
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                              _________________________          No. 96-2110                             IN RE:  NAPOLEON G. SOARES,                                       Debtor.                              _________________________                                 NAPOLEON G. SOARES,                                      Appellant,                                          v.                                BROCKTON CREDIT UNION,                                      Appellee.                              _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. Joseph L. Tauro, U.S. District Judge]                                            ___________________                              _________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Boudin, Circuit Judge.                                          _____________                              _________________________               Michael P. Cashman for appellant.               __________________               Gary W. Cruickshank for appellee.               ___________________                              _________________________                                    March 10, 1997                              _________________________                    SELYA,  Circuit  Judge.    "[T]he dead  tree  gives  no                    SELYA,  Circuit  Judge.                            ______________          shelter."   T.S. Eliot, The Waste Land, I, The Burial of the Dead                                  ______________     ______________________          (1922).  Like a shade tree, the automatic  stay which attends the          initiation of bankruptcy proceedings,  11 U.S.C.   362(a) (1994),          must be nurtured if it  is to retain its vitality.   This appeal,          which pits a Chapter 13 debtor  bent on saving his home against a          creditor bent on  enforcing its rights  under a mortgage,  raises          issues  which touch upon  the degree of  judicial protection that          the  automatic  stay  invites.   These  issues  are  whether  the          automatic  stay  precludes   a  state   court  from   undertaking          ministerial acts after a bankruptcy filing; if not, what acts are          exempt under  that rubric; whether  a bankruptcy court  may grant          retroactive relief from the automatic stay; and if so, what legal          standard it should apply in prescribing such an anodyne.          I.  LAYING THE FOUNDATION          I.  LAYING THE FOUNDATION                    We   begin  by  retracing  the  labyrinthine  corridors          through  which this litigation has  passed.  In  1990 the debtor,          Napoleon G. Soares, purchased  a home in Brockton, Massachusetts.          He executed  a $70,000  promissory  note to  the Brockton  Credit          Union (BCU)  and secured the note by a first mortgage on the real          estate.   After  sustaining  injuries in  a motorcycle  accident,          Soares  lagged in  his monthly  payments.   BCU grew  restive and          commenced foreclosure  proceedings in  the state  superior court.          Soares did  not file an  answer.  On  March 22, 1995,  BCU sent a          letter to  the clerk of court  seeking an order of  default and a          judgment  authorizing foreclosure.  Two days later Soares filed a                                          2          bankruptcy  petition, thus  triggering  the automatic  stay.   He          immediately gave  notice to  BCU, but  neither party  alerted the          state court.  On April 10, with the stay still firmly in place, a          judge of that court issued the requested default order.  One week          later, she authorized the entry of a foreclosure judgment.                    Soares missed some post-petition mortgage payments.  On          June 14, 1995, BCU, without apprising the bankruptcy court of the          orders  previously obtained  in  the state  proceedings, filed  a          motion  seeking relief  from the  automatic stay.   The  debtor's          then-counsel,   Gerard  Williamson,  neglected  to  oppose  BCU's          motion.   The bankruptcy  court granted  the unopposed  motion on          June 29  (the same day, coincidentally,  that Soares, unbeknownst          to  the  judge, paid  the  post-petition arrearage).    The court          subsequently refused  to entertain  a belated objection  filed by          Williamson.                    When Soares missed his  November payment, BCU activated          the  state court judgment.  At the ensuing foreclosure sale, held          on November 29, BCU itself bid in the mortgaged premises and paid          approximately  $14,200 in  overdue municipal  taxes to  clear the          title.  Soares thereafter sought relief in the state court on the          ground  that   the  foreclosure  judgment  had   been  issued  in          contravention of  the  automatic  stay.   The  court  denied  the          motion,   saying  that   its  post-petition   actions  had   been          "ministerial" and that any error was harmless.1                                        ____________________               1Although Soares  did not appeal  from this ruling,  BCU has          never  urged it  as  a  basis  for  res  judicata  or  collateral          estoppel.  Hence, we deem any such asseveration waived.                                          3                    Soares'  unsuccessful  foray  apparently  rang  warning          bells  for  BCU, which  asked  the  bankruptcy court  to  clarify          whether  the June 29 order (lifting  the automatic stay) ratified          the  earlier state  court judgment.   