Joan Wendt

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 09-49975 T
Chapter 11
JOAN WENDT, 	R.S. GJB-4514
Debtor.
_______________________________/
MEMORANDUM OF DECISION RE MOTION FOR RELIEF FROM SAY
The motion of One West Bank FSB, its assignees and/or successors
in interest (“Secured Creditor”) for relief from the automatic stay
pursuant 	to 	11 	U.S.C. 	§ 	362(d)(1) 	and(2) 	to 	proceed 	with 	a
foreclosure 	on 	real 	property 	(the 	“Real 	Property”) 	owned 	by 	the
above-captioned debtor (the “Debtor”) came before the Court on April
2, 	2010 	at 	2:00 	p.m. 	for 	a 	duly 	noticed 	final 	evidentiary 	hearing.
At 	the 	conclusion 	of 	the 	hearing, 	the 	Court 	took 	the 	motion 	under
submission. 	Having reviewed the entire file and having listened to
the tape of the preliminary hearing, the Court now concludes that the
motion should be granted. 	The reasons for the Court’s decision are
set forth below.
Signed: April 02, 2010
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
April 05, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-49975 Doc# 76 Filed: 04/02/10 Entered: 04/05/10 10:06:46 Page 1 of 7

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SUMMARY OF FACTS
The 	above-captioned 	case 	was 	filed 	on 	October 	22, 	2009. 	The
Debtor is a Senior Systems Programmer at Wells Fargo Bank, N.A. 	On
Schedule 	I 	of 	her 	Schedules 	of 	Assets 	and 	Liabilities 	(the
“Schedules”), 	she 	listed 	gross 	monthly 	income 	of 	$16,685, 	of 	which
$7,410 is from wages and $9,275 is from rental income. 	On Schedule
J, she listed monthly expenses of $32,632, of which $30,847 are real
property expenses. 	On Schedule A, she listed seven parcels of real
property, 	all 	located 	in 	Oakland, 	California, 	including 	the 	Real
Property, which is located at 1453 5th Street. 	The Real Property is
not the Debtor’s residence. 	On the detail to Schedule I, the Debtor
indicated that the Real Property generated rents totaling $3,750 per
month and incurred expenses totaling $4,710 per month, representing
a 	negative 	cash 	flow 	of 	$910 	per 	month. 	On 	Schedule 	A, 	the 	Debtor
listed 	the 	value 	of 	the 	Real 	Property 	as 	$333,000. 	She 	listed
encumbrances 	against 	the 	Real 	Property 	as 	totaling 	approximately
$525,000, 	including 	the 	Secured 	Creditor’s 	first 	deed 	of 	trust
securing a debt of approximately $425,000 and a second deed of trust
securing a debt of approximately $100,000.
A status conference was conducted on December 14, 2009. 	At the
status 	conference, 	counsel 	for 	the 	Office 	of 	the 	United 	States
Trustee (the “UST”) indicated that the monthly operating reports were
delinquent. 	The Court noted that an order approving the employment
of 	Debtor’s 	counsel 	had 	not 	yet 	been 	obtained. 	Debtor’s 	counsel
requested 	90 	days 	to 	file 	a 	plan. 	The 	Court 	agreed 	to 	the 	90 	day
deadline and issued an order setting a deadline of March 15, 2010 for
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26 1No monthly operating reports have been filed since these two.
2This has never been done.
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filing 	a 	plan 	and 	disclosure 	statement. 	The 	Court 	continued 	the
status 	conference 	to 	January 	19, 	2010 	and 	indicated 	that, 	by 	then,
monthly operating reports should be current and counsel should have
been formally retained. 	A retention order was filed on December 18,
2009. 	Monthly operating reports for October and November 2009 were
filed on January 11, 2010. 1
At the continued status conference on January 19, 2010, the UST
advised 	the 	Court 	that 	the 	Debtor 	was 	delinquent 	in 	filing 	her 	tax
returns. 	Debtor’s 	counsel 	represented 	that 	he 	would 	be 	filing 	an
application 	to 	employ 	an 	accountant 	so 	that 	this 	problem 	could 	be
remedied. 2 	The 	UST 	also 	raised 	a 	concern 	about 	the 	sale 	of 	stock
reflected on the monthly operating reports. 	The Court continued the
status 	conference 	to 	February 	1, 	2010 	and 	ordered 	the 	Debtor 	to
appear 	at 	the 	status 	conference 	personally 	unless 	the 	UST 	had
received a satisfactory explanation from her with regard to the stock
sales. 	The Debtor filed a declaration addressing this issue. 	This
apparently 	satisfied 	the 	UST, 	because 	the 	February 	1, 	2010 	status
conference was dropped.
On 	February 	16, 	2010, 	the 	Secured 	Creditor 	filed 	a 	motion 	for
relief from stay to foreclose on the Real Property. 	The motion was
set 	for 	a 	preliminary 	hearing 	on 	March 	5, 	2010. 	The 	motion 	stated
that the balance secured by the first deed of trust was approximately
$425,000, 	that 	the 	Debtor 	had 	made 	no 	payments 	to 	the 	Secured
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Creditor 	since 	February 	2009, 	and 	that 	there 	were 	approximately
$19,000 in post-petition defaults.
On 	March 	4, 	2010, 	the 	Debtor 	filed 	a 	motion 	to 	value 	the 	Real
Property 	at 	$260,000. 	However, 	the 	motion 	misidentified 	the 	party
holding the first deed of trust on the Real Property as Aurora Loan
Services. 	A 	corrected 	motion 	was 	filed 	on 	March 	8, 	2010. 	In 	the
motion, the Debtor expressed the intent to file a plan to bifurcate
the Secured Creditor’s claim into a secured claim for this amount and
a 	general, 	unsecured 	claim 	for 	the 	balance. 	An 	amended 	Schedule 	A
was 	also 	filed 	on 	March 	4, 	2010, 	listing 	the 	value 	of 	the 	Real
Property as $260,000.
