Cite as: Keith M. Lundin, Lundin On Chapter 13, § 153.4, at ¶ ____, LundinOnChapter13.com (last visited __________).
Bankruptcy courts reinstate Chapter 13 cases or set aside orders of dismissal in Chapter 13 cases, often on less compelling facts than courts otherwise consider sufficient to set aside orders ending litigation. Given the voluntary nature of Chapter 13 and the likelihood of difficulties during the long duration of the case, and recognizing that dismissal often just forces the debtor to refile, courts look favorably on sincere efforts to get back into the Chapter 13 case without having to start over.
Bankruptcy Rules 9023 and 9024 control relief from an order of dismissal.1 Under Bankruptcy Rule 9023, a motion for a new trial or to alter or amend the order of dismissal must be served not later than 10 days after entry of the order of dismissal.2 A motion for relief from an order of dismissal under Bankruptcy Rule 9024 and Federal Rule of Civil Procedure 60 can be made after 10 days after the entry of the order, but the standards for granting the motion are somewhat more strict.
The debtor bears the burden to prove cause for relief from an order of dismissal under Bankruptcy Rule 9024.3 The debtor must act quickly under Rule 60—the timeliness of the motion for relief from the order of dismissal is relevant to relief under Rule 60 and Rule 60 relief is not available for events that occur after the dismissal.4
It has been held that allegations of misconduct by a creditor are not “newly discovered evidence” for purposes of relief from an order of dismissal under Rule 60(b)(2) when the Chapter 13 case was dismissed because it was filed in violation of the 180-day bar to refiling in § 109(g).5 The bankruptcy court in In re Noble6 held that tendering sufficient money to bring a plan current after dismissal for nonpayment is not an “extraordinary circumstance” for purposes of relief under Bankruptcy Rule 9021:
It is the Court’s understanding that reinstatement is a function of obtaining relief from an order of dismissal under Federal Rules of Bankruptcy Procedure [R]ule 9023 and 9024 . . . . [T]he Court does not see the post-deadline curing of defaults (whether the deadline is a hearing date or monthly plan payments to the Chapter 13 Trustee) as grounds for relief under Rule 60. . . . [T]he Court is reluctant to grant relief from an order of dismissal (e.g. to reinstate a case after dismissal) except in truly extraordinary circumstances . . . . Cure of a payment default would generally not be grounds for reinstatement.7
On unusual facts, one bankruptcy court reinstated a dismissed Chapter 13 case under Rule 60(b)(6).8 In Aubain v. LaSalle National Bank (In re Aubain),9 the Chapter 13 case was dismissed in the 57th month when the debtor defaulted in payments because of a medical problem. Almost immediately the debtor tendered the balance necessary to pay off the plan and asked the bankruptcy court to reinstate the case under Rule 60. Refusal to grant relief from dismissal would have allowed a wholly unsecured second mortgage holder that failed to file a proof a claim to reinstate its lien and enhance its position because of first mortgage payments and appreciation during the Chapter 13 case. The bankruptcy court granted relief from the dismissal order:
[T]he debtor moved fairly expeditiously—within three weeks of the date of the entry of the order of dismissal—to reinstate her case. . . . [D]ebtor satisfactorily explained that she was unable to remit the last three chapter 13 plan payments . . . due to a flare-up of her chronic illnesses. . . . [T]he debtor made extraordinary efforts to comply with her obligations under her confirmed plan despite a severely limited personal income, chronic poor health and the challenges of raising two teen-age children in the United States while supporting a third child in Haiti. . . . To deny the debtor an opportunity to reinstate her case under these very harrowing circumstances, so that she may gain the benefits of what she is legally entitled to as a successful chapter 13 debtor, would be a palpable injustice. . . . [T]he debtor has fully satisfied the requirements of Fed. R. Civ. P. 60(b)(6).10
Debtors sometimes cite § 350 of the Code in support of a motion to set aside an order dismissing a Chapter 13 case. Section 350(b) provides: “A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.”11 In isolation, this subsection seems to support setting aside an order of dismissal when the debtor has changed circumstances and can now continue in a Chapter 13 case. But the immediately preceding subsection suggests otherwise.
