### NOT FOR PU BLICA TION

U NIT E D ST A T E S BA NK RU PT CYA PPE L L A T E PA N E L

OF T HE NINT H CIRCU IT In re: FRA N KJA K U B A ITIS,

Deb to r. FRA N KJA K U B A ITIS,

A p pellant,

v. JPMO R GA N C HA SE BA N K , N .A ., A p pellee. BA P N o . C C -18-1069-FLS Bk. N o . 8:13-b k-10223-TA

M E M ORA ND U M *

Sub m itted W itho ut A rgum ent o n Feb ruary 21, 2019

Filed – March 7, 2019 A ppeal fro m the U nited States Bankruptcy C o urt fo r the C entral Distric t o f C alifo rnia Ho no rab le Theo d o r C . A lb ert, Bankruptc y Judge, Presiding 

# FIL ED
MAR 7 2019
S USAN M . SPRAUL, CLERK U. S. BKCY

. APP. PANEL O F T H E NI NT H CI RCUI T

* Thi s di sposi ti on i s not appr opr i ate for publi cati on. Although i t may be ci ted for whatev er per suasiv e v alue i t may hav e, see Fed. R. App. P. 32.1, i t has no pr ecedenti al v alue, see 9th Ci r . BAP Rule 8024-1.A ppearanc es: Frank Jakub aitis, pro se, o n the b rief.

Befo r e: FA R IS, LA FFERTY, and SPRA K ER , Bankruptc y Judges. INT ROD U CT I ON C hapter 7 1 deb to r Frank Jakub a itis rec eived his discharge in 2014, and the b ankruptc y c o urt c lo sed his c ase. In 2018, the b ankruptc y c o urt granted c redito rJPMo rgan C hase Bank, N .A . (“C hase”) relief fro m the auto m aticstay to enfo rc e its lien rights against his auto m o b ile. Mr. Jakub aitis appeals, arguing that the c o urt sho uld no t have granted relief fro mthe auto m atic stay, b ec ause the stay term inated upo n his discharge. He also argues that C hase waited to o lo ng to seek relief. The b ankruptc y c o urt sho uld no t have granted relief fro mthe auto m aticstay b ec ause the stay had already expired, and the c o u rt lac ked po wer to grant relief fro m the disc harge injunc tio n. But the discharge injunc tio n left C hase free to enfo rc e its in remrights against Mr. Jakub aitis’ auto m o b ile witho ut seeking perm issio n fro mthe c o u rt. A c c o rdingly, the
erro r was harm less, and we A FFIR M.

1 Unless speci fi ed other wi se, all chapter and secti on r efer ences ar e to the Bankr uptcy Code, 11 U.S

. C. §§ 101-1532, and all “Rule” r efer ences ar e to the Feder al Rules of Bankr uptcy Pr ocedur e. 2FA CT U A L BA CK GROU ND 2

A . M r. Jakubaitis ’ bankruptcy c as e Mr. Jakub aitis filed his chapter 7 petitio n in January 2013 and
scheduled a 2005 Merc edes Benz ML350 (“Vehic le”), whic h was sub jec t to C hase’s purchase m o ney lien. Mr. Jakub aitis indic ated his intentio n to reaffirm the deb t to C hase. C hase did no tfile a pro o f o f c laim, and Mr. Jakub a itis never exec uted a reaffirm atio n agreem ent c o nc erning the Vehic le. Mr. Jakub aitis rec eived his discharge in January 2014, and the b ankruptc y c o u rt c lo sed his c ase. A year later, in January 2015, ano ther c redito r filed a m o tio n to
reo pen Mr. Jakub aitis’ c ase. The c o urt granted the m o tio n to reo pen. B. T he m otion for relief fromthe autom atic s tay C hase m a d e its first appearanc e in the c ase o ver two years later, when it filed a request fo r c o urtesy no tic e o f elec tro nicfiling in O c to b er 2017. Three m o nths later, o n January 29, 2018, it filed a m o tio n fo rrelief fro mthe auto m aticstay (“Mo tio n fo r R elief”). C hase requested autho rity to “pro c eed under applic ab le no nb ankruptc y law to enfo rc e its rem edies to repo ssess and sell the [Vehic le].” Mr. Jakub aitis o ppo sed the Mo tio n fo r R elief. He argued that there

