                                                           FILED
                                                            DEC 16 2011
 1
                                                        SUSAN M SPRAUL, CLERK
                                                          U.S. BKCY. APP. PANEL
 2                                                        OF THE NINTH CIRCUIT


 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL

 4                            OF THE NINTH CIRCUIT

 5
     In re:                        )       BAP No.   CC-11-1222-KiPaH
 6                                 )
     JOSEPH ANTHONY ORTOLA,        )      Bk. No.    10-34218-MJ
 7                                 )
                    Debtor.        )
 8   ______________________________)
                                   )
 9   JOSEPH ANTHONY ORTOLA,        )
                                   )
10                  Appellant,     )
                                   )
11   v.                            )       M E M O R A N D U M1
                                   )
12   DEYANIRA ORTOLA; ROD          )
     DANIELSON, Chapter 13 Trustee,)
13                                 )
                    Appellee.      )
14   ______________________________)

15                  Argued and Submitted on November 17, 2011
                             at Pasadena, California
16
                            Filed - December 16, 2011
17
              Appeal from the United States Bankruptcy Court
18                for the Central District of California

19        Honorable Meredith A. Jury, Bankruptcy Judge, Presiding
                    _____________________________________
20
     Appearances:     Elizabeth A. Larocque, Esq. of Goe & Forsythe, LLP
21                    argued for appellant, Joseph A. Ortola;
                      John F. Mansour, Esq. of the Mansour Law Group
22                    argued for appellee, Deyanira Ortola.
                      _____________________________________
23
     Before: KIRSCHER, PAPPAS, and HOLLOWELL, Bankruptcy Judges.
24
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.
28   See 9th Cir. BAP Rule 8013-1.
 1           Appellant, chapter 132 debtor Dr. Joseph Ortola (“Ortola”),
 2   appeals a bankruptcy court order granting a motion for relief
 3   from the automatic stay pursuant to § 362(c)(3)(A) (“Stay Relief
 4   Order”) filed by Ortola’s former spouse, appellee Deyanira Ortola
 5   (“Deyanira”).       We AFFIRM.   However, the order contains an error,
 6   which counsel for Deyanira acknowledged at oral argument.        The
 7   order suggests that the stay in Ortola’s second chapter 13 case
 8   expired on July 30, 2010 - the date he filed the petition.           This
 9   is incorrect.       The stay did not expire until 30 days after the
10   filing date - August 29, 2010.
11                      I. FACTUAL AND PROCEDURAL BACKGROUND
12           Ortola filed his first chapter 13 bankruptcy case on May 19,
13   2010.       The chapter 13 trustee moved to dismiss for Ortola’s
14   failure to provide a copy of his 2009 tax return as required
15   under § 521(e)(2)(A)(I).3        At a June 30, 2010 hearing on the
16   matter, Ortola’s counsel stated that he had advised Ortola to
17   provide the tax return to the trustee prior to the § 341
18   creditor’s meeting, and he was unsure why Ortola had not
19
20
             2
            Unless otherwise indicated, all chapter, section and rule
21   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
22   The Federal Rules of Civil Procedure will be referred to as
     “FRCP.”
23
             3
                 Section 521(e)(2)(A)(i) provides in relevant part:
24
                  (A) The debtor shall provide--
25
                      (i) not later than 7 days before the date first set
26           for   the first meeting of creditors, to the trustee a copy of
             the   Federal income tax return required under applicable law
27           . .   . for the most recent tax year ending immediately before
             the   commencement of the case and for which a Federal income
28           tax   return was filed.
                                         - 2 -
 1   complied.    The court denied Ortola’s request for a 10-day
 2   extension and dismissed the case without prejudice.     An order
 3   dismissing Ortola’s first bankruptcy case was entered on July 6,
 4   2010.
 5           Ortola filed his second chapter 13 bankruptcy case on
 6   July 30, 2010.    On October 12, 2010, Deyanira moved to confirm
 7   termination of the automatic stay under § 362(c)(3) or,
 8   alternatively, that no stay was in effect under §
 9   362(c)(4)(A)(ii)(“Stay Relief Motion”).     Deyanira sought stay
10   relief to proceed in state court with pending dissolution
11   proceedings commenced in 2001.    According to Deyanira’s moving
12   papers, Ortola had filed for divorce in 2001.     The case was
13   bifurcated as to marital status and division of property in 2003,
14   and judgment for termination of the marriage was entered at that
15   time.    Deyanira contended the stay should be terminated to allow
16   the state court to determine her interest in their community
17   property.    She further contended the automatic stay terminated as
18   to Ortola and his estate 30 days after he filed his second
19   chapter 13 case because his first case had been dismissed on
20   July 6, 2010.
21           Ortola opposed the motion, contending that Deyanira was not
22   entitled to relief because she had failed to show why his prior
23   bankruptcy case had been dismissed.      Ortola further contended
24   that Deyanira had not shown “cause” for a determination of her
25   interests in what was undividable community property - the
26   building in which Ortola operated his dental practice.     In his
27   supporting declaration, Ortola stated that he had dismissed his
28   first chapter 13 case because he did not yet have all the