Section 350(a) states, “After an estate is fully administered and the court has discharged the trustee, the court shall close the case.”12 Reading subsections (a) and (b) together, the bankruptcy court in In re Archer13 concluded that § 350(b) is not available to a Chapter 13 debtor when the case was dismissed before the completion of payments:
Bankruptcy case law is uniform in holding that Code § 350(b), which allows the court to reopen a closed case, does not apply to a dismissed case. . . . [Section] 350(b) applies only to cases that are closed pursuant to § 350(a), i.e., “[a]fter an estate is fully administered and the court has discharged the trustee.”14
Not all courts agree that § 350 is unavailable to reopen a Chapter 13 case dismissed before discharge. As explained by the bankruptcy court in In re Ross,15 dismissal of a Chapter 13 case for nonpayment does not bar reopening under § 350(b) because the bankruptcy rules contemplate closing without regard to whether payments have been completed under the plan:
Defendant argues that Debtor cannot use Section 350(b) to seek to reopen her case because her case was dismissed rather than closed. . . . [Some courts] conclude that the language of Section 350(b) refers to “closed” cases and should be read with reference to Section 350(a), which allows courts to close a case after the estate has been fully administered and trustee discharged. . . . They reason that a dismissed case does not fit this definition because it terminates “for reasons other than the completed administration of the estate.” . . . Rule 5009 states that a Chapter 13 case is presumed to be fully administered when “the trustee has filed a final report and final account and has certified that the estate has been fully administered” . . . . Based on this Rule, a dismissed case can be fully administered after the trustee has done what the Rule requires with no objections. . . . Therefore, neither the language of Section 350 nor the effect of dismissal support the exclusion of a case that has been dismissed and subsequently closed from the operation of Section 350(b).16
When the Chapter 13 case was fully administered, debtors have been permitted to reopen under § 350, for example, to avoid a lien that impairs an exemption under § 522(f).17 In one reported decision, a Chapter 13 debtor was refused reopening under § 350 to avoid a lien when the debtor waited four and one-half years after the petition and six months after closing and the debtor offered no excuse for the delay.18 In In re Zurn,19 the U.S. Court of Appeals for the Seventh Circuit refused to reopen a dismissed Chapter 13 case to recover a claim that was paid in full based on a state court judgment that was reversed on appeal. The Seventh Circuit reasoned that the debtor’s remedy was an action in state court against the claim holder, not relief from the closed Chapter 13 case.
When the creditor that moved for dismissal failed to give the debtor notice of the hearing, the debtor is entitled to relief from the order to reinstate the Chapter 13 case.20 When dismissal resulted from debtor’s counsel’s failure to file documents, reinstatement was allowed; the court observed it would be “tragically unfair to punish a client . . . for the sins of their counsel.”21 Reinstatement has been denied when relief from dismissal would work some inequity on creditors or the debtor.22
Reinstatement after dismissal can be a frustrating process for creditors. About the time the creditor receives notice that the Chapter 13 case has been dismissed, forces may already be at work to schedule a hearing on the debtor’s motion to set aside that order and reinstate the case. Under local practice, notice of a motion to reinstate a Chapter 13 case may or may not be sent to all creditors. The automatic stay expired at dismissal of the case, but an order vacating the order of dismissal may “reimpose” the stay and cut off any foreclosure action or collection effort that commenced at dismissal.23 In one reported decision, a Chapter 13 debtor was awarded actual damages for the value of a car, lost wages, attorney fees and punitive damages of $40,000 when a bank, with knowledge that the debtor’s third Chapter 13 case had been reinstated after dismissal, sold the debtor’s car and sought to collect a deficiency from the debtor.24
