1 UNITED STATES BANKRUPTCY COURT 2 EASTERN DISTRICT OF CALIFORNIA 3 In re: ) Case No. 22-21184-B-13 4 ) BERTHA LEE VALENTINE, ) Adversary No. 22-2086 5 ) ) 6 Debtor(s). ) ________________________________) 7 ) BERTHA LEE VALENTINE, ) 8 ) ) 9 Plaintiff(s), ) ) 10 v. ) ) 11 ROY B. HOLMES, III, ALLIANCE ) ROTH 401(k) PROFIT SHARING PLAN ) 12 AND TRUST, SHAWN O’CONNOR and ) YELENA OSTROVSKY, as Trustees ) 13 of the Alliance Roth 401(k) ) Profit Sharing Plan and Trust, ) 14 ) Defendant(s). ) 15 ________________________________) 16 MEMORANDUM DECISION GRANTING PARTIAL SUMMARY JUDGMENT FOR 17 PLAINTIFF ON CLAIMS UNDER 11 U.S.C. § 362(a) IN THE EIGHTH AND NINTH CLAIMS FOR RELIEF OF THE COMPLAINT 18 This memorandum decision holds that all acts taken in 19 violation of the automatic stay of 11 U.S.C. § 362(a) are void 20 and are of absolutely no effect whatsoever regardless of whether 21 the acts are willful or so-called “technical” automatic stay 22 violations. This memorandum decision also holds that a 23 bankruptcy court has the authority to declare acts that violate 24 the automatic stay void independent of its authority to determine 25 whether the violations warrant actual damages and attorney’s fees 26 under 11 U.S.C. § 362(k). 27 28 1 1 I. 2 Introduction 3 Plaintiff Bertha Valentine is 80 years old. She is also the 4 debtor in the parent Chapter 13 case. 5 Plaintiff filed the Complaint that commenced this adversary 6 proceeding on August 29, 2022. See Adv. Docket 1. Generally, 7 the Complaint alleges: (1) Plaintiff met with Defendant Roy B. 8 Holmes, III, in Las Vegas, Nevada; (2) Holmes convinced Plaintiff 9 it was necessary for Plaintiff to sign a Quitclaim Deed conveying 10 her residence to him so that he could help Plaintiff with 11 mortgage issues; (3) Plaintiff was unrepresented and did not 12 understand the implications of signing the Quitclaim Deed; (4) 13 Holmes obtained a rental agreement from occupants who reside with 14 Plaintiff at her residence; (5) Holmes conveyed Plaintiff’s 15 residence to Defendant Alliance 401(k) Profit Sharing Plan and 16 Trust; (6) Plaintiff sued Holmes in state court to void the 17 Quitclaim Deed, recorded a lis pendens in the state court action, 18 and thereafter filed a Chapter 13 bankruptcy case; (7) Alliance 19 401(k) Profit Sharing Plan and Trust conveyed Plaintiff’s 20 residence to Defendant Alliance Roth 401(k) Profit Sharing Plan 21 and Trust; (8) in an effort to obtain title to and possession of 22 Plaintiff's residence, Defendants (other than Holmes) retained an 23 attorney by the name of Steffanie Stelnick who filed quiet title 24 and unlawful detainer actions against Plaintiff and her residence 25 in state court; and (9) transfers of the Plaintiff’s residence 26 occurred and were recorded - and attorney Steffanie Stelnick 27 filed the quiet title and unlawful detainer actions in state 28 court - after Plaintiff filed her bankruptcy petition. 2 1 Defendants Shawn O’Connor, Yelena Ostrovsky, Alliance 401 (k) Profit Sharing Plan and Trust, and/or Alliance Roth 401(k) Profit 3 || Sharing Plan and Trust filed an answer on October 4, 2022. See Adv. Docket 8. Defendant Holmes filed an answer on October 25, 5 || 2022.' See Adv. Docket 23. 6 On October 25, 2022, the court issued an Order and Notice of 7 || Intent to Sua Sponte Grant Partial Summary Judgment for Plaintiff Eighth and Ninth Claims for Relief and Providing Opportunity to Respond (the “Order and Notice”). See Adv. Docket 24. The 10 || Order and Notice informed the parties of the court’s intent to 11 |} sua sponte grant partial summary judgment for Plaintiff on claims 12 1 brought under 11 U.S.C. § 362(a) in the Eighth and Ninth Claims 13 || for Relief of the Complaint. It also noted the unique procedural 14 || posture of this adversary proceeding which permitted the court to consider facts undisputed for purposes of summary judgment.* 16 The Order and Notice further provided Defendants with an 17} opportunity to respond under Local Bankruptcy Rule 7056-1 by 18 |] November 15, 2022. None of the Defendants availed themselves of 19] that opportunity.?* 20 ————_ 21 ‘Holmes’ default was entered on October 6, 2022, see Adv. Docket 16, and vacated on October 29, 2022. See Adv. Docket 26. 22 “The court noted that the Complaint is supported by 23 | Plaintiff’s declaration and authenticated exhibits which were filed with the Complaint. See Adv. Dockets 6, 7. Defendants 241! have also made relevant admissions in a sworn declaration filed 25 in the parent Chapter 13 case. See Bankr. Docket 23. 26 *Defendants’ arguments in response or opposition to the Order and Notice are deemed waived and forfeited. See United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 275 (2010) (“United therefore forfeited its arguments . . . by failing to 28 || raise a timely objection in [the bankruptcy] court.”); Reid and
1 II. Undisputed Facts 2 The presence or absence of a genuine dispute of material 3 fact lies at the core of the summary judgment process. It is 4 therefore critical that, when responding to a motion for summary 5 judgment, a non-moving party challenge asserted undisputed facts. 6 See Fed. R. Civ. P. 56(c); Fed. R. Bankr. P. 7056. 7 Failure to dispute an assertion of fact permits the court to 8 consider the fact undisputed for purposes of a motion for summary 9 judgment and grant summary judgment. See Fed. R. Civ. P. 10 56(e)(2)-(3);4 Fed. R. Bankr. P. 7056. This court’s local rules 11 also stress the importance of disputing assertions of undisputed 12 facts. See Local Bankr. R. 7056-1(b).5 13 14 Heller, APC v. Laski (In re Wrightwood Guest Ranch, LLC), 896 15 F.3d 1109, 1113 (9th Cir. 2018). Oral argument is not necessary and it will not assist in the decision-making process. See Local 16 Bankr. R. 9014-1(h), 1001-1(f). The hearing on December 6, 2022, 17 will be vacated. 18 4The relevant part of the Civil Rule states as follows: If a party fails to properly support an assertion of 19 fact or fails to properly address another party’s assertion of fact as required by Rule 56(c), the court 20 may: [. . .] 21 (2) consider the fact undisputed for purposes of the 22 motion; [or] (3) grant summary judgment if the motion and 23 supporting materials-including the facts considered undisputed- show that the movant is entitled to it[.] 24 5The relevant part of the local rule states as follows: 25 Any party opposing a motion for summary judgment or 26 partial judgment shall reproduce the itemized facts in the Statement of Undisputed Facts and admit those facts 27 which are undisputed and deny those which are disputed, including with each denial a citation to the particular 28 portions of any pleading, affidavit, deposition, 4 1 The United States Supreme Court has stated that a party 2 opposing summary judgment who “fail[s] specifically to challenge 3 the facts identified in [a] statement of undisputed facts . . . 4 is deemed to have admitted the validity of [those] facts[.]”. 5 Beard v. Banks, 548 U.S. 521, 527 (2006); accord Moon v. Rush, 69 6 F.Supp. 3d 1035, 1039-40 (E.D. Cal. 2014) (under local district 7 court rule virtually identical to local bankruptcy court rule); 8 Baroni v. NationStar Mortgage, Inc. (In re Baroni), 2015 WL 9 6956664, *6 (9th Cir. BAP Nov. 10, 2015) (“Once the moving party 10 has presented facts as undisputed and has presented admissible 11 evidence in support of those facts, the non-moving party may be 12 deemed to have admitted those facts for summary judgment purposes 13 unless he or she specifically challenges those facts and presents 14 controverting evidence in support of his or her position.”). 