2 We exer ci se our di scr eti on to r ev i ew the bankr uptcy cour t’s docket, as appr opr i ate. See Woods & Erickson, LLP v. Leonard (In re AVI, Inc.) , 389 B.R. 721, 725 n.2 (9th Ci r. BAP 2008). 3was no c ause to lift the auto m aticstay b ec ause he had rec eived his

discharge and the stay had term inated; the reo pened c a se did no t give C hase additio nal rights. He also argued that the Mo tio n fo r R elief was prejudic ial and im po sed a hardship o n him . He c o ntended that C hase was b arred b y the do c trine o f lac hes b ec ause five years had passed sinc e the petitio n date and fo ur years had passed sinc e his discharge, yet C hase had
no t filed a pro o f o f c laimo r so ught relief prio r to discharge. The b ankruptc y c o urt issued a tentative ruling o n the Mo t io n fo r R elief and stated that it was inc lined to grant the m o tio n: “The allegatio n o f prejudic e and hardship m akes no sense. A ltho ugh the stay tec hnic a lly has
evo lved into a discharge injunc tio n upo n the entry o f a discharge, the analysis is the sam e.” A fter a hearing, the c o urt granted the Mo tio n fo r R elief. 3 The c o urt entered a fo rmo rder (“Stay R elief O rder”) granting C hase relief fro mthe auto m aticstay under § 362(d)(1). It “[t]erm inated [the auto m aticstay] as to the Deb t o rand the Deb to r’s b ankruptc y estate.” It additio nally pro vided: Mo vant m ay enfo rc e its rem edies to repo ssess o r o therwise o b tain po ssessio n and dispo se o f the [Vehic le] in ac c o rdanc e with applic ab le no nb ankruptc y law, b ut m ay no t pursue any defic ienc y c laim against the Deb to r o r pro perty o f the estate

3 Mr
. Jakubai ti s declined to pr ov i de us wi th a copy of the tr anscr i pt of the hear i ng. Ther efor e, we ar e enti tled to pr esume that nothi ng sai d at the hear i ng was helpful to hi s posi ti on. See Gionis v. Wayne (In re Gionis) , 170 B.R. 675, 681 (9th Ci r . BAP 1994), aff’d, 92 F.3d 1192 (9th Ci r . 1996). 4exc ept b y filing a pro o f o f c laim pursuant to 11 U .S.C . § 501.

Mr. Jakub aitis tim ely appealed the Stay R elief O rder. He represents
o n appeal that C hase has no t c o ntac t ed himc o nc erning the Vehic le o r
o therwise attem p ted to exerc ise its lien rights. JU RISD ICT ION The b ankruptc y c o urt had jurisdic tio n pursuant to 28 U .S.C . §§ 1334 and 157(b )(2)(A ) and (G). W e have jurisdic tio n under 28 U .S.C . § 158. ISSU E W hether the b a nkruptc y c o urt erred in granting C hase relief fro mthe auto m aticstay to enfo rc e its lien rights against the Vehic le. ST A ND A RD S OF RE V IE W W e review de no vo the b ankruptc y c o urt’s interpretatio n o f the Bankruptc y C o de. S ha piro v. H enso n , 739 F.3d 1198, 1200 (9th Cir. 2014). “De
no vo review requires that we c o nsider a m atter anew, as if no dec isio n had b een m ade previo usly.” F ra ncis v. W a lla c e (In re F ra ncis) , 505 B.R . 914, 917 (9th C ir. BA P 2014) (c itatio ns o m itted). W e review fo r an ab u s e o f disc retio n the b ankruptc y c o u rt’s rulings regarding lac hes. Bea ty v. S elinger (In re Bea ty) , 306 F.3d 914, 920-21 (9th Cir. 2002). W e also review fo r ab use o f disc retio n the b ankruptc y c o urt’s dec isio n to grant relief fro m the auto m aticstay. Kro nem yer v. Am
. C o ntra cto rs Indem . Co . (In re Kro nem yer) , 405 B.R . 915, 919 (9th C ir. BA P 2009) (c itatio ns o m itted).
5W e apply a two -part test to determ ine whether the b ankruptc y c o urt

