                                                          FILED
                                                           SEP 04 2013
                                                       SUSAN M SPRAUL, CLERK
 1                                                       U.S. BKCY. APP. PANEL
                                                         OF THE NINTH CIRCUIT

 2
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )     BAP No.     NV-12-1378-KiDJu
                                   )
 6   BRADLEY I. WEINSTEIN and      )     Bk. No.     09-25205-MKN
     ROCHELLE H. WEINSTEIN,        )
 7                                 )
                    Debtors.       )
 8                                 )
                                   )
 9   BRADLEY I. WEINSTEIN;         )
     ROCHELLE H. WEINSTEIN,        )
10                                 )
                    Appellants,    )
11                                 )
     v.                            )     M E M O R A N D U M1
12                                 )
     FEDERAL NATIONAL MORTGAGE     )
13   ASSOCIATION; SETERUS INC.,    )
     Servicer for FANNIE MAE;      )
14   DAVID A. ROSENBERG, Chapter 7 )
     Trustee; SHUMWAY VAN &        )
15   HANSEN,                       )
                                   )
16                  Appellees.     )
     ______________________________)
17
                    Argued and Submitted on January 25, 2013
18                            at Las Vegas, Nevada
19                         Filed - September 4, 2013
20             Appeal from the United States Bankruptcy Court
                         for the District of Nevada
21
          Honorable Mike K. Nakagawa, Bankruptcy Judge, Presiding
22
     Appearances:    George Haines, of Haines & Krieger, L.L.C., argued
23                   for appellants.
24
     Before: KIRSCHER, DUNN and JURY, Bankruptcy Judges.
25
26
          1
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may have
     (see Fed. R. App. P. 32.1), it has no precedential value. See 9th
28   Cir. BAP Rule 8013-1.
 1           Appellants, chapter 72 debtors Bradley I. Weinstein and
 2   Rochelle H. Weinstein (“Debtors”), appeal an order from the
 3   bankruptcy court directing the former chapter 13 trustee, Kathleen
 4   A. Leavitt (“Trustee Leavitt”), to disburse funds she held to
 5   appellee, Federal National Mortgage Association (“Fannie Mae”),3
 6   after the conversion of Debtors' bankruptcy case from chapter 13
 7   to chapter 7.      Debtors also appeal the bankruptcy court's order
 8   denying their motion for reconsideration.      We AFFIRM both orders.
 9                   I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
10   A.      The chapter 13 bankruptcy case and Fannie Mae's first motion
             for relief from stay
11
12           Debtors filed a chapter 13 bankruptcy case on August 18,
13   2009.       In 2004, Debtors obtained a purchase money loan from Mylor
14   Financial Group, Inc. for their residence in Las Vegas, Nevada.
15   In exchange for the loan, Debtors executed a promissory note and
16   first deed of trust in favor of the lender.      At the time of their
17   bankruptcy filing, Debtors' first mortgage was $4,369.34 in
18   arrears, as evidenced by a proof of claim filed by Mylor's
19   successor in interest, CitiMortgage, Inc. (“CitiMortgage”).
20           Debtors filed an Amended Chapter 13 Plan #2 (“Plan #2") on
21   September 5, 2010, which was confirmed on October 5, 2010.
22
23           2
            Unless specified otherwise, all chapter, code and rule
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
24   the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. The
     Federal Rules of Civil Procedure are referred to as “Civil Rules.”
25
             3
            On October 2, 2012, a Conditional Order of Waiver was
26   entered advising appellees: Fannie Mae; Seterus Inc., servicer
     for Fannie Mae; David A. Rosenberg, chapter 7 trustee; and Shumway
27   Van & Hansen that if they failed to file a responsive brief, they
     would waive their right to oral argument. Appellees waived their
28   right to oral argument.

                                         -2-
 1   Plan #2 proposed plan payments of $2,091.00 for 60 months to
 2   commence on September 14, 2009.    Plan #2 also included a "Loan
 3   Modification Plan,” which set forth details regarding adequate
 4   protection payments to be distributed by Trustee Leavitt to
 5   CitiMortgage while Debtors continued to negotiate a loan
 6   modification agreement on their first mortgage.    Section 6.02.B.4.
 7   of Plan #2 (found in the Loan Modification Plan) states:
 8           The Creditor designated in Paragraph 1 above shall have
             a lien on all Adequate Protection Payments as set forth
 9           in Paragraph 2.c above whether this case is confirmed
             or unconfirmed. In the event this case is Dismissed or
10           Converted to another Chapter, the Trustee shall
             distribute the unpaid Adequate Protection Payments to
11           Creditors as soon as practicable and before closing the
             case.
12
13   During the parties' negotiation process, Fannie Mae became
14   CitiMortgage's successor in interest of the first deed of trust on
15   Debtors' residence.
16           On August 26, 2011, Fannie Mae filed a motion for relief from
17   stay to proceed with its foreclosure rights on Debtors' residence
18   (“First Stay Relief Motion”).    By this point, Debtors'
19   postpetition arrears on their first mortgage were $38,472.82.
20   Based on Debtors' valuation of the residence of $222,000 and total
21   encumbrances of $361,212.64, and because Debtors had failed to
22   make postpetition mortgage payments, Fannie Mae argued that relief
23   from stay was warranted under § 362(d)(1) and (d)(2). In its
24   prayer for relief, Fannie Mae also asked the bankruptcy court to
25   order Trustee Leavitt to set aside and deliver all adequate
26   protection payments she had received from Debtors for the
27   residence, or any other payments Debtors had made to satisfy the
28   note.    Fannie Mae's attached proposed order granted relief from

