Opinion
C/A No. 23-01059-EG
2023-06-09
IN RE, Warren Clayton EPTING, Debtor.
Benjamin R. Matthews, Benjamin R. Matthews & Associates, Columbia, SC, for Debtor. Pamela Simmons-Beasley, Columbia, SC, Trustee, pro se.
Benjamin R. Matthews, Benjamin R. Matthews & Associates, Columbia, SC, for Debtor. Pamela Simmons-Beasley, Columbia, SC, Trustee, pro se.
ORDER DENYING DEBTOR'S MOTION TO IMPOSE THE AUTOMATIC STAY
Elisabetta G. M. Gasparini, United States Bankruptcy Judge
This matter is before the Court on a Motion to Impose the Automatic Stay ("Motion"), filed by Warren Epting ("Debtor") pursuant to 11 U.S.C. § 362(c)(4)(B). The Motion was served on all creditors, and no objections were filed. Pamela Simmons-Beasley, the Chapter 13 Trustee (the "Trustee"), filed a notice of consent to the Motion. On June 5, 2023, the Court conducted a hearing on the Motion (the "Hearing"). Debtor's counsel appeared but Debtor was not present. At the conclusion of the Hearing, the Court took the matter under advisement. Having considered the Motion, the arguments of counsel at the Hearing, and all matters of record before it, the Motion is denied for the reasons stated herein.
ECF No. 15, filed May 12, 2023.
ECF No. 16, filed May 15, 2023.
See Notice of Consent of Trustee, filed May 30, 2023.
FINDINGS OF FACT
This is Debtor's fourth bankruptcy filing and the second within the last year. Prior to this case, Debtor filed Chapter 13 Case No. 21-03114-dd on December 3, 2021 (the "2021 Case"). Debtor was represented by his current counsel in the 2021 Case. The prior case was dismissed on March 7, 2023 for failure to make plan payments to the Trustee.
In addition to the current case and the 2021 Case, Debtor also filed two prior chapter 13 cases: Case No. 00-01461-jd, filed on February 17, 2000, and Case No. 02-14489-wb, filed on December 2, 2002.
On April 12, 2023 (the "Petition Date"), approximately a month after the 2021 Case was dismissed, Debtor filed this case. Pursuant to § 362(c)(3)(A), the automatic stay provided by § 362(a) was scheduled to terminate on May 12, 2023—thirty (30) days after the Petition Date. Debtor did not file a motion to extend the stay pursuant to § 362(c)(3)(B); rather, on the date the stay expired, Debtor filed the Motion pursuant to § 362(c)(4)(B). Debtor's counsel self-scheduled and noticed the Hearing on the Motion for June 5, 2023—fifty-four (54) days after the Petition Date.
ECF No. 1.
Section 362(c)(3)(A) of the Bankruptcy Code provides as follows:
[I]f a single or joint case is filed by or against debtor who is an individual in a case under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed, other than a case refiled under a chapter other than chapter 7 after a dismissal under section 707(b)—
(A) the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease shall terminate on the 30th day after the filing of the later case.
In the Motion, Debtor identifies only one other bankruptcy filing within the prior year. He also sets forth the reasons for non-payment in his previous case and the change in his circumstances since that filing. Debtor indicates that he was unable to make all the required payments in the 2021 Case because his mother passed away without insurance in August 2022. He states he has since recovered from the unexpected financial burdens of the funeral expenses and is now on firm financial footing to pursue a chapter 13 reorganization. Accordingly, Debtor requests that the Court enter an order "imposing the automatic stay under § 362(a) as to all creditors for the duration of this Chapter 13 proceeding, or until such time as the stay is terminated under § 362(c)(1) or (c)(2), or a motion for relief is granted under § 362(d)."
At the Hearing, the Court inquired why a motion to extend the stay was not filed on the Petition Date or prior to its expiration pursuant to the provisions of § 362(c)(3). Counsel was apparently under the impression that multiple cases, aside from the 2021 Case, were previously filed within the last year but was unable to identify any such filings. Upon the review of the Pacer National Database, the Court takes judicial notice that aside from Debtor's bankruptcy cases in 2000 and 2002—Case Nos. 00-01461-jd and 02-14489-wb—the 2021 Case was the only other case Debtor had filed within the previous year.
CONCLUSIONS OF LAW
In the Motion, Debtor seeks relief pursuant to § 362(c)(4)(B) of the Bankruptcy Code. The issues before the Court are twofold: First, whether § 362(c)(3)(B) applies under these circumstances to "extend the stay" when Debtor failed to file a motion and request such relief to be heard and granted within the first 30 days of the case. Second, whether the Court has the authority under § 362(c)(4)(B) to "order the stay to take effect" when only one other case was pending within the year prior to the Petition Date. The Court concludes that neither provision applies in this case.