Several reported decisions address the problems creditors face when a Chapter 13 case is dismissed, a foreclosure sale or other collection action recommences, and the debtor then successfully reinstates the Chapter 13 case. For the most part, these cases hold that collection action between dismissal and reinstatement is not invalidated or retroactively voided by reinstatement of the Chapter 13 case.25 On unusual facts, bankruptcy courts have invoked “equitable principles” to allow reinstatement of a Chapter 13 case to undo collection action between dismissal and reinstatement.26 Other reported decisions indicate that the bankruptcy courts can use annulment of the automatic stay as a mechanism for balancing the equities when creditors get into trouble with the automatic stay during an on-again, off-again, on-again Chapter 13 case.27
The impact of reinstatement on creditor actions during the interim was an urgent issue in the Ninth Circuit after the Bankruptcy Appellate Panel decided Peters v. Mason-McDuffie Mortgage Corp. (In re Peters),28 and until reversal of that BAP decision a year or so later.29 Discussed in detail elsewhere,30 in 1995 in Peters, the Ninth Circuit BAP held that curing mortgage defaults through a Chapter 13 plan under § 1322(b)(5) was effected immediately at entry of the confirmation order. Mortgage holders in the Ninth Circuit felt much abused by this decision. It was the practice in the Ninth Circuit that when the filing of a Chapter 13 petition interrupted a foreclosure sale, the mortgage holder would appear at the time and place and announce that the sale was continued. If the Chapter 13 case was dismissed, the mortgage holder would simply complete its previously scheduled (and continued) foreclosure sale without renoticing. For the year or so during which the BAP’s decision in Peters prevailed, reinstatement of a Chapter 13 case put the mortgage holder at risk that the instantaneous “curing” effected by confirmation eliminated the factual predicate for the continued foreclosure sale. In 1996, the Ninth Circuit eliminated the “Peters problem” by holding that confirmation does not immediately cure default.31
Reopening Chapter 13 cases after dismissal has become a hot topic in Chapter 13 practice from an unlikely source: the appellate courts of Georgia. As detailed elsewhere,32 in 2001 the Supreme Court of Georgia concluded in Wolfork v. Tackett33 that a Chapter 13 debtor’s tort claim action was barred by judicial estoppel because the debtor failed to schedule the lawsuit during a Chapter 13 case. Word of Wolfork spread quickly through the insurance defense bar and almost immediately judicial estoppel cases involving former Chapter 13 debtors were reported from jurisdictions across the country.34 Almost as quickly, former Chapter 13 debtors facing judicial estoppel arguments returned to the bankruptcy courts to reopen their Chapter 13 cases to reveal the omitted lawsuits. The courts have not been particularly receptive to this maneuver.
For example, in Billups v. Pemco Aeroplex, Inc. (In re Burnes),35 the debtor filed an employment discrimination claim six months after filing a Chapter 13 petition but did not amend the schedules to reveal the lawsuit. The debtor later converted to Chapter 7. When judicial estoppel was raised as a defense in the employment discrimination action, the debtor moved to reopen the Chapter 13 case to add the cause of action. The Eleventh Circuit held that reopening would not solve the debtor’s problem:
Allowing Billups to back-up, reopen the bankruptcy case, and amend his bankruptcy filings, only after his omission has been challenged by an adversary, suggests that a debtor should consider disclosing potential assets only if he is caught concealing them. This so-called remedy would only diminish the necessary incentive to provide the bankruptcy court with a truthful disclosure of the debtors’ assets.36
Other courts have held that a dismissed Chapter 13 case can be reopened to amend schedules to address a judicial estoppel challenge to an unscheduled lawsuit.37 Still other courts have found that a Chapter 13 debtor can reopen a closed case to reveal a lawsuit but it is not necessary to do so to overcome concerns about Wolfork when the conditions for judicial estoppel are not present.38
1 See Diviney v. NationsBank of Tex. (In re Diviney), 211 B.R. 951, 962–68 (Bankr. N.D. Okla. 1997) (“Although couched as a motion to reinstate, the motion can only be considered a motion to vacate the Dismissal Order. Such a motion is proper under Bankruptcy Rule 9024.”), aff’d, 225 B.R. 762 (B.A.P. 10th Cir. 1998).