15 Defendants’ failure dispute facts identified as undisputed 16 means the following facts are admitted for present purposes: 17 (1) Plaintiff resides at 3854 Townshend Circle, Stockton, California. Adv. Docket 6 at ¶ 2. 18 (2) Plaintiff acquired her residence with her now 19 deceased husband in 2003. Id. at ¶ 4; Adv. Docket 7 at Ex. 1. 20 (3) Prior to her husband’s death, Plaintiff and her 21 husband held the residence as joint tenants. Adv. Docket 6 at ¶ 5; Adv. Docket 7 at Ex. 2. 22 (4) On or about September 22, 2011, Plaintiff conveyed 23 her residence to a revocable trust and thereafter held 24 interrogatory answer, admission, or other document 25 relied upon in support of that denial. The opposing 26 party may also file a concise ‘Statement of Disputed Facts,’ and the source thereof in the record, of all 27 additional material facts as to which there is a genuine issue precluding summary judgment or 28 adjudication. 5 1 the property as trustee of the trust. Adv. Docket 6 at I 7; Adv. Docket 7 at Ex. 3. 2 (5) A June 10, 2021, Quitclaim Deed which purports to 3 convey Plaintiff’s residence to Holmes was recorded with the San Joaquin County Recorder on June 17, 2021, 4 as Document No. 2021-104274. Adv. Docket 6 at 12, 15; Adv. Docket 7 at Ex. 5; Bankr. Dkt. 23 at Ex. 2. 5 (6) Disputing the validity of the Quitclaim Deed on 6 the basis it was fraudulently obtained, on September 29, 2021, Plaintiff filed an action against Holmes in 7 the San Joaquin County Superior Court (Case No. STK-CV-2021-0009120) which seeks to void the Quitclaim 8 Deed. Adv. Docket 6 at 9 17. 9 (7) A lis pendens concerning the Plaintiff’s state court action was recorded with the San Joaquin County 10 Recorder on October 7, 2021, as Document No. 2021- 168697, and on November 9, 2021, as Document No. 2021- 11 187604. Adv. Docket 6 at FJ 18; Adv. Docket 7 at Ex. 7. 12 (8) Plaintiff filed a Chapter 13 petition on May 9, 2022 (“Petition Date”). Adv. Docket 6 at 9 19; Bankr. 13 Docket 1.° 14 (9) A May 20, 2022, Quitclaim Deed which purports to transfer Plaintiff’s residence from Holmes to Shawn 15 O’Connor and Yelena Ostrovsky, Trustees of the Alliance 401 (k) Profit Sharing Plan and Trust, was recorded with 16 the San Joaquin County Recorder on May 23, 2022, as Document No. 2022-065505. Adv. Docket 6 at FI 21; Adv. 17 Docket 7 at Ex. 10; Bankr. Dkt. 23 at Ex. 4. 18 (10) An unrecorded May 31, 2022, Grant Deed purports to transfer Plaintiff’s residence from Shawn O’Connor and 19 Yelena Ostrovsky, Trustees of the Alliance 401 (k) Profit Sharing Plan and Trust, to Shawn O’Connor and 20 Yelena Ostrovsky, Trustees of the Roth 401(k) Profit Sharing Plan and Trust. Adv. Docket 6 at 7 23; Adv. 21 Docket 7 at Ex. 12. 22 (11) On or about June 10, 2022, a Three-Day Notice to Pay Rent or Quit signed by attorney Steffanie Stelnick 23 was posted on Plaintiff’s residence. Adv. Docket 6 at q 20; Adv. Docket 7 at Ex. 9. 24 (12) On June 29, 2022, attorney Steffanie Stelnick 25 filed a complaint, which seeks to quiet title to Plaintiff’s residence in Defendants Shawn O’Connor and 26 27 ‘The September 29, 2021, state court action was pending on 28 || the Petition Date. See Bankr. Docket 1, Official Form 107, No. 9
