     Case: 19-50598   Document: 00515230780     Page: 1   Date Filed: 12/10/2019




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                               United States Court of Appeals
                                                                        Fifth Circuit


                                No. 19-50598                          FILED
                                                              December 10, 2019
                              Summary Calendar
                                                                 Lyle W. Cayce
                                                                      Clerk
SHARON D. ROSE,

            Plaintiff–Appellant,

v.

SELECT PORTFOLIO SERVICING, INCORPORATED; US BANCORP,

            Defendants–Appellees.



                Appeal from the United States District Court
                     for the Western District of Texas




Before OWEN, Chief Judge, and SOUTHWICK and WILLETT, Circuit Judges.
PER CURIAM:
      The case is about a foreclosure. Plaintiff ShaRon Rose (Rose) sued Select
Portfolio Servicing, Inc. (SPS) and US Bank, N.A. (US Bank) (collectively
Defendants), asserting a claim to quiet title and separately seeking a
declaratory judgment that the statute of limitations had expired on
Defendants’ power to foreclose on certain real property.       The Defendants
counterclaimed for judicial foreclosure, relying on various tolling concepts. The
district court denied Rose’s motion for summary judgment, granted the
Defendants’ motion for summary judgment, and entered a Final Judgment and
Order of Foreclosure.    Rose now appeals, challenging the district court’s
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                                 No. 19-50598
determination that the statute of limitations had not run on the Defendants’
counterclaim for judicial foreclosure. We affirm.
                                       I
      In 2005, Rose and her then-husband purchased property with a
purchase-money mortgage.      The mortgage was eventually assigned to US
Bank, with SPS servicing the loan. In 2010, Rose and her husband divorced.
Rose’s husband was awarded the home, subject to a lien that required him to
convey the home to Rose in the event of default. The record indicates that no
payment has been made on the loan since March 1, 2011.            Although the
property was not conveyed to Rose until 2016, she has been actively involved
in litigation concerning foreclosure of the property since early 2014.
      On October 1, 2013, Defendants sent Rose a Notice of Default regarding
the loan and her property. Then, on March 26, 2014, Defendants sent Rose a
Notice of Acceleration regarding the loan and property, setting a May 6, 2014
foreclosure sale. On May 5, 2014, Rose sued in Texas state court, asserting
various claims relating to the pending foreclosure sale and requesting a TRO.
The state court granted the TRO that same day, blocking the May 6th
foreclosure sale. After the TRO expired, the Defendants removed the case to
federal court. The case was then dismissed with prejudice by stipulation of the
parties.
      On June 2, 2015, the Defendants sent Rose a second Notice of
Acceleration, setting a July 7, 2015 foreclosure sale. On January 4, 2016, Rose
filed her first bankruptcy petition. The matter was dismissed on January 28,
2016 because Rose failed to file timely a “Plan and/or Schedules.” Over the
course of the next three years, the Defendants sent three additional Notices of
Acceleration, each setting a new date for the foreclosure sale. Each time, Rose
filed for bankruptcy protection just days before the scheduled sale, thwarting
Defendants’ attempts to foreclosure.       According to the parties, the four
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                                       No. 19-50598
bankruptcy proceedings were pending for at least 269 days.
       Before her last bankruptcy matter was dismissed, Rose sued to quiet title
in state court, claiming that the statute of limitations had expired on
Defendants’ power to foreclose.               Defendants removed under diversity
jurisdiction. Then, on September 21, 2018, Defendants counterclaimed for
judicial foreclosure. Both parties moved for summary judgment. The district
court denied Rose’s motion and granted the Defendants’ motion, adopting the
magistrate judge’s report and recommendation that the statute of limitations
had not expired on Defendants’ power to foreclose. The district court then
entered a Final Judgment and Order of Foreclosure in favor of the defendants.
Rose appeals the Report and Recommendation, the Order on the Report and
Recommendation of the United States Magistrate Judge, and the Final
Judgment and Order of Foreclosure.
                                              II
       This court reviews a grant of summary judgment de novo. 1 A grant of
summary judgment is appropriate only if “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” 2 “The evidence and all inferences must be viewed in the
light most favorable to the non-movant.” 3
                                              III
       Rose’s appeal hinges on whether the statute of limitations expired on the
Defendants’ power to foreclose on her property.                  Whether the statute of
limitations expired turns on the length of Rose’s bankruptcy stays. According



