Mel Dahl, Esq., Attorney for Appellant.
John K. Britt, Esq., Attorney for Appellee.
de Jesús, J.
This appeal challenges the bankruptcy court's ruling granting a
motion to annul the automatic stay at the conclusion of a
nonevidentiary hearing. (1)
Appellant argues the court abused its
discretion by refusing his request for a second hearing and ordering
the annulment without receiving documentary and testimonial evidence.
We affirm, finding a bankruptcy court need not hold an evidentiary
hearing before adjudicating all motions under section 362 of the
Bankruptcy Code, and in this case, the record shows admitted facts
obviated the need for further hearings. The bankruptcy court's order annulling the automatic stay under
11 U.S.C. § 362(d) is a final order. 3 Collier on Bankruptcy, § 362.12, pp. 362-117 (15th ed. rev.). We have jurisdiction under 28
U.S.C. § 158(a)(1) and (b). Since Appellant challenges the bankruptcy
court's ruling on grounds of factual and legal error, we review for
abuse of discretion. In re Montclair, 177 B.R. 663 (9th Cir. BAP,
1995). Discussion Appellant first challenges the ruling by claiming all hearings
to consider motions filed under 11 U.S.C. § 362 (d) must be
evidentiary hearings. (2)
The law provides the Court may resolve a
motion to terminate, annul, condition or modify the automatic stay
"after notice and hearing". 11 U.S.C. § 362(d). Section 102(1) of
the Bankruptcy Code defines "after notice and a hearing" as
"...after such notice as is appropriate in the particular
circumstances, and such opportunity for a hearing as is appropriate
in the particular circumstances...". (Our emphasis) These two
sections allow a bankruptcy court leeway in fashioning the notice
and the hearings given and held in section 362 motions to suit the
needs of each case, as long as there is no abuse of discretion, or
deprivation of procedural due process. Epstein, Nickles & White,
Bankruptcy Vol. 1 § 3-31 p. 334 (1992); In re Drislor Associates,
110 B.R. 937, 940 (D. Colo. 1990). Hence, the law does not require
hearings, whether evidentiary or otherwise, before the court
adjudicates a section 362 motion. The second challenge to the ruling claims there are two
disputed material facts requiring an evidentiary hearing. First,
Appellant avers arrears are not owed and second, Appellant states
the plan incorporates an agreement for curing arrears which
precluded Appellee's motion. Our review of the record on appeal and the transcript of the
hearing convinces us the parties agreed to a series of payments and
their application which obviated the need for an evidentiary
hearing. These show Appellant was four months behind in post
petition payments to Appellee. These also show Appellant's claim to
an agreement is absurd. Appellee could not have agreed that the
Chapter 13 plan cure the admitted arrears because these had not yet
accrued on the dates the plan and the amended plans were filed. (3) Under these circumstances, the court's ruling is correct. An
evidentiary hearing was not needed because the admitted facts did
not justify a continuance of the stay in this case. The Bankruptcy Court's order is AFFIRMED. 1. Appellee held the mortgage over Appellant's residence. Appellant attempted to cure the arrears due through a
Chapter 13 plan. Appellee filed a motion to annul the stay
under 11 U.S.C. § 362(d)(1), claiming arrears as cause and
asking that it be allowed to continue with its state
foreclosure action. 2. Here the Court scheduled a nonevidentiary hearing . The notice states: "The above hearing shall be nonevidentiary.
If in the course of the nonevidentiary hearing, the court
determines the existence of a disputed material issue of
fact, the court will schedule a further evidentiary hearing.
If this is a hearing under Section 362, it will be a
consolidated preliminary and final nonevidentiary hearing
unless at the conclusion thereof the court sets down an
evidentiary hearing." (Excerpts of Record at 61).
3. The transcript of the December 8, 1997 hearing, shows Appellant admitted making these payments which Appellee credited as follows:
April 8, 1997 $ 2,800.00 pre-petition arrears
April 8, 1997 $ 700.00 March installment
May 15, 1997 $ 700.00 April installment
July 11, 1997 $ 750.00 May installment
August 1, 1997 $ 697.00 June installment
September 27, 1997 $ 713.00 July installment
November 17, 1997 $ 713.00 August installment
(Excerpts of Record at 58,70-78).
The Chapter 13 Plan was dated May 14, 1997. It was modified to increase monthly payment on July 24, 1997. During the December 8, 1997 hearing, Appellee alleged the Appellant owed four post petition monthly installments. (Excerpts of Record at 25, 29 & 64-69).