A. The Automatic Stay Is No Longer In Place and Cannot Be Extended Pursuant to 11 U.S.C. § 362(c)(3)(B).
Section 362(c)(3)(B) provides:
On the motion of a party in interest for continuation of the automatic stay and upon notice and a hearing, the court may extend the stay in particular cases
as to any or all creditors (subject to such conditions or limitations as the court may then impose) after notice and a hearing completed before the expiration of the 30-day period only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed.11 U.S.C. § 362(c)(3)(B) (emphasis added). Debtor moved to extend the automatic stay at 3:47 p.m. on May 12, 2023, the date that the stay expired by virtue of § 362(c)(3)(A). No motion to expedite hearing or to seek a temporary extension was filed. Section 362(c)(3)(B) does not provide the Court with any authority to extend the stay after it is terminated under § 362(c)(3)(A) if a hearing is not conducted before the expiration of the stay. 11 U.S.C. § 362(c)(3)(B); see also In re Cartledge, No. 06-00119-JW, 2006 WL 3068829, at *1 (Bankr. D.S.C. Feb. 15, 2006) (citing In re Wells, C/A No. 05-45311-W, slip op. at 2 (Bankr.D.S.C. Jan. 3, 2006)); In re Robinson, C/A No. 07-05198-JW, slip op. (Bankr. D.S.C. Dec. 14, 2007); McGrath, 2011 WL 2116992, at *1; In re Flynn, 582 B.R. 25 (B.A.P. 1st Cir. 2018) (bankruptcy court lacked discretion to extend the automatic stay after 30-day period expired); Capital One Auto Fin. v. Cowley, 374 B.R. 601 (W.D. Tex. 2006) (vacating order extending the automatic stay because hearing held after 30-day period had expired and remanding for consideration of whether an injunction to extend the stay should be issued pursuant to § 105); In re Berry, 340 B.R. 636 (Bankr. M.D. Ala. 2006) (court lacks authority to extend stay under section 362(c)(3)(B) because debtor's motion was filed more than thirty days after petition).
To be clear, it is not the Court's responsibility to expedite hearings on motions for the extension of the automatic stay without further action by Debtor's counsel. When Debtor's counsel brings the timing issue to the Corut's attention or when the Court notices the timing issue when managing its calendar, the Court often temporarily extends the stay if the available self-scheduled hearing date falls outside the 30-day period. Filing the motion an hour before close of business on the 30th day without any further request, however, renders it unfeasible to hold a hearing within the deadline and thus impossible to extend the stay outside the limits imposed by the Bankruptcy Code. In re McGrath, No. 10-20530-RGM, 2011 WL 2116992, at *1 (Bankr. E.D. Va. Jan. 25, 2011) ("An expedited hearing is available when a regular motion's day is not available within the 30-day period as long as neither the debtor nor counsel are dilatory in requesting it.").
In this case, Debtor also failed to adhere to this Court's local rules concerning motions to extend the automatic stay. SC LBR 4001-1(b) provides, in pertinent part, that "[a]ll motions pursuant to 11 U.S.C. § 362(c) must . . . be scheduled by the movant within thirty (30) days following the filing of the case." Notably, by filing the Motion on the 30th day after the Petition Date, Debtor failed to seek a hearing on the Motion for a date preceding the termination of the stay. The automatic stay expired on May 12, 2023, and the Court is without authority to extend the automatic stay under § 362(c)(3)(B).
B. Section 362(c)(4)(B) Is Inapplicable in This Case.
Section 362(c)(4)(A)(i) provides:
[I]f a single or joint case is filed by or against a debtor who is an individual under this title and if 2 or more single or joint cases of the debtor were pending within the previous year but were dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b), the stay under subsection (a) shall not go into effect upon the filing of the later case."11 U.S.C. § 362(c)(4)(A)(i). When § 362(c)(4) applies to a case, no automatic stay is in effect until one is imposed by the court. In re Norman, 346 B.R. 181, 183 (Bankr. N.D.W. Va. 2006). Section 362(c)(4)(B) provides that the court may order the stay to take effect after notice and a hearing if a party in interest requests such relief within 30 days after the case is filed. 11 U.S.C. § 362(c)(4)(B). Section 362(c)(4) only applies, however, to multiple repeat filers with two or more cases that were pending but dismissed within the past year and not to first-time repeat filers. See, e.g., Norman, 346 B.R. at 183; In re Whitaker, 341 B.R. 336, 343 (Bankr. S.D. Ga. 2006); In re Flynn, 582 B.R. 25, 29 (B.A.P. 1st Cir. 2018); In re Clark, No. 19-10698-JDW, 2019 WL 2488146, at *4 (Bankr. N.D. Miss. May 9, 2019).
These cases stand for the premise that a single-repeat filer cannot use § 362(c)(4) to extend the deadline set forth in § 362(c)(3). However, at least one court has held that one-time repeat filers are entitled to the § 362(c)(4) safe harbor. See In re Toro-Arcila, 334 B.R. 224 (Bankr.S.D.Tex.2005). This Court, like the courts in Whitaker and Norman, finds the arguments supporting the holding in Toro-Arcila unpersuasive. Congress specifically chose to treat debtors with one prior case dismissal in the preceding one-year period differently than debtors that had two prior case dismissals in the same period. Moreover, the approach taken by Toro-Arcila effectively writes the requirement in § 362(c)(3)(B)—that court complete the hearing on the motion to extend the automatic stay within 30-days from the petition date—out of the statute. See Norman, 346 B.R. at 184. Therefore, this Court disagrees with Toro-Arcila in that it can find no indication in the legislative history of § 362(c)(3)(B), that its notice and hearing requirements were to be displaced by those listed in § 362(c)(4)(B).
As the record before the Court reflects, Debtor had only one case pending within the one year period preceding the Petition Date. Therefore, Debtor is not entitled to a reinstatement of the automatic stay under § 362(c)(4)(B).
CONCLUSION
The Court does not have the authority to extend the stay under § 362(c)(3)(B) after it expired on the 30th day following the Petition Date. Further, the Court cannot order the stay to take effect under § 362(c)(4)(B) because Debtor is not a multiple repeat filer as required by § 362(c)(4)(A). Accordingly, the stay under § 362(a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease is deemed to have terminated and cannot be reimposed. For the reasons stated herein, the Motion is hereby DENIED.
AND IT IS SO ORDERED.