United States District Court, E.D. New York
In Re: JEAN S. JEAN-FRANCOIS, Debtor-Appellant
In Re: Jean S. Jean-Francois, Debtor: John W. Freeman, LEAD ATTORNEY, John W. Freeman, Attorney at Law, Jamaica, NY; Victor M. Wilson, LEAD ATTORNEY, Victor M. Wilson, P.C., Brooklyn, NY.
MEMORANDUM & ORDER
DORA L. IRIZARRY, United States District Judge.
Debtor-Appellant Jean S. Jean-Francois appeals from an order of the United States Bankruptcy Court for the Eastern District of New York (" Bankruptcy Court" ) entered on November 25, 2013, annulling the automatic stay that went into effect with Debtor-Appellant's chapter 13 bankruptcy filing on August 15, 2013, and from an order denying Debtor-Appellant's request for a continuance at the November 5, 2013 hearing on annulling the automatic stay. For the reasons set forth below, the Bankruptcy Court's decisions are affirmed.
Unless otherwise noted, the parties agree to the following facts. Debtor-Appellant purchased a mixed-use residential and commercial property located at 3502 Church Avenue, Brooklyn, New York (the " property" ) on February 28, 2007 for the sum of $750,000. (Br. of Debtor-Appellant at 2, Dkt. Entry No. 2.) In connection with this purchase, Debtor-Appellant used the property to secure a mortgage with Flushing Savings Bank in the amount of $562,500. ( Id.)
Debtor-Appellant eventually fell behind on his mortgage payments and Flushing Savings Bank initiated a foreclosure action in New York State Supreme Court, Kings County. (Br. of Appellee at 7, Dkt. Entry No. 3.) Appellee, Church Avenue Partners, LLC, purchased the loan from Flushing Savings Bank and was substituted for Flushing Savings Bank in the ongoing state foreclosure action. (Br. of Debtor-Appellant at 3.) A final Judgment of Foreclosure and Sale was entered in the foreclosure action on February 7, 2012 and was amended on or about May 31, 2013. (Br. of Appellee at 8; Judgment of Foreclosure and Sale annexed to Mot. for Relief from Stay attached to Notice of Appeal from Bankr. Ct. (" Notice of Appeal" ) as Ex. 5, Dkt. Entry No. 1.) A foreclosure sale date was scheduled for August 15, 2013. (Br. of Debtor-Appellant at 3.)
On August 13, 2013, Debtor-Appellant attempted to file for chapter 13 bankruptcy in the Bankruptcy Court by filing a credit counseling certificate. He then sent a letter to Appellee indicating that he had filed for bankruptcy. ( Id. at 4.) However, as the filing did not have an actual bankruptcy petition attached to it, the Clerk of the Bankruptcy Court issued a Notice of Defective Filing. ( Id. at 4; Notice of Defective Filing attached to Notice of Appeal as Ex. 2.) Twenty minutes before the foreclosure sale, Debtor-Appellant learned of his mistake and refiled properly for chapter 13 bankruptcy giving effect to the automatic stay that attaches to all bankruptcy filings. (Br. of Debtor-Appellant at 4; Refiled Petition attached to Notice of Appeal as Ex. 3.) Meanwhile, Appellee went forward with the foreclosure sale and sold the property to a third party. (Br. of
Debtor-Appellant at 4.)
On September 17, 2013, the Chapter 13 Trustee filed a Motion to Dismiss Debtor-Appellant's bankruptcy because Debtor-Appellant had failed to: 1) submit any monthly pre-confirmation payments to the Trustee; 2) file copies of pay statements from employers, written appraisals for properties, and lease agreements or affidavits from tenants; 3) provide the Trustee with his previous year's State and Federal Tax Returns; and 4) appear at the initial § 341 meeting of creditors. (Mot. to Dismiss attached to Notice of Appeal as Ex. 4.)
On September 24, 2013, Appellee filed a Motion for Order Modifying and Annulling the Automatic Stay (" Motion for Relief from Stay" ). (Mot. for Relief from Stay attached to Notice of Appeal as Ex. 5.) Debtor-Appellant responded to the Motion on October 29, 2013. (Affirmation in Opposition attached to Notice of Appeal as Ex. 8.) The Bankruptcy Court heard oral argument on the Motion on November 5, 2013, and issued a verbal order at oral argument followed by a written order on November 25, 2013 annulling nunc pro tunc the automatic stay to August 15, 2013, and allowing the foreclosure sale to go through. (Transcript of Mot. For Relief from Stay attached to Br. of Debtor-Appellant as Ex. A at 16-17; Order Annulling the Automatic Stay attached to Notice of Appeal as Ex. 10.) Debtor-Appellant also requested an adjournment at oral argument because he had retained new counsel only several days prior and new counsel wanted more time to familiarize himself with the case. The Bankruptcy Court denied Debtor-Appellant's request for an adjournment. (Transcript of Mot. For Relief from Stay attached to Br. of Debtor-Appellant as Ex. A at 9-10.) Debtor-Appellant timely filed a Notice of Appeal as to both rulings on December 9, 2013. (Notice of Appeal at 1-2.)
Debtor-Appellant asserts that the Bankruptcy Court erred in annulling the automatic stay because: 1) Appellee had constructive notice of the bankruptcy and automatic stay;  2) Appellee lacked a clear interest in the property in need of protection that justified exempting it from the automatic stay; 3) Debtor-Appellant did not file the bankruptcy action in bad faith; 4) Debtor-Appellant may have had equity in the property; 5) the property was necessary for Debtor-Appellant's effective ...