In re Snyder
Opinion of the Court
OPINION
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
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 sheriffs sale of the Allegheny County properties was not in violation of the automatic stay.
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.
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 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 sheriffs sale. Snyder waited more than ten months after the sheriffs 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 sheriffs 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.
We have considered the remaining arguments presented in Snyder’s brief and 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.
. 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).
. 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.
. 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.
. 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
. Neither Snyder’s motion nor the adversary complaint manifest any intent to pursue Chapter 13 relief.
. 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.
Reference
- Full Case Name
- In re: Shanni SNYDER
- Status
- Published