The National Bank of Alaska (NBA) filed a motion to lift the stay to foreclose against Dunlap's home. A preliminary hearing was held on January 12, 1996 (more than 30 days after the motion was filed).

The court is without jurisdiction to rule on the relief from stay motion because of a pending appeal to the 9th Circuit of the bankruptcy court's ruling that the confirmed plan was not res judicata with respect to NBA's secured claim. This matter should be taken up with the U.S. District Court in connection with a stay pending appeal. FRCivP 62 may offer some relief for NBA.

This is an old chapter 13 case. It was filed in 1990. A 36-month plan was confirmed in the summer of 1990. At that time, it was permissible to bifurcate a claim in chapter 13, even though secured only by a       4 ABR 255  chapter 13 debtor's residence. In re Hougland, 886 F2d 1182 (9th Cir. 1989). Such bifurcation is called a "strip-down" by bankruptcy aficionados.

Dunlap's plan, as confirmed, stripped-down the secured claim of NBA to $21,390, leaving NBA an unsecured claim of over $30,000 (Docket Entry 24). Such a plan would not be confirmable under current 9th Circuit authority, In re Barnes, 32 F3d 405 (9th Cir 1994) (modification of a secured claim can only be accomplished if the payoff is within the allowable time limits for a chapter 13 plan, not to exceed 60 months).

The order confirming the plan was appealed by NBA and eventually reversed under the authority of Nobelman v American Savings Bank (In re Nobelman), 113 SCt 2106 (1993) (holding chapter 13 debtors were not entitled to strip-down under 11 USC § 1322(b)(2)).

The case was remanded to me following the Nobelman reversal. Dunlap then contended that NBA should be bound by the confirmed plan notwithstanding Nobelman since NBA had not obtained a stay pending appeal. I ruled that res judicata did not bar modification of the order confirming the plan to reinstate the entire amount due to NBA (Docket Entry 111, filed January 23, 1995).

Pursuant to further motions by Dunlap, I reiterated that ruling by an order entered March 9, 1995 (Docket Entry 123). The principal authority for these orders was In re Spiritos, 992 F2d 1004, 1007 (9th Cir 1993) which allows the court to fashion a remedy notwithstanding the mootness doctrine where one is available. I found that the inconvenience or prejudice to Dunlap in performing a plan that was later reversed on appeal was not particularly onerous in this case.

Dunlap appealed this ruling to the U.S. District Court, and Judge Singleton affirmed in September, 1995. See, Docket Entries 155 and 157. The parties advise me that Dunlap has since appealed Judge Singleton's ruling to the 9th Circuit Court of Appeals.

On November 29, 1995, NBA filed a motion for relief from stay to allow it to foreclose (Docket Entry 162). NBA alleged that Dunlap's obligation at that time was approximately:

Principal	$47,100
Interest	$2,725
Attorney fees and costs	$21,600
TOTAL	$71,425

Dunlap has not paid on the deed of trust since about May, 1995. Dunlap claims that the attorney fees are not recoverable in a bankruptcy situation, citing In re Fobian, 951 F2d 1149, 1153 (9th Cir 1991). A large portion of the fees were incurred fighting the strip-down, which is a bankruptcy issue. Certainly some attorney fees are allowable, however, and even if none were allowable, the debt to NBA, according to the terms of the note, would exceed $50,000. The house is now valued by NBA at $38,500. Under this scenario, NBA argues that the stay should be lifted under 11 USC § 362(d)(2).

Dunlap opposed the relief from stay. He rehashes the arguments which did not prevail on appeal to the U.S. District Court and challenges NBA's accounting. Numerous exhibits are attached. See, Docket Entries 164 and 167.

Another complication was added to this case by an error by the court. A form notice of the motion was served on Dunlap by NBA. It indicated that Dunlap had to respond and arrange for a preliminary hearing by December 28, 1995, or the stay would automatically lift. See, Docket Entry 163, which follows AK LBF 2 (pre 1/1/96 version).

In an attempt to assist the pro se debtor with procedural matters, the court sent a letter to Dunlap indicating that, although he had filed an objection to the relief from stay shortly after it was filed, he had not sought a hearing. He was mistakenly advised by the court that unless he arranged for the hearing to be held by January 14, 1996, the stay would automatically terminate. The correct date should have been December 28, 1995.

Although the letter also said he had to have the hearing within 30 days of the motion, Dunlap appears to have relied on the court's erroneous calculation. Mr. Dunlap has, to my knowledge, generally been timely in his responses.

Neither party discussed the implications of the pending 9th Circuit appeal, the jurisdiction of the bankruptcy court to enter an order, or matter of a stay pending appeal of the U.S. District Court's order affirming the Bankruptcy Court's order implementing the reversal under Nobelman.

