Opinion
Case No. 04-18175-BKC-AJC.
April 11, 2005
ORDER DENYING DEBTOR'S MOTION FOR TURNOVER OF TRACTOR TRUCK
This matter came on to be heard on March 24, 2004 at 10:00 A.M. on the Debtor's Emergency Motion To Compel Rody Truck Center/Transworld To Turn Over Vehicle. The court heard argument of counsel and ordered the parties to submit competing proposed orders with proposed findings of fact and conclusions of law. The court has carefully considered the competing orders submitted by counsel for the parties, and the following constitutes the Court's findings of fact and conclusions of law entered pursuant to F.R.B.P. 7052.
FINDINGS OF FACT
The facts are undisputed. The debtor owned a tractor truck financed by secured creditor Trans World Financing, Inc. Trans World filed an objection to confirmation. On March 13, 2005, the court entered an order dismissing the Debtor's Chapter 13 case, which had been confirmed over Trans World's objection, for failure to make a payment required by the confirmation order.
On March 21, eight days after the dismissal order was entered, agents of Trans World repossessed the truck. On March 22, 2005, the debtor, through counsel, filed the instant emergency motion, seeking reinstatement of his Chapter 13 case and turnover of the truck by Trans World.
The debtor's motion to reinstate his Chapter 13 case was granted on March 23, 2005. Trans World did not oppose the reinstatement of the case, but did oppose the turnover motion.
CONCLUSIONS OF LAW
The effect of the dismissal order of March 13, 2005 was to terminate the 11 USC 362 automatic stay that prevented Trans World from exercising its state law rights as a secured creditor, including its right to repossess the truck for noncompliance with its security agreement with the debtor. Section 362(c)(2) of the Bankruptcy Code provides that the automatic stay terminates upon the earlier of the time the case is closed, the time that the case is dismissed, or the time that a discharge is granted or denied. Although there is a split of authority regarding exactly when a bankruptcy case is "dismissed," so as to result in the termination of the automatic stay, the latest event that any of the cases cited by the parties have held to be the effective date of the dismissal is the docketing of the dismissal order by the clerk. See In re Saunders, 240 B.R. 636, 643 (S.D.Fla. 1999) and cases cited therein. The dismissal order in this case was docketed by the clerk on March 15, 2005 (the date when it was signed) 6 days prior to the repossession of the truck on March 21, 2005. Therefore, no matter which line of cases the court might choose to follow, the automatic stay had already terminated at the time the truck was repossessed.
The debtor argues that the ten-day period during which he may move for reconsideration or rehearing pursuant to F.R.B.P. 9023 or 9024, or the ten-day stay of enforcement of judgments provided pursuant to F.R.B.P. 7062, precluded the dismissal order from becoming effective to terminate the stay prior to March 23, 2005. This is incorrect. Rule 7062, which provides for a 10-day stay of proceedings to enforce judgments, has never applied to orders dismissing a bankruptcy case. In re Weston, 101 B.R. 202 (Bkrtcy., E.D. Cal. 1989). Moreover, because Rule 9014 was amended effective December 1, 1999 to remove F.R.C.P. 62 from applicability to contested matters, the ten-day stay applies only in adversary proceedings, and not to orders of dismissal. In re Hill, 305 B.R. 100, 109 (Bkrtcy, M.D. Fla. 2003). Similarly, Rules 9023 and 9024 do not provide for a stay of the effectiveness or enforcement of an order unless a separate stay order is entered by the court. Consequently, there is no rule curently in force that stays the effectiveness of an order of dismissal whether for ten days or for any other period. Id. See also In re Frank, 254 B.R. 368 Bkrtcy., S.D. Tex. 2000); In re Rivera, 280 B.R. 699 (Bkrtcy., S.D.Ala. 2001).
Accordingly, the only stay that could have prevented Trans World from repossessing the Truck between the time that the order of dismissal was entered and the time that the court reinstated the case would have been one entered by separate order of Court. No such stay order had been entered as of the date of the repossession, and as discussed above, the Section 362 automatic stay was no longer in effect when Trans Word repossessed the truck.
In addition, the reinstatement the debtor's Chapter 13 case did not have the effect of reimposing the stay retroactively, inasmuch as the court has no authority under the Bankruptcy Code or the Rules of Bankruptcy Procedure to impose a retroactive stay. In re Lashley, 825 F.3rd 362 (11th Cir. 1987). See also In re Nagel, 245 B.R. 657, 662 (D. Ariz. 1999); In re Jennings, 2001 WL 1806980 (Bkrtcy., D.S.C. 2001). Accordingly, Trans World's repossession of the truck after the dismissal and prior to the reinstatement was not a violation of any stay, as none was in effect at the time of the repossession, and the reinstatement order did not give rise to a stay that would have applied retroactively to prevent Trans World from exercising its rights as a secured creditor before the case was reinstated.
The effect of a legal repossession of collateral by a secured creditor under color of Florida law is to terminate the debtor's ownership rights in the collateral. The only rights in such collateral that remain in the debtor after a legal repossession of the collateral by the secured creditor is a right of redemption, which is insufficient to constitute the repossessed collateral as property of the estate. In re Kalter, 292 F.3d 1350 (11th Cir. 2002). Since the repossession by Trans World was not violative of any stay, the truck ceased to be property of the estate after the repossession, and was no longer property of the estate at the time that the order reinstating this case was entered. Accordingly, the debtor has no right to an order directing Trans World to turn over the truck to the debtor for use during the period of his Chapter 13 plan. Although the Court does not agree with the Kalter Decision, it is never the less Bound by it.
Pursuant to the findings of fact and conclusions of law stated above, the Debtor's Motion for Turnover is DENIED.
DONE AND ORDERED.