       1  Shepherd ex rel. Estate of Shepherd v. City of Shreveport, 920 F.3d 278, 282 (5th Cir.
2019) (quoting DeVoss v. Sw. Airlines Co., 903 F.3d 487, 490 (5th Cir. 2018)).
        2 FED. R. CIV. P. 56(a).
        3 Germain v. US Bank Nat’l Ass’n as Tr. for Morgan Stanley Mortgage Loan Tr. 2006-

7, 920 F.3d 269, 272 (5th Cir. 2019) (citing FDIC v. Dawson, 4 F.3d 1303, 1306 (5th Cir.
1993)).
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                                     No. 19-50598
to Rose, her status as a repeat filer under the bankruptcy code curtails the
stays in this case to 135 days. Under that calculation, the Defendants’ claim
would be barred.       She argues that the district court erred in concluding
otherwise.
      Under Texas Civil Practice and Remedies Code § 16.035(a), “[a] person
must bring suit for the recovery of real property under a real property lien or
the foreclosure of a real property lien not later than four years after the day
the cause of action accrues.” 4 Similarly, “[a] sale of real property under a power
of sale in a mortgage or deed of trust that creates a real property lien must be
made not later than four years after the day the cause of action accrues.” 5 After
four years from accrual, “the real property lien and a power of sale to enforce
the real property lien become void.” 6
      Texas common law tolls the statute of limitations during a bankruptcy
stay. 7 The federal Bankruptcy Abuse Prevention and Consumer Protection Act
of 2005 (BAPCPA), however, limits the automatic stay for debtors who have
filed for bankruptcy within the past year. Specifically, 11 U.S.C. § 362(c)(3)(A)
provides:
      (3) if a single or joint case is filed by or against a debtor who is an
      individual in a case under Chapter 7, 11, or 13, and if a single or
      joint case of the debtor was pending within the preceding 1-year
      period but was dismissed, other than a case refiled under a chapter
      other than Chapter 7 after dismissal under section 707(b)—

            (A) the stay under subsection (a) with respect to any action
      taken with respect to a debt or property securing such debt or with
      respect to any lease shall terminate with respect to the debtor on

      4  TEX. CIV. PRAC. & REM. CODE § 16.035(a).
      5  TEX. CIV. PRAC. & REM. CODE § 16.035(b).
       6 TEX. CIV. PRAC. & REM. CODE § 16.035(d).
       7 See HSBC Bank USA, N.A., as Tr. for Merrill Lynch Mortg. Loan v. Crum, 907 F.3d

199, 204-205 (5th Cir. 2018) (discussing the Texas common law tolling principle); see also
Peterson v. Tex. Commerce Bank-Austin, Nat’l Ass’n, 844 S.W.2d 291, 293-94 (Tex. App. 1992)
(same).
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                                        No. 19-50598
       the 30th day after the filing of the later case . . . .

       Courts are divided on the proper interpretation of § 362(c)(3)(A) and the
import of the phrase “with respect to the debtor.” 8 The Fifth Circuit has not
addressed the issue. The majority view, adopted by three bankruptcy courts
in this circuit, 9 interprets the provision to terminate the stay as to actions
against the debtor but not as to actions against the bankruptcy estate. 10
According to the majority, the plain meaning of the provision dictates such an
interpretation. 11 The minority view, adopted by the First Circuit as a matter
of first impression in the courts of appeals, “reads the provision to terminate
the whole stay.” 12 According to the minority, the provision is ambiguous;
therefore, congressional intent is determinative. 13                  After reviewing the
legislative history surrounding the provision and the BAPCPA, the minority
conclude that Congress intended the provision to terminate the stay in its
entirety. 14
       We adopt the majority position, which has already been applied in the
district where Rose has repeatedly filed for bankruptcy. 15 Specifically, after
reviewing the plain language of the provision and the context of the provision


       8  See In re Smith, 910 F.3d 576, 581 (1st Cir. 2018) (noting the split); see also Smith
v. Me. Bureau of Revenue Servs., 590 B.R. 1, 7 n.1, 9 n.3 (D. Me. 2018).
        9 In re Gautreaux, No. 14-10226, 2014 WL 4657433, at *1 (Bankr. E.D. La. Sept. 16,