                                       -3-
 1   stay, but did not order the turnover of the mortgage payment
 2   funds.
 3        A hearing on the First Stay Relief Motion was held on
 4   September 28, 2011, but was continued to October 26, 2011, so the
 5   parties could determine whether the arrears as stated in the
 6   motion matched the funds received by Trustee Leavitt as provided
 7   for in Debtors' confirmed Plan #2.4   Before the next hearing, it
 8   was determined that Debtors did not qualify for a HAMP loan
 9   modification based on their income and, because their loan was
10   more than eighteen months delinquent, they were also ineligible
11   for any in-house modification programs.   The parties agreed that
12   if Debtors made a lump sum payment of $13,072 so the loan would be
13   less than eighteen months delinquent, they would then be
14   considered for in-house options.
15        At the continued hearing on October 26, 2011, counsel
16   informed the bankruptcy court that Trustee Leavitt was holding
17   approximately $30,000 Debtors could use to reduce the delinquency
18   on their loan, making them eligible for review for an in-house
19   modification.   At Debtors' counsel's request, the hearing on the
20   First Stay Relief Motion was continued again to November 9, 2011,
21   so counsel could discuss the options with his clients.   Prior to
22   the November 9 hearing, Debtors' counsel emailed counsel for
23
24        4
            The following facts are set forth in the declaration of
     Cindy Lee Stock, counsel for Fannie Mae, filed in support of
25   Fannie Mae's opposition to Debtors' motion for reconsideration.
     Debtors did not submit the Stock declaration as part of the
26   record, but we were able to locate it on the bankruptcy court's
     electronic docket at Docket No. 102. See O’Rourke v. Seaboard
27   Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957-58 (9th Cir.
     1988); Atwood v. Chase Manhattan Mortg. Co. (In re Atwood),
28   293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).

                                     -4-
 1   Fannie Mae advising her that Trustee Leavitt had agreed to release
 2   the funds in her possession to Fannie Mae.    However, a
 3   disagreement over the amount of funds to be released arose, so the
 4   hearing was continued to November 30, 2011.   The November 30
 5   hearing was continued again to December 14, 2011, as the parties
 6   had not yet agreed on the amount of funds to be released.    Prior
 7   to that continued hearing, it was determined that Debtors were not
 8   eligible for any loan modification because the current interest
 9   rate on their loan was already at 3%.
10        At the continued hearing on December 14, 2011, Debtors'
11   counsel asked to continue the hearing on the First Stay Relief
12   Motion again until January 4, 2012, so he could discuss with
13   Debtors whether to bring their mortgage loan current or allow the
14   motion to be granted.   The hearing was continued again to
15   January 18, 2012, as Debtors' counsel had not yet conferred with
16   his clients.
17        At the continued hearing on January 18, 2012, Debtors'
18   counsel stated that Debtors wanted to keep their residence, and
19   that he would be putting together a written proposal that would
20   include turnover of the approximate $33,000 being held by Trustee
21   Leavitt and filing an amended chapter 13 plan to handle the
22   remaining postpetition arrears.    The hearing on the First Stay
23   Relief Motion was continued to February 1, 2012.   Just before that
24   hearing, Debtors' counsel sent an email to counsel for Fannie Mae
25   requesting a continuance to February 15 to finalize Debtors'
26   proposal.   Debtors' counsel confirmed that Trustee Leavitt was
27   holding $35,140.00 for Fannie Mae.
28        The First Stay Relief Motion was ultimately taken off

                                       -5-
 1   calendar, as the parties had reached an agreement.    On
 2   February 27, 2012, the bankruptcy court entered the parties'
 3   Agreed Order Conditioning the Automatic Stay and Granting Secured
 4   Creditor Adequate Protection (“Agreed Order”).   Under the Agreed
 5   Order:
 6   •    Debtors agreed to re-commence making regular monthly payments
          to Fannie Mae under the terms of the note until all
 7        outstanding amounts were paid in full;
 8   •    As of February 13, 2012, Trustee Leavitt had paid to Fannie
          Mae $13,804.34 in adequate protection during the course of
 9        Debtors' chapter 13 bankruptcy, $4,369.34 of which had been
          credited towards the prepetition arrearage;
10
     •    Debtors agreed that $35,140.00, the current amount held by
11        Trustee Leavitt for the benefit of Fannie Mae, would be
          turned over immediately and credited against their $48,913.28
12        postpetition arrearage;
13   •    the remaining $13,773.28 deficiency would be paid through a
          modified plan, which Fannie Mae would support upon receiving
14        at least $32,000 from Trustee Leavitt.
15   B.   Debtors' conversion to chapter 7 and Fannie Mae's second
          motion for relief from stay
16
17        On the same day the court entered the Agreed Order, Debtors
18   filed a notice to convert their case to chapter 7.5   Fannie Mae
19   filed its second motion for relief from stay ("Second Stay Relief
20   Motion") two days later on February 29, 2012, to proceed with its
21   foreclosure rights.   Fannie Mae contended that no equity existed
22   in the residence, and relief from stay was warranted under
23   § 362(d)(2).   In its prayer for relief, Fannie Mae asked the court
24   to terminate the stay and order Trustee Leavitt to set aside and
25   deliver all adequate protection payments received from Debtors, or
26   any other payments Debtors had made on the note.   Despite Debtors'
27
          5
            Debtors' notice to convert was filed at 9:17 a.m.; the
28   Agreed Order was filed at 2:30 p.m.

                                     -6-
 1   assertion in their appellants’ opening brief to the contrary,
 2   Fannie Mae's attached proposed order requested this same relief.
 3   Fannie Mae's separately filed notice warned, as required by Local
 4   Rule 9014(d)(1), that if Debtors failed to file and serve a timely
 5   written opposition, they could be denied the opportunity to speak
 6   at the hearing, and the court could rule against them.    Despite
 7   the warning, Debtors did not file an opposition.
 8        The hearing on the Second Stay Relief Motion was held on
 9   April 4, 2012.   Counsel appeared for Debtors, Fannie Mae and
10   Trustee Leavitt.   Counsel for Trustee Leavitt, who did not oppose
11   the relief, began by noting that Fannie Mae's disbursement request
12   did not specify how much money she was to disburse, so she was
13   appearing to get an exact figure.     Debtor's counsel then
14   apologized to the court for not filing a response and stated that
15   he had no excuse for not doing so.    Nonetheless, he proceeded to
16   argue whether it was appropriate for Fannie Mae to be requesting
17   monetary relief in a motion for relief from stay.    Fannie Mae's
18   counsel then explained that this was an unusual motion because,
19   just prior to the conversion, the parties had agreed that the
20   approximately $35,000 in adequate protection funds held by Trustee
21   Leavitt would be turned over to Fannie Mae.    However, now that
22   Debtors had converted to chapter 7, the Code directed that the
23   money revert back to Debtors.   Nonetheless, argued counsel,
24   Debtors had been promising the funds to Fannie Mae since August
25   2011 to obtain continuances of the motion and a loan modification,
26   and Fannie Mae wanted the funds that had been set aside for its
27   benefit.
28        Upon hearing counsels' arguments, the bankruptcy court ruled

                                     -7-
 1   that it was not considering Debtors' oral objection because they
 2   had not filed a written opposition.    The court further ruled that
 3   it was terminating the stay with respect to Fannie Mae's
 4   foreclosure rights, but the disbursement matter would be continued
 5   for thirty days.   On April 11, 2012, the bankruptcy court entered
 6   an order terminating the automatic stay but requiring that the
 7   funds held by Trustee Leavitt not be disbursed until further order
 8   of the court.
 9        The continued hearing on the disbursement matter was held on
10   May 2, 2012.    Debtors again did not file an opposition prior to
11   the hearing.    Counsel appeared for Debtors, Fannie Mae and Trustee
12   Leavitt.   Fannie Mae's counsel requested that the court order
13   Trustee Leavitt to turn over to Fannie Mae the approximate $36,000
14   she was holding in adequate protection funds, less Trustee
15   Leavitt's fees.    Debtors' counsel acknowledged that he did not
16   file an opposition, but he nonetheless objected to Fannie Mae's
17   request because he argued § 1326 required the funds to be turned
18   over to Debtors.   Although noting that Fannie Mae had not filed a
19   separate motion to compel Trustee Leavitt to turn over the funds,
20   the court inquired whether David A. Rosenberg, the chapter 7
21   trustee ("Trustee Rosenberg"), had received notice of the motion
22   and whether any party had filed an opposition.   Upon being
23   informed that Trustee Rosenberg was noticed and that no opposition
24   had been filed, the court granted the motion.
25        On May 9, 2012, the bankruptcy court entered an order
26   directing that the funds held by Trustee Leavitt in the
27   approximate sum of $36,000, less her fees, be disbursed to Fannie
28   Mae (“Disbursement Order”).

                                      -8-
 1   C.   Debtors' motion for reconsideration
 2        Debtors filed a timely motion to reconsider (“Reconsideration
 3   Motion”) on May 18, 2012, thereby tolling the appeal time of the
 4   Disbursement Order.   Debtors argued that even though the Second
 5   Stay Relief Motion was asking for the additional relief of
 6   turnover of the funds, their counsel had inadvertently not filed
 7   an opposition to Fannie Mae's Second Stay Relief Motion because
 8   Debtors had decided to surrender the residence.6   While
 9   acknowledging that the local rules authorized the bankruptcy court
10   to not consider their oral argument in the absence of a written
11   opposition, Debtors contended that their failure to file an
12   opposition was excusable under Civil Rule 60(b)(1) due to their
13   counsel's negligence.   Debtors also argued that § 1326(a)(2)
14   directs a trustee to immediately return to the debtor all funds in
15   the trustee's possession upon conversion or dismissal of a
16   chapter 13 case, and their admitted failure to file an opposition
17   should not result in the manifestly unjust result of Fannie Mae
18   receiving both the residence and $35,000 of Debtors' money.7
19        Trustee Rosenberg opposed the Reconsideration Motion,
20
21        6
            Although Debtors' counsel argued that the residence was
     being surrendered, their amended statement of intention, a copy of
22   which we obtained from the bankruptcy court’s electronic docket,
     stated that they planned to retain the residence. In re E.R.
23   Fegert, Inc., 887 F.2d at 957-58; In re Atwood, 293 B.R. at 233
     n.9.
24
          7
            On course, there is another way of looking at this
25   situation. Even if the “under water” residence ultimately is sold
     at a foreclosure sale (and at oral argument, it was reported that
26   the Debtors still were living in the residence), it is not
     necessarily unjust that the Debtors be required to pay
27   approximately $35,000 rent for the period that they occupied the
     residence when unpaid maintenance payments in excess of $48,000
28   accrued.

                                     -9-
 1   contending that even though he sympathized with Debtors'
 2   frustrations and recognized their monetary loss, he did not
 3   consider it appropriate or reasonable for Debtors' counsel to make
 4   this request for relief now, especially since he had not provided
 5   any legitimate reason for reconsideration.   Specifically, Trustee
 6   Rosenberg argued that Debtors' failure to file an opposition was
 7   not excusable, particularly since he told Debtors and their
 8   counsel at the § 341(a) meeting of creditors that Fannie Mae's
 9   motion was seeking the funds held by Trustee Leavitt, which should
10   rightfully go to Debtors under § 348, and that if Debtors failed
11   to object, they stood to lose out on a substantial sum of money.
12   However, despite his warnings, Debtors' attorney failed to file an
13   opposition even though he had opportunities to do so before each
14   hearing on the Second Stay Relief Motion.    Nonetheless, argued
15   Trustee Rosenberg, Debtors had a remedy, as they could sue their
16   attorney's insurance carrier for malpractice given his admission
17   of negligence.
18        Fannie Mae also opposed the Reconsideration Motion,
19   contending that Debtors could not support a claim under Civil
20   Rule 60(b)(1) for mistake, inadvertence, surprise or excusable
21   neglect because they were given proper notice of the Second Stay
22   Relief Motion and two hearings were held to consider it, yet they
23   admittedly chose not to file an opposition because they intended
24   to surrender the residence.   Fannie Mae further argued that the
25   funds held by Trustee Leavitt rightfully belonged to Fannie Mae as
26   a result of the parties' negotiations and, in any event, payment
27   of the funds would not cure Debtors' postpetition delinquency of
28   $48,913.28.

                                     -10-
 1        After a hearing on June 20, 2012, the bankruptcy court
 2   entered an order denying Debtors' Reconsideration Motion on
 3   July 18, 2012 (“Reconsideration Order”).   In reviewing the four
 4   factors under Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
 5   P'ship, 507 U.S. 380, 385 (1993), the court found that Debtors'
 6   failure to file a written opposition to the Second Stay Relief
 7   Motion did not constitute excusable neglect.   Specifically, the
 8   court noted that Local Rule 9014 clearly states that a written
 9   opposition must be filed at least 14 days before the hearing, or
10   the court can refuse to hear the opposing party's arguments and
11   rule against that party.   Considering that this warning was
12   conspicuously stated in Fannie Mae's notice of hearing, the court
13   found that Debtors' counsel's failure to recognize and address the
14   potential consequence of not complying with Local Rule 9014 was
15   not excusable; Debtors should have at least filed a limited
16   opposition, but they consciously chose not to file anything.
17        The court also rejected Debtors' alternative theory for
18   relief under Civil Rule 60(b)(6), reasoning that clause (6) and
19   the preceding clauses under Civil Rule 60(b) are mutually
20   exclusive, and a motion brought under clause (6) must be for some
21   reason other than the five reasons preceding it.   Therefore, since
22   Debtors had asserted excusable neglect under Civil Rule 60(b)(1)
23   as a basis for relief, they could not also claim relief under
24   Civil Rule 60(b)(6).
25        Finally, although relegated to a footnote, the court noted
26   that Debtors' reliance on § 1326(a)(2) that funds held by a
27   trustee must be turned over to the debtor upon conversion was
28   misplaced because that provision applies only when a plan has not

                                     -11-
 1   been confirmed.   In the case of a confirmed chapter 13 plan, as in
 2   the Debtors’s case, § 348(f) rather than § 1326(a)(2) applies.
 3   Section 348(f) states that if the funds held by Trustee Leavitt
 4   consisted of Debtors’ postpetition earnings or other property
 5   acquired postpetition (no such evidence had been submitted by
 6   Debtors), such proceeds were not property of the estate upon
 7   conversion and belonged to Debtors.     Further, noted the court,
 8   once Debtors' case was converted to chapter 7, § 348(e) and
 9   Rule 1019(4) terminated Trustee Leavitt's services and her
10   authority to distribute funds, and any non-estate property she
11   held generally was to be turned over to Trustee Rosenberg.
12        Debtors timely appealed the Disbursement Order and
13   Reconsideration Order on July 23, 2012.
14                              II. JURISDICTION
15        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
16   and 157(b)(2)(G).   We have jurisdiction under 28 U.S.C. § 158.
17                                 III. ISSUES
18   1.   Did the bankruptcy court abuse its discretion by relying on
19   Local Rule 9014 to disregard Debtors' oral opposition to the
20   Second Stay Relief Motion on the basis that Debtors failed to file
21   a written opposition?
22   2.   Did the bankruptcy court abuse it discretion in entering the
23   Disbursement Order based on Debtors' failure to file an opposition
24   to the Second Stay Relief Order?
25   3.   Did the bankruptcy court abuse its discretion in denying the
26   Reconsideration Motion?
27                           IV. STANDARDS OF REVIEW
28        We review issues of law, including interpretation of the

                                      -12-
 1   Bankruptcy Code and Rules of Procedure, de novo and findings of
 2   fact for clear error.    Bunyin v. United States (In re Bunyin),
 3   354 F.3d 1149, 1150 (9th Cir. 2004); Schook v. CBIC
 4   (In re Schook), 278 B.R. 815, 820 (9th Cir. BAP 2002).
 5        A court's interpretation and application of a local rule is
 6   reviewed for abuse of discretion. United States v. Heller,
 7   551 F.3d 1108, 1111 (9th Cir. 2009).    We review orders granting
 8   relief from the automatic stay for abuse of discretion.     Kronemyer
 9   v. Am. Contractors Indem. Co. (In re Kronemyer), 405 B.R. 915, 919
10   (9th Cir. BAP 2009).    The bankruptcy court's denial of a motion
11   for reconsideration is reviewed for an abuse of discretion.
12   OneCast Media, Inc. v. James (In re OneCast Media, Inc.), 439 F.3d
13   558, 561 (9th Cir. 2006).   A bankruptcy court abuses its
14   discretion if it applied the wrong legal standard or its findings
15   were illogical, implausible or without support in the record.
16   TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832 (9th
17   Cir. 2011).
18                               V. DISCUSSION
19   A.   The bankruptcy court did not abuse its discretion by relying
          on its local rules to not consider Debtors' oral opposition
20        to the Second Stay Relief Motion.
21        Debtors do not challenge the April 4, 2012 order granting
22   Fannie Mae relief from stay to proceed with its foreclosure rights
23   against the residence.   In fact, they concede that issue is moot
24   since they received a discharge on May 30, 2012.   See
25   § 362(c)(2)(C).   Debtors challenge only the Disbursement Order
26   entered one month later directing that the funds held by Trustee
27   Leavitt be turned over to Fannie Mae.
28        Motions for relief from the stay are contested matters.      See

                                      -13-
 1   Rules 4001(a) and 9014(a).    Debtors contend on appeal that a
 2   written opposition to the Second Stay Relief Motion was not
 3   necessary under Rule 9014 or Local Rule 9014(d)(3), and that the
 4   bankruptcy court failed to properly apply these rules by refusing
 5   to consider their oral opposition based on the lack of a written
 6   opposition.   Debtors did not raise this issue before the
 7   bankruptcy court.   In fact, their Reconsideration Motion
 8   acknowledged that the local rules authorized the bankruptcy court
 9   to not consider their oral argument in the absence of a written
10   opposition.
11        Generally, we will not consider arguments raised for the
12   first time on appeal.    See Smith v. Marsh, 194 F.3d 1045, 1052
13   (9th Cir. 1999).    However, even if we did consider Debtors’
14   argument here, we disagree with Debtors.    Rule 9014(a) states:
15        In a contested matter not otherwise governed by these
          rules, relief shall be requested by motion, and
16        reasonable notice and opportunity for hearing shall be
          afforded the party against whom relief is sought. No
17        response is required under this rule unless the court
          directs otherwise.
18
19   While we agree that no written response is generally required by
20   Rule 9014(a), the bankruptcy court may direct otherwise.    The
21   Bankruptcy Court for the District of Nevada has directed otherwise
22   in its local rules.8    Pursuant to Local Rules 9014(b) and (d)(1),
23   if a party opposes the relief requested in a contested motion and
24   fails to file a written response, the bankruptcy court may refuse
25   to allow the party to speak at the scheduled hearing and rule
26
27        8
            The Bankruptcy Court for the District of Nevada promulgated
     new local rules effective on January 1, 2013. The local rules in
28   effect prior to the January 1, 2013 govern this appeal.

