Appeal from United States District Court for the Central District of California. D.C. No. CV 91-1208, CV 91-1209 H. Marilyn L. Huff, District Judge, Presiding
Before: Fletcher and D.w. Nelson, Circuit Judges, and Will,*fn* Senior District Judge.
Appellant-debtor Robert Landry appeals an order of the district court, affirming the bankruptcy court's orders lifting an automatic stay of appellee-creditor Chevy Chase Federal Savings Bank's foreclosure proceedings and denying confirmation of Landry's proposed Chapter 13 plan and dismissing his petition.
We have jurisdiction to hear Landry's timely appeal pursuant to 28 U.S.C. § 158(d). We affirm.
On December 28, 1984, Landry borrowed $176,400 from Chevy Chase, in order to purchase a residential 4-plex in Mesa, Arizona. Landry made regular monthly mortgage payments until September, 1990, at which point he began defaulting on the payments. On December 27, 1990, Chevy Chase gave notice that it had scheduled a foreclosure sale of the 4-plex, for April 2, 1991. On March 25, 1991, Landry filed a Chapter 13 bankruptcy petition in the Bankruptcy Court for the Southern District of California. That filing resulted in an automatic stay of the foreclosure sale, pursuant to 11 U.S.C. § 362(a).
On June 7, 1991, Chevy Chase filed a motion for relief from the automatic stay. The motion was sent to Landry on June 13, 1991, but he alleges that he was out of state, received his mail late, and was not made aware of the motion until July 3 or 4, 1991. Landry subsequently called the calendar clerk and managed to obtain a hearing date of July 24, 1991. The request was not made within the required 14-day period. See Local Bankruptcy Rule 4001-3(a).
At the hearing, the bankruptcy Judge granted Chevy Chase relief from the automatic stay. This was based primarily on a finding that the 4-plex did not generate enough income to cover its own mortgage payments. In terminating the automatic stay, however, the Judge simply signed and filed a proposed order previously submitted by Chevy Chase, titled "Order Terminating Automatic Stay (Non-Contested Matter)." This proposed order was submitted after the 14-day period for Landry's reply had passed, on the assumption that he was not going to oppose Chevy Chase' motion. Thus, although the Bankruptcy Judge's decision to terminate the automatic stay was reached on the merits, the form of the order was that of a default judgment.
On August 8, 1991, Chevy Chase carried out the foreclosure sale of Landry's 4-plex. Chevy Chase itself was the only bidder, and took the property.*fn1 Chevy Chase has subsequently sold the property to a third party.
Meanwhile, on August 6, 1991, the bankruptcy court denied confirmation of Landry's proposed Chapter 13 plan and dismissed his bankruptcy petition. The bankruptcy Judge believed Landry would be incapable of making the necessary monthly payments, and that the plan had been submitted in bad faith (Landry had failed to make three out of four post-petition payments of $100 each).
Landry appealed both the termination of the automatic stay and the denial of his Chapter 13 plan to the district court. The court held Landry's appeal moot because of Landry's failure to obtain a stay of the foreclosure sale pending appeal. The court, on an alternate basis, also affirmed the termination of the automatic stay, primarily on the theory that Landry's response to Chevy Chase' motion was not made until after the 14-day period specified by local rule 4001-3(a) had expired. In the court's opinion, the order terminating the stay as a "noncontested matter" was therefore proper. Finally, the district court also affirmed on the merits the rejection of Landry's Chapter 13 plan and the dismissal of his petition, noting that the bankruptcy Judge had based his ruling on both lack of good faith and inability to keep to the payment schedule.
We independently review the bankruptcy court's findings of fact for clear error, and its Conclusions of law de novo. 28 U.S.C. § 157(b)(1); In Re Professional Investment Properties of America, 955 F.2d 623, 626 (9th Cir.), cert. denied, 113 S. Ct. ...