ab used its disc retio n. First, we c o nsider de no vo whether the b ankruptc y c o u rt applied the c o rrec t legal standard. Then, we review the b ankruptc y c o u rt’s fac tual findings fo r c lear erro r. S ee S ulliva n v. H a rnisch (In re S ulliva n) , 522 B.R . 604, 611 (9th C ir. BA P 2014) (c iting United S ta tes v. Hinkso n , 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en b anc )). W e m ust affirm the b ankruptc y c o urt’s fac tual findings unless we c o nc lude that they are illo gic al, im p lausib le, o r witho ut suppo rt in the rec o rd. Id. at 612 (c iting Hinkso n , 585 F.3d at 1262). W e m a y affirm the dec isio n o f the b ankruptc y c o urt o n any b asis suppo rted b y the rec o rd. S ee AS AR C O, LLCv. Unio n Pa c. R .R . Co . , 765 F.3d 999, 1004 (9th C ir. 2014) (c itatio ns o m itted). D ISCU SSION A . T he bankruptcy c ourt erred by granting Chas e relief fromthe autom atic s tay or dis c harg e injunc tion. Mr. Jakub aitis argues that the b ankruptc y c o urt c o uld no t grant C hase relief fro mthe auto m atic stay b ec ause he had rec eived his discharge. In its tentative ruling, the b ankruptc y c o urt rec o gnized that the auto m atic stay was no tin effec t and had b een superseded b y the disc harge injunc tio n. N evertheless, the Stay R elief O rder granted C hase relief fro mthe auto m atic stay. This was erroneo us. W hen the c o urt grants a deb t o r a discharge, the auto m atic stay
6term inates and is replac ed b y the disc harge injunc tio n. S ee § 362(c )(2)(C )

(“the [auto m atic ] stay . . . c o ntinues until . . . the tim e a discharge is granted
o r denied”). In o ther wo rds, “the existenc e o f a discharge m eans that there is no auto m a ticstay fro mwhic h relief m ay b e granted to perm it an ac tio n against the deb to r . Inso far as the auto m aticstay b ars ac tio ns against the deb to r, the stay auto m atic ally expires upo n the grant o f a discharge.” R uva c a lba v. M uno z (In re M uno z ) , 287 B.R . 546, 551 (9th C ir. BA P 2002); see a lso Z iLO G, Inc. v. Co rning (In re Z iLO G, Inc.) , 450 F.3d 996, 1009 n.13 (9th C ir. 2006) (“W e do n’t understand why the distric t c o urt discussed the auto m aticstay. By A ugust 21, 2002, the auto m atic stay had lo ng sinc e disappeared; it was only the disc harge injunc tio n that was relevant.”). The
c o u rt ab uses its disc r etio n if it grants relief fro mthe auto m atic stay after it is term inated. S ee La kha ny v. K ha n (In re La kha ny) , 538 B.R . 555, 561 (9th C ir. BA P 2015) (“A s the stay had ‘auto m atic ally expire[d] upo n the grant o f [Lakhany’s] discharge,’ the b ankruptc y c o urt ab u sed its disc retio n in granting relief fro m the stay. R a ther, the appro p riate inquiry wo uld have b een the applic ab ility o f the disc harge injunc tio n.”). The auto m aticstay term inated o n January 21, 2014, when the b ankruptc y c o urt issued Mr. Jakub aitis’ discharge. The c o urt c o u ld no t thereafter grant C hase relief fro mthe no nexistent auto m aticstay. The b ankruptc y c o urt ab used its disc retio n when it did so

