In Re: Gregory Papadopoulos

Filing 6

OPINION AND ORDER: For the reasons stated above, the appeal is DENIED and the judgment of the Bankruptcy Court is AFFIRMED. The Clerk of the Court is respectfully directed to terminate the appeal, Doc. 2, to mail a copy of this Opinion and Order to A ppellant, and to close this case. Furthermore, the Court certifies, pursuant to 28 U.S.C. § 1915(a)(3), that any appeal from this Opinion and Order would not be taken in good faith; therefore, in forma pauperis status is denied for purposes of an appeal. See Coppedge v. United States, 369 U.S. 438, 444-45 (1962). It is SO ORDERED. (Signed by Judge Edgardo Ramos on 3/04/2015) The Clerks Office Has Mailed Copies. (ama)

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK —————————————————————x In re: : : GREGORY PAPADOPOULOS, : : Debtor. : : : GREGORY PAPADOPOULOS, : : Appellant, : : v. : : IAN J. GAZES, : : Appellee. : —————————————————————x OPINION AND ORDER 14 Civ. 4750 (ER) Ramos, D.J.: This is an appeal from an April 15, 2014 Order of the Bankruptcy Court (Grossman, J.), which vacated the automatic stay imposed under 11 U.S.C. § 362(a) as to a debtor’s interest in a rented apartment in order to allow his landlord to “enforce[] . . . its rights in, and remedies in and to,” that property. Bankr. Doc. 119 at 1 (Order). 1 For the following reasons, the appeal is DENIED and the Order of the Bankruptcy Court is AFFIRMED. I. Background On July 18, 2012, Gregory Papadopoulos (“Papadopoulos”) filed for voluntary relief under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. § 701 et seq., in the United States Bankruptcy Court for the Southern District of New York. See In re Papadopoulos, No. 12–13125 (JLG) (Bankr. S.D.N.Y. 2012); Bankr. Doc. 1. Papadopoulos is “a prolific filer in the 1 References to “Bankr. Doc.” refer to documents filed in the underlying bankruptcy proceeding, In re Papadopoulos, No. 12–13125 (JLG) (Bankr. S.D.N.Y. 2012). References to “Doc.” refer to documents filed in the instant appeal. courthouses of this Circuit,” and is subject to a “filing ban” in the Southern District. Papadopoulos v. Gazes, No. 14 Civ. 3713 (KPF), 2014 WL 3928940, at *1 (S.D.N.Y. Aug. 12, 2014). 2 Although Papadopoulos’ submissions in this action contain numerous outlandish assertions, which he frames as pertinent to the merits of his appeal, see Docs. 2, 5, the essential facts are quite straightforward. 3 Several months before Papadopoulos filed his Chapter 7 petition, on January 18, 2012, he entered into a non-rent stabilized residential lease with I.S.T.A. Management Co. (“I.S.T.A.”) to rent an apartment at 210 East 68th Street in Manhattan (the “Property”). See Bankr. Doc. 101-1 at 1; Bankr. Doc. 119 at 1. When Papadopoulos filed for bankruptcy in July of that same year, he was current on his rental payments. Tr. 2:14-17. 4 At some point after August 1, 2012, however, Papadopoulos ceased regularly paying his rent, and I.S.T.A, which had not yet been made aware of the ongoing bankruptcy action, commenced non-payment and holdover proceedings against him in New York State Civil Court (“Civil Court”). Id. 2:21-3:1; Bankr. Doc. 101 at 7. On February 21, 2014, after learning of the ongoing bankruptcy proceedings, I.S.T.A. moved in Bankruptcy Court for an order, pursuant to 11 U.S.C. § 362(d), directing Papadopoulos to pay his outstanding post-petition rent or, alternatively, lifting the automatic stay so that I.S.T.A. could seek relief in Civil Court. Id. at 1. The Chapter 7 Trustee, Ian J. Gazes, filed a Statement of No Objection to I.S.T.A.’s motion on March 10, 2014. Bankr. Doc. 109. 2 The filing ban does not, however, bar Papadopoulos from bringing this appeal. 3 The following facts are drawn from the motion to vacate, Bankr. Doc. 101, and Order, Bankr. Doc. 119, from which Papadopoulos appeals, as well as the transcript of the March 18, 2014 hearing upon which the Bankruptcy Court based its Order. See Bankr. Doc. 119 (explaining that the Bankruptcy Court had held a hearing, during which the Court overruled, on the record, Papadopoulos’ objection to a lift of the automatic stay). 4 All citations to “Tr.” refer to the transcript of the March 18, 2014 hearing regarding I.S.T.A.’s motion to lift the automatic stay, attached as Exhibit A to this Opinion and Order. 2 Papadopoulos objected, claiming, inter alia, that I.S.T.A.’s calculations were inaccurate, that I.S.T.A. was “defrauding” the Court, and that I.S.T.A. had insufficiently supported its request for relief. See Bankr. Doc. 112 at 3-5. A hearing was held on March 18, 2014, at which Papadopoulos first argued that he did not owe I.S.T.A. any money because a substantial security deposit had been applied to his rent, Tr. 7:1-3, but then acknowledged that he was “probably a month” behind. Id. 10:1-10. I.S.T.A. claimed that Papadopoulos was actually three or four months behind and provided a rent schedule documenting his outstanding payments. See id. 10:3; Bankr. Doc. 101-2. Additionally, I.S.T.A. explained that it is their practice to “hold” each security deposit until the end of a lease and only then apply it to rent or damages. Tr. 7:17-23. 5 During the hearing, Judge Robert E. Grossman informed Papadopoulos that he had a legal obligation to pay all rent incurred since the time of his bankruptcy filing, regardless of what had transpired before that point. Id. 5:18-20. Concluding, based on I.S.T.A.’s statements and documentation, that Papadopoulos had seemingly failed to pay more than $12,000 in postpetition rent, Judge Grossman found that he had “no alternative but to let [I.S.T.A.] go to Landlord and Tenant Court,” id. 5:18-22, and had to grant I.S.T.A.’s motion “as a matter of law” unless Papadopoulos was “prepared to cut them a check [that day] for all that [he] owe[d] them.” Id. 6:21-24. To the extent that Papadopoulos sought to challenge I.S.T.A.’s demand for payment, Judge Grossman declared that the proper forum for any such defenses and counterclaims would be New York State Civil Court. Id. 11:7-21. 5 Moreover, the rent schedule provided by I.S.T.A. reflected that the amount of Papadopoulos’ security deposit was significantly less than the amount he owed I.S.T.A. in post-petition rent as of the March 18, 2014 hearing, rendering the deposit insufficient to protect I.S.T.A.’s interests. Bankr. Doc. 101-2; see In re Mad Lo Lo LLC, No. 09-11911 (MG), 2009 WL 2902567, at *4 (Bankr. S.D.N.Y. May 28, 2009) (suggesting that where a security deposit, held by a landlord, is smaller than the amount of rent due, the landlord is not “adequately protected” from the debtor’s nonpayment of his rental obligations). 3 On April 15, 2014, Judge Grossman issued a one-page order granting I.S.T.A.’s motion to lift the automatic stay. Bankr. Doc. 119. Papadopoulos filed his motion for leave to appeal on April 24, 2014. Bankr. Doc. 120. That motion is unopposed. 6 II. Discussion Section 362(d)(1) of the Bankruptcy Code directs courts to grant relief from the automatic stay “for cause, including the lack of adequate protection of an interest in property of such party in interest . . . .” 11 U.S.C. § 362(d)(1). “The term ‘cause’ is not defined in the Bankruptcy Code, and whether cause exists should be determined on a case by case basis.” Manhattan King David Rest. Inc. v. Levine, 163 B.R. 36, 40 (S.D.N.Y. 1993) (citing In re Sonnax Industries, 907 F.2d 1280, 1286 (2d Cir.1990)). However, courts have concluded that a debtor’s “failure to pay post-petition rent may . . . serve as grounds for lifting the automatic stay.” In re Mad Lo Lo LLC, No. 09-11911 (MG), 2009 WL 2902567, at *4 (Bankr. S.D.N.Y. May 28, 2009) (citing In re Taylor, No. 97 Civ. 5967 (HB), 1997 WL 642559, at *1 (S.D.N.Y. Oct. 16, 1997)). The Second Circuit Court of Appeals has outlined a set of twelve factors that may be relevant in a court’s determination of whether there is “cause” to grant relief from an automatic stay in order to permit a party to commence or continue litigation in another forum. (1) whether relief would result in a partial or complete resolution of the issues; (2) lack of any connection with or interference with the bankruptcy case; (3) whether the other proceeding involves the debtor as a fiduciary; (4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action; (5) whether the debtor’s insurer has assumed full responsibility for defending it; (6) whether the action primarily involves third parties; 6 On June 18, 2014 the Court set a briefing schedule for Papadopoulos’ motion, directing that it be filed by July 11, 2014, that opposition papers be filed by July 25, 2014, and that reply papers be filed by August 8, 2014. Doc. 1. Papadopoulos filed his brief on July 11, 2014, Doc. 5, but no opposition papers or reply papers have been filed in this appeal. Nevertheless, because Papadopoulos’ motion is moot—a reality that, perhaps, contributed to I.S.T.A.’s decision not to oppose the instant motion—the Court may dispose of it without consideration of any opposing arguments. 