                                      -14-
 1   against the party without formally calling the matter at the
 2   hearing.9     Therefore, while Debtors were not required to file a
 3   response to the Second Stay Relief Motion under Rule 9014(a), they
 4   were mandatorily required to file one (along with supporting
 5   affidavits) under Local Rules 9014(b) and (d)(1)10 if they wanted
 6
          9
 7             Local Rule 9014(b) states:
 8        (b) Notice of hearing and service of motion and notice.
               (1) The movant must obtain a hearing date, and the
 9             notice of hearing must be filed with the motion and
               must, in addition to the requirements of Fed. R. Bankr.
10             P. 2002(c), include the following:
                    (A) The date, time, and place of the hearing;
11                  (B) A brief description of the relief sought;
                    (C) A statement of the time for filing and serving
12                  objections or oppositions in accordance with LR
                    9014(d); and,
13                      This statement:
                    "If you object to the relief requested, you must
14                  file a WRITTEN response to this pleading with the
                    court. You must also serve your written response on
15                  the person who sent you this notice.
                    If you do not file a written response with the
16                  court, or if you do not serve your written response
                    on the person who sent you this notice, then:
17                       • The court may refuse to allow you to speak
                    at the scheduled hearing; and,
18                       • The court may rule against you without
                    formally calling the matter at the hearing."
19                  (Emphasis in original).
20   Further, Local Rule 9014(d)(1) states:
21        (d) Opposition, response, and reply.
          (1) Except as set out in subsection (3) below, any opposition
22        to a motion must be filed, and service of the opposition must
          be completed on the movant, no later than fourteen (14) days
23        preceding the hearing date for the motion. The opposition
          must set forth all relevant facts and any relevant legal
24        authority. An opposition must be supported by affidavits or
          declarations that conform to the provisions of subsection (c)
25        of this rule.
26   It is undisputed that Fannie Mae's notice of hearing for the
     Second Stay Relief Motion complied with these local rules.
27
          10
               In the local rules in effect prior to January 1, 2013, two
28                                                          (continued...)

                                       -15-
 1   their opposition considered or face the consequences of the
 2   bankruptcy court rejecting their oral opposition and ruling
 3   against them.
 4        Debtors also attempt to argue that the Second Stay Relief
 5   Motion was subject to Local Rule 9014(d)(3), not (d)(1), and
 6   therefore no written opposition was required.11   Local Rule
 7   9014(d)(3) provides exceptions to the application of Local Rule
 8   9014(d)(1).    However, Debtors have failed to explain why (d)(3)
 9   applies here and not (d)(1).    The only exception that could
10   possibly apply here under Local Rule 9014(d)(3) is (C) - motions
11   or contested matters for which the court has set a separate
12   briefing schedule either in open court or by separate order.      The
13   initial hearing on the Second Stay Relief Motion was scheduled
14   for, and took place on, April 4, 2012.    No “separate briefing
15   schedule” was ever ordered by the court in open court or by
16   separate order.    The disbursement matter was then continued to
17   May 2, 2012.    Again, no “separate briefing schedule” was ordered
18   by the court.    Even if the continuance could somehow be construed
19
20
          10
           (...continued)
21   subparagraphs were identified as (c). However, Appellant, in his
     opening brief, correctly refers to the second subparagraph (c) as
22   (d). This designation is consistent with the January 1, 2013
     local rules.
23
          11
               Local Rule 9014(d)(3) states:
24
          (3) Subsections (d)(1) and (2) do not apply to:
25        (A) Motions for summary judgment brought in any adversary
          proceeding;
26        (B) Motions for which an order shortening the time for the
          hearing date has been obtained; and,
27        (C) Motions or contested matters for which the court has set
          a separate briefing schedule either in open court or by
28        separate order.