                                      - 3 -
 1   required documents.
 2           In her reply, Deyanira explained that Ortola had failed to
 3   comply with prior state court orders ordering the sale of their
 4   community property, which were issued to satisfy Ortola’s
 5   domestic support obligations.      According to Deyanira, the state
 6   court was prepared to issue a ruling granting her exclusive right
 7   to sell certain real properties at a July 23, 2010 hearing in the
 8   dissolution proceeding, but the matter was continued to September
 9   10, 2010.      She asserted that Ortola filed his second chapter 13
10   case on July 30 to circumvent entry of the state court orders.
11   Deyanira asked the bankruptcy court to take judicial notice of
12   her recently-filed adversary proceeding against Ortola that
13   sought to have these and other debts declared nondischargeable.4
14           At a hearing on December 1, 2010, the bankruptcy court
15   denied the Stay Relief Motion without prejudice.      Without
16   controlling Ninth Circuit authority on the matter, the court
17   reasoned that under In re Jumpp, a case from the First Circuit
18   BAP, the automatic stay under § 362(c)(3)(A) terminated only as
19   to the debtor and debtor’s property, not property of the estate.
20   The court concluded that the issues Deyanira raised in her
21   motion, which were the same issues raised in her adversary
22   complaint, would be better addressed by the bankruptcy court.
23   The court further noted that any orders entered by the state
24   court after July 30, 2010, violated the automatic stay and were
25   void.       No order was ever entered on the Stay Relief Motion.
26
             4
27          Because Deyanira untimely filed her reply brief just one
     day prior to the hearing, the bankruptcy court reviewed it but
28   did not consider it on the merits.
                                        - 4 -
 1        Deyanira subsequently filed a motion seeking to dismiss
 2   Ortola’s second bankruptcy case for exceeding debt limitations
 3   under § 109(e).   A hearing on that matter was held on
 4   February 28, 2011.   After discussing the pending matters in the
 5   dissolution proceeding, the bankruptcy court inquired:
 6        COURT: Did you get the stay continued in this case . . .
          Mr. Chien?
 7
          . . . .
 8
          MR. CHIEN: There’s no -- this was addressed at the
 9        previous hearing, your Honor. There is an automatic stay
          with respect to the court.
10
          COURT: No there isn’t. The recent Resnick [sic] case,
11        BAP case, which I will follow, said there is no automatic
          stay as to the estate, or the debtor in the second case,
12        unless it has been extended within 30 days of the filing.
          So there is no automatic stay, which means that the state
13        court probably didn’t violate anything when it had a
          hearing on September the 10th.
14
          . . . .
15
          COUNSEL FOR DEYANIRA: I filed a motion to carve out
16        relief from stay. Your Honor ruled that there was a stay
          in place at that time.
17
          COURT: Yeah. That was before the Resnick [sic] case came
18        down. I’ve had to change my precedent.
19        . . . .
20        COURT: [I]f there’s an order out there by which I deny
          the request for relief from automatic stay, I would sua
21        sponte, based on the now new, precedential law -- or I
          recognize it as precedent anyway from the BAP, I would
22        sign an amended order that would make it clear to the
          family court they could proceed. I think -- I mean, I
23        think the law compels me to do that. So, somebody can
          send me an order on that.
24
25   Hr’g Tr. (Feb. 28, 2011) 15:10-11, 15:25-16:10, 18:14-19,
26   25:15-22.
27        On March 16, 2011, the bankruptcy court entered the Stay
28   Relief Order under § 362(c)(3)(A), effectively reversing its