1 Yelena Ostrovsky as Trustees of the Alliance Roth 401(k) Profit Sharing Plan and Trust and which names 2 Plaintiff individually as a defendant, in the San Joaquin County Superior Court (Case #STK-CV-URP-2022- 3 0005483). Adv. Docket 6 at ¶ 23; Adv. Docket 7 at Ex. 12; Bankr. Dkt. 23 at Ex. 7. 4 (13) On July 13, 2022, attorney Steffanie Stelnick 5 filed an unlawful detainer complaint in the San Joaquin County Superior Court (Case #STK-CV-LUDR-2022-6501) 6 which seeks to obtain possession of Plaintiff’s residence on behalf of Shawn O’Connor as Trustee of the 7 Alliance Roth 401(k) Profit Sharing Plan and Trust. Adv. Docket 6 at ¶ 24; Adv. Docket 7 at Ex. 13. 8 (14) A version of the Grant Deed of May 31, 2022, this 9 one dated June 7, 2022, was recorded with the San Joaquin County Recorder on October 26, 2022, as 10 Document No. 2022-123236. Bankr. Dkt. 21 at ¶ 5; Bankr. Dkt. 21 at Ex. 8.7 11 12 III. 13 Jurisdiction and Venue 14 The court has jurisdiction over this adversary proceeding 15 pursuant to 28 U.S.C. §§ 157(b)(2) and 1334. The claims brought 16 under 11 U.S.C. § 362(a) in the Eighth and Ninth Claims for 17 Relief are core matters under 28 U.S.C. §§ 157(b)(2)(A), (G), and 18 (O). Venue is proper under 28 U.S.C. §§ 1408 and 1409. 19 20 IV. Applicable Legal Standard 21 Civil Rule 56(f) - made applicable in this adversary 22 proceeding by Bankruptcy Rule 7056 - states as follows: “After 23 giving notice and a reasonable time to respond, the court may: 24 . . . (3) consider summary judgment on its own after identifying 25 26 27 7“The court need not consider only the cited materials, but it may consider other materials in the record.” Fed. R. Civ. P. 28 56(c)(3); Fed. R. Bankr. P. 7056. 7 1} for the parties material facts that may not be genuinely in dispute.” Fed. R. Civ. P. 56(f) (3); see also Norse v. City of 3} Santa Cruz, 629 F.3d 966, 971-73 (9th Cir. 2010) (en banc). 4 Summary judgment is warranted when there is no genuine 5 || dispute as to any material fact and judgment may be entered as a 6|]/matter of law. See Fed. R. Civ. P. 56(a); Fed. R. Bankr. P. 747056. A motion for summary judgment calls for a “threshold inguiry” into whether a trial is necessary, that is, whether there are “any genuine factual issues that properly can be 10 || resolved only by a finder of fact because they may reasonably be 11] resolved in favor of either party.” Anderson v. Liberty Lobby, 12 }}Inc., 477 U.S. 242, 250 (1986). The court does not weigh 13 evidence or assess credibility; rather, it determines which facts are not disputed then draws all inferences and views all evidence in the light most favorable to the non-moving party. See Id. at 16] 255; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 17 | 574, 587-88 (1986). “Where the record taken as a whole could not 18 || lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’” Matsushita, 475 U.S. at 20] 587; see also C.A.R. Transp. Brokerage Co. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations, internal 22 || quotations omitted). 23 24 Vv. Analysis 25 A. 26 Applicability of the Automatic Stay 27 The filing of a bankruptcy petition invokes the automatic 28} stay of 11 U.S.C. § 362(a) which “effect[s] an immediate freeze
1 of the status quo by precluding and nullifying post-petition 2 actions, judicial or nonjudicial, in nonbankruptcy fora against 3 the debtor or affecting the property of the estate.” Mwangi v. 4 Wells Fargo Bank, N.A. (In re Mwangi), 764 F.3d 1168, 1173 (9th 5 Cir. 2014) (emphasis in original, quotation omitted). 