United States Bankruptcy Appellate Panel

For the Eighth Circuit

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No. 20-6014

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In re: Jeffrey D. Brooks

 Debtor

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Jeffrey D. Brooks

 Debtor - Appellant

v.

First Central Bank McCook

 Creditor - Appellee

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Appeal from United States Bankruptcy Court

for the District of Nebraska - Lincoln

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Submitted: October 23, 2020

Filed: November 25, 2020

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Before SCHERMER, NAIL, and DOW, Bankruptcy Judges.

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NAIL, Bankruptcy Judge.
Jeffrey D. Brooks("Debtor") appealsthe May 27, 2020 order of the bankruptