Case 1-08-40476-ess Doc 34 Filed 05/13/08 Entered 05/14/08 14:44:22 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------------x In re: Chapter 7 IVONNE WINER, Case No. 08-40476-ess Debtor. ------------------------------------------------------------x MEMORANDUM DECISION ON MOTION FOR RELIEF FROM STAY Appearances: Manuel Portela, Jr., Esq. Ivonne Winer 350 Broadway (10th Floor) Debtor, pro se New York, New York 10013 Attorney for Movant Lina Portela Case 1-08-40476-ess Doc 34 Filed 05/13/08 Entered 05/14/08 14:44:22 HONORABLE ELIZABETH S. STONG UNITED STATES BANKRUPTCY JUDGE Before the Court is the motion of Lina Portela a/k/a Leopoldina Portela (the “Landlord”) for relief from the automatic stay pursuant to Section 362 of Title 11 of the United States Code (the “Bankruptcy Code”) in the above-captioned bankruptcy case. JURISDICTION This Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 1334(b), 157(b)(1), and 157(b)(2)(G). BACKGROUND On January 29, 2008, Ivonne Winer, the above-captioned debtor (the “Debtor”), filed a petition for relief under Chapter 7 of the Bankruptcy Code. Docket No. 1. On February 14, 2008, the Landlord, filed a motion seeking an order confirming the absence of the automatic stay pursuant to Section 362(b)(22) of the Bankruptcy Code, or in the alternative, granting the Landlord relief from the automatic stay pursuant to Section 362(d) of the Bankruptcy Code with respect to the property at 141-35 82nd Drive, 1st floor, Briarwood, NY 11435 (the “Premises”) (the “Landlord’s Stay Relief Motion”). Docket No. 11. The Landlord also filed an Affidavit in Support of Motion to Confirm Absence of Automatic Stay (the “Affidavit in Support”), sworn to on February 12, 2008. Docket No. 28. On March 4, 2008, a hearing was held on the Landlord’s Stay Relief Motion at which the Landlord’s attorney appeared and was heard and the Debtor did not appear. Docket Entry dated March 4, 2008. At that hearing, the Court granted the Landlord’s Stay Relief Motion and directed the Landlord’s attorney to submit a proposed order. Id. Before that proposed order was entered, the Debtor filed a motion to reconsider the Landlord’s Stay Relief Motion on grounds that she did not receive notice of the Landlord’s Stay Case 1-08-40476-ess Doc 34 Filed 05/13/08 Entered 05/14/08 14:44:22 Relief Motion (the “Debtor’s Request for Reconsideration”). Docket No. 14. On March 14, 2008, the Court issued an order scheduling a hearing on the Debtor’s Request for Reconsideration for March 26, 2008. Docket No. 17. On March 20, 2008, Manuel Portela, Jr., the Landlord’s attorney, filed an Affirmation in Opposition to the Debtor’s Motion to Reconsider (the “Affirmation in Opposition”) stating that, among other things, the Landlord’s interest in the Premises is not adequately protected and that granting the Debtor’s Request for Reconsideration and further delaying eviction proceedings would unduly prejudice the Landlord. Docket No. 23. The Affirmation in Opposition also states that the Debtor defaulted in her rent payments in the second month of possession and only made rent payments thereafter when they were “required and part of a Court Order or Stipulation entered into during a proceeding brought by the Landlord.” Affirmation in Opposition ¶¶ 11-12. In addition, the Affirmation in Opposition states that “[s]ince Debtor filed the instant bankruptcy petition, [the] Landlord has not received any payments for arrears or rent that has become due from Debtor or the purported Co-Lessee.” Affirmation in Opposition ¶ 19. On March 26, 2008, a hearing was held on the Debtor’s Request for Reconsideration at which the Landlord’s attorney and Mateo Winer, the co-lessee, appeared and were heard, and the Debtor did not appear. Docket Entry dated March 26, 2008. On that same day, the Court issued an Order granting the Landlord interim adequate protection, adjourning the Landlord’s Stay Relief Motion to April 17, 2008, and continuing the automatic stay pending the April 17, 2008, hearing (the “Adequate Protection Order”). Docket No. 24. As the record reflects, the Adequate Protection Order directed, among other things, that as adequate protection pending the resolution of this matter, the Debtor and Mateo Winer shall, 2 Case 1-08-40476-ess Doc 34 Filed 05/13/08 Entered 05/14/08 14:44:22 jointly and severally, tender $1,100, in certified funds or postal money order, representing use and occupancy due for February 2008, to be received by the Landlord by 5:00 p.m. on April 4, 2008, and the Debtor and Mateo Winer shall, jointly and severally, tender $1,100, in certified funds or postal money order, representing use and occupancy due for March 2008, to be received by the Landlord by 5:00 p.m. on April 11, 2008. Id. On April 6, 2008, the Landlord filed a notice of default indicating that the Debtor had not complied with the terms of the Adequate Protection Order in that she had not tendered the payment representing use and occupancy due for February 2008 (the “Notice of February Default”). Docket No. 25. One week later, on April 13, 2008, the Landlord filed a notice of default indicating that the Debtor had not complied with the terms of the Adequate Protection Order in that she had not cured the prior default for use and occupancy due for February 2008 and that she had not tendered the payment representing use and occupancy due for March 2008 to be received by the Landlord by 5:00 p.m. on April 11, 2008 (the “Notice of March Default”). Docket No. 26. On April 17, 2008, the Debtor faxed to the Court an order dated March 12, 2008, from the Supreme Court of the State of New York, Appellate Term, 2nd and 11th Judicial Districts, in the case of Leopoldina Portela v. Mateo Weiner and “John Doe” and “Jane Doe” (N.Y. Sup. Ct. App. Term No. 2006-1623 Q C March 12, 2008) (the “Appellate Term Order”). Docket No. 33. The Appellate Term Order vacated and reversed without costs an order of the Civil Court of the City of New York, Queens County, entered October 12, 2006, and granted the tenant’s motion to vacate the default final judgment entered against him. Appellate Term Order at 1. Also on April 17, 2008, a hearing was held on the Landlord’s Stay Relief Motion, at 3 Case 1-08-40476-ess Doc 34 Filed 05/13/08 Entered 05/14/08 14:44:22 which the Debtor appeared telephonically and was heard and the Landlord’s attorney appeared and was heard. Docket Entry dated April 17, 2008. DISCUSSION The filing of a bankruptcy petition under any chapter of the Bankruptcy Code triggers a stay of “any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate” and “any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title.” 11 U.S.C. §§ 362(a)(3), (a)(6). The automatic stay is a fundamental debtor protection designed to promote equal treatment among creditors and to provide the debtor with a breathing spell from the financial pressures which drove the debtor into bankruptcy. Eastern Refractories Co. v. Forty Eight Insulations Inc., 157 F.3d 169, 172 (2d Cir. 1998). Notwithstanding this statutory protection, the court may modify the automatic stay for cause, including lack of adequate protection. 11 U.S.C. § 362(d)(1). In order to lift the stay on this basis, the burden is on the movant to make an initial showing of cause. Where such a prima facie case has not been made, the court should deny relief. Sonnax Industries, Inc. v. Tri Component Products Corp. (In re Sonnax Industries, Inc.), 907 F.2d 1280, 1285 (2d Cir. 1990). Grounds for Relief from the Automatic Stay – Section 362(b)(22) The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) established certain new limitations on the scope and extent of the protections afforded by the automatic stay. As amended, Section 362(b) of the Bankruptcy Code states: The filing of a petition under section 301, 302, or 303 of this title . does not operate as a stay . 4 Case 1-08-40476-ess Doc 34 Filed 05/13/08 Entered 05/14/08 14:44:22 (22) subject to subsection (l), under subsection (a)(3), of the continuation of any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential property in which the debtor resides as a tenant under a lease or rental agreement and with respect to which the lessor has obtained before the date of the filing of the bankruptcy petition, a judgment for possession of such property against the debtor . 11 U.S.C. § 362(b)(22). Section 362(l) was also added to the Bankruptcy Code by BAPCPA, and states: Except as otherwise provided in this subsection, subsection (b)(22) shall apply on the date that is 30 days after the date on which the bankruptcy petition is filed, if the debtor files with the petition and serves upon the lessor a certification under penalty of perjury that– (A) under nonbankruptcy law applicable in the jurisdiction, there are circumstances under which the debtor would be permitted to cure the entire monetary default that gave rise to the judgment for possession, after that judgment for possession was entered; and (B) the debtor (or an adult dependent of the debtor) has deposited with the clerk of the court, any rent that would become due during the 30-day period after the filing of the bankruptcy petition.