                                    - 5 -
 1   December 1, 2010 ruling denying the Stay Relief Motion.
 2   According to the Stay Relief Order, any actions or orders issued
 3   by the state court after July 30, 2010, were determined not void
 4   or a violation of the automatic stay.
 5        Ortola, appearing pro se, moved to reconsider the Stay
 6   Relief Order on March 28, 2011, thus tolling the appeal time.
 7   See Rule 8002(b).   Deyanira opposed the motion.   On April 20,
 8   2011, Ortola filed a proposed motion to continue the stay under
 9   § 362(c)(3)(B).   The bankruptcy court denied both motions at a
10   hearing on April 25, 2011.   The court reasoned that even if it
11   had not raised its own motion to reconsider its ruling denying
12   the Stay Relief Motion, it would have granted such a motion had
13   anyone filed one after Reswick.
14        Although no order had yet been entered on the motion to
15   reconsider, Ortola filed his notice of appeal on May 6, 2011,
16   seeking to appeal the Stay Relief Order and the “order” denying
17   his motion to reconsider.    Subsequently, on June 2, 2011, the
18   bankruptcy court entered an order denying the motion to
19   reconsider, thus curing Ortola’s ineffective appeal of the Stay
20   Relief Order.   See Rule 8002(b).
21                            II. JURISDICTION
22        The bankruptcy court had jurisdiction under 28 U.S.C.
23   §§ 157(b)(2)(G) and 1334.    We have jurisdiction under 28 U.S.C.
24   § 158.5
25
          5
26          This appeal may be moot. Ortola did not seek a stay
     pending appeal and, according to the parties at oral argument,
27   the property at issue was sold to a bona fide third-party
     purchaser on October 3, 2011. Nonetheless, neither party
28   contended this matter was moot and neither party filed any
                                                        (continued...)

