Baldwin v. Credit Based Asset Servicing & Securitization
Baldwin v. Credit Based Asset Servicing & Securitization
Opinion of the Court
Debtor Alvin Leroy Baldwin appeals from the Bankruptcy Court’s
FACTUAL BACKGROUND
Debtor Alvin Leroy Baldwin has filed eight Chapter 13 bankruptcy cases since 1996, all of which were dismissed prior to confirmation of a plan. Four of the cases were filed after he entered into a home loan with the predecessor of Credit Based Asset Servicing and Securitization (CBASS) in May 2002. Specifically, on January 6, 2003, the Debtor filed what was his fifth Chapter 13 case. That case was dismissed two months later, on March 10, 2003, on the trustee’s motion for failure to commence plan payments. He filed his
Upon being notified of the current bankruptcy filing, CBASS postponed the March 2 foreclosure sale to March 9, 2006 at 11:00 a.m., which is the maximum length of time a scheduled foreclosure sale can be continued under Missouri law, without the consent of the mortgagor.
The Debtor did not appear at the hearing because, he says, he did not receive notice of it due to his being out of town on business as an over-the-road truck driver. He did find out about the hearing, however, after the Motion and Notice were delivered by the postal service and opened by his live-in companion at approximately 10:45 a.m. that morning, which was not enough time for him to appear or otherwise respond prior to the hearing.
In any event, at the hearing, CBASS alleged that the bankruptcy case should be dismissed, or relief from the stay granted, because this was the Debtor’s eighth bankruptcy filing and the third time CBASS had stayed or canceled a pending foreclosure sale on this property. The Bankruptcy Court granted the motion to expedite, dismissed the case, and barred the Debtor from refiling for 180 days, finding that this case was filed solely to hinder, delay and frustrate creditors, and thus not filed in good faith. The Court denied as moot the motion for relief from the stay. CBASS proceeded with its foreclosure sale at approximately 11:00 a.m. and sold the property to a third party, Cody Properties, as the highest bidder at the sale.
That same day, at 12:34 p.m., the Debtor filed a pleading in the Bankruptcy Court, entitled “Debtor’s Motion Agstin [sic] Motion for Expedited Hearing,” in which he objected to the expedited hearing and requested that “the motion to release for
CBASS filed a motion to dismiss the appeal, asserting it was moot because the Debtor failed to obtain a stay pending appeal and the foreclosure sale had already occurred. We denied CBASS’s motion but cautioned that, due to the procedural posture of the case, any appeal from the Court’s Order dismissing the case as being filed in bad faith was untimely, so the appeal was limited to the issue of whether the Court erred in denying the Debtor relief from the dismissal Order on the ground it was void for due process violations.
DISCUSSION
We review the bankruptcy court’s legal conclusions de novo and its factual findings for clear error.
At the outset, we note that the Bankruptcy Court’s March 28 Order denied the Debtor’s March 23 Motion because it was filed more than ten days after the dismissal Order was entered. However, because we deemed the March 23 Motion to be a Rule 60(b) motion to vacate the dismissal Order, it was timely. Nevertheless, we are not bound by the grounds articulated by the bankruptcy court for denying the Debtor’s motion, and we may affirm the judgment on any other grounds supported by the record.
Section 1307(c) provides, in relevant part, that “on request of a party in interest ... and after notice and a hearing,” the court may convert or dismiss a Chapter 13 case for cause.
The phrase “after notice and a hearing” means “after such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances.”
Rule 1017 provides that Rule 9014 governs a proceeding to dismiss a case under § 1307(c).
(a) Motion. In a contested matter in a case under the Code not otherwise governed by these rules, relief shall be requested by motion, and reasonable notice and opportunity for hearing shall be afforded the party against whom relief is sought. No response is required under this rule unless the court orders an answer to a motion.
(b) Service. The motion shall be served in the manner provided for service of a summons and complaint by Rule 7004. Any paper served after the motion shall be served in the manner provided by Rule 5(b) F.R.Civ.P.12
Rule 7004(b) authorizes service by first class mail prepaid postage “[u]pon the debtor, after a petition has been filed ... by mailing a copy of the summons and complaint to the debtor at -the address shown in the petition or statement of affairs or to such other address as the debt- or may designate in a filed writing and, if the debtor is represented by an attorney, to the attorney at the attorney’s post-office address.”
CBASS filed the Motion on Friday, March 3, 2006. Hearing was set for March 9. When asked about service at that hearing, CBASS’s counsel stated that the Motion and Notice were mailed on March 3 and that she had obtained personal service on the Debtor on March 7. The Debt- or does not dispute that CBASS’s attorney mailed the Motion and Notice on March 3, and that it was mailed to his correct address as reflected on his petition. He does dispute the assertion that CBASS obtained personal service on him, reiterating that he is an over-the-road truck driver who had not been home since the first part of February and did not return until sometime after the date of the foreclosure sale on March 9. Because CBASS did not submit an affidavit of personal service, we will presume for these purposes that it did not obtain personal service on the Debtor.