6 The scope of the automatic stay is expansive. As noted in 7 In re Daniel, 404 B.R. 318 (Bankr. N.D. Ill. 2009), it applies to 8 three kinds of activity: 9 (1) activity directed against “the debtor” personally, such as “the commencement or continuation ... of a 10 judicial, administrative, or other action or proceeding against the debtor” (11 U.S.C. § 362(a)(1)); 11 (2) activity directed against property of the debtor’s 12 estate, such as “any act to obtain possession of property of the estate” or “of property from the 13 estate” or “to exercise control over property of the estate” and “any act to create, perfect or enforce any 14 lien against property of the estate” (11 U.S.C. §§ 362(a)(3) and (4)); and 15 (3) activity directed against “property of the debtor,” 16 such as “any act to create, perfect, or enforce against property of the debtor any lien to the extent that such 17 lien secures a claim that arose before the commencement of the case” (11 U.S.C. § 362(a)(5)). 18 See Id. at 322. 19 In the present context, the automatic stay protects 20 Plaintiff individually as a Chapter 13 debtor. 21 The automatic stay also protects an interest Plaintiff had 22 in her residence when she filed her bankruptcy petition. 23 All of a debtor’s legal and equitable interests in property 24 become property of the estate when a bankruptcy case is filed. 25 See 11 U.S.C. § 541(a)(1). Bankruptcy courts look to state law 26 to ascertain the extent of a debtor’s legal and equitable 27 interests at the start of a bankruptcy case and, thus, the extent 28 9 1] of property of the estate under 11 U.S.C. § (1) protected by the automatic stay of 11 U.S.C. § 362(a). Butner v. United 31 States, 440 U.S. 48, 54-55 (1979); Lowenschuss v. Selnick (In re 4 || Lowenschuss), 170 F.3d 923, 929 (9th Cir. 1999). The applicable 5 || state law here is California lis pendens law.® 6 A lis pendens is a real property interest under California law. As the Ninth Circuit explained in Hurst Concrete Products, 8 v. Lane (In re Lane), 980 F.2d 601 (9th Cir. 1992), “under California law, a party attains an interest [in real property] 10 || superior to subsequent purchasers upon recordation of the lis 11] pendens.” Id. at 606 (emphasis added); see also United States v. 12 |} $3,124,977.28 in U.S. Currency, 239 Fed.Appx. 335, 3352007 WL 13 1814329, *1 (9th Cir. June 22, 2007) (“Under California law, a 141 properly recorded and indexed lis pendens provides parties who subsequently acquire an interest in the property with constructive notice of the interest reflected in the lis 17 || pendens.”). 18 The interest represented in the lis pendens is contingent 19] until a judgment in the underlying litigation is entered at which 20 |} point the contingency is removed and the interest is quantified. Lane, 980 F.2d at 605 (“Until judgment, [plaintiff’s] 22 interest [under the recorded lis pendens] may have been the 23 |) entire property, a lien on the property, or zero interest in the
*Federal courts look to state lis pendens law. Singh v. Baidwan, 2017 WL 616436, *1 (E.D. Cal. Feb. 14, 2017). The 26} California legislature has also stated that California’s lis pendens laws should apply in federal court. See Cal. Code Civ. 27 P. § 405.5 (“This title applies to an action pending in any United States District Court in the same manner that it applies 28 an action pending in the courts of this state.”). 10
property.”); see also United States v. Alvarado, 108 F.3d 339, WL 68037, *1 (9th Cir. Feb. 18, 1997) (“The government was 3 merely protecting its potential interest in the property by 4|| filing the lis pendens [under California law].”).