                                     - 6 -
 1                                 III. ISSUES
 2   1.   Did the bankruptcy court abuse its discretion when it
 3   reversed its prior ruling and granted the Stay Relief Motion
 4   under § 362(c)(3)(A)?
 5   2.   Did the bankruptcy court abuse its discretion in denying the
 6   motion to reconsider?
 7                           IV. STANDARDS OF REVIEW
 8        We review the bankruptcy court’s findings of fact for clear
 9   error and its conclusions of law de novo.      Hoopai v. Countrywide
10   Home Loans, Inc. (In re Hoopai), 369 B.R. 506, 509 (9th Cir. BAP
11   2007).
12        We review a bankruptcy court’s order granting relief from
13   the automatic stay for an abuse of discretion.      Arneson v.
14   Farmers Ins. Exch. (In re Arneson), 282 B.R. 883, 887 (9th Cir.
15   BAP 2002).   Denial of a motion to amend or alter judgment under
16   FRCP 59(e) or for relief from judgment under FRCP 60(b) is also
17   reviewed for an abuse of discretion.      Dixon v. Wallowa Cty.,
18   336 F.3d 1013, 1022 (9th Cir. 2003).      To determine whether the
19   bankruptcy court abused its discretion, we conduct a two-step
20   inquiry: (1) we review de novo whether the bankruptcy court
21   “identified the correct legal rule to apply to the relief
22   requested” and (2) if it did, whether the bankruptcy court's
23   application of the legal standard was illogical, implausible or
24   “without support in inferences that may be drawn from the facts
25   in the record.”   United States v. Hinkson, 585 F.3d 1247, 1261-62
26
          5
27         (...continued)
     documentation confirming the sale.       Therefore, we proceed to
28   address the merits of this appeal.
                                      - 7 -
 1   (9th Cir. 2009)(en banc).
 2                               V. DISCUSSION
 3   A.   The bankruptcy court did not abuse its discretion in
          granting the Stay Relief Motion under § 362(c)(3)(A).
 4
 5        Ortola first contends that § 362(c)(3)(A) is inapplicable
 6   because Deyanira failed to carry her burden to prove why his
 7   first chapter 13 case was dismissed - i.e., that he filed it in
 8   “bad faith.”    Contrary to Ortola’s belief, no such requirement
 9   for moving parties exists under § 362(c)(3)(A).   The only time a
10   “good faith/bad faith” determination comes into play is when a
11   party in interest timely moves for a continuation of the
12   automatic stay in compliance with § 362(c)(3)(B), and these
13   statutes apply to the second case filed, not the first.    No such
14   motion occurred here.   Even if it had, Ortola’s second chapter 13
15   case was presumptively filed in bad faith because, by his own
16   admission and his attorney’s statement, Ortola’s first case was
17   dismissed for his failure to timely provide the trustee with a
18   copy of his 2009 tax return.   See § 362(c)(3)(C)(i)(II)(aa).6
19        Despite Ortola’s argument to the contrary, § 362(c)(3)(A)
20   applies because he filed a second bankruptcy case within less
21   than one year from when his first bankruptcy case had been
22   dismissed for failing to comply with § 521(e)(2)(A)(I), and no
23   order had been timely entered to continue the stay under §
24   362(c)(3)(B).   Section 362(c)(3)(A) provides:
25
          6
26          A substantial excuse for a failure to timely provide a
     required document may defeat the presumption of bad faith under
27   § 362(c)(3)(C)(i)(II)(aa). However, inadvertence or negligence
     by the debtor (as opposed to debtor’s counsel) does not qualify
28   as a substantial excuse. Id.
                                     - 8 -
 1        (3) if a single or joint case is filed by or against
          debtor who is an individual in a case under chapter 7,
 2        11, or 13, and if a single or joint case of the debtor
          was pending within the preceding 1-year period but was
 3        dismissed, other than a case refiled under a chapter
          other than chapter 7 after dismissal under section
 4        707(b) -
 5        (A) the stay under subsection (a) with respect to any
          action taken with respect to a debt or property
 6        securing such debt or with respect to any lease shall
          terminate with respect to the debtor on the 30th day
 7        after the filing of the later case . . . .” (emphasis
          added).
 8
 9        Since this provision was added to the Bankruptcy Code as
10   part of the Bankruptcy Abuse Prevention and Consumer Protection
11   Act of 2005 (“BAPCPA”), courts have been divided on whether the
12   phrase “with respect to the debtor” means that on the 30th day
13   after the petition date the automatic stay terminates only with
14   respect to the debtor and the debtor’s property, or whether that
15   also includes property of the estate.   The parties agreed that
16   the subject community property was property of the estate.
17        In its initial decision to deny Deyanira’s motion for relief
18   from stay on December 1, 2010, the bankruptcy court,
19   acknowledging the lack of any Ninth Circuit precedent on this
20   issue, relied upon Jumpp v. Chase Home Finance, LLC (In re
21   Jumpp), 356 B.R. 789 (1st Cir. BAP 2006), which adopted the
22   majority view that the stay terminates only with the respect to
23   the debtor and the debtor’s property.   On February 4, 2011, the
24   Panel issued Reswick v. Reswick (In re Reswick), 446 B.R. 362,
25   373 (9th Cir. BAP 2011),7 which adopted the minority view,
26
          7
27          In re Reswick is on appeal with the Ninth Circuit (case
     no. 11-60014). On November 16, 2011, the parties in In re
28                                                      (continued...)

