Tara Hills, Inc.

OCR transcription for search; preserved printed pages are authoritative

Entered on Docket a

4 : June 01, 2007 iE CEIVED
, - _ ; GLORIA L. FRANKLIN, CLERK
6 | | ())ORTERNDSTRCT OF caLFORNN MAY 39 2007
1 FILE BANKRUPTCY COUR
NOT FOR PUBLICATION OAKLAND, CALIFORNIA

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- UNITED S mpecaln OF APPEALS FILED

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FOR THE NINTH CIRCUIT MAY 01 2007

CATHY A. CATTERSON, CLERK
U.S. COURT OF APPEALS

No. 06-15240

. D.C. No. CV-05-02138-CRB
In re: TARA HILLS, INC.,

MEMORANDUM”

for the Northern District of California

Appeal from the United States District Court
Charles R. Breyer, District Judge, Presiding

Submitted April 12, 2007” yu

| Before: SKOPIL, FARRIS, and BOOCHEVER, Circuit Judges.
Debtor, Tara Hills, Inc., appeals the district court’s decision affirming the
bankruptcy court’s refusal to reopen a bankruptcy petition to permit an adversary
proceeding against a creditor for an alleged violation of the automatic stay. We

affirm.

This disposition is not appropriate for publication and is not -
precedent except as provided by 9th Cir. R. 36-3.

This panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34{a)(2).

UscovernO ASE. 04-44259 Doc#57 Filed: 05/01/07 Entered: 06/01/07 15:15:23 Page 1 of 4

DISCUSSION
The debtor contends it did not receive adequate notice of the creditor’s
request or the bankruptcy court’s grant of relief from the automatic stay provisions
of 11 U.S.C. § 362(a) — relief that permitted the creditor to foreclose on the
debtor’s property. The bankruptcy court sought to cure these notice deficiencies
by retroactively annulling the automatic stay to the filing date of the debtor’s
petition — a petition the court determined was filed in bad faith.

Bankruptcy courts clearly have the authority to annul retroactively the

automatic stay. See In re National Environ. Waste Corp., 129 F.3d 1052,1054 (9th

Cir. 1997); In re Kissinger, 72 F.3d 107, 109 (9th Cir. 1995); In re Schwartz, 954

F.2d 569, 572-73 (9th Cir. 1992). The debtor contends, however, the court erred
by doing so without notice and hearing. We disagree. The court entered its order
sua sponte “to eliminate any vestiges of the abuse of process” committed by the
debtor’s filing of a bad faith petition. Bankruptcy courts are statutorily authorized
to issue orders sua sponte “to prevent.an abuse of process.” See 11 U.S.C. §
105(a).

Moreover, we conclude the bankruptcy court’s order rendered harmless any
notice deficiencies by the creditor or the court when it lifted the stay to permit the

sale of the debtor’s property. See In re Preblich, 181 F.3d 1048, 1051 (9th Cir.

Case: 04-44259 Doc#57 Filed: 05/01/07 Entered: 06/01/07 15:15:23 Page 2 of 4

1999) (noting the failure to give a debtor proper notice may be harmless). As the
district court reasoned, any due process violation was harmless because the
retroactive annulment of the stay rendered the creditor’s motion for relief from the
stay moot. See Schwartz, 954 F.2d at 573 (noting there is no violation of the
automatic stay if the creditor obtains retroactive relief).

AFFIRMED.

3

Case: 04-44259 Doc#57 Filed: 05/01/07 Entered: 06/01/07 15:15:23 Page 3 of 4

MOATT ORALSC

CLOSED

INTERNAL USE ONLY: Proceedings include all events.
06-15240 Tara Hill, Inc., et al v. Office of US Trust

In re: TARA HILLS, INC.

TARA HILL, INC.
Appellant

Vv.

OFFICE OF THE U.S. TRUSTEE,
OAKLAND
Appellee

UNITED STATES BANKRUPTCY COURT,
Northern District of
California, Oakland

Appellee

EDWARD D. JELLEN, Judge
Appellee

Docket as of May 1, 2007 11:49 am

Case: 04-44259 Doc#57 Filed: 05/01/07 Entered: 06/01/07 15:15:23 Page 4 of 4

Duane L. Tucker, Esq.
510/670-0668

[COR LD NTC ret]
27793 Tampa Ave.
Hayward, CA 94544

Andrew D. Velez-Rivera, Esq.
(510) 637-3200 ,

Ste. 690-N

(COR LD NTC gov]

OFFICE OF THE U.S. TRUSTEE
1301 Clay St.

Oakland, CA.94612-5202

No appearance
No appearance

Edward D. Jelien, Judge
[COR LD NTC prs]

US Bankruptcy Court
1300 Clay St.

Oakland, CA 94612

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