4 (7) whether litigation in another forum would prejudice the interests of other creditors; (8) whether the judgment claim arising from the other action is subject to equitable subordination; (9) whether movant’s success in the other proceeding would result in a judicial lien avoidable by the debtor; (10) the interests of judicial economy and the expeditious and economical resolution of litigation; (11) whether the parties are ready for trial in the other proceeding; and (12) impact of the stay on the parties and the balance of harms. Sonnax, 907 F.2d at 1286. However, “[o]nly those factors relevant to a particular case need be considered, and the Court need not assign them equal weight.” In re Touloumis, 170 B.R. 825, 828 (Bankr. S.D.N.Y. 1994) (citations omitted). Typically, a district court will review a bankruptcy court’s discretionary decision to lift an automatic stay using an “abuse of discretion” standard.” In re Bogdanovich, No. 00 Civ. 2266 (JGK), 2000 WL 1708163, at *4 (S.D.N.Y. Nov. 14, 2000) (citing In re Boodrow, 126 F.3d 43, 47 (2d Cir. 1997); Sonnax, 907 F.2d at 1286). “A bankruptcy court abuses its discretion when it bases its decision on an erroneous view of the law or clearly erroneous factual findings.” In re Watkins, No. 06 Civ. 1341 (DGT), 2008 WL 708413, at *2 (E.D.N.Y. Mar. 14, 2008). In this case, it is unnecessary for the Court to consider whether the Bankruptcy Court abused its discretion or properly lifted the automatic stay in order to permit I.S.T.A. to proceed with its action in Civil Court, because Papadopoulos’ appeal is moot. “It is well-established that an appeal is rendered moot if the appellate court is unable to grant any effective relief.” Id. at *2 (quoting In re Baker, 339 B.R. 298, 302 (E.D.N.Y. 2005)). Courts have dismissed as moot bankruptcy appeals where the debtor’s primary reason for contesting the lifting of an automatic stay is to delay or stop state-court eviction proceedings once the stay has been lifted and the debtor has been evicted. Id. (citing In re Gucci, 105 F.3d 837, 839-40 (2d Cir.1997); In re Baker, 339 B.R. at 302-304)). 5 Here, Papadopoulos himself acknowledges the mootness of his appeal with regard to his effort to avoid eviction, as he has already been evicted. See Doc. 5 at 1 (“[T]his matter is now moot as debtor was thrown out in the street during pendancy [sic] and had to rent a room in Queens.”). Yet Papadopoulos argues that this Court should still reverse the judgment of the Bankruptcy Court in order to prevent I.S.T.A. from pursuing collection of approximately $9,000 in past due post-petition rent, claiming that such collection would “prejudice the rights of existing priority creditors,” including his ex-wife, to whom $1,200,000 in maintenance and child support is due. Id. at 1, 3. He therefore asks this Court to remand this matter to the Bankruptcy Court “with instructions to reinstate the stay with regard to collections and list I.S.T.A. Management as a general creditor whose claims are subject to the final discharge or a dismissal.” Id. at 3. However, even if Papadopoulos’ appeal were not moot, his portrayal of the relationship between the bankruptcy proceedings and I.S.T.A.’s state court action against him—the status of which is unknown to this Court beyond the fact of Papadopoulos’ eviction—is incorrect. That action involves “a private dispute between the debtor and landlord,” which “will not interfere with the administration and ultimate closing of the bankruptcy case, or prejudice the debtor’s creditors.” In re Henderson, 245 B.R. 449, 455 (Bankr. S.D.N.Y. 2000); see also Touloumis, 170 B.R. at 828 (observing that a Chapter 7 debtor’s lease “lack[ed] any connection with [his] bankruptcy case” and that even pre-petition eviction proceedings in state court would “have no prejudice on . . . the interests of either the creditors or the trustee”) (citing Sonnax, 907 F.2d at 1286). Therefore, assuming arguendo, that Papadopoulos’ appeal is not moot with regard to I.S.T.A.’s ability to collect past-due rent from Papadopoulos in the state court action, this Court cannot conclude that the Bankruptcy Court abused its discretion by lifting the automatic stay. 6

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