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Barner v. Saxon Mortgage Services, Inc. (In Re Barner)
Citations: 597 F.3d 651; 2010 WL 517587Docket: 09-60394
Court: Court of Appeals for the Fifth Circuit; March 2, 2010; Federal Appellate Court
Original Court Document: View Document
Saxon Mortgage Services, Inc. conducted a foreclosure sale of Nancy Barner’s residence a day after her bankruptcy filing. Saxon then sought a determination that the automatic stay was not in effect during the sale, referencing a prior order from Barner's earlier bankruptcy case. The bankruptcy court agreed, citing a precedent that allows for the continuation of foreclosure proceedings when a prior order had lifted the automatic stay in a related case. Barner appealed this decision, contending that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) precludes the enforcement of the previous order. The court ruled that BAPCPA did not negate pre-existing orders and affirmed the lower court decisions. Barner raised three issues on appeal: the applicability of BAPCPA to bar enforcement of the earlier order, whether BAPCPA overruled established case law, and the requirement for Saxon to initiate an adversary proceeding regarding the automatic stay. The court focused on the provisions of BAPCPA, specifically addressing 11 U.S.C. § 362(d)(4), which pertains to the lifting of the automatic stay in cases of fraudulent intent involving multiple filings. The court did not explore the implications of Jefferson v. Mississippi Gulf Coast YMCA, Inc. as neither party contested its applicability under prior law. Orders granted under 11 U.S.C. § 362(d)(4) are binding for any subsequent cases involving the same real property if filed within two years of the order's entry. Subsection (b)(20) permits enforcement of these orders for the same two-year period. However, an order lifting the automatic stay that was issued before the BAPCPA's effective date does not need to comply with § 362(d)(4) since this provision did not exist at that time and is not retroactively applicable. Consequently, orders from earlier cases, such as Barner's first bankruptcy, remain unaffected by § 362(d)(4) or subsection (b)(20). Barner argues that BAPCPA implicitly overturned the precedent set in Jefferson, which allowed the application of pre-BAPCPA stay relief orders in subsequent bankruptcy cases. However, BAPCPA did not retroactively affect orders issued before its effective date, and the validity of such prior orders remains unchanged. Furthermore, Barner contends that Rule 7001 of the Federal Rules of Bankruptcy Procedure necessitated Saxon to file an adversary proceeding instead of a motion. However, Rule 4001(1) allows for a motion to seek relief from an automatic stay. Saxon’s motion, which aimed to clarify that the automatic stay was not in effect when Barner's bankruptcy was filed, did not require an adversary proceeding and ultimately did not infringe upon Barner's rights. The district court affirmed its decision based on these points.