BCU  served  this so-called          clarification  motion on  the  attorney, Williamson,  but not  on          Soares.2   In a margin  order entered on February  9, 1996, Judge          Kenner addressed the question of retroactivity for the first time          and vacated  the automatic  stay retroactive to  March 24,  1995,          "such that  the [state]  judgment and movant's  foreclosure shall          not be deemed to have violated the automatic stay."                    Less  than  three  weeks  later  Soares, through  newly          retained counsel, filed a motion to reconsider both  the February          9 order and the original grant of relief from the automatic stay.          Judge Kenner denied the reconsideration motion on the merits3 and          also denied a companion motion to void the foreclosure sale.  The          judge advanced three reasons for having lifted the automatic stay                                        ____________________               2The title  "clarification motion"  is a misnomer.   Neither          the June 29 order nor  the motion leading up to it  mentioned the          state court judgment, and the order clearly had not been meant to          ratify the judgment.               3The  judge was  wise to  reach the  merits.   The so-called          clarification motion had been served in derogation of  a standing          order promulgated  by the  bankruptcy judges in  the District  of          Massachusetts, which provides in pertinent part:                    (a) All motions and  requests for orders must                    be  served  on the  Chapter  13 trustee,  the                    debtor,  the  debtor's attorney,  persons who                    have requested  notice, and all creditors . .                    . .          Joint  Procedural Order    13.5  (Sept. 1,  1994).   Despite this          order, BCU had not served the motion on the debtor.                                          4          retroactively  on February  9.    First,  because BCU  "had  done          everything  right,"   it  would  be  inequitable   to  upset  its          expectations.   Second,  because  the foreclosure  had wiped  out          junior lienholders,  it would  be too complicated  to "unscramble          the  egg."  Third, because Soares could not immediately repay the          funds  that BCU had expended to  clear title to the property, the          economic realities favored ratification of the foreclosure.                    Soares appealed.  The district court temporarily stayed          further  proceedings  (blocking both  a  planned  eviction and  a          possible  resale  of the  property).    Eventually, however,  the          district  court    although finding  that BCU  had neglected  its          responsibility  to   apprise  the  state   tribunal  of   Soares'          bankruptcy  (an error  which it  termed "harmless")    determined          that  the  retroactive  lifting  of the  automatic  stay  did not          constitute an abuse of discretion.                    Soares again appealed.  We enlarged the earlier stay on          condition  that Soares make monthly  payments to BCU  for use and          occupancy of  the premises (to  be credited against  the mortgage          indebtedness, should Soares prevail on appeal).          II.  DISCUSSION          II.  DISCUSSION                    To the extent that the threshold inquiries in this case          involve   questions  of  statutory  interpretation,  we  exercise          plenary review.4   See In re  Jarvis, 53 F.3d 416,  419 (1st Cir.                             ___ _____________                                        ____________________               4A different  standard of  review applies to  the bankruptcy          court's  discretionary  decision  to  lift  the   automatic  stay          retroactively.   See Part II(B)(4), infra.  We review that ruling                           ___                _____          for abuse of discretion.  See Tringali v. Hathaway Mach. Co., 796                                    ___ ________    __________________          F.2d 553, 561 (1st Cir. 1986).                                          5          1995).   From this vantage  point we first  address the purported          exemption  for "ministerial  acts," as  it is  only necessary  to          reach the retroactivity question if a violation of  the automatic          stay in fact occurred.                     A.  The Nature of the State Court's Actions.                     A.  The Nature of the State Court's Actions.                         _______________________________________                    The  parties clash head-on in respect to classification          of the state court's actions.   The debtor claims that  the state          court  order and judgment  transgressed the automatic  stay.  The          creditor  claims  that  these  entries,  though  occurring  post-          petition, were purely ministerial and, thus, not offensive to the          stay.  The debtor has the better argument.                    