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In re Serra

United States District Court, S.D. Florida

March 28, 2018

IN RE MAXIMA SERRA, Debtor.
v.
THE BANK OF NEW YORK MELLON, and NANCY K. NEIDICH, Standing Trustee, Appellees. MAXIMA SERRA, Appellant,

          ORDER REVERSING BANKRUPTCY COURT ORDERS AND REMANDING CASE

          MARCIA G. COOKE United States District Judge

         This case is a consolidated appeal[1] arising out of a pro se bankruptcy petition filed by Appellant Maxima Serra (“Ms. Serra”). Ms. Serra appeals two bankruptcy court orders issued in the underlying bankruptcy proceeding, Order Granting the Bank of New York Mellon's Motion for Relief from the Automatic Stay, see ECF No. 1, and Order Denying Confirmation and Dismissing Chapter 13 Case, see C2 ECF No. 1. For the reasons stated below, I reverse the rulings of the bankruptcy court.

         I. BACKGROUND

         On December 6, 2013, a final judgement of foreclosure was entered against Maria Serra and in favor of Appellee, The Bank of New York Mellon (“Bank of NYM”), related to a property located in Hialeah, Florida. ECF No. 5-2, 32-33. Ms. Maxima Serra was listed as a tenant on the judgment. Id. at 32. The foreclosed property was eventually sold and a certificate of title to the property was issued to Bank of NYM on October 13, 2015. Id. at 38.

         Ms. Serra filed a Chapter 13 bankruptcy petition on January 17, 2017. ECF No. 9, 4; ECF No. 5-2, 6-14. Bank of NYM was the only creditor listed to be noticed on her bankruptcy petition. ECF No. 5-2, 1-14. While Ms. Serra lived at the foreclosed property, she does not appear to have ever had a legal interest in the property. See Deed, C2 ECF No. 10-1, 3. In fact, it was Ms. Serra's daughter who owned the property from 2002 until it was foreclosed on and sold to Bank of NYM in 2015. Id.; ECF No. 5-2, 32-33. At the time Ms. Serra filed her bankruptcy petition, a writ of possession was pending in the foreclosure proceeding. Trustee's Br., 3; C2 ECF No. 10-1, 9-10.

         On February 1, 2017, the bankruptcy court issued a notice that the meeting of creditors was scheduled for March 2, 2017, but Ms. Serra filed a motion to excuse her appearance because she was elderly. Trustee's Br., 4; C2 ECF No. 6-1, 3-4. Appellee Nancy N. Neidich, the appointed Trustee (“Trustee”), objected, and a hearing was held on Ms. Serra's motion on April 4, 2017. Id. At the hearing, the bankruptcy court took testimony from Ms. Serra and ruled that Ms. Serra must appear at the meeting of creditors. Trustee's Br., 4. On May 12, 2017, the bankruptcy court scheduled the confirmation hearing for the afternoon of June 6, 2017. Id.; C2 ECF No. 10-1, 9-10. Shortly thereafter, Bank of NYM filed a Motion for Relief from Automatic Stay to Enforce Final Judgment of Foreclosure with Certificate of Title Already Issued. ECF No. 5-2, 28-31. Bank of NYM argued its interest in the foreclosed property was not adequately protected while Ms. Serra occupied the property without making payments on the final judgment or Chapter 13 plan, that Ms. Serra had no equity in the property, and that the property was not necessary for an effective reorganization. Id. at 29. According to Bank of NYM, it was therefore entitled to relief from the automatic bankruptcy stay pursuant to 11 U.S.C. §§ 362(d)(2)(A) and (B). Id. A hearing on Bank of NYM's motion was scheduled for the morning of June 6, 2017. ECF No. 5-2, 40. Ms. Serra never filed a response to Bank of NYM's motion. Bank's Br., 8.

         In her briefs, Ms. Serra states that she fell a week prior to the June 6, 2017 hearings and injured her hip, causing her to be bedridden and unable to attend either of the June 6, 2017 hearings. Serra's Br., 4. Ms. Serra alleges that her daughter sent documents to the Trustee and to the bankruptcy court, alerting both that Ms. Serra was unable to go to the courthouse for the scheduled hearing. Id.; Serra's Br., ECF No. 9, 9. She does not allege that she notified Bank of NYM and Bank of NYM denies receiving any notice that Ms. Serra was unable to attend the meeting. Bank's Br., 3. The Trustee does not deny that she received notice that Ms. Serra could not attend the hearing. See generally, Trustee's Br. The hearing on Bank of NYM's Motion for Relief from the Automatic Stay took place on June 6, 2017 and the motion was granted. ECF No. 1, 3-5. According to the Trustee, during the hearing on the motion for relief from stay, the bankruptcy court considered the record and the testimony given by Ms. Serra at the April 4, 2017 hearing. Trustee's Br., 4-5. The bankruptcy court then directed the Trustee to request a dismissal of the Bankruptcy Case because bankruptcy could not afford Ms. Serra relief from the writ of possession. Id. at 5-6. However, there is no transcript from the June 6, 2017 hearing in the record.

         It does not appear that the confirmation hearing scheduled for the afternoon of June 6, 2017 took place, as the bankruptcy docket shows a Notice of Continued Confirmation Hearing was entered on June 9, 2017, which continued the confirmation hearing to July 11, 2017. On June 7, 2017, the bankruptcy court issued its Order Granting The Bank of New York Mellon's Motion for Relief from the Automatic Stay. ECF No. 1, 3-5. On June 19, 2017, the bankruptcy court issued its Order Denying Confirmation and Dismissing Chapter 13 Case. C2 ECF No. 1, 4-5.

         Ms. Serra appealed both Orders timely and I have consolidated both appeals into the instant case. Ms. Serra claims that the bankruptcy court violated her right to due process and abused its discretion by holding the June 6, 2017 hearing on Bank of NYM's motion knowing she was confined to her bed and could not attend the hearing.[2] ECF No. 9, 10-11. She makes the same arguments as to the bankruptcy court's dismissal of her case, and makes the additional legal argument that the bankruptcy court abused its discretion in dismissing her case without a hearing in violation of Bankruptcy Rule 9014(a).

         II. LEGAL STANDARD

         “When entertaining an appeal from a bankruptcy court, district courts are entitled to ‘affirm, modify, or reverse a bankruptcy court's . . . order' and will accept its findings of fact unless those findings are clearly erroneous. In re Boykin, 313 B.R. 516, 519 (M.D. Ga. 2004) (Fed. Bankr. R. 8013). “A bankruptcy court's legal conclusions and application of the law to the facts of a given case are reviewed de novo . . . .” HDR Architecture, P.C. v. Maguire Grp. Holdings, 523 B.R. 879, 885 (S.D. Fla. 2014) (citing Carrier Corp. v. Buckley (In re Globe Mfg. Corp.), 567 F.3d 1291, 1296 (11th Cir. 2009)).

         III. DISCUSSION

         A. Dismissal of Bankruptcy Case

          Ms. Serra argues she was entitled to a hearing prior to the dismissal of her bankruptcy case. The Trustee argues that the case was properly dismissed because there was no good faith reason to keep the case open. Trustee does not engage with or specifically address Ms. Serra's argument that she was entitled to a hearing; she simply argues the bankruptcy case could not provide Ms. ...


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