                                   - 9 -
 1   holding that § 362(c)(3)(A) terminates the automatic stay in its
 2   entirety - including property of the estate - on the 30th day
 3   after the petition date.
 4        On February 28, 2011, at the hearing on Deyanira’s § 109(e)
 5   motion, the issue regarding the stay was raised.   The bankruptcy
 6   court recognized the BAP’s decision in In re Reswick and decided
 7   to reverse its prior ruling denying the Stay Relief Motion and
 8   grant it under § 362(c)(3)(A).   Ortola contends the court erred
 9   in applying In re Reswick retroactively because it unfairly, and
10   without notice, denied him the right to pursue continuing the
11   stay under § 362(c)(3)(B).   For the reasons stated below, we
12   disagree.
13        As courts of equity, bankruptcy courts have broad discretion
14   under FRCP 59(e) and 60(b), made applicable here by Rules 9023
15   and 9024, to sua sponte reconsider, vacate, or modify past orders
16   so long as no intervening rights have become vested in reliance
17   on the order.   Meyer v. Lenox (In re Lenox), 902 F.2d 737, 739–40
18   (9th Cir. 1990).   No party’s intervening rights became vested in
19   relying on the bankruptcy court’s initial decision to deny the
20   Stay Relief Motion because the decision was not a final order.
21   FRCP 59(e) refers to “judgments.”   “Judgment” is defined in FRCP
22   54(a) as “a decree and any order from which an appeal lies.”     In
23   other words - a judgment is a “final” order.   FRCP 60(b) also
24   refers to relief from “final” orders.   All that exists in this
25   case is the docket entry which states: “Hearing Held - [Stay
26
          7
27         (...continued)
     Reswick notified the court of a pending settlement.   As a result,
28   the appeal has been stayed until December 30, 2011.
                                   - 10 -
 1   Relief Motion] denied without prejudice.”   Even under local rule,
 2   this mere docket entry does not constitute entry of a judgment or
 3   final order.8
 4        Accordingly, the bankruptcy court’s ruling denying the Stay
 5   Relief Motion never became a final order.   As such, the court had
 6   inherent power to modify, alter, or vacate it.   United States v.
 7   Martin, 226 F.3d 1042, 1048-49 (9th Cir. 2000)(authority of
 8   district courts to reconsider their own orders before they become
 9   final absent some contrary rule or statute allows them to correct
10   decisions based on shifting precedent).   The bankruptcy court was
11   free to recognize the holding of In re Reswick and reverse its
12   prior ruling denying the Stay Relief Motion.
13        We reject Ortola’s argument that the court’s application of
14   In re Reswick unfairly denied him the right to pursue continuing
15   the stay under § 362(c)(3)(B).   Any motion under § 362(c)(3)(B)
16   must have been filed, heard, and ruled upon before expiration of
17   the 30-day period.   In this case, that date was August 29, 2010.
18   Ortola’s proposed motion to continue the stay, filed on April 20,
19   2011, was grossly untimely.   Even if Ortola had timely sought to
20   continue the stay under § 362(c)(3)(B) and it was granted, the
21   bankruptcy court made it clear at the hearing on Ortola’s motion
22   to reconsider that it would have lifted the stay if a motion had
23
          8
24          Local Rule 58-6 of the Central District of California
     dictates that a notation in the civil docket of entry of a
25   memorandum of decision, an opinion of the court, or a minute
     order of the clerk, does not constitute entry of judgment unless
26   specifically ordered by the judge. This rule does not exist in
     the Central District’s Local Bankruptcy Rules; however, under
27   LBR 1001-1(e)(1), a matter not specifically covered by the Local
     Bankruptcy Rules may be determined by parallel reference or
28   analogy to the District Court Rules.


                                   - 11 -
 1   been filed after In re Reswick.   Thus, the result is the same -
 2   no stay exists as to the subject property.9
 3   B.   Ortola waived his appeal of the reconsideration order.
 4        Even though in his notice of appeal Ortola appealed the
 5   order denying his motion to reconsider, he failed to provide any
 6   argument on the issue in his brief.    An appellate court in this
 7   circuit “will not review issues which are not argued specifically
 8   and distinctly in a party’s opening brief.”    City of Emeryville
 9   v. Robinson, 621 F.3d 1251, 1261 (9th Cir. 2010).    Even if we did
10   review the matter, we see no abuse of discretion by the
11   bankruptcy court in denying it.
12                            VI. CONCLUSION
13        We conclude that the bankruptcy court did not abuse its
14   discretion in reversing its prior ruling denying the Stay Relief
15   Motion and granting it under § 362(c)(3)(A).   Accordingly, we
16   AFFIRM, but we REMAND for a corrected order reflecting the stay
17   termination date of August 29, 2010.
18
19
20
21
22
23
24
25
          9
26          We also reject Ortola’s argument that § 362(c)(3)(A) does
     not apply because his first case was “closed” not “dismissed.”
27   This argument defies common sense. Furthermore, Ortola admitted
     in his declaration in support of his opposition to the Stay
28   Relief Motion that he “dismissed” his first chapter 13 case.


                                  - 12 -