Section 362(a)(1) of the Bankruptcy Code provides  that          the filing  of a  bankruptcy petition  stays the commencement  or          continuation  of all  nonbankruptcy judicial  proceedings against          the debtor.5  Here, the state court default order eventuated more          than  two  weeks  after  Soares  filed  for  bankruptcy  and  the                            _____                                        ____________________               5Leaving to one side exceptions inapplicable to this appeal,          the statute provides that a filed bankruptcy petition                    operates  as  a   stay,  applicable  to   all                    entities, of                           (1)     the     commencement     or                         continuation,     including     the                         issuance or  employment of process,                         of  a judicial,  administrative, or                         other action  or proceeding against                         the debtor  that was or  could have                         been    commenced     before    the                         commencement of the case under this                         title,  or  to   recover  a   claim                         against   the  debtor   that  arose                         before the commencement of the case                         under this title; . . . .          11 U.S.C.   362(a)(1).                                          6          foreclosure judgment one week later.  The issue, then, is whether          these entries contravened the mandate  of section 362(a)(1).  BCU          asserts that they did not because the stay was not in effect when          the creditor requested  the state  court to act  and because  the          state court's actions, when taken, constituted ministerial acts.                    The  creditor's first  assertion  is mere  buzznacking.          The focus  here is whether or not the state court's actions, when          effected, transgressed the automatic stay.  The date on which the          creditor  asked  the state  court to  act,  while material  to an          assessment of  the creditor's good faith (which  is not seriously          questioned  here),  does  not  bear  on  whether  the  activities          themselves constituted  the forbidden continuation  of a judicial          proceeding.                    BCU's   second   assertion    is   more    substantial.          Ministerial  acts,  even  if   undertaken  in  a  state  judicial          proceeding subsequent to a bankruptcy filing,  do not fall within          the  proscription of the  automatic stay.   See Rexnord Holdings,                                                      ___ _________________          Inc. v. Bidermann, 21 F.3d  522, 527 (2d Cir. 1994);  Savers Fed.          ____    _________                                     ___________          Sav.  & Loan Ass'n v.  McCarthy Constr. Co.  (In re Knightsbridge          __________________     ____________________   ___________________          Dev. Co.),  884 F.2d 145,  148 (4th  Cir. 1989).   But the  state          ________          court's actions in this case cannot properly be  characterized as          ministerial.                    A ministerial  act is one that  is essentially clerical          in nature.  See Black's Law Dictionary 996 (6th ed. 1990).  Thus,                      ___ ______________________          when an  official's  duty is  delineated  by,  say, a  law  or  a          judicial  decree with  such crystalline  clarity that  nothing is                                          7          left to the  exercise of the  official's discretion or  judgment,          the  resultant act  is ministerial.   See  United States  ex rel.                                                ___  ______________________          McLennan v. Wilbur, 283  U.S. 414, 420 (1931) (indicating  that a          ________    ______          duty is ministerial  if "the obligation  to act [is]  peremptory,          and plainly defined");  Neal v.  Regan, 587 F.  Supp. 1558,  1562                                  ____     _____          (N.D. Ind. 1984) (describing a ministerial act as "one which `the          law prescribes and defines . . . with such precision  as to leave          nothing to  the exercise  of discretion or  judgment'") (citation          omitted).  Such acts can usefully be visualized as the antithesis          of judicial acts,  inasmuch as the essence  of a judicial  act is          the  exercise  of  discretion  or  judgment.    See  Black's  Law                                                          ___  ____________          Dictionary, supra, at 846.          __________  _____                    Virtually by definition, a judicial proceeding does not          conclude until the judicial function is completed, that is, until          the  judicial decision is made.  See, e.g., Bidermann, 21 F.3d at                                           ___  ____  _________          528  (holding  that the  judicial function  is completed  "at the          moment  the judge  direct[s]  entry of  judgment").   Frequently,          routine scrivening, such  as recordation or entry  on the docket,          follows on  the heels  of a  judicial decision.   Such  actions            taken  in obedience  to  the judge's  peremptory instructions  or          otherwise   precisely   defined   and  nondiscretionary       are          ministerial  and, consequently,  do  not  themselves violate  the          automatic stay even if undertaken  after an affected party  files          for bankruptcy.  See,  e.g., Knightsbridge Dev., 884 F.2d  at 148                           ___   ____  __________________          (suggesting that  merely  recording a  previously  decided  award          would be a  "clerical act"  and therefore would  not infract  the                                          8          automatic stay); In re Capgro Leasing Assocs., 169 B.R. 305, 315-                           ____________________________          16 (Bankr. E.D.N.Y. 1994) (stating that "entry of a judgment will          constitute a  `ministerial act'  where the judicial  function has          been  completed  and the  clerk has  merely  to perform  the rote          function  of entering the judgment upon the court's docket").  