2 See Fed. R. Bankr. P. 9023, Fed. R. Civ. P. 59(b).
3 See Ciralsky v. LaBarge (In re Ciralsky), 281 B.R. 915, 917 (B.A.P. 8th Cir. 2002) (“The bankruptcy court gave Debtor ample opportunity to appear and be heard on the issue of whether his case should be reinstated. Debtor presented no evidence to warrant the bankruptcy court’s reinstatement of his case and did not advance any appropriate basis for altering or amending the bankruptcy court’s judgment. The motion to reinstate simply reiterated factors that the bankruptcy court had already taken into account on the Trustee’s motion to dismiss.”); In re Garcia, 115 B.R. 169 (Bankr. N.D. Ind. 1990)(Debtor failed to demonstrate cause for setting aside dismissal under Bankruptcy Rule 9024.).
4 See, e.g., In re Archer, 264 B.R. 165, 169 (Bankr. E.D. Va. 2001) (Debtor’s motion to reopen is denied under Bankruptcy Rule 9024 because the motion to reopen was filed more than a year after dismissal and the purpose of the reopening is to remove a judgment lien docketed after the dismissal. “[T]he unexplained delay in the instant case of over a year, combined with debtor’s abusive bankruptcy filing history requires the court to deny debtor’s motion pursuant to Rule 60(b).”).
5 In re Clayton, No. 02-82063C-13D, 2003 WL 22014579, at *2 (Bankr. M.D.N.C. Aug. 19, 2003) (unpublished) (Debtor failed to state a ground under Rule 60 for relief from order dismissing ninth Chapter 13 case filed in violation of § 109(g). “In order to obtain relief [from the Order of Dismissal] under Rule 60(b)(2), the newly discovered evidence must be material to the issues that were tried and must be such that it likely would change the outcome of the earlier order or judgment. . . . The operative facts are that, while a motion for relief from the automatic stay was pending in the Chapter 13 case that preceded this case, the Debtor sought and obtained the dismissal of that case. This action by Debtor brought into play § 109(g) . . . . When this case was filed within 180 days, this case therefore was subject to dismissal pursuant to § 109(g). Even if the alleged evidence of misconduct on the part [of] Ameriquest could be regarded as newly discovered, it does not satisfy the requirements of Rule 60(b)(2) because it would not alter the outcome of the motion to dismiss.”). Accord Hanno v. TCF Nat’l Bank of Ill. (In re Hanno), 254 B.R. 732 (Bankr. N.D. Ill. 2000) (Debtor’s efforts to vacate order of dismissal or reinstate Chapter 13 case fail because allegation that mortgage holder interfered with refinancing of property after dismissal is not supported by the evidence. State court proceeding is pending in which the debtor can raise that issue, and there is no newly discovered evidence for purposes of Bankruptcy Rule 9024.).
6 No. 01-37926-H2-13, 2002 WL 31778056 (Bankr. S.D. Tex. Sept. 26, 2002) (unpublished).
7 2002 WL 31778056, at *1.
8 Bankruptcy Rule 9024, incorporating Rule 60(b)(6) of the Federal Rules of Civil Procedure permits relief from an order for “any other reason justifying relief from the operation of the judgment.”
9 296 B.R. 624 (Bankr. E.D.N.Y. 2003).
10 296 B.R. at 633–34.
11 11 U.S.C. § 350(b).
12 11 U.S.C. § 350(a) (emphasis added).
13 264 B.R. 165 (Bankr. E.D. Va. 2001).
14 264 B.R. at 168–69. Accord In re Garcia, 115 B.R. 169, 170 (Bankr. N.D. Ind. 1990) (A case that has been dismissed for failure of the debtor to file a plan cannot be reopened pursuant to 11 U.S.C. § 350(b) because an order dismissing a bankruptcy case is different from an order closing it. “An order closing a bankruptcy case contemplates that the bankruptcy proceedings and administration of the estate have been completed. An order of dismissal, however, terminates a bankruptcy proceeding for reasons other than the completed administration of the estate.”).
15 278 B.R. 269 (Bankr. M.D. Ga. 2001).
16 278 B.R. at 271–73.