     3.  ANALYSIS -

     3.1.   The Bankruptcy Court Lost Jurisdiction To Rule On NBA's Relief From Stay When Debtor Appealed -

When a matter that a trial court has ruled on is appealed, the trial court loses its jurisdiction unless retention is defined by some rule or statute. Griggs v. Provident Consumer Discount Co., 459 US 56, 59, 103 SCt 400, 402, 74 LEd2d 225 (1982); In re Bialac, 694 F2d 625, 627 (9th Cir 1982); In re Weston, 110 BR 452, 458 (ED Cal 1989).

In this matter, Dunlap is appealing the reamortization of the secured claim of NBA to allow the whole claim to be treated as secured, instead of bifurcated into a partially secured and partially unsecured claim (i.e., strip-down). Dunlap is appealing the bankruptcy court's ruling that NBA is not bound by res judicata or the mootness doctrine. NBA has moved for relief from stay under the reconstituted, fully secured claim. This involves the core to the issues being appealed by Dunlap, and the bankruptcy court has lost jurisdiction to rule on the relief from stay in my opinion.

An automatic stay appears to be in effect since the case has not been closed, debtor has not been discharged and the residence is still property of the bankruptcy estate. See, 11 USC §§ 362(c)(1), (c)(2) defining when the automatic stay terminates upon the happening of certain events. § 362(c)(1) indicates it terminates against acts against property when the property is no longer property of the estate, § 362(c) (2) when the case is closed, dismissed, or a discharge has been granted or denied. Compare, Security Bank of Marshalltown, Iowa v Neiman, 1 F3d 687, 689 (8th Cir 1993) (holding there is an estate after confirmation of a chapter 13 plan) with In re Petrucelli, 113 BR 5, 16 (Bankr SD Cal 1990) (holding there is no estate after confirmation where the property revests in the debtor). In In re Peters, 184 BR 799 (9th Cir BAP 1995), the Bankruptcy Appellate Panel assumed without discussion that the estate still exists after confirmation.

This presents a conundrum. A motion for relief from stay must be addressed expeditiously, or it expires automatically with respect to actions involving property of the estate. 11 USC § 362(e). If the bankruptcy court cannot act because it lacks jurisdiction, what prevents the stay from lifting automatically? I don't know.

     3.2.   The Late Hearing Should Be Excused As Grounds For Lifting the Automatic Stay -

The automatic stay expires as a bar to proceeding against debtor's property unless a motion is timely objected to and a hearing promptly held. 11 USC § 362(e) has some tight time limits imposed by Congress to protect creditors. The court cannot arbitrarily extend these. In re Marine Power & Equipment Co., 71 BR 925 (WD WA 1987).

One is that a preliminary hearing be held within 30 days. But, where the court is instrumental in giving a party an incorrect time limit, the court can correct its own error. In re Anwiler, 958 F2d 925 (9th Cir 1992).

If this were a matter where I had jurisdiction, I would apply Anwiler to this case and determine the preliminary hearing on January 12, 1996, was timely.

     3.3.   The Proper Resolution Appears To Be Seeking Relief From The U.S. District Court Under FRCivP 62(c); The Bankruptcy Court Does Not Have Authority To Address Stay Issues Under FRBP 8005 -

The parties did not raise, and therefore did not brief, any issues regarding stay pending appeal. I believe this is an issue that should be addressed.

FRBP 8005 provides that "[a] motion for a stay of the judgment, order, or decree of a bankruptcy judge, for approval of a supersedeas bond, or for other relief pending appeal must ordinarily be presented to the bankruptcy judge in the first instance." (emphasis added). I could find no authority that the application for a stay pending appeal from the district court or the Bankruptcy Appellate Panel to the 9th Circuit should be ruled upon in the first instance by the bankruptcy court.

The U.S. District Court might have authority under FRCivP 62(c)to fashion an appropriate stay order conditioned upon Dunlap making continued monthly mortgage payments and catching up on arrears, subject to disgorgement if the 9th Circuit rules in his favor. FRCivP 62(c) provides:

(c) Injunction Pending Appeal. When an appeal is taken from an interlocutory or final judgment granting, dissolving, or denying an injunction, the court in its discretion may suspend, modify, restore, or grant an injunction during the pendency of the appeal upon such terms as to bond or otherwise as it considers proper for the security of the rights of the adverse party.

It appears inequitable to NBA to go into the hole pending appeal by virtue of the fact that the bankruptcy court, and presumably the district court, do not have jurisdiction to lift the automatic stay.

     4.  CONCLUSION -

Although NBA should have some relief, such as continuing mortgage payments or a bond pending appeal, the bankruptcy court is without authority to grant such relief. I will enter an order indicating the court does not have jurisdiction to address the relief from stay motion.

DATED: January 19, 1996

HERBERT A. ROSS
U.S. Bankruptcy Judge