By          the  same token,  however,  acts  undertaken  in  the  course  of          carrying out the core judicial function  are not ministerial and,          if essayed after bankruptcy filing, will be deemed to violate the          automatic stay.                    Bidermann   captures  this  distinction.    There,  the                    _________          district judge ruled  ora sponte and endorsed  the motion papers.                                ___ ______          The  defendant then  sought  refuge in  bankruptcy.   The  Second          Circuit held  the clerk's subsequent, post-petition  entry of the          judgment  on  the  docket  to  be  ministerial  (and,  therefore,          unaffected by the automatic stay).   21 F.3d at 528.  Other cases          are  to the same effect.  See  Heikkila v. Carver (In re Carver),                                    ___  ________    ______  ____________          828  F.2d 463,  464  (8th Cir.  1987)  (holding that  a  "routine          certification"  by  the  clerk,  entered  post-petition, did  not          transgress the automatic stay); Capgro Leasing, 169 B.R. at  315-                                          ______________          16 (holding the  clerk's entry of  judgment on the  docket to  be          ministerial  when, prior to the bankruptcy  filing, the court had          ordered  summary judgment).  A  parallel line of cases reinforces          the notion that the compendium of ministerial acts excludes those          involving  deliberation,  discretion,  or  judicial  involvement.          See, e.g., Ellis  v. Consolidated  Diesel Elec.  Corp., 894  F.2d          ___  ____  _____     _________________________________          371, 372-73  (10th Cir.  1990) (invalidating a  judicial decision                                          9          that  granted  summary  judgment  two weeks  after  a  bankruptcy          filing);  Knightsbridge  Dev.,  884   F.2d  at  148  (voiding  an                    ___________________          arbitration award  because the bulk of  the panel's deliberations          occurred  after the stay arose);  Ellison v. Northwest Eng'g Co.,                                            _______    ___________________          707  F.2d 1310,  1311 (11th  Cir. 1983)  (holding that  while the          automatic stay was in effect a court could not  render a decision          in a case which had been briefed and argued pre-petition).                    This line  of demarcation  makes perfectly  good sense.          The statutory proviso which gives rise to the automatic stay says          what it means and means what it says.  See ICC v. Holmes Transp.,                                                 ___ ___    _______________          Inc., 931 F.2d 984, 987 (1st Cir. 1991).  Confining the exemption          ____          for  ministerial  acts to  those  actions  which are  essentially          clerical, as  opposed to judicial, honors  this principle because          such  an  interpretation  comports  precisely with  the  text  of          section  362(a)(1).   In  the bargain,  this interpretation  also          facilitates the statute's due administration.                    Silhouetted against this legal landscape, it is readily          apparent that the state court's actions in ordering a default and          directing the entry of a judgment possess a distinctly  judicial,          rather  than a  ministerial, character.   The  record is  totally          barren  of any  evidence that  the state  court judge  decided to          grant BCU's request prior  to the date of the  bankruptcy filing,          and all visible signs point in the opposite direction.  The judge          did  not enter the default order until  more than two weeks after          Soares  sought the protection of the bankruptcy court and she did          not  direct the entry of a judgment authorizing foreclosure until                                          10          another week had  elapsed.  Moreover,  the judge indicated  after          the fact  that she waited  to confirm Soares'  nonmilitary status          before  directing   the  entry  of  judgment.     This  indicates          deliberativeness   and  a  concomitant  willingness  to  exercise          discretion.                    Nor does  the fact  that the judge  later characterized          her entry of the foreclosure judgment  as "ministerial" require a          different result.   An appellate  court is  not bound by  a trial          judge's unsupported  description, see,  e.g., Estate of  Soler v.                                            ___   ____  ________________          Rodriguez, 63  F.3d 45,  47 n.1  (1st Cir.  1995);  In re  G.S.F.          _________                                           _____________          Corp., 938 F.2d 1467,  1473-74 (1st Cir. 1991), and we  are aware          _____          of no reason  why that  salutary principle would  not apply  with          equal vigor to our assessment of a state court's actions when the          underlying question relates to the effect of  those actions under                                                                      _____          federal law.  Hence, we decline to adopt the label that the state          _______ ___          court judge chose in hindsight to affix to her activities.                    