                                      -16-
 1   as a separate briefing schedule, Local Rule 9014(d)(3) still does
 2   not eliminate the consequences of failing to file and serve a
 3   written opposition as set forth in Local Rule 9014(b)(1).
 4        Both the Ninth Circuit and this Panel have confirmed that
 5   “courts have broad discretion to interpret their local rules.
 6   Only in rare cases will an appellate court question the exercise
 7   of discretion in connection with the application of the local
 8   rules.”   Qualls by and Through Qualls v. Blue Cross, 22 F.3d 839,
 9   842 (9th Cir. 1994); Katz v. Pike (In re Pike), 243 B.R. 66, 69
10   (9th Cir. BAP 1999)(“The bankruptcy court has broad discretion to
11   apply its local rules.”).   This is not a “rare case” in which we
12   question the bankruptcy court's discretion.
13        Accordingly, we conclude that the bankruptcy court,
14   consistent with its local rules, did not abuse its discretion by
15   not considering Debtors' oral opposition to the Second Stay Relief
16   Motion based on their failure to file and serve a written
17   opposition.
18   B.   The bankruptcy court did not abuse its discretion by granting
          Fannie Mae relief on the sole basis that Debtors failed to
19        file an opposition to the Second Stay Relief Motion.
20        “Local rules have the ‘force of law’ and are binding upon the
21   parties and upon the court . . . .”    Prof’l Programs Grp. v. Dep’t
22   of Commerce, 29 F.3d 1349, 1353 (9th Cir. 1994). “[J]udges must
23   adhere to their court’s local rules . . . .”   Alliance of
24   Nonprofits for Ins., Risk Retention Group v. Kipper, 712 F.3d
25   1316, 1327 (9th Cir. 2013), citing In re Corrinet, 645 F.3d 1141,
26   1146 (9th Cir. 2011).
27        The bankruptcy court granted the Disbursement Order because
28   Debtors failed to file any written opposition to the Second Stay

                                     -17-
 1   Relief Motion after having the opportunity to do so prior to two
 2   scheduled hearings held over approximately two months.     At the
 3   first scheduled hearing on April 4, 2012, Debtors’ counsel stated,
 4   “I apologize for not filing a response.     I don’t actually have an
 5   excuse, but I’m not sure it’s entirely appropriate for a motion
 6   for relief to request monetary relief.”     Hr’g Tr. (April 4, 2012)
 7   4:13-16.   The bankruptcy court responded, “Well, the cash would be
 8   part of their collateral, I suspect . . . .”     Id. 4:20-21.    Later,
 9   the bankruptcy court stated, “Well, with respect to the debtors’
10   objection, I’m not going to consider that because they didn’t file
11   an opposition.”   Id.   5:24-6:1.    At the conclusion of the April 4
12   hearing, the bankruptcy court stated, “But I’ll enter an order
13   . . . terminating the stay as to your ability to foreclose on the
14   property and continue this for a status hearing in 30 days . . .
15   so that [the bankruptcy court] can hear the issue of or the
16   resolution of the money that was held by the Chapter 13 Trustee.”
17   Id. 7:2-6.   At the second scheduled hearing held on May 2, 2012,
18   the bankruptcy court inquired as to whether any opposition had
19   been filed concerning the amount and who should receive the money.
20   Fannie Mae’s counsel informed the bankruptcy court that no
21   opposition had been filed.   Debtors’ counsel concurred by stating,
22   “Yeah.   There was no timely opposition filed.”    Hr’g Tr. (May 2,
23   2012) 3:24-25.    Given the conversion from a chapter 13 to
24   chapter 7 case, the bankruptcy court inquired if the chapter 7
25   trustee had notice and upon confirming adequate notice, the
26   following discussion occurred:
27       THE COURT: Well, there is no opposition on file.       Was
         there one even filed at all?
28       [FANNIE MAE’S COUNSEL]: No.

                                         -18-
 1        THE COURT:    None at all.   All Right. So I’ll grant the
          motion.
 2
 3   Id. 5:22-6:1.
 4        Debtors contend that as a motion for relief from stay is a
 5   summary proceeding such a motion should not incorporate an
 6   additional request for a monetary award.      In support of their
 7   position they refer to Biggs v. Stovin (In re Luz Int’l, Ltd.),
 8   219 B.R. 837, 842 (9th Cir. 1998) (given the expedited nature of
 9   motion, merits of claims, defenses or counterclaims should not be
10   adjudicated).     Debtors’ reliance on this case however overlooks
11   the basic fact that in In re Luz Int’l, Ltd., the “trustee filed
12   an opposition to the motion.”     Id. at 841.    For this reason,
13   In re Luz Int’l, Ltd. is distinguishable.       Debtors never filed any
14   written opposition to the Second Stay Relief Motion.
15        Consistent with the bankruptcy court’s Local Rule 9014(b)(1)
16   and given Debtor’s repeated failure to file a written opposition
17   to Fannie Mae’s Second Stay Relief Motion and the broad discretion
18   the bankruptcy court has in applying its local rules, the
19   bankruptcy court, in this instance, did not abuse its discretion
20   in granting the Disbursement Order.      See Qualls by and Through
21   Qualls, 22 F.3d at 842; In re Pike, 243 B.R. at 69.
22   C.   The bankruptcy court did not abuse its discretion in denying
          the Reconsideration Motion.
23
24        Debtors in their Reconsideration Motion relied upon Civil
25   Rule 60(b)(1), incorporated in Fed. R. Bankr. P. 9024, in
26   asserting that their failure to file any written opposition to the
27   Second Stay Relief Motion arose from their counsel’s negligence
28   and constituted excusable neglect.       Debtors further asserted that