°* The 5 || contingent interest, however, is no less property of the 6 || bankruptcy estate. Neuton v. Danning (In re Neuton), 922 F.2d 7 1379, 1382-83 (9th Cir. 1990); see also Anderson v. Rainsdon (In 8 || re Anderson), 572 B.R. 743, 747 (9th Cir. BAP 2017) (“In this Circuit, any contingent interest of the debtor ‘sufficiently 10 || rooted in the pre-bankruptcy past’ is estate property, even if the contingency is not satisfied until after the bankruptcy is 12 || filed.”); Jones v. Mullen (In re Jones), 2014 WL 465631, *5 (9th BAP Feb. 5, 2014) (citing Neuton as “longstanding Ninth 14 || Circuit precedent which holds that property of the estate under § 15 |} (1) includes contingent interests.”). And as such, it is 16 || protected by the automatic stay of 11 U.S.C. § 362(a). 17 Applying the foregoing principles here, Plaintiff recorded a lis pendens concerning her residence in October and November 19 20 °The contingent nature of the interest pending judgment is also reflected in Cal. Code Civ. P. § 405.24 which states: 21 From the time of recording the notice of pendency of 22 action, a purchaser, encumbrancer, or other transferee of the real property described in the notice shall be 23 deemed to have constructive notice of the pendency of the noticed action as it relates to the real property 24 and only of its pendency against parties not fictitiously named. The rights and interest of the 25 Claimant in the property, as ultimately determined in 26 the pending noticed action, shall relate back to the date of the recording of the notice. 271 (Emphasis added). 28 11
1} 2021. Inasmuch as the lis pendens was of record on the Petition Date, i.e., May 9, 2022, and as of the Petition Date judgment had 31} not been entered in the litigation from which the lis pendens 4!|arises, Plaintiff had a contingent interest in her residence when 5 || she filed her bankruptcy case. The contingent interest became - remains - property of Plaintiff’s bankruptcy estate. As 7 ||) such, it is protected by the automatic stay. 8 B. Violations of the Automatic Stay ° Automatic stay violations may be willful or technical. “A willful violation is satisfied if a party knew of the automatic stay, and its actions in violation of the stay were intentional.” Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210, 1215 (9th Cir. 2010) (citing Pinkstaff v. United States (In re Pinkstaff), 974 F.3d 113, 115 (9th Cir. 1992)). Intent to violate the automatic stay is irrelevant and only the actions themselves need be intentional. Pinkstaff, 974 F.3d at 115 (citing Goichman v. Bloom (In re Bloom), 875 F.2d 224, 227 (9th Cir. 1989)). 19 A technical violation may occur when actions are taken without notice of the bankruptcy case or knowledge of the automatic stay. In re Iezzi, 504 B.R. 777, 792 (Bankr. E.D. Pa. 2014); In re Kline, 424 B.R. 516, 523 (Bankr. N.M. 2010). In the Ninth Circuit, “violations of the automatic stay [are] void, not voidable.” Schwartz v. United States (In re Schwartz), 954 F.2d 569, 571 (9th Cir. 1992); see also Gruntz v. ee County of Los Angeles (In re Gruntz), 202 F.3d 1074, 1082 (9th Cir. 2000) (en banc). 28 12
1 Nevertheless, the Ninth Circuit Bankruptcy Appellate Panel 2 || recently suggested that a technical violation may be voidable: 3 This panel has expressed some support for ‘the idea that a technical violation of stay will not necessarily 4 make that violation void.’ Wash. Mut. Sav. Bank v. James (In re Brooks), 79 B.R. 479, 481 (9th Cir. BAP 5 1987), aff’d on other grounds, 871 F.2d 89 (9th Cir. 1989); see also Jones v. Wingo (In re Wingo), 89 B.R. 6 54, 57 (9th Cir. BAP 1988) (stating in dicta that *‘[t]here are situations in which a technical violation 7 of the stay will not necessarily render that violation void’). The Ninth Circuit has expressly ‘refrain[ed] 8 from addressing the validity of the Brooks exception.” Schwartz v. United States (In re Schwartz), 954 F.2d 9 569, 574-75 (9th Cir. 1992). 