Thus, the question is whether the mailed Notice and Motion, which were mailed via first-class mail on Friday, March 3, was reasonable and appropriate notice of the hearing on Thursday, March 9, under the particular circumstances. The parties each point to Rule 9006’s computation of time formulas,
With regard to expedited hearings, the Local Rules for the Bankruptcy Court in the Eastern District of Missouri provide:
Service of Notice of Hearing. Movant must serve the notice of hearing upon the same parties served with the motion (L.B.R. 9013-1 A.) When a motion is heard on an expedited or emergency basis (L.B.R.9013-2), the motion and notice of hearing must be served as expeditiously as possible (e.g. by personal service or electronic means) upon opposing counsel or upon the opposing party if not represented by counsel, and any other necessary parties.15
The Debtor asserts that the regular first-class mail notice, mailed six days prior to the hearing, and on a Friday, is insufficient to meet this requirement. Under other circumstances, we might agree. However, in this case, the Debtor filed his bankruptcy case when he knew a foreclosure sale was pending, and while he was away from the only address known for him for a period of several weeks. This was the Debtor’s eighth bankruptcy filing, and not his first case filed for the purpose of staying a foreclosure sale. Because the Debt- or chose to file his case pro se such that CBASS could not contact an attorney, and he filed the case during a weeks-long period of time when he was absent from the State of Missouri, there was no reasonable way for CBASS to have provided him with notice in any form. Accordingly, we conclude that the mailed notice six days prior to the hearing was sufficient under the circumstances.
The Debtor relies on In re Krueger, which said that although the concept of “notice and a hearing” is a flexible one, it was inappropriate under the circumstances of that case for the debtors to be uninformed of the hearing at which their bankruptcy case was dismissed.
We agree with the general notice and due process principles outlined in Krueger. However, the facts in that case are distinguishable from the facts here. In Krueger, despite being specifically directed by the court to do so, the foreclosing creditor did not even attempt to provide the debtors with notice of the continued hearing following which the case was dismissed. Nor did it notify the debtors that it had
Moreover, this is the Debtor’s eighth bankruptcy filing, the fourth since he entered into the loan with CBASS’s predecessor. It is also the third time CBASS has stayed or canceled a foreclosure sale. He filed this case pro se such that an attorney could not be contacted by CBASS, and he filed it while he was out of town and would not return until after the foreclosure sale. We recognize that the automatic stay is a valuable benefit provided by the Code, and that many debtors legitimately invoke it to prevent foreclosure. However, “a debtor does not have a constitutional or fundamental right to a discharge in bankruptcy.”
In this case, CBASS attempted both personal service and first-class mail notification of its Motion six days prior to the hearing. The Debtor also concedes he had notice of the foreclosure sale. Under the particular circumstances of this case, we conclude this was sufficient notice and opportunity for hearing under the requirements of the Bankruptcy Code, the Rules and Local Rules, and that the Debtor’s constitutional due process rights were adequately protected.
Accordingly, the Bankruptcy Court’s Order denying the Debtor’s March 23 Motion to vacate is AFFIRMED.
. The Honorable Barry S. Schermer, United States Bankruptcy Judge for the Eastern District of Missouri.
. Fed.R.Civ.P. 60(b), made applicable to bankruptcy proceedings pursuant to Fed. R. Bankr.P. 9024.
. Mo.Rev.Stat. Ann. § 443.355.2.
. First Nat’l Bank of Olathe v. Pontow (In re Pontow), 111 F.3d 604, 609 (8th Cir. 1997); Sholdan v. Dietz (In re Sholdan), 108 F.3d 886, 888 (8th Cir. 1997); Fed. R. Bankr.P. 8013.
. Matter of Royale Airlines, Inc., 98 F.3d 852, 856 (5th Cir. 1996) (citing Forsyth v. Bair, 19 F.3d 1527, 1534 n. 12 (5th Cir.), cert. denied, 513 U.S. 871, 115 S.Ct 195, 130 L.Ed.2d 127 (1994)); Arthur Pew Const. Co. v. Lipscomb, 965 F.2d 1559 (11th Cir. 1992).
. 11 U.S.C. § 1307(c).
. See In re Molitor, 76 F.3d 218, 220 (8th Cir. 1996).
. 11 U.S.C. § 102(1)(A).
. 11 U.S.C. § 102(1)(B).
. Fed. R. Bankr.P. 1017(f)(1).
. Fed. R. Bankr.P. 4001(a).
. Fed. R. Bankr.P. 9014(a) and (b).
. Fed. R. Bankr.P. 7004(b)(9).
. Fed. R. Bankr.P. 9006(a) and (f).
. L.B.R. 9060-1 C (emphasis added).
. 88 B.R. 238, 241 (9th Cir. BAP 1988).
. Id.
. Id. (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950)).
. In re Golden State Capital Corp., 317 B.R. 144, 149 (Bankr.E.D.Cal. 2004) (citing Grogan v. Garner, 498 U.S. 279, 287, 111 S.Ct. 654, 659, 112 L.Ed.2d 755 (1991)).
. Id. (citing In re Tolbert, 258 B.R. 387, 390 (Bankr.W.D.Mo. 2001)).
. See In re Martwick, 60 F.3d 482 (8th Cir. 1995) (holding that the bankruptcy court did not abuse its discretion in denying the debtors' motion for continuance of the expedited hearing on a foreclosing creditor’s motion for relief from stay and to dismiss due to debtors’ counsel being out of town; counsel’s election to file the case and then leave the state on the eve of the foreclosure sale, knowing that the creditor would likely seek to lift the stay, did not warrant a continuance of the expedited hearing).
Reference
- Full Case Name
- In re Alvin Leroy BALDWIN, Debtor. Alvin Leroy Baldwin, Debtor-Appellant v. Credit Based Asset Servicing and Securitization, Creditor-Appellee
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- 1 case
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- Published