William Joseph Kelly

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 09-42376 TG
Chapter 13
WILLIAM JOSEPH KELLY, RS ABK 001
Debtor.
___________________________/
MEMORANDUM OF DECISION
Wildwood 	at 	Village 	Park 	Owners’ 	Association, 	Inc. 	(“Movant”)
filed 	a 	motion 	for 	relief 	from 	the 	automatic 	stay 	in 	the 	above-
captioned Chapter 13 case. 	Movant seeks relief from stay in order to
record 	a 	lien 	against 	Debtor’s 	real 	property 	and 	foreclose 	on 	that
lien, as well as to file a lawsuit against Debtor to collect unpaid
homeowner’s assessments. 	The motion for relief came on for hearing
on February 22, 2010. 	Counsel for Debtor and counsel for Movant both
appeared at the hearing. 	The Court took the matter under submission
and 	established 	a 	schedule 	for 	the 	parties 	to 	submit 	additional
briefs. 	After 	considering 	the 	arguments 	presented, 	the 	Court
concludes 	that 	the 	motion 	should 	be 	granted 	in 	part 	and 	denied 	in
part for the reasons set forth below.
Signed: April 28, 2010
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
April 28, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-42376 Doc# 47 Filed: 04/28/10 Entered: 04/28/10 14:53:48 Page 1 of 5

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SUMMARY OF FACTS
Debtor 	filed 	the 	above-captioned 	Chapter 	13 	case 	on 	March 	26,
2009. 	On 	Schedule 	A, 	Debtor 	listed 	a 	100% 	fee 	interest 	in 	real
property 	located 	at 	273 	South 	Wildwood, 	Hercules, 	CA 	(“the
Property”). 	The Property is encumbered by a first Deed of Trust held
by Chase Financial (“Chase”). 	Under Movant’s “Homeowner Association
Covenant, 	Conditions 	and 	Restrictions” 	(“the 	CC&Rs”) 	Debtor 	was
required 	to 	pay 	assessments 	to 	Movant 	for 	as 	long 	as 	Debtor 	had 	a
legal, equitable, or possessory interest in the Property.
On June 9, 2009, the Court confirmed Debtor’s Chapter 13 Plan,
which 	provided 	that 	Debtor 	would 	surrender 	the 	Property 	and 	pay
general unsecured creditors on a pro tanto basis. 	On June 24, 2009,
Chase obtained an order granting its motion for relief from stay as
holder of the first Deed of Trust on the Property. 	Despite obtaining
relief from stay, Chase has not yet foreclosed on the Property.
Movant’s motion for relief alleges that Debtor owes Movant $664
in 	pre-petition 	assessments 	and 	$5,537.26 	in 	post-petition
assessments, late charges, and interest for the period from April 1,
2009 	to 	January 	21, 	2010. 	Under 	the 	CC&Rs, 	Debtor 	is 	personally
liable for the assessments.
DISCUSSION
Debtor does not oppose Movant’s request for relief from stay to
record 	a 	lien 	against 	the 	Property 	and 	foreclose. 	The 	Court 	will
grant this part of the motion.
Movant seeks further relief to file a lawsuit against Debtor for
his personal liability for the delinquent post-petition assessments.
Case: 09-42376 Doc# 47 Filed: 04/28/10 Entered: 04/28/10 14:53:48 Page 2 of 5

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Debtor objects to this relief. 	The parties do not dispute that prior
to 	filing 	his 	bankruptcy 	petition 	Debtor 	agreed 	to 	comply 	with 	the
CC&Rs, 	under 	which 	he 	was 	to 	pay 	certain 	assessments 	to 	Movant.
Because this obligation arose pre-petition, Movant currently holds an
unsecured pre-petition claim.
The 	Bankruptcy 	Code 	broadly 	defines 	a 	claim 	as 	a 	“right 	to
payment, 	whether 	or 	not 	such 	right 	is 	reduced 	to 	judgment,
liquidated, 	unliquidated, 	fixed, 	contingent, 	matured, 	unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured.” 	11
U.S.C. 	§ 	101(5)(A). 	A 	homeowner’s 	assessment 	arising 	from 	a 	pre-
petition 	contract 	constitutes 	a 	pre-petition 	debt 	under 	the
Bankruptcy 	Code’s 	broad 	definition 	of 	a 	claim. 	See 	Matter 	of
Rosteck, 899 F.2d 694, 696 (7th Cir. 1990).
In 1994, Congress added 11 U.S.C. § 523(a)(16), which provides
that homeowner’s association fees that become due and payable post-
petition 	are 	non-dischargeable 	under 	sections 	727, 	1141, 	1228(a),
1228(b), 	or 	1328(b). 	In 	this 	case, 	Debtor 	seeks 	a 	discharge 	under
section 1328(a), which does not except from discharge post-petition
homeowner’s association fees. 	Instead, section 1328(a) provides for
discharge of “all debts provided for by the plan or disallowed under
section 502.” 	Debtor’s confirmed Chapter 13 plan provides for this
debt 	by 	indicating 	that 	Debtor 	will 	surrender 	the 	Property, 	and 	by
making 	payments 	to 	the 	Chapter 	13 	trustee 	of 	$900 	each 	month 	to 	be
distributed on a pro rata basis to general unsecured creditors, such
as Movant.
Case: 09-42376 Doc# 47 Filed: 04/28/10 Entered: 04/28/10 14:53:48 Page 3 of 5

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After the passage of section 523(a)(16), a New Jersey bankruptcy
court 	decided 	the 	very 	issue 	before 	the 	court 	in 	this 	case. 	In
Matter 	of 	Mattera, 	the 	bankruptcy 	court 	held 	that 	pre-petition 	and
post-petition homeowner’s assessments were discharged by the debtor’s
successful 	completion 	of 	a 	Chapter 	13 	plan. 	203 	B.R. 	565, 	572
(Bankr. 	D. 	N.J. 	1997). 	The 	court 	reasoned 	that 	post-petition
assessments were pre-petition claims and that the debtor’s Chapter 13
plan 	provided 	for 	the 	claim 	by 	stating 	the 	debtor’s 	intention 	to
surrender the condominium. 	Id.
Movant, 	as 	a 	holder 	of 	an 	unsecured 	claim, 	presents 	no 	cause
under 	section 	362(d)(1) 	for 	terminating 	the 	automatic 	stay 	for 	the
purpose 	of 	collecting 	on 	a 	dischargeable 	unsecured 	debt. 	For 	this
reason, Movant’s request to terminate the stay to allow it to pursue
Debtor personally for unpaid homeowner’s assessments is denied.
CONCLUSION
The 	motion 	for 	relief 	from 	stay 	is 	granted 	to 	allow 	Movant 	to
record 	a 	lien 	against 	the 	Property 	and 	foreclose 	on 	that 	lien.
Movant’s 	request 	for 	relief 	from 	stay 	to 	collect 	amounts 	owed 	from
Debtor 	personally 	is 	denied. 	Counsel 	for 	Movant 	is 	instructed 	to
submit a proposed form of order consistent with this decision.
END OF DOCUMENT
Case: 09-42376 Doc# 47 Filed: 04/28/10 Entered: 04/28/10 14:53:48 Page 4 of 5

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COURT SERVICE LIST
Sally J. Elkington
Elkington Law Office
409 13th St 10th Fl
Oakland, CA 94612
Alyssa B. Klausner
Swedelson & Gottlieb
11900 W. Olympic Blvd., Ste. 700
Los Angeles, CA 90064
Case: 09-42376 Doc# 47 Filed: 04/28/10 Entered: 04/28/10 14:53:48 Page 5 of 5