10 || Koeberer v. California Bank of Commerce (In re Koeberer), 632 11 B.R. 680, 690 n.4 (9th Cir. BAP 2021). 12 The Ninth Circuit has not adopted the so-called “Brooks exception.” And this court doubts it would for several reasons. 14 First, the Ninth Circuit continues to recognize that 15 || Schwartz stands for the proposition that all violations of the 16 || automatic stay are void. Indeed, it said so in Burkart v. 17 | Coleman (In re Tippett), 542 F.3d 684 (9th Cir. 2008): 18 In interpreting 11 U.S.C. § 362(a), we do not write on a clean slate. In Schwartz, we addressed the question 19 whether violations of the automatic stay by creditors were void ab initio or simply voidable. 954 F.2d at 20 570-71. We concluded that the purpose of the provision—namely, broad protection of debtors from 21 creditors—could be vindicated only if all violations were rendered void, not merely voidable. Id. at 571. 22 Id. at 691 (emphasis added); see also Bank of New York Mellon, 23 fka Bank of New York, as Trustee for the Certificate Holders of 24 CWALT, INC., Alternative Loan Trust 2005-54CB, Mortgage Pass- 25 Through Certificates Series 2005-54CB v. Enchantment at Sunset 26 Bay Condominium Assoc., 2 F.4th 1229, 1235 (9th Cir. 2021) 27 (VanDyke, J., concurring) (stating “we have consistently 28 13
1] reapplied In re Schwartz to affirm that any violations of the automatic stay provision are indeed void[.].” (Emphasis added)). 3 Second, the authority on which the so-called “Brooks exception” is based is questionable, at best. The Ninth Circuit affirmed Brooks on standing grounds which means it did not reach 6} the void/voidable issue. James v. Washington Mut. Sav. Bank (In re Brooks), 871 F.2d 89, 90 (9th Cir. 1989). It was also recently noted that the suggestion in Brooks that some automatic stay violations are voidable is “inconsistent with [the 10 | Circuit’s] more recent bankruptcy jurisprudence.” Bank of New 11 |} York Mellon, 2 F.4th at 1236 (VanDyke, J., concurring) (so 12] stating). And Wingo was largely discredited in 40235 Washington 13 }} Street Corp. v. Lusardi, 329 F.3d 1076, 1083 (9th Cir. 2003). 14 Third, the BAP has retreated from the so-called “Brooks 15 || exception” and, in so doing, has aligned itself with more recent 16] Ninth Circuit authority: 17 The voidness of acts and judicial proceedings pursued in violation of the stay is a critical feature of one 18 of the most important provisions of the Bankruptcy Code, because it helps to ensure that the stay is 19 self-executing. []. 20 For voidness purposes, it makes no difference whether the stay violator was aware of the stay when he or she 21 violated the stay. []. Regardless, all acts and judicial proceedings undertaken in violation of the 22 stay are void. []. 23 || Carter v. Barber (In re Carter), 2016 WL 1704719, *4 (9th Cir. BAP April 22, 2016) (emphasis added, internal citations omitted); 25 |} In re Gagliardi, 290 B.R. 808, 814 (Bankr. D. Colo. 2003) 26 (“Actions taken in violation of the automatic stay are void and 27 no force or effect, even when there is no actual notice of the 28 existence of the stay.”). 14
1 The point here is that all acts that violate the automatic 2\ stay are void without regard to any knowledge or notice of a 3 || bankruptcy case or the automatic stay. The latter is relevant, of course, for purposes of determining if damages and attorney’s 5] fees are warranted under 11 U.S.C. § 362(k). But that 6 | determination exists independent of the bankruptcy court’s 7! authority to declare void all acts that violate the automatic 8 || stay. In re Parast, 612 B.R. 710, 716 (Bankr. D.S.C. 2020) 9l| (stating that damages are in addition to a void act and citing 10 || Davis v. Blair (In re Davis), C/A No. 17-06271-JW, Adv. Pro. No. 11] 18-80038-JW (Bankr. D.S.C. Oct. 3, 2018), as an example where the 12 bankruptcy court voided an arrest warrant and held a later 13 || hearing to determine if the non-debtor who pursued proceedings 14] that resulted in the arrest warrant was liable for damages). 