Aniel et al v. GMAC Mortgage, LLC et al

Filing 49

GRANTING 41 MOTION TO STAY. **Civil Case Terminated.** Signed by Judge Saundra Brown Armstrong on 6/12/2014. (ndr, COURT STAFF) (Filed on 6/12/2014)

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UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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OAKLAND DIVISION
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7 ERLINDA ABIBA ANIEL, an individual;

FERMIN SOLIS ANIEL, an individual;
8 MARC JASON ANIEL, an individual,

Case No: C 12-04201 SBA
ORDER GRANTING
MOTION TO STAY

Plaintiffs,

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Docket 41
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v.

11 GMAC MORTGAGE, LLC; EXECUTIVE

TRUSTEE SERVICES, LLC., DBA ETS
12 SERVICES, LLC; AND DOES 1 THROUGH

50,
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Defendants.
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Plaintiffs Erlinda Aniel, Fermin Aniel, and Marc Aniel (collectively, “Plaintiffs”)

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bring the instant action against Defendants GMAC Mortgage, LLC and Executive Trustee

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Services, LLC, dba ETS Services, LLC (collectively, “Defendants”), alleging various

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claims for relief in connection with their mortgage loan and Defendants’ attempt to

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foreclose on their real property located at 75 Tobin Clark Drive, Hillsborough, CA 94010.

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See Compl., Dkt. 1. The parties are presently before the Court on Defendants’ motion to

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stay pending completion of bankruptcy proceedings. Dkt. 41. Plaintiffs oppose the motion.

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Dkt. 44. Having read and considered the papers filed in connection with this matter and

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being fully informed, the Court hereby GRANTS Defendants’ motion, for the reasons

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stated below. The Court, in its discretion, finds this matter suitable for resolution without

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oral argument. See Fed.R.Civ.P. 78(b); N.D. Cal. Civ. L.R. 7-1(b).

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I.

BACKGROUND

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On May 14, 2012, Defendants filed petitions for Chapter 11 Bankruptcy in the

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United States Bankruptcy Court for the Southern District of New York (“Bankruptcy

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Court”), thus triggering the automatic stay set forth in 11 U.S.C. § 362(a).1 On July 13,

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2012, the Bankruptcy Court issued an order (“Final Supplemental Order”) modifying the

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terms of the automatic stay. See Final Supplemental Order, Dkt. 15.

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In particular, the Final Supplemental Order allows for limited relief from the

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automatic stay for “a borrower, mortgagor, or lienholder (each, an ‘Interested Party’) . . . to

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assert and prosecute direct claims and counter-claims relating exclusively to the property

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that is the subject of the loan owned or serviced by a Debtor for the purpose of defending,

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unwinding, or otherwise enjoining or precluding any foreclosure, whether in a Judicial

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State or a Non-Judicial State. . . .” Final Supplemental Order ¶ 14(a). The Final

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Supplemental Order provides that “absent further order of the Court, the automatic stay

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shall remain in full force and effect with respect to all pending and future Interested Party

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direct claims . . . (i) for monetary relief of any kind and of any nature against the Debtors,

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except where a monetary claim must be plead in order for an Interested Party to assert a

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claim to defend against or otherwise enjoin or preclude a foreclosure (each a ‘Mandatory

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Monetary Claim’); (ii) for relief that if granted, would not terminate or preclude the

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prosecution and completion of a foreclosure or eviction. . . .” Id. ¶ 14(b). Significantly, the

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Final Supplemental Order also provides that “any disputes regarding the extent, application,

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and/or effect of the automatic stay under this Order shall be heard and determined in the

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Debtors’ jointly administered bankruptcy cases pending in the United States Bankruptcy

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Court for the Southern District of New York, Case No. 12-12020 in accordance with the

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Case Management Order entered in the Debtors’ cases.” Id. ¶ 23.

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II.

DISCUSSION

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Defendants move for an order staying the instant action pending completion of the

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bankruptcy proceedings. See Defs.’ Mot. at 1, Dkt. 41. Defendants contend that a stay is

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warranted pursuant to the automatic stay set forth in § 362(a) and the terms of the Final

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Supplemental Order. Id.