                                       -19-
 1   if Rule 60(b)(1) did not apply then Rule 60(b)(6)(any other reason
 2   justifies relief) applies.12    Alternatively, Debtors asserted that
 3   § 1326(a)(2) required disbursement of the retained payments to
 4   Debtors.13    The bankruptcy court thoughtfully reviewed and analyzed
 5   Debtors’ assertions in its Reconsideration Order.
 6        The bankruptcy court properly applied the four factors
 7   adopted in Pioneer Inv. Servs. Co. in considering excusable
 8   neglect under Civil Rule 60(b)(1).14     As to factors one and two,
 9   the bankruptcy court found that they favored the debtors because
10   “requiring a party to litigate the merits of its motion generally
11   does not create a significant risk of prejudice” and Debtors’
12   prompt Reconsideration Motion minimized delay and impact on the
13   judicial process.    Reconsideration Order, p. 5-6.   As to factors
14   three and four, the bankruptcy court found the Debtors should have
15   promptly filed a written opposition to the Second Stay Relief
16
17
          12
               Civil Rule 60, in part, provides:
18
                  (b) Grounds for Relief from a Final Judgment,
19                Order, or Proceeding. On motion and just terms,
                  the court may relieve a party . . . from a final
20                . . . order . . . for the following reasons:
                       (1) mistake . . ., or excusable neglect;
21                          * * *
                       (6) any other reason that justifies relief.
22
          13
            Section 1326(a)(2) provides, in part: “If a plan is
23   confirmed, the trustee shall distribute any such payment in
     accordance with the plan as soon as is practicable. If a plan is
24   not confirmed, the trustee shall return any such payments not
     previously paid . . . to debtor . . . .”
25
          14
            The four factors are: “the danger of prejudice to the
26   [non-moving party], the length of the delay and its potential
     impact on judicial proceedings, the reason for the delay,
27   including whether it was within the reasonable control of the
     movant, and whether the movant acted in good faith.” Pioneer Inv.
28   Servs. Co., 507 U.S. at 395.

                                       -20-
 1   Motion and failed to prove that “their failure to file a written
 2   opposition to the [Second Stay Relief Motion] constitutes
 3   excusable neglect.”   Reconsideration Order, p. 7.   Local
 4   Rule 9014(b)(1) mandates that a written response to a pleading be
 5   filed, and if that response is not filed, an adverse ruling may be
 6   entered.   Debtors’ counsel acknowledged at the hearings that he
 7   had notice of the Second Stay Relief Motion and apologized to the
 8   court for not filing a response and acknowledged that he did not
 9   have an excuse.   On these facts and given the principles discussed
10   in Pioneer Inv. Servs. Co., 507 U.S. at 395-96, the bankruptcy
11   court did not err in finding that excusable neglect did not apply.
12        In Debtors’ opening appellant brief, they no longer raise the
13   excusable neglect factor of Civil Rule 60(b)(1) or that some other
14   reason justifies relief under (b)(6), except to state the
15   bankruptcy court denied the Reconsideration Motion for Debtors’
16   failure to file a response, finding an absence of excusable
17   neglect.   As Debtors have not further raised or argued Civil
18   Rule 60(b)(1) or (b)(6), the Panel deems Debtors to have waived
19   any issues associated with Civil Rule 60.    See Jodoin v. Samayoa
20   (In re Jodoin), 209 B.R. 132, 143 (9th Cir. BAP 1997).
21        Also, Debtors no longer argue that the wrong Code section,
22   § 1326(a)(2) applies, as they did in the Reconsideration Motion.
23   Now, they argue on appeal that § 348(f) applies, an argument that
24   they did not make to the bankruptcy court.   At this point, that
25   argument makes its appearance too late in the game.   The Panel
26   will not consider an argument involving § 348(f) that was not
27   raised by Debtor before the bankruptcy court, either orally or in
28   a written opposition.   See In re E.R. Fegert, Inc., 887 F.2d at

                                     -21-
 1   957.
 2          Debtors’ failure to file a written response to the Second
 3   Stay Relief Motion after receiving conspicuous notice to file a
 4   response allowed the bankruptcy court, in its discretion, to
 5   refuse Debtors the opportunity to speak at any scheduled hearing
 6   and to have an adverse ruling entered against them.   As the local
 7   rules “have the ‘force of law’ and are binding upon the parties
 8   and upon the court, . . . ,”   Prof’l Programs Grp., 29 F.3d at
 9   1353, and as the Debtors failed to raise any viable argument in
10   support of their Reconsideration Motion, the bankruptcy court did
11   not abuse its discretion in denying Debtors’ Reconsideration
12   Motion.
13                               VI. CONCLUSION
14          Based on the foregoing reasons, we AFFIRM the Disbursement
15   Order and the Reconsideration Order.
16
17
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19
20
21
22
23
24
25
26
27
28

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