2014); In re Williford, No. 13-31738, 2013 WL 3772840, at *2-3 (Bankr. N.D. Tex. July 17,
2013); In re Scott–Hood, 473 B.R. 133, 136-40 (Bankr. W.D. Tex. 2012).
        10 See, e.g., In re Rinard, 451 B.R. 12, 18-20 (Bankr. C.D. Cal. 2011).
        11 See, e.g., In re Holcomb, 380 B.R. 813, 816 (B.A.P. 10th Cir. 2008) (noting that there

is “no ambiguity in the language of the statute”); In re Williford, 2013 WL 3772840, at *3
(noting that “the relevant statutory language is clear”); In re Rinard, 451 B.R. at 19 (noting
that the “plain text of § 362(c)(3)(A) is crystal clear”).
        12 In re Smith, 910 F.3d at 581; see also In re Paschal, 337 B.R. 274, 278-81 (Bankr.

E.D.N.C. 2006).
        13 See, e.g., In re Reswick, 446 B.R. 362, 371 (B.A.P. 9th Cir. 2011) (resorting to

legislative history after determining the language in § 362(c)(3)(A) is ambiguous).
        14 See, e.g., Smith v. Me. Bureau of Revenue Servs., 590 B.R. 1, 9-10 (D. Me. 2018)

(discussing how minority view courts examine the legislative history of the BAPCPA).
        15 See In re Scott–Hood, 473 B.R. 133, 136-40 (Bankr. W.D. Tex. 2012).

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                                         No. 19-50598
within § 362, we conclude that § 362(c)(3)(A) terminates the stay only with
respect to the debtor; it does not terminate the stay with respect to the property
of the bankruptcy estate.
         We believe the language in § 362(c)(3)(A) is clear. As an initial matter,
we note that § 362(c)(3)(A) cannot be read in isolation; it must be read in
conjunction with § 362(a), which defines the scope of the automatic stay. 16 As
the First Circuit aptly noted in In re Smith, § 362(a) “operates as a stay of
certain actions in three categories: against the debtor, the debtor’s property,
and property of the bankruptcy estate.” 17                 For example, § 362(a)(1) stays
actions “against the debtor”; § 362(a)(2) stays “enforcement of a judgment
against the debtor or against property of the estate”; and § 362(a)(3) stays “any
act to obtain possession of property of the estate or of property from the
estate.” 18 After recognizing that § 362(a) operates as a stay as to certain
actions in three separate categories, the language in § 362(c)(3)(A) becomes
clear.        In   § 362(c)(3)(A),      Congress       stated     that     “the    stay     under
[§ 362(a)] . . . shall terminate with respect to the debtor.” 19 There is no mention
of the bankruptcy estate, and we decline to read in such language.
         Moreover, “Congress knew how to terminate the entire stay, and in fact
did so in the very next section of the statute.” 20 Section 362(c)(4)(A)(i)—which
discusses debtors who have had two or more cases pending in the prior year—
does not include the limiting language in § 362(c)(3)(A). 21 It merely states that



          See 11 U.S.C. § 362(a).
         16

          In re Smith, 910 F.3d 576, 580 (1st Cir. 2018) (internal quotation marks omitted).
         17
       18 See In re Alvarez, 432 B.R. 839, 842 (Bankr. S.D. Cal. 2010) (quoting In re Jones,

330 B.R. 360, 363-64 (Bankr. E.D.N.C. 2006)); 11 U.S.C. § 362(a).
       19 See 11 U.S.C. § 362(c)(3)(A) (emphasis added).
       20 In re Williford, No. 13-31738, 2013 WL 3772840, at *3 (Bankr. N.D. Tex. July 17,

2013).
       21 See 11 U.S.C. § 362(c)(4)(A)(i). In its entirety, § 362(c)(4)(A)(i) provides the following



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                                         No. 19-50598
“the stay under subsection (a) shall not go into effect upon the filing of the later
case.” 22 Accordingly, for debtors falling under § 362(c)(4)(A)(i), the automatic
stay is terminated in its entirety. 23 In contrast, Congress chose to use a
qualifier in § 362(c)(3)(A).         This can only be interpreted as “impl[ying] a
limitation upon the scope of the termination of the automatic stay.” 24
       Importantly, we are not convinced that this plain meaning interpretation
substantially harms creditors. 25 As one court in this circuit aptly noted, 26
creditors may file a motion for relief under § 362(d) if a debtor is abusing the
automatic stay. 27 The motion must be heard within 30 days, and it will be
granted unless the debtor can offer the creditor adequate protection. 28
Therefore, even if the automatic stay remains in effect with respect to the
bankruptcy estate—as is the case under our interpretation of § 362(c)(3)(A)—
creditors can still obtain judicial relief under § 362(d) if circumstances demand
it.
       We recognize that several courts have found § 362(c)(3)(A) somewhat
ambiguous. 29      But when read in conjunction with § 362(a) and the other