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Section 362 prohibits, among other things, “the commencement or continuation . . .
of a judicial . . . or other action or proceeding against the debtor.” See 11 U.S.C. § 362(a).
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“When a debtor files a bankruptcy petition, an automatic stay immediately arises.”

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See Hilis Motors, Inc. v. Hawaii Auto. Dealers Ass’n, 997 F.2d 581, 585 (9th Cir. 1993);

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11 U.S.C. § 362(a). This stay is designed “to effect an immediate freeze of the status quo

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by precluding and nullifying post-petition actions, judicial or nonjudicial, in nonbankruptcy

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fora against the debtor or affecting the property of the estate.” Hilis Motors, Inc., 997 F.2d

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at 585 (italics in original). The goal of this automatic stay is to “ensure that all claims

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against the debtor will be brought in a single forum, the bankruptcy court.” Id. Aside from

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the limited exceptions set forth in § 362(b), “[t]he stay of section 362 is extremely broad in

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scope and . . . should apply to almost any type of formal or informal action against the

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debtor or property of the estate.” In re Miller, 397 F.3d 726, 730-731 (9th Cir. 2005).

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While the automatic stay is broad in scope, “section 362(d) ‘gives the bankruptcy court

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wide latitude in crafting relief from the automatic stay.” In re Nat’l Envtl. Waste Corp.,

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129 F.3d 1052, 1054 (9th Cir. 1997). Specifically, the bankruptcy court may, “grant relief

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from the stay . . . such as by terminating, annulling, modifying, or conditioning such stay.”

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11 U.S.C. § 362(d).

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Here, Plaintiffs do not dispute that the automatic stay set forth in § 362(a) applies to

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the instant action. Instead, they contend that Defendants’ motion to stay should be denied

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because they have a right under the Final Supplemental Order to “continue to prosecute

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[their] claims relating to defending, unwinding, or enjoining a foreclosure. . . .” Pls.’ Opp.

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at 3, Dkt. 44. Defendants disagree, arguing that Plaintiffs are prohibited from prosecuting

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any of their claims because “each claim, if successful, would result in either monetary

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damages or pecuniary loss to Defendants.” Defs.’ Mot. at 1. Defendants further argue that

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“if Plaintiffs wish to dispute the extent of the automatic stay under the Final Supplemental

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Order they must have their dispute heard in the Bankruptcy Court, not here.” Id.

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The Court finds that Defendants’ filing of Chapter 11 Bankruptcy petitions triggered

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the automatic stay set forth in § 362(a). As such, the remaining issue is whether the Final

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Supplemental Order, which modifies the terms of the automatic stay, allows Plaintiffs to

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prosecute any of their claims. The Court finds that this issue must be resolved by the
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Bankruptcy Court. The plain language of the Final Supplemental Order provides that the

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Bankruptcy Court “shall” resolve “any disputes regarding the extent, application, and/or

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effect of the automatic stay. . . .” Final Supplemental Order ¶ 23. Plaintiffs offer no

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authority or legal analysis demonstrating that it is proper for the Court to resolve the

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parties’ dispute regarding the scope of the automatic stay. Accordingly, because this action

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is subject to the automatic stay set forth in § 362(a), Defendants’ motion to stay is

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GRANTED. To the extent Plaintiffs wish to prosecute any of their claims while the

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bankruptcy proceedings are pending, Plaintiffs must raise this issue with the Bankruptcy

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Court.

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III.

CONCLUSION

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For the reasons stated above, IT IS HEREBY ORDERED THAT:

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1.

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Defendants’ motion to stay is GRANTED. This action is STAYED pending

completion of the bankruptcy proceedings.
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The Clerk shall ADMINISTRATIVELY CLOSE the file. In the event the

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Bankruptcy Court determines that Plaintiffs may prosecute any of their claims during the

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pendency of the bankruptcy proceedings, Plaintiffs may file a motion to reopen the case.

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3.

The parties are instructed to submit status reports to the Court every six (6)

months, apprising the Court of the status of the bankruptcy proceedings.
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Upon completion of the bankruptcy proceedings, the parties shall jointly

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submit to the Court, within two (2) weeks, a letter requesting that a case management

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conference be scheduled.

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5.

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IT IS SO ORDERED

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This Order terminates Docket 41.

Dated: 6/12/2014

_______________________________
SAUNDRA BROWN ARMSTRONG
United States District Judge

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