. In its tentative ruling, the b ankruptc y c o urt stated that it was inc lined

7to grant the Mo tio n fo r R elief as to the discharge injunc tio n. This was also

erro neo us. “The assum ptio n that the § 524(a)(2) statuto ry discharge injunc tio n
c an b e m o dified is inc o r rec t; the discharge injunc tio n is set in statuto ry
c o nc rete.” In re M uno z, 287 B.R . at 550. A ltho ugh the c o urt c anno t m o dify the disc harge injunc tio n, it c an determ ine its sc o pe. Ho wever, “determ inatio ns regarding the sc o pe o f the disc harge require a dec larato ry judgm ent o b tained in an adversary pro c eeding.” Id. at 551 (c itatio ns
o m itted); see C la rk

v. S tra nd (In re C la rk

) , BA P N o . C C -07-1393-C K Mo , 2008 W L 8444804, at *3 (9th Cir. BA P A pr. 3, 2008) (“relief fro mthe discharge injunc tio n o f Sec tio n 524 is o nly availab le thro ugh a c o m plaint to revo ke discharge under Sec tio n 727(e) and Rule 7001(4)”). Such determ inatio n
c anno t b e so ught in the guise o f a relief fro m stay m o tio n. Therefo re, the b a nkruptc y c o urt erred when it granted C hase relief fro meither the auto m a ticstay o r discharge injunc tio n. B. T he bankruptcy c ourt’s error washarm les s bec a us e Chas e did not need s tay relief to enforc e its lien rig hts . Bo th C hase’s m o tio n and the b ankruptc y c o urt’s o rder were
unnec essary. C hase did no t need relief fro mthe discharge injunc tio n to enfo rc e its in remrights against the Vehic le. A c c o rdingly, the b ankruptc y c o u rt’s erro r was harm less. A discharge “o perates as an injunc t io n against the c o m m enc em ent o r
8c o ntinuatio n o f an ac tio n, the em plo ym ent o f pro c ess, o r an ac t, to c o llec t,

rec o ver o r o ffset any [disc harged] deb t as a pers onal liability of the debtor . . . .” § 524(a)(2) (em phasis added). Bec ause the discharge applies o nly to the deb to r ’s “perso nal liab ility,” a c redito r ’s rights in the deb t o r’s pro perty are no t affec ted. S ee H S B C Ba nk , U S A, N a t’l Ass’n v. Blendheim(In re Blendheim ) , 803 F.3d 477, 494 (9th C ir. 2015) (“Discharges leave unim paired a c redito r ’s right to pro c eed in rem against the deb to r’s pro perty.”); O cwen Lo a n S ervicing, LLC v. Ma rino (In re Ma rino ) , 577 B.R . 772, 783-84 (9th C ir. BA P2017) (“The discharge has o ne im po rtant lim it: it b ars o nly effo rts to c o llec t deb ts ‘as a perso nal liab ility o f the deb to r.’ . . . This m eans that secured c redito r s c an fo rec lo se their liens after the disc harge is entered.” (c itatio ns o m itted)); 4 C o llier o n Bankruptc y ¶ 524.02 (Ric hard Levin & Henry J. So m m er eds., 16th ed.) (“[T]he pro visio ns [o f § 524] apply o nly to the perso nal liab ility o f the deb to r, so they do no taffec t an o therwise valid prepetitio n lien o n pro perty.”). Thus, the discharge do es no t affec t a c redito r’s rights in the deb to r ’ s pro perty, inc luding the right to repo ssess an auto m o b ile. S ee C o bbs v. Nissa n M o to r Accepta nce Co rp. (In re Co bbs) , BA P N o . SC -18-1064-FSKu, 2018 W L 5289698, at *5-6 (9th Cir. BA P O c t. 24, 2018), a ppea l dism issed , 2018 W L 7137677 (9th C ir. N o v. 28, 2018). In the present c a se, the b ankruptc y c o urt ruled that C hase “m ay enfo rc e its rem edies to repo ssess o r o therwise ob t a in po ssessio n and