At 	the 	preliminary 	hearing 	on 	March 	5, 	2010, 	Debtor’s 	counsel
indicated 	that 	it 	would 	probably 	be 	appropriate 	for 	the 	Debtor 	to
make an adequate protection payment. 	However, he indicated that the
appropriate 	payment 	should 	reflect 	the 	bifurcated 	value 	of 	the
secured claim.
Secured 	Creditor’s 	counsel 	expressed 	frustration 	about 	the
length of time that has passed during the case, during which time the
Debtor 	was 	presumably 	collecting 	rents 	and 	not 	making 	any 	payments
to 	the 	Secured 	Creditor. 	Secured 	Creditor’s 	counsel 	expressed 	the
need as well for information concerning the property related costs.
The 	Court 	noted 	that 	the 	plan 	deadline 	was 	imminent 	and 	that, 	once
the 	plan 	and 	disclosure 	statement 	were 	filed, 	the 	Court 	and 	the
Secured 	Creditor 	would 	be 	in 	a 	better 	position 	to 	know 	whether 	a
successful reorganization was likely.
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The Court set the matter for an evidentiary hearing on April 2,
2010. 	By 	that 	time, 	the 	Court 	assumed, 	the 	plan 	and 	disclosure
statement 	would 	have 	been 	filed 	and 	the 	Court 	would 	be 	in 	a 	better
position 	to 	determine 	whether 	the 	automatic 	stay 	should 	be 	vacated
or 	whether 	the 	Debtor 	should 	be 	ordered 	to 	make 	an 	adequate
protection 	payment 	pending 	confirmation 	of 	the 	plan 	and, 	if 	so, 	in
what amount. 	The Court ordered the parties to file witness lists and
exchange documents one week before the scheduled hearing. 	The Court
ordered 	the 	Debtor 	to 	cooperate 	with 	the 	Secured 	Creditor 	by
providing 	counsel 	with 	any 	information 	he 	reasonably 	requested
concerning the Real Property.
No 	plan 	was 	filed 	on 	March 	15, 	2010 	nor 	was 	a 	motion 	filed
requesting an extension of the plan filing deadline. 	One day before
the scheduled final hearing, the Debtor filed her declaration and the
declaration of an appraiser, valuing the Real Property at $118,000.
The 	Debtor 	did 	not 	appear 	at 	the 	final 	hearing. 	No 	witnesses 	were
provided. 	The Debtor’s counsel represented that the Debtor had been
collecting rents from the Real Property but had not spent them, that
they were in a bank account and could be turned over to the Secured
Creditor. 	Without 	the 	Debtor 	present 	to 	testify 	to 	this
representation 	and 	without 	monthly 	operating 	reports 	reflecting
sequestered rents, the Court had no way to verify it.
Secured 	Creditor’s 	counsel 	expressed 	frustration 	with 	the
Debtor’s 	failure 	to 	provide 	him 	with 	the 	information 	requested
outside 	the 	courtroom 	on 	the 	day 	of 	the 	preliminary 	hearing.
Debtor’s 	counsel 	admitted 	that 	Secured 	Creditor’s 	counsel 	had
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requested 	the 	information. 	He 	stated 	that 	he 	did 	not 	feel 	that 	it
was 	necessary 	to 	comply 	with 	the 	request 	because 	it 	was 	not 	made
formally.
No meaningful explanation or evidence was provided to the Court
as to the necessity of the Real Property to a reorganization or the
feasibility 	of 	the 	Debtor 	confirming 	a 	plan 	within 	a 	reasonable
period of time. 	Based on the foregoing, the Court concludes that the
Debtor 	has 	failed 	to 	meet 	its 	burden 	of 	proving 	that 	the 	Secured
Creditor’s 	interest 	in 	the 	Real 	Property 	is 	adequately 	protected.
Moreover, the Debtor clearly has no equity in the Real Property. 	See
11 U.S.C. § 362(d)(1), (2) & (g). 	Based on the Debtor’s conduct of
the 	case 	to 	date, 	the 	Court 	concludes 	that 	it 	is 	unlikely 	that 	the
Debtor will be able to effectuate a successful reorganization within
a reasonable time. 	Therefore, the automatic stay will be vacated to
permit the Secured Creditor to proceed with its remedies under state
law.
CONCLUSION
The 	Debtor 	has 	failed 	to 	meet 	her 	burden 	of 	proving 	that 	the
Secured 	Creditor’s 	interest 	in 	the 	Real 	Property 	is 	adequately
protected or that the Real Property is necessary for a reorganization
that 	is 	reasonably 	likely 	to 	occur 	in 	the 	near 	future. 	The 	Debtor
admits 	that 	she 	has 	no 	equity 	in 	the 	Real 	Property. 	Consequently,
the automatic stay will be vacated to permit the Secured Creditor to
foreclose. 	Counsel 	for 	the 	Secured 	Creditor 	is 	directed 	to 	submit
a proposed form of order in accordance with this decision.
END OF DOCUMENT
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COURT SERVICE LIST
Joan Wendt
516 Lewis Street
Oakland, CA 94607
Robert T. Kawamoto
Law Offices of Robert T. Kawamoto
234 Van Ness Ave.
San Francisco, CA 94102-3623
JaVonne M. Phillips
McCarthy & Holthus, LLP
1770 Fourth Ave.
San Diego, CA 92101
Case: 09-49975 Doc# 76 Filed: 04/02/10 Entered: 04/05/10 10:06:46 Page 7 of 7