17 See discussion beginning at § 49.1 Available in Chapter 13 Cases.
18 In re Levy, 256 B.R. 563 (Bankr. D.N.J. 2000).
19 290 F.3d 861 (7th Cir. 2002).
20 See Great Pac. Money Mkts., Inc. v. Krueger (In re Krueger), 88 B.R. 238 (B.A.P. 9th Cir. 1988) (Order dismissing Chapter 13 case was void, automatic stay did not expire, and mortgage company’s foreclosure after dismissal was void where creditor’s counsel was assigned responsibility to give debtor notice of a continued hearing on confirmation, no notice was given, and, upon the debtor’s failure to appear, the case was dismissed.); Barry v. BA Properties, Inc. (In re Barry), 201 B.R. 820 (C.D. Cal. 1996) (At reinstatement after dismissal, equitable principles require reversal of a continued foreclosure sale conducted while the plan was dismissed. Debtor failed to get notice of the motion to dismiss, and dismissal was in error because trustee’s records did not show payments that the debtor sent to the trustee’s former address. After reinstatement, it is appropriate to apply equitable principles to reverse the foreclosure sale and return the parties to the status quo before the dismissal.).
21 In re Pearson, 70 B.R. 202 (Bankr. S.D. Fla. 1986) (Debtor’s counsel was enjoined from practicing before the U.S. Bankruptcy Court for the Southern District of Florida.).
22 See In re Robinson, 196 B.R. 454, 457–58 (Bankr. E.D. Ark. 1996) (Denies pro se debtor’s motion to reinstate fourth Chapter 13 case dismissed for default in payments pursuant to a drop-dead order. The court had previously reinstated the case and had been “extremely lenient with the debtor.” Debtor repeatedly hurled insults, including accusing the bankruptcy court of being like “an all white community of an old southern town that had a rope hanging from the limb of a huge oak tree with a noose at one end, with a note attached, saying, this is where the n---- hang out.” Court rejects argument that strict compliance provision was “‘unbearable’ because he is on a low and fixed income.”). See also In re Lampkin, 116 B.R. 450 (Bankr. D. Md. 1990) (Motion to reopen to permit creditor to seek relief from the stay to validate a foreclosure sale conducted in unknowing violation of automatic stay is denied because actions in violation of the stay are “void” and validation of an unknowing violation of the stay can only be accomplished by annulment of the stay.); In re Simonis, 92 B.R. 807 (Bankr. E.D. Wis. 1988) (Reopening is denied where debtor innocently omitted claim of Wisconsin Higher Education Corporation because of mistaken belief that the debt had been discharged in an earlier bankruptcy case. Creditor did not have an opportunity to share in the 10% dividend paid other unsecured creditors, and creditor lost its opportunity to object to confirmation. Reopening would be inequitable.).
23 See, e.g., In re Garnett, 303 B.R. 274, 279 (E.D.N.Y. 2003) (In dicta, “[i]f [the bankruptcy court] had decided to vacate the dismissal, the petition would have come back to life, the automatic stay would have been reimposed, and [the mortgage holder] would have been prevented from proceeding with his state court foreclosure action. By refusing to vacate the dismissal, the Bankruptcy Court made a decision not to call the bankruptcy estate back into existence so that the Bankruptcy Court could then administer its assets.”).
24 Diviney v. NationsBank of Tex. (In re Diviney), 211 B.R. 951, 962–68 (Bankr. N.D. Okla. 1997) (Order reinstating a dismissed Chapter 13 case reimposes stay and confirmed plan; bank willfully violated stay by repossessing and disposing of car with actual knowledge of reinstatement. “Although couched as a motion to reinstate, the motion can only be considered a motion to vacate the Dismissal Order. Such a motion is proper under Bankruptcy Rule 9024. . . . [T]he automatic stay was reinstated . . . with the entry of the Reinstatement Order . . . . Bank received a copy of the motion to reinstate . . . . Bank had actual notice of the reinstatement . . . . Bank knew or should have known that the reinstatement of a case reinstates the automatic stay. . . . Bank, armed with knowledge that the Third Case had been reinstated, made a conscious, affirmative decision to sell the Car and seek collection of a deficiency which it was not entitled to under the terms of the Final Plan.” Debtor awarded actual damages for value of car, lost wages and attorney fees and punitive damages of $40,000.), aff’d, 225 B.R. 762 (B.A.P. 10th Cir. 1998).
