REVISED March 2, 2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
February 15, 2010
No. 09-60394
Summary Calendar Charles R. Fulbruge III
Clerk
In the Matter of: NANCY BARNER
Debtor
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NANCY BARNER
Appellant
v.
SAXON MORTGAGE SERVICES, INC. Servicer for Deutsche Trust Company
Appellee
Appeal from the United States District Court
for the Southern District of Mississippi
Before JONES, Chief Judge, and GARZA and BENAVIDES, Circuit Judges.
PER CURIAM:
Appellee Saxon Mortgage Services, Inc. (“Saxon”), conducted a foreclosure
sale of Appellant Nancy Barner’s (“Barner”) principal residence a day after her
bankruptcy filing and subsequently moved for a determination that the
No. 09-60394
automatic stay was not in effect at the time of the sale. The bankruptcy court,
citing an order issued in Barner’s previous bankruptcy, granted the motion and
the district court affirmed. Barner appeals, arguing that the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005 (“BAPCPA”) precludes
application of the prior order. Because no provision of BAPCPA affected the
continued vitality of pre-BAPCPA orders, we AFFIRM.
I. BACKGROUND
Barner filed her first bankruptcy case, under Chapter 7 of the Bankruptcy
Code, on October 18, 2004. At the time, Deutsche Bank Trust owned a deed of
trust secured by Barner’s principal residence and serviced by Saxon. On
December 14, 2004, the bankruptcy court entered an order (“2004 order”) lifting
the automatic stay as it applied to Barner’s residence. Barner’s case was
subsequently dismissed.
On February 1, 2007, one day before the scheduled foreclosure sale of her
residence, Barner filed a second bankruptcy petition, this time under Chapter
13. Saxon proceeded with the sale and, on June 27, filed a motion seeking a
determination that the automatic stay was not in effect as to the residence at the
time of the sale. After a hearing on the merits, the bankruptcy court ruled that
the stay was not in effect because of the 2004 order. The court relied on Jefferson
v. Mississippi Gulf Coast YMCA, Inc., 73 B.R. 179, 182 (S.D. Miss. 1986), which
held that the automatic stay does not bar foreclosure proceedings “where an
Order . . . was entered lifting the stay . . . in a previous bankruptcy involving the
same debtors, the same creditors and the same property.” The court therefore
issued an order stating that the sale was not a violation of the automatic stay.
Barner appealed that order, and the district court affirmed. She now
appeals to this court.
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II. DISCUSSION
“We review a district court’s affirmance of a bankruptcy court decision by
applying the same standard of review to the bankruptcy court decision that the
district court applied.” In re Martinez, 564 F.3d 719, 726 (5th Cir. 2009). We
therefore review factual findings for clear error and conclusions of law de novo.
Id.
Barner raises three issues on appeal: that provisions of BAPCPA, which
became effective before her second filing, prohibited enforcement of the order
from her prior bankruptcy; that BAPCPA effectively overruled Jefferson v.
Mississippi Gulf Coast YMCA, Inc., supra; and that the Federal Rules of
Bankruptcy Procedure required Saxon to bring an adversary proceeding to
determine whether the automatic stay was in effect at the time of the foreclosure
sale. Neither party challenges Jefferson’s holding under pre-BAPCA law, which
would be an issue of first impression before this court. Therefore, we do not
address it.
Barner argues first that 11 U.S.C. §§ 362(d)(4) and (b)(20) prohibit
enforcement of the 2004 order lifting the automatic stay as to her residence.
Subsection (d)(4) provides that the bankruptcy court may grant relief from the
automatic stay as to real property when it finds that the filing of the bankruptcy
petition was “part of a scheme to delay, hinder, and defraud creditors” that
involved multiple bankruptcy filings affecting the real property. 11 U.S.C.
§ 362(d)(4)(B). Orders granted under (d)(4) “shall be binding in any other case
under this title purporting to affect such real property filed not later than
2 years after the date of the entry of such order by the court.”
Subsection (b)(20), in turn, is the exception to the automatic stay allowing
for enforcement of (d)(4) orders from prior cases. It too provides that such a (d)(4)
order may be enforced for 2 years after the date of its entry.
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That the order lifting the automatic stay was entered prior to the effective
date of BAPCPA relieves it from compliance with § 362(d)(4). That provision did
not exist, in any form, at the time the order was entered, and BAPCPA, which
added the provision, stated clearly that its provisions were not to apply
retroactively to cases filed before its effective date. Pub. L. No. 109-8
§ 1501(b)(1). Barner’s first bankruptcy was such a case, and so § 362(d)(4) is
irrelevant to orders issued in that case.
Because the 2004 order was not entered under subsection (d)(4), the
limitation of subsection (b)(20), which provides that (d)(4) orders may suspend
the automatic stay for no longer than two years after their entry, is also
inapplicable. The provision applies exclusively to an “order under subsection
(d)(4) as to such real property in any prior case under this title.” Not being a
(d)(4) order, the 2004 order is unaffected by subsection (b)(20).
Barner’s second argument is that BAPCPA implicitly overturned Jefferson
with respect to in rem orders issued before it became effective. Jefferson held
that “principles of res judicata or collateral estoppel” allowed the application of
an order under (pre-BAPCPA) § 362(d) suspending the automatic stay in a
subsequent bankruptcy case “involving the same debtors, the same creditors and
the same property.” 73 B.R. at 182 (internal citations omitted). The law, at the
time, allowed entry of an order providing relief from the automatic stay with
respect to property “for cause, including the lack of adequate protection of an
interest in property of such party in interest.” 11 U.S.C. § 362 (1994). The law
did not limit the length of time that such an order could remain in effect.
Whether or not BAPCPA overturned Jefferson prospectively, it did not
modify or affect orders issued in cases filed before its effective date. Pub. L.
No. 109-8 § 1501(b)(1). Further, none of the amendments made to § 362(b) affect
the validity of such orders. Jefferson’s applicability to pre-BAPCPA cases, and
orders issued in them, is therefore unchanged.
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Finally, Barner contends that Rule 7001 of the Federal Rules of
Bankruptcy Procedure required Saxon to seek relief in an adversary proceeding,
rather than by motion. Rule 7001, in relevant portion, requires an adversary
proceeding “(2) to determine the validity, priority, or extent of a lien or other
interest in property” and “(9) to obtain a declaratory judgment relating to any
of the foregoing.” Rule 4001(1), however, provides that a motion is the proper
means to seek “relief from an automatic stay provided by the Code.”
In this case, Saxon did not seek an in rem order or a lien. Rather than ask
the court to determine the fact or extent of its interest in Barner’s residence,
Saxon moved for the court to “enter an order determining that because the
automatic stay had been previously lifted and the subject property abandoned
from the estate of the debtor in [the previous case] that the automatic stay was
not in effect when the subject bankruptcy was filed on February 2, 2007, and
that the foreclosure sale conduct on FEBRUARY 2, 2007, was not invalid.” This
requested relief does not fall within the bounds of Rule 7001.
Further, Barner’s substantial rights were unaffected by Saxon’s seeking
relief by motion rather than by adversary proceeding. See FED. R. BANKR.
P. 9005; FED. R. CIV. P. 61. The parties had a full hearing on the merits before
the bankruptcy court and the ability to litigate all questions of law there and
before the district court. If there was error in proceeding by motion, it was
harmless.
III. CONCLUSION
For the reasons discussed above, the district court’s decision is
AFFIRMED.
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