9dispo se o f the Pro perty in ac c o r danc e with applic ab le no nb ankruptc y law

. . . .” But this ruling was unnec essary; C hase did no t need prio rc o urt appro val to enfo rc e its rights against the Vehic le (as o ppo s ed to its c laim s against Mr. Jakub aitis perso nally), b ec ause the discharge injunc tio n did no t affec t its lien rights. The Stay R elief O rder also did no t perm it C hase to enfo rc e any in perso nam c laimagainst Mr. Jakub aitis: it pro vides that C hase “m a y no t pursue any defic ienc y c laimagainst the Deb to r o r pro perty o f the estate exc ept b y filing a pro o f o f c laimpursuant to 11 U .S.C
. § 501.” Therefo re, the o rder granting relief fro m the disc harge injunc tio n
was unnec essary, the b a nkruptc y c o urt’s erro rwas harm less, and affirm anc e is warranted. 4 C. T he bankruptcy c ourt did not err in dec liningto apply lac h es . Mr. Jakub aitis argues that Chase sat o n its hands fo rto o lo ng such that the do c trine o f lac hes b arred it fro mseeking relief. W e need no t dec ide this issue. Mr. Jakub aitis do es no t m ake c lear exac t ly what he thinks C hase is b arred fro mdo ing. If he m eans that C hase is b arred fro mseeking stay relief, his argum ent is superfluo us, b ec ause (as he c o rrec tly asserts) the auto m aticstay has term inated b y o peratio n o f law. If he m eans that C hase

4 We note that r ev er sal of the bankr uptcy cour t’s or der would leav e the par ti es in exactly the same posi ti ons that they occupy upon affi r mance. Ei ther way, the automati c stay does not apply, and the di schar ge i nj uncti on does not bar Chase’s enfor cement of i ts li en r i ghts. 10m ay no t seek relief fro mthe discharge injunc tio n, his argum ent is also

superfluo us, b ec ause o ne c anno t ever o b t a in relief fro mthat injunc tio n. W e think that Mr. Jakub aitis prob ab ly intends to argue that C hase’s delay prec ludes it fro m enfo rc ing its lien o n the Vehic le. But this questio n was no t b efo re the b a nkruptc y c o urt and is no t b efo r e us. In dec iding a
m o tio n fo r relief fro mstay, the b ankruptc y c o urt is o nly tasked with dec iding whether the m o vant has a c o lo r ab le c laimto enfo r c e its rights against the pro perty, no t the sub stanc e o r m erit o f the c laim

. S e e V ea l v. Am
. H o m e Mo rtg. S ervicing, Inc. (In re V ea l) , 450 B.R . 897, 914-15 (9th C ir. BA P 2011) (“a party seeking stay relief need o nly estab lish that it has a c o lo rab le
c laimto enfo r c e a right against pro perty o f the estate”); F i rst Fed. Ba nk . o f Ca l. v. R o bbins (In re R o bbins) , 310 B.R . 626, 631 (9th C ir. BA P 2004) (“Stay relief hearings do no t invo lve a full adjudic atio n o n the m erits o f c laim s, defenses, o rc o unterc laim s, b ut sim ply a determ inatio n as to whether a
c redito r has a c o lo rab le c laim .”). A c c o rdingly, we need no t dec ide whether lac hes prec ludes C hase fro menfo rc ing its lien rights. CONCL U SION A ltho ugh the b ankruptc y c o u rt sho uld no t have granted relief fro m the auto m aticstay o rdischarge injunc tio n, to do so was harm less erro r. W e A FFIR M.

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