We summarize succinctly.   Because  the decision  which          animated the entry of  the order and judgment occurred  after the          stay  was in  force, those actions  continued the  state judicial          proceeding    within   the   meaning    of   section   362(a)(1).          Consequently,  the actions  violated the  automatic stay.   Given          this  infraction,  we now  must  assess  the  availability  of  a          retroactive cure.                       B.  The Operation of the Automatic Stay.                       B.  The Operation of the Automatic Stay.                           ___________________________________                    We  subdivide this  part  of our  discussion into  four          segments.   In each  segment, our comments  reflect our awareness                                          11          that  bankruptcy  courts  traditionally  pay  heed  to  equitable          principles.   See  Bank of  Marin v.  England, 385  U.S.  99, 103                        ___  ______________     _______          (1966); Jarvis, 53 F.3d at 419.                  ______                    1.   The  Nature of  the Stay.   The automatic  stay is                    1.   The  Nature of  the Stay.                         ________________________          among the most basic of debtor protections  under bankruptcy law.          See  Midlantic  Nat'l  Bank   v.  New  Jersey  Dep't  of   Envtl.          ___  ______________________       _______________________________          Protection, 474  U.S. 494, 503 (1986);  see also S.  Rep. No. 95-          __________                              ___ ____          989, at 54 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5840.  It                             _________ __          is  intended to give the debtor breathing room by "stop[ping] all          collection efforts, all harassment, and all foreclosure actions."          H.R.  Rep.  No.   95-595,  at  340  (1977),   reprinted  in  1978                                                        _________  __          U.S.C.C.A.N. 5963, 6296-97; see also Holmes Transp., 931  F.2d at                                      ___ ____ ______________          987; In re Smith Corset Shops, Inc., 696 F.2d 971,  977 (1st Cir.               ______________________________          1982).                    The stay springs into being immediately upon the filing          of  a  bankruptcy petition:    "[b]ecause the  automatic  stay is          exactly what the name implies   `automatic'   it operates without          the necessity for judicial intervention."  Sunshine Dev., Inc. v.                                                     ___________________          FDIC,  33 F.3d  106, 113 (1st  Cir. 1994).   It  remains in force          ____          until a federal court either disposes of the case, see  11 U.S.C.                                                             ___            362(c)(2),  or lifts  the stay,  see id.     362(d)-(f).   This                                             ___ ___          respite  enables debtors to resolve their debts in a more orderly          fashion, see In re  Siciliano, 13 F.3d  748, 750 (3d Cir.  1994),                   ___ ________________          and  at the  same time  safeguards their creditors  by preventing          "different  creditors  from  bringing  different  proceedings  in          different  courts, thereby  setting in  motion a  free-for-all in                                          12          which opposing interests maneuver to capture the lion's share  of          the  debtor's  assets."   Sunshine  Dev.,  33  F.3d  at 114;  see                                    ______________                      ___          generally 3 Collier on Bankruptcy   362.03 (15th rev. ed. 1996).          _________   _____________________                    In order to secure these important  protections, courts          must display a  certain rigor  in reacting to  violations of  the          automatic stay.   See Kalb  v. Feuerstein, 308  U.S. 433,  438-39                            ___ ____     __________          (1940); Holmes Transp., 931  F.2d at 987-88; Smith  Corset Shops,                  ______________                       ___________________          696 F.2d at 976.  The circuits are split on whether actions taken          in derogation  of the  automatic stay  are merely  "voidable" or,          more accurately, "void."   Some courts characterize  unauthorized          post-petition  proceedings as  "voidable."   See, e.g.,  Jones v.                                                       ___  ____   _____          Garcia (In  re Jones), 63  F.3d 411, 412  & n.3 (5th  Cir. 1995),          ______  ____________          cert. denied, 116 S.  Ct. 1566 (1996); Bronson v.  United States,          _____ ______                           _______     _____________          46 F.3d 1573, 1578-79 (Fed. Cir. 1995); Easley v. Pettibone Mich.                                                  ______    _______________          Corp.,  990 F.2d  905, 911  (6th Cir.  1993).   Other courts    a          _____          majority, insofar as we can tell    call such actions "void," but          recognize that equitable considerations may  alter some outcomes.          See, e.g.,  Siciliano, 13 F.3d at  751; In re  Schwartz, 954 F.2d          ___  ____   _________                   _______________          569, 571 (9th Cir. 1992); Job v. Calder (In re  Calder), 907 F.2d                                    ___    ______  _____________          953, 956 (10th Cir. 1990) (per curiam); 48th St. Steakhouse, Inc.                                                  _________________________          v. Rockefeller Group, Inc. (In re 48th St. Steakhouse, Inc.), 835             _______________________  _______________________________          F.2d 427, 431 (2d Cir. 1987), cert. denied, 485 U.S. 1035 (1989);                                        _____ ______          Albany Partners Ltd. v. Westbrook (In re  Albany Partners, Ltd.),          ____________________    _________  ____________________________          749 F.2d 670, 675 (11th Cir. 1984).                    Our earlier opinions   which we  today reaffirm   align          us with  the majority view.  See Holmes Transp., 931 F.2d at 987-                                       ___ ______________                                          13          88;  Smith  Corset  Shops,  696  F.2d  at  976.    This  semantic               ____________________          difference    has    practical    consequences     because    the          characterization of an infringing  action as "void" or "voidable"          influences the burden of going forward.  Treating an action taken          in  contravention of the automatic stay as void places the burden          of validating the action after the fact squarely on the shoulders          of the offending creditor.  In contrast, treating an action taken          in contravention  of the  automatic stay as  voidable places  the          burden  of challenging  the action  on the  offended debtor.   We          think that  the former  paradigm,  rather than  the latter,  best          harmonizes  with  the  nature  of  the  automatic  stay  and  the          important  purposes that it serves.   See generally  3 Collier on                                                ___ _________    __________          Bankruptcy, supra,    362.11[1] & n.1 (observing that most courts          __________  _____          hold violations void and terming this the better view).                    2.   The Availability of Retroactive Relief.  While the                    2.   The Availability of Retroactive Relief.                         ______________________________________          automatic  stay is significant, it is not an immutable article of          faith.    Indeed,  the  Bankruptcy  Code,  11  U.S.C.     362(d),          expressly authorizes courts to  lift it in particular situations.          Whether  this  statutory  authorization  encompasses  retroactive          relief is not entirely clear.  We previously hinted that  a court          may set aside the automatic stay retroactively in  an appropriate          case.   See Smith  Corset  Shops, 696  F.2d at  976-77.   We  now                  ___ ____________________          confirm  Smith's adumbration,  holding  that 11  U.S.C.    362(d)                   _____          permits   bankruptcy   courts   to   lift  the   automatic   stay          retroactively and thereby validate actions which  otherwise would          be void.                                          14                    Section  362(d) confers upon courts discretionary power          in certain  circumstances to  terminate, annul, modify,  or place          conditions upon  the  automatic  stay.6   In  drafting  the  law,          Congress  chose to include both  the power to  terminate the stay          and the  power to annul  it.   When construing this  language, we          must try  to give independent  meaning to each word.   See United                                                                 ___ ______          States Dep't of Treasury v.  Fabe, 508 U.S. 491, 504  n.6 (1993);          ________________________     ____          United States v. Ven-Fuel,  Inc., 758 F.2d 741, 751-52  (1st Cir.          _____________    _______________          1985).  The only  plausible distinction between the two  verbs in          this   context   is  that   terminating   the   stay  blunts   it          prospectively, from the moment  the court's order enters, whereas          annulling the  stay erases it  retrospectively, as  of some  date          prior to the entry of the court's order (reaching as  far back as          the  date when the debtor  filed the bankruptcy  petition, if the          court so elects).                    Seen from this perspective,  Congress' grant of a power          of annulment is meaningful only if the court may thereby validate          actions taken before  the date on which the court  rules.  On any                        ______          other construction, annulment lacks any independent significance;                                        ____________________               6The statute provides in pertinent part:                    On request  of a party in  interest and after                    notice and  a hearing, the court  shall grant                    relief  from  the stay  .  .  ., such  as  by                    terminating,    annulling,   modifying,    or                    conditioning such stay                           (1) for cause,  including the  lack                         of   adequate   protection  of   an                         interest in property of  such party                         in interest; . . . .          11 U.S.C.   362(d).                                          15          it merely  replicates termination.   It follows,  therefore, that          section 362(d)  authorizes retroactive relief from  the automatic          stay.  