Vivian Y. Seton

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: :
:
VIVIAN Y. SETON : Case No. 04-19692PM
: Chapter 13
Debtor :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
RICHARD L. SUGARMAN, Trustee :
Movant :
vs. :
:
VIVIAN Y. SETON :
Respondent :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
MEMORANDUM OF DECISION
This case is before the court on the motion of Richard L. Sugarman to annul the stay of
11 U.S.C. § 362(a), together with the entry of an order enabling Movant to consummate a
foreclosure proceeding docketed June 8, 2004, Case No. V252496, in the Circuit Court for
Montgomery County, Maryland. The motion is opposed by the Debtor, who also requests leave
to file an adversary proceeding based upon an alleged willful violation of the automatic stay
under § 362(h) of the Bankruptcy Code.
This is the third bankruptcy case filed by the Debtor. Case No. 99-13542 filed under
Chapter 13 on March 25, 1999, was dismissed July 9, 1999. Case No. 03-31759 filed under
Chapter 13 on October 29, 2003, was dismissed on November 17, 2003. The present case was
filed on April 20, 2004. When the Debtor failed to appear for the meeting of creditors on June 3,
2004, held pursuant to § 341 of the Bankruptcy Code, the Chapter 13 Trustee filed a motion to
Date signed May 02, 2005
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dismiss. Debtor did not respond to the motion, and on July 9, 2004, this bankruptcy case was
dismissed with prejudice pursuant to § 109(g)(1) of the Bankruptcy Code. As noted, on June 8,
2004, a foreclosure was docketed by Movant as Trustee under a second deed of trust. A motion
for relief from the stay of § 362(a) was also filed by the holder of the senior lien, CitiBank N.A.,
on July 8, 2004; however, that motion was denied the following day as moot following dismissal
of the case. The instant case was thereafter reopened on the motion of Movant Sugarman to
annul the stay.
At the outset, the court notes that the Debtor filed exceptions to the ratification of the sale
at the foreclosure proceeding, asserting in the exceptions that the docketing of the foreclosure
proceeding was done in violation of the stay of § 362(a) of the Bankruptcy Code and that,
therefore, the foreclosure sale that occurred after this bankruptcy case was dismissed with
prejudice was a nullity. Debtor argued as well in this court that Sugarman had the duty to
dismiss the foreclosure sale that he had docketed in violation of the stay.
The court finds that the Circuit Court for Montgomery County had jurisdiction to render
the decision that it did. This court has exclusive jurisdiction under 28 U.S.C. § 1334(a) of all
cases under Title 11. But under 28 U.S.C. § 1334(b) the court has original but not exclusive
jurisdiction of all civil proceedings arising under Title 11 or arising in or related to cases under
Title 11. Thus, the Circuit Court for Montgomery County had the power to do precisely what it
did. However, to avoid further controversy, the court will rule on the motion to annul the stay.
First, the court finds as a fact that neither Sugarman nor the holder of the second trust
secured by the lien on Debtor’s property had knowledge of the filing of this bankruptcy case
under Chapter 13 prior to docketing the foreclosure action. When information was received after
the docketing of the foreclosure sale, Movant ceased all further action. Robert Goldsten, the
principal of the holder of the note instructed Sugarman to cancel the sale. When the bankruptcy
case was thereafter dismissed and the automatic stay of 11 U.S.C. § 362(a) terminated, Sugarman
was instructed to recommence docketing the sale.
The court finds as a fact, from the testimony presented, that while the docketing of the
foreclosure after the filing of this case was done in violation of the automatic stay, the docketing
was an inadvertent violation of the stay. This is because the action was taken without knowledge
of the filing of the bankruptcy case. In such cases, the court is empowered by 11 U.S.C. § 362(d)
to enter an order annulling the stay. In numerous cases, courts have annulled the stay or, as has
Case 04-19692 Doc 37 Filed 05/02/05 Page 2 of 3

been said, granted retroactive relief from the stay. See generally, In re Soares, 107 F.3d 969,
976-78 (CA1 1997); In re Lampkin, 116 B.R. 450 (BC Md. 1990); and In re Hall, 216 B.R. 702
(BC E.D.N.Y. 1998). This is such a case for such discretionary relief. The Debtor filed this case
and then abandoned, as she had in two previous cases, any effort to complete the Chapter 13
process. Had she gone forward with the case, the creditor could then have filed a motion for
relief from the stay. The court finds no basis to support the proposition that this creditor must
begin an entirely new foreclosure proceeding as opposed to reactivating a pending but stayed
foreclosure, where, as here, the Debtor’s bankruptcy case was dismissed on account of her failure
to appear before the court in proper prosecution of the case.
An appropriate order will be entered.
cc:
J. Worthington H. Talcott Jr., Esq., 11921 Rockville Pike, 3rd Floor, Rockville, MD 20852
Robert J. Haeger, Esq. 9535 Fern Hollow Way, Gaithersburg, MD 20886
Vivian Y. Seton, 3808 Fox Valley Drive, Rockville, MD 20853
Nancy S. Grigsby, Trustee, P.O. Box 958, Bowie, MD 20718
End of Memorandum
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