15 Turning to acts taken against Plaintiff and her contingent 16 |) interest in her residence, the following postpetition acts 17 || violate the automatic stay, are void, and are of no effect: 18 (1) the May 20, 2022, Grant Deed and its recordation on May 23, 2022, are VOID as a violation of 11 U.S.C. § 19 362 (a) (3); 20 (2) the Grant Deeds of May 31, 2022, and June 7, 2022, and the recordation of the latter on October 26, 2022, 21 are VOID as a violation of 11 U.S.C. § 362(a) (3); 22 (3) the notice to quit posted on Plaintiff’s residence on or about June 10, 2022, is VOID as a violation of il 23 U.S.C. §§ 362(a) (1), (a) (3), and/or (a) (6); 24 (4) the actions filed in state court on June 29, 2022, and July 13, 2022, are VOID as violations of 11 U.S.C. 25 §§ 362(a) (1), (a) (3), and/or (a) (6).*° 26 27 ‘Defendants (except Holmes) have moved for relief from the automatic stay to proceed with their June 29, 2022, quiet title 28 |} action under 11 U.S.C. § 362(b) (24). To the extent not waived or 15
1 The underlying objective of each of the foregoing acts was 2 to divest Plaintiff of all right, title, interest in - and 3 ownership and possession of - her residence by postpetition 4 transfers of the residence, recordation of the transfers, and 5 confirmation and ratification of both through state court 6 litigation. In that regard, each act is in some measure an 7 exercise of control over the contingent interest that Plaintiff 8 had in her residence when she filed her bankruptcy case and thus, 9 at a very minimum, each act is an exercise of control over 10 property of the Plaintiff’s bankruptcy estate. As explained 11 above, at this juncture the court need not determine who knew 12 what with regard to the Plaintiff’s bankruptcy case and/or the 13 automatic stay when each act occurred. That determination will 14 be made at a later date for purposes of damages and attorney’s 15 fees under 11 U.S.C. § 362(k). Suffice it to say for present 16 purposes, the above-described acts are void and of no effect. 17 18 VI. Conclusion 19 For all the foregoing reasons, and good cause appearing, 20 partial summary judgment will be GRANTED for Plaintiff and 21 against Defendants on the Eighth and Ninth Claims for Relief of 22 the Complaint as and to the extent stated hereinabove. 23 24 forfeited, the argument is rejected. Section 362(b)(24) states 25 that a filed petition does not operate as a stay under “[362(a)] 26 of any transfer that is not avoidable under section 544 and that is not avoidable under section 549.” 11 U.S.C. § 362(b)(24). By 27 its terms, the exception applies to a transfer of property. Defendants’ quiet title action is not a transfer. It is 28 litigation. The exception is inapplicable. 16 1 The acts identified in paragraphs (1)-(4) on page 15 of this 2 memorandum decision are VOID and of no legal effect whatsoever. 3 A separate order will issue. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 1 INSTRUCTIONS TO CLERK OF COURT SERVICE LIST 2 The Clerk of Court is instructed to send the attached 3 document, via the BNC, to the following parties: 4 Fred A. Ihejirika 1600 Sacramento Inn Way #109 5 Sacramento CA 95815 6 Sanaz S. Bereliani 12100 Wilshire Blvd., 8th Floor 7 Los Angeles CA 90025 8 Roy B. Holmes III 1690 Willow Park Way 9 Stockton CA 95206 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18