying these factors, we cannot say that the Bankruptcy Court abused its
discretion in annulling the automatic stay for the purpose of ratifying the Allegheny
County sheriff’s sale. Snyder waited more than ten months after the sheriff’s sale to
dispute the validity of the default judgments that were entered years earlier. The serial
bankruptcy filings by her family members, as described earlier, suggest conduct in bad
faith. Furthermore, as emphasized by the Bankruptcy Court during the hearing, also at
stake were the significant interests of the third-party purchasers of the Allegheny County
properties.
Snyder argues that the Bankruptcy Court’s order ratified the sheriff’s sale without
affecting the underlying state court judgment. Thus, she argues that she should have been
allowed to revive her bankruptcy case to assert her claim that the judgment was entered in
violation of the automatic stay and was void ab initio. To the extent that Snyder’s
position is based on the basis that an automatic stay is absolute and that a “void” action
may never be cured by retroactive annulment, we have rejected this argument in previous
cases, as noted above.4 Moreover, we discern no abuse of discretion in the Bankruptcy
4
Also, we are unpersuaded by the suggestion that an annulment of the stay as to
Allegheny County properties’ sale somehow leaves the underlying default judgment
subject to Snyder’s challenge. To annul a stay is to negate its existence. See In re
Siciliano, 13 F.3d at 751 (distinguishing annulment of a stay, where annulment can
operate as of the date of the bankruptcy petition’s filing that gave rise to the stay, from
termination of a stay, where a stay ends as of the date ordered). By the Bankruptcy
Court’s order annulling the stay for purposes of the Allegheny County properties’
Court’s denying allowance for Snyder’s adversary complaint to proceed. Snyder does not
dispute that pursuing her adversary action was the sole purpose of her motion to revive
the proceedings. Instead, she asserts that the Bankruptcy Court erred by acknowledging
during the hearing that a damages claim would be allowable yet ignoring that Snyder’s
complaint did include a claim for damages. Snyder’s argument oversimplifies the basis
of Bankruptcy Court’s ruling. The hearing transcript reflects that the Bankruptcy Court
engaged in an inquiry as to Snyder’s intentions regarding her motion, ultimately
ascertaining from Snyder’s responses that Snyder had no intention to pursue Chapter 13
relief. The Bankruptcy Court emphasized that allowing Snyder’s bankruptcy case to
continue would involve filing schedules, creating a payment plan, and paying remaining
creditors–and that Snyder could amend her motion to comply with those Chapter 13
requirements–otherwise, her case would be dismissed (again). (See, e.g., H’rg Tr. Feb.
15, 2006 at 25, 27 (Appellant’s App. Vol. II at 108, 110).)5 Especially given Snyder’s
own history in failing to file a financing plan, as well as the history of Snyder’s family’s
bankruptcy filings, we cannot say that denying the motion to revive her bankruptcy
proceedings was an abuse of discretion.
We have considered the remaining arguments presented in Snyder’s brief and
sheriff’s sale, it is as though the stay never existed. Accordingly, Snyder cannot argue
that the underlying Allegheny County judgment was entered in violation of a non-existent
stay.
5
Neither Snyder’s motion nor the adversary complaint manifest any intent to
pursue Chapter 13 relief.
motions and find them to be unpersuasive. We will affirm the District Court’s judgment
affirming the Bankruptcy Court’s order annulling the stay as to the Allegheny County
properties.6 Snyder’s and Appellees’ respective motions to expand the record are denied.
6
Snyder devotes part of her brief to disputing the District Court’s “prejudicial
dicta” that the Bankruptcy Court’s annulment applied not only to the Allegheny County
properties but also to the Westmoreland County properties. She contends that the District
Court’s decision is thus inconsistent with the Bankruptcy Court’s subsequent order in
Mark Snyder’s bankruptcy matter–separately pending at C.A. No. 07-2780–and
improperly expanded the Bankruptcy Court’s ruling. Regardless of this characterization
of the District Court’s opinion, we merely note that the Bankruptcy Court’s order is
specific as to the intended scope of the annulment.
7