Accord  Siciliano, 13  F.3d at 751;  Albany Partners,  749                 ______  _________                    _______________          F.2d at  675; see also  Franklin Sav. Ass'n  v. Office of  Thrift                        ___ ____  ___________________     _________________          Supervision, 31 F.3d 1020, 1023 (10th Cir. 1994) (recognizing the          ___________          authority  to  annul  the  stay  and  thereby  grant  retroactive          relief);  Sikes v. Global Marine, Inc., 881 F.2d 176, 178-79 (5th                    _____    ___________________          Cir.  1989) (same); see generally 3 Collier on Bankruptcy, supra,                              ___ _________   _____________________  _____            362.11[1].                    3.      The  Limiting   Principle.     Recognizing  the                    3.      The  Limiting   Principle.                            _________________________          discretionary authority of bankruptcy courts to relieve creditors          and other interested parties  retroactively from the operation of          the  automatic stay tells us nothing about the yardstick by which          attempts to secure such relief should be measured.   We turn next          to this inquiry.                    Once again,  the overarching  purpose of  the automatic          stay informs our  analysis.   Because the stay  is a  fundamental          protection for all parties  affected by the filing of  a petition          in bankruptcy,  it should not be dismantled  without good reason.          See, e.g., Little  Creek Dev. Co. v.  Commonwealth Mortgage Corp.          ___  ____  ______________________     ___________________________          (In  re Little  Creek Dev.  Co.), 779  F.2d 1068, 1072  (5th Cir.           ______________________________          1986).     Undoing  the  stay  retroactively   should  require  a          measurably greater showing.  Congress intended the stay to afford          debtors  breathing  room and  to  assure  creditors of  equitable          distribution.   See  H.R. Rep.  No. 95-595,  supra, at  340, 1978                          ___                          _____          U.S.C.C.A.N.  at   6296-97.    If   retroactive  relief   becomes                                          16          commonplace,  creditors    anticipating post  facto validation                                                     ____  _____          will be  tempted to pursue  claims against bankrupts  heedless of          the stay, leaving debtors with  no choice but to defend for  fear          that   post-petition   default   judgments   routinely   may   be          resuscitated.                    We believe that Congress  created the automatic stay to          ward off scenarios of  this sort.  Thus, if  congressional intent          is  to be  honored  and  the  integrity  of  the  automatic  stay          preserved, retroactive relief should  be the long-odds exception,          not  the general rule.  In our  view, only a strict standard will          ensure  the  accomplishment  of  these objectives.    See  Albany                                                                ___  ______          Partners,  749  F.2d  at  675  (explaining  that  "the  important          ________          congressional policy  behind  the  automatic  stay  demands  that          courts be  especially hesitant to validate  acts committed during          the  pendency of  the  stay").    We  conclude,  therefore,  that          although courts possess a limited discretion to grant retroactive          relief from the  automatic stay, instances in which  the exercise          of that  discretion is  justified are  likely to be  few and  far          between.                    We do not  suggest that  we can write  a standard  that          lends itself to mechanical application.  Each case is sui generis          and must be judged  accordingly.  But, while it is  not practical          to  anticipate and  catalogue the  varied circumstances  in which          retroactive relief from the automatic stay may be warranted, some          examples may be helpful.                    When  a creditor  inadvertently violates  the automatic                                          17          stay in ignorance of a pending bankruptcy, courts sometimes  have          afforded retroactive relief.  See, e.g., Jones, 63 F.3d at 412-13                                        ___  ____  _____          (affirming retroactive validation of a foreclosure sale where the          mortgagee had no notice of the bankruptcy filing); Mutual Benefit                                                             ______________          Life Ins. Co. v. Pinetree, Ltd.  (In re Pinetree, Ltd.), 876 F.2d          _____________    ______________   ____________________          34, 37 (5th Cir. 1989) (similar).  By like token, debtors who act          in  bad faith may create situations that are ripe for retroactive          relief.   See, e.g., Calder, 907 F.2d at 956; Easley, 990 F.2d at                    ___  ____  ______                   ______          911; Albany Partners, 749 F.2d at 675-76.               _______________                    These  examples    a  creditor's  lack of  notice  or a          debtor's bad  faith   clearly  do not exhaust  the possibilities.          But  they   illustrate  that  a  rarely   dispensed  remedy  like          retroactive relief from the  automatic stay must rest on a set of          facts  that is both unusual  and unusually compelling.   The case          law  echoes  this conclusion.   See  Mataya  v. Kissinger  (In re                                          ___  ______     _________   _____          Kissinger), 72 F.3d 107, 109 (9th Cir. 1995) (stating that courts          _________          should   indulge   retroactive   annulment   only    in   extreme          circumstances); In re Pulley, 196 B.R. 502, 504 (Bankr. W.D. Ark.                          ____________          1996) (similar).                    4.   Applying  the  Standard.   Having constructed  the                    4.   Applying  the  Standard.                         _______________________          limiting principle, we now  consider whether the bankruptcy court          erred  in  validating the  foreclosure  judgment  which had  been          obtained in violation of the automatic stay.  We conclude that no          proper  predicate existed  for doing  so and that  the bankruptcy          court therefore  abused  its discretion  in ordering  retroactive          relief.   See Anderson v.  Beatrice Foods Co.,  900 F.2d 388, 394                    ___ ________     __________________                                          18          (1st Cir.) (equating abuse of discretion with a meaningful  error          in judgment), cert. denied, 498 U.S. 891 (1990).                        _____ ______                    Contrary to BCU's  importunings, it  is the  creditor's          knowledge,  not the state court's  nescience, that is relevant to          the question  at  hand.   Bankruptcy law  forbids creditors  from          continuing  judicial proceedings against bankrupts, see 11 U.S.C.                                                              ___            362(a)(1), and, accordingly, it is the creditor's obligation to          inform other courts  of the situation, see In re  Timbs, 178 B.R.                                                 ___ ____________          989, 991 (Bankr. E.D. Tenn. 1989) (collecting cases).  Here, both          BCU's knowledge and its failure to act are undisputed; the debtor          immediately notified BCU  of the bankruptcy filing,  but BCU kept          quiet and permitted the superior court to proceed in ignorance of          the  stay.   We are  reluctant to  reward creditors  who, despite          notice  of a bankruptcy filing, fail for no discernible reason to          notify  courts in  which they  have initiated proceedings  of the          changed circumstances.                    The other facts  are no more conducive to  the bestowal          of retroactive relief.   The creditor was  represented by counsel          throughout and  does not claim that it  misapprehended the effect          of the filing.  The bankruptcy court made no finding  that Soares          acted in bad faith, and, at any rate, the record does not contain          any basis for such a finding.  The procedural errors committed by          both parties, such as BCU's failure to serve Soares with the  so-          called clarification  motion and Soares' failure  to lodge timely          objections at various points in the proceedings, seemingly cancel          each  other  out.   And BCU's  entreaty  that the  equities favor                                          19          retroactive relief rings unmistakably hollow; though BCU expended          funds to clear title and maintain the property after foreclosing,          this financial  hardship is the  natural consequence  of its  own          failure to abide by the terms of the automatic stay.  Thus, it is          unredressable.   See K-Mart  Corp. v.  Oriental Plaza,  Inc., 875                           ___ _____________     _____________________          F.2d  907,  916  (1st Cir.  1989)  (declining  to  deny permanent          injunctive relief which would  require substantial demolition  of          an  expensive  structure where  "appellant's  wound,  deep as  it          appears,  was self-inflicted").  In the last analysis, BCU is the          author of its own misfortune.          III.  CONCLUSION          III.  CONCLUSION                    To sum up, we hold that the state court's post-petition          issuance of  a foreclosure judgment violated  the automatic stay;          that bankruptcy courts ordinarily must hold those  who defile the          automatic stay  to the predictable consequences  of their actions          and can grant retroactive relief only sparingly and in compelling          circumstances;   and   that,  because   this  case   involves  no          sufficiently unusual  circumstances, the bankruptcy  court abused          its discretion in granting  retroactive relief from the automatic          stay.7                    In  an abundance of caution, we note that our review is          confined to the order granting the so-called clarification motion          and the retroactive relief awarded therein.   Although Soares may                                        ____________________               7We recognize  the difficulties  that attend the  undoing of          the  foreclosure sale  and  the restoration  of the  pre-petition          status  quo, but  that problem  cannot in  and of  itself justify          overlooking BCU's unexcused violation of the automatic stay.  Cf.                                                                        ___          K-Mart, 875 F.2d at 916.          ______                                          20          ask the bankruptcy court  to reconsider its decision to  lift the          automatic stay, BCU can request a new foreclosure judgment in the          state court unless and until the bankruptcy court  reinstates the          stay.  For our part, we need go no further.          Reversed and remanded.          Reversed and remanded.          _____________________                                          21