       [I]f a single or joint case is filed by or against a debtor who is an individual
       under this title, and if 2 or more single or joint cases of the debtor were pending
       within the previous year but were dismissed, other than a case refiled under a
       chapter other than chapter 7 after dismissal under section 707(b), the stay
       under subsection (a) shall not go into effect upon the filing of the later case . . . .

Id.
       22 Id.
       23 See, e.g., In re Williford, No. 13-31738, 2013 WL 3772840, at *3 (Bankr. N.D. Tex.
July 17, 2013) (discussing § 362(c)(4)(A)(i)’s language in relation to § 362(c)(3)(A)’s).
       24 Id.
       25 See, e.g., In re Scott–Hood, 473 B.R. 133, 136 n.3 (Bankr. W.D. Tex. 2012); but see

In re Jupiter, 344 B.R. 754, 761-62 (Bankr. D.S.C. 2006) (suggesting that the majority’s plain
meaning interpretation would harm creditors).
       26 In re Scott–Hood, 473 B.R. at 136 n.3.
       27 See 11 U.S.C. § 362(d).
       28 Id.
       29 See In re Williford, No. 13-31738, 2013 WL 3772840, at *2 (Bankr. N.D. Tex. July

17, 2013) (collecting cases); see also In re Baldassaro, 338 B.R. 178, 182 & n.3 (Bankr. D.N.H.
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                                        No. 19-50598
language in § 362(c), we believe the meaning of the provision is clear.
Moreover, we are not unsympathetic to other courts’ conclusions that a
contrary interpretation may better serve the BAPCPA’s policy goals. But in a
statutory construction case such as this, we begin with the plain language of
the statute. 30 When that language is clear, that is where our inquiry ends. 31
Such is the case here.
                                              IV
       Having determined that § 362(c)(3)(A) does not terminate the automatic
stay with respect to property of the bankruptcy estate, we conclude that
Texas’s statute of limitations does not bar Defendants’ claim for judicial
foreclosure. Under Texas Civil Practice and Remedies Code § 16.035(a), a suit
for foreclosure must be brought within four years from the date the statute of
limitations began to accrue. 32 Rose claims that the statute of limitations began
to accrue on March 26, 2014, the date the Defendants sent the first Notice of
Acceleration. Therefore, absent any tolling, the statute of limitations in this
case would have expired on March 26, 2018. U.S. Bank filed its counterclaim
for judicial foreclosure 179 days after March 26, 2018. The question, then, is
whether the bankruptcy stays in this case tolled the statute of limitations more
than 179 days.
       The four bankruptcy proceedings in this case lasted at least 269 days.
Rose admittedly filed several bankruptcy petitions within one year of each
other. However, under the interpretation of § 362(c)(3)(A) of the bankruptcy
code that we adopt today, Rose’s successive filings did not terminate the action



2006) (describing § 362(c)(3) as “poorly written” and “bad work product”); In re Charles, 332
B.R. 538, 541 (Bankr. S.D. Tex. 2005) (explaining how § 362(c)(3) is “at best, . . . difficult to
parse”).
       30 See In re Condor Ins. Ltd., 601 F.3d 319, 321 (5th Cir. 2010).
       31 Id.
       32 TEX. CIV. PRAC. & REM. CODE § 16.035(a).

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with respect to the property of the bankruptcy estate. There is no debate that
the property at issue in this case is part of the bankruptcy estate. Therefore,
the stay with respect to the property at issue in this case lasted the duration
of the bankruptcy proceedings (269 days), and the statute of limitations was
tolled for at least the same. Accordingly, because the Defendants’ counterclaim
for judicial foreclosure was filed within the 269-day tolling period, it is not
barred by the statute of limitations. The district court correctly concluded the
same.
                                *        *         *
        For these reasons, we AFFIRM the district court’s judgment.




                                         9