25 See Carl I. Brown & Co. v. Anderson (In re Anderson), 195 B.R. 87, 90, 91 (B.A.P. 9th Cir. 1996) (Foreclosing mortgage holder need not renotice scheduled foreclosure sale that took place after dismissal but before reinstatement of Chapter 13 case. Distinguishing In re Acosta, 181 B.R. 477 (Bankr. D. Ariz. 1995), and Tome v. Baer (In re Tome), 113 B.R. 626 (Bankr. C.D. Cal. 1990), “[i]n this instance, the state mechanism for continuing the foreclosure sale by public declaration was not invoked. Therefore, we decline to address the due process issue . . . . An intervening bankruptcy, without more, is not sufficient to call into question the effectiveness of notice for a scheduled trustee sale following dismissal of the debtor’s case where the sale occurred on the original scheduled date. As such, the context presented here is different from Acosta and Tome, both of which involved continued foreclosure sales.”); In re Rivera, 280 B.R. 699, 701 (Bankr. S.D. Ala. 2001) (Repossession after dismissal of Chapter 13 case and before order reinstating the case did not violate stay. “[A]n order dismissing a case is not stayed pursuant to Fed. R. Bankr. P. 7062. . . . Debtors . . . must request expedited relief on motions to reinstate in order to protect against repossessions, foreclosures, garnishments, executions, and other state law collection remedies. There is no protection to a debtor once a case is dismissed.”); Frank v. Gulf States Fin. Co. (In re Frank), 254 B.R. 368, 374 (Bankr. S.D. Tex. 2000) (Repossession of car after dismissal and before entry of order reinstating the case did not violate automatic stay. “An order dismissing a case is not subject to the limitations of FRBP 7062. It is effective immediately upon entry and the stay terminates immediately. . . . Once the stay has terminated, it is not reimposed by reinstating a case, at least not with respect to foreclosure sales that have occurred prior to the reinstatement. . . . [T]he automatic stay is not retroactively reinstated with respect to creditor conduct that occurred between the dismissal and the reinstatement.”); In re Bland, 252 B.R. 133, 136 (Bankr. W.D. Tenn. 2000) (Reinstatement or reopening of a Chapter 13 case after dismissal “is not effectively granted until entry of the order granting the motion.” Foreclosure sale completed after dismissal and before entry of an order granting motion to reinstate strips the debtor of all interest in the real property.); In re Christian, 199 B.R. 382 (Bankr. N.D. Ill. 1996) (Citicorp violated the automatic stay after reinstatement of Chapter 13 case by seeking state court confirmation of the foreclosure sale conducted while the case was dismissed. However, because Citicorp completed foreclosure sale during the interim, debtor could not effect a cure under § 1322(c)(1), and thus Citicorp would have been entitled to relief from the stay had it asked permission under § 362(d). Equities favor annulment of the stay to validate Citicorp’s actions after reinstatement of the case.); G.E. Capital Mortgage Servs., Inc. v. Thomas (In re Thomas), 194 B.R. 641, 646 (Bankr. D. Ariz. 1995) (Reinstatement of pro se debtors’ third Chapter 13 case does not void or otherwise affect trustee’s sale that occurred after dismissal and before reinstatement. Debtors miscalendared the notice of the meeting of creditors and failed to attend. “Although the Debtors made a sufficient showing at an ex parte motion that their case be reinstated, they did not make any showing or carry their burden of proof that the . . . order of dismissal should have been rescinded or set aside.” Court declines to follow Tome v. Baer (In re Tome), 113 B.R. 626 (Bankr. C.D. Cal. 1990)—that the trustee’s sale was continued a number of times during the Chapter 13 case did not require new notice of foreclosure from the mortgage holder.).
26 Barry v. BA Properties, Inc. (In re Barry), 201 B.R. 820 (C.D. Cal. 1996) (At reinstatement after dismissal, equitable principles require reversal of a continued foreclosure sale conducted while the plan was dismissed. Confirmed plan provided for the curing of defaults on a home mortgage. Peters v. Mason-McDuffie Mortgage Corp. (In re Peters), 184 B.R. 799 (B.A.P. 9th Cir. 1995) [later rev’d, 101 F.3d 618 (9th Cir. 1996)], was wrongly decided—confirmation does not immediately cure defaults but rather accomplishes cure over a “reasonable time” consistent with § 1322(b)(5). Mortgage holder did not violate stay by continuing foreclosure sale after confirmation. There was no stay in effect after dismissal. However, debtor failed to get notice of the motion to dismiss, and dismissal was in error because trustee’s records did not show payments that the debtor sent to the trustee’s former address. After reinstatement, it is appropriate to apply equitable principles to reverse the foreclosure sale and return the parties to the status quo before the dismissal.); In re Nail, 195 B.R. 922, 929–30 (Bankr. N.D. Ala. 1996) (Oral order reinstating Chapter 13 case is effective to reimpose automatic stay and defeats foreclosure sale conducted after oral order but before entry of written order. Citing the “collateral bar rule”—that orders duly issued by a court with subject matter jurisdiction must be obeyed regardless of their ultimate validity—court finds “that its oral order granting the debtors’ motion to reinstate their case was effective when made. This Court also finds that section 362 of the Bankruptcy Code imposed an automatic stay on the actions of the movant at the same moment the oral order was issued. Consequently, the movant’s foreclosure on the debtors’ home was in violation of the oral order and the automatic stay. Those actions are void and the foreclosure is due to be set aside.” In addition, the court finds “equitable reasons” to set aside the foreclosure sale.).
27 See In re Williams, 257 B.R. 297 (Bankr. W.D. Mo. 2001) (Although foreclosure sale conducted after reinstatement of a dismissed Chapter 13 case was voidable, bankruptcy court annuls the stay retroactively to validate the foreclosure sale because of bad faith by the debtor and lack of notice of the reinstatement to creditors.); In re Christian, 199 B.R. 382 (Bankr. N.D. Ill. 1996) (Citicorp violated stay after reinstatement of Chapter 13 case by seeking state court confirmation of foreclosure sale conducted while case was dismissed. However, because Citicorp completed foreclosure sale during the interim, debtor could not effect a cure under § 1322(c)(1), and thus Citicorp would have been entitled to relief from the stay had it asked permission under § 362(d). Equities favor annulment of the stay to validate Citicorp’s actions after reinstatement of the case.), rev’d, 214 B.R. 352, 356 (N.D. Ill. 1997) (“Because I have held that Section 1322(c)(1) permits a debtor to cure a mortgage default until the foreclosure sale is confirmed, the [bankruptcy] court’s decision to annul must be reversed. I am remanding the case . . . for a new determination whether the balance of equities favors granting the annulment of the stay or the imposition of sanctions for violating it.”), after remand, 231 B.R. 288 (N.D. Ill. 1999) (Affirms retroactive annulment of stay based on findings that debtor failed to act after reinstatement of plan; Citicorp detrimentally relied on the debtor’s inaction.). See also Aheong v. Mellon Mortgage Co. (In re Aheong), 276 B.R. 233 (B.A.P. 9th Cir. 2002) (Not necessary for bankruptcy court to reopen closed Chapter 13 case to consider creditor’s motion to annul automatic stay. Debtor lacks standing to object to reopening. Bankruptcy court appropriately annulled stay in first of three bankruptcy cases to validate foreclosure.).
28 184 B.R. 799 (B.A.P. 9th Cir. 1995).
29 Peters v. Mason-McDuffie Mortgage Corp. (In re Peters), 101 F.3d 618 (9th Cir. 1996).
30 See §§ 75.1 [ Examples of Stay Violations, and Not ] § 62.1 Examples of Stay Violations, and Not, 229.1 [ 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors ] § 120.2 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors and 235.1 [ Other Limitations ] § 121.4 Other Limitations.
31 Peters v. Mason-McDuffie Mortgage Corp. (In re Peters), 101 F.3d 618 (9th Cir. 1996).
32 See § 47.7 [ Causes of Action ] § 46.11 Causes of Action—Including Judicial Estoppel Issues.
33 540 S.E.2d 611 (Ga.), cert. denied, 534 U.S. 819, 122 S. Ct. 51, 151 L. Ed. 2d 21 (2001).
34 See § 47.7 [ Causes of Action ] § 46.11 Causes of Action—Including Judicial Estoppel Issues.
35 291 F.3d 1282 (11th Cir. 2002).
36 291 F.3d at 1288. Accord De Leon v. Comcar Indus., Inc., 321 F.3d 1289 (11th Cir. 2003) (Applying Billups v. Pemco Aeroplex, Inc. (In re Burnes), 291 F.3d 1282 (11th Cir. 2002), discrimination claims against former employer are barred by judicial estoppel notwithstanding amendment to Chapter 13 schedules to reveal the prepetition cause of action.). But see Parker v. Wendy’s Int’l, Inc., 365 F.3d 1268 (11th Cir. 2004) (Refusing to apply judicial estoppel against Chapter 7 trustee in the case before it, the Eleventh Circuit panel stated, “[I]t is questionable as to whether judicial estoppel was correctly applied in Billups v. Pemco Aeroplex, Inc. (In re Burnes), 291 F.3d 1282 (11th Cir. 2002),.The more appropriate defense in the Burnes case was, instead, that the debtor lacked standing.”).
37 See, e.g., In re Tarrer, 273 B.R. 724, 733 (Bankr. N.D. Ga. 2001) (Chapter 13 discharged and closed in 2000 is reopened in 2001 to permit debtors to amend schedule of assets to reveal prepetition lawsuit after defendant raised judicial estoppel; debtors also agreed to amend plan to pay discharged creditors from any recovery. “Georgia courts have recognized that such an amendment effectively nullifies the original position taken in the bankruptcy case, and therefore, the failure initially to list the asset cannot serve as the basis upon which the second court applies the doctrine of judicial estoppel. See . . . Jowers v. Arthur, 245 Ga. App. 68, 537 S.E.2d 200, 202 (2000) . . . . However, at least one federal district court has found that the debtor’s request to amend his schedules came too late to rectify the earlier inconsistency. See Scoggins v. Arrow Trucking Company, 92 F.Supp.2d 1372, 1376 (S.D. Ga. 2000).”).
38 See, e.g., In re Ross, 278 B.R. 269, 275 (Bankr. M.D. Ga. 2001) (Dismissal for nonpayment and closing of Chapter 13 case do not bar reopening under § 350(b) to amend schedules; because postpetition lawsuit vested in the debtor at confirmation, it is not necessary to reopen the case to schedule the lawsuit. Although the case can be reopened under § 350(b), under Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000), cert. denied, 531 U.S. 1073, 121 S. Ct. 765, 148 L. Ed. 2d 666, reh’g denied, 531 U.S. 1185, 121 S. Ct. 1173, 148 L. Ed. 2d 1030 (2001), the postconfirmation lawsuit was not property of the bankruptcy estate, the debtor had no duty to disclose the claim and thus “the Court has no reason to allow Debtor to reopen her case to make such a disclosure.”); In re Lott, 277 B.R. 871, 874 (Bankr. S.D. Ga. 2001) (Motion to amend Chapter 13 schedules to add a medical malpractice claim that the debtor did not realize he had until after confirmation is denied because Bankruptcy Rule 1009(a) permits amendment of schedules without leave of court; acknowledging concern about Wolfork v. Tackett, 540 S.E.2d 611 (Ga.), cert. denied, 534 U.S. 819, 122 S. Ct. 51, 151 L. Ed. 2d 21 (2001), “the Court is confident that a state court would accept proof of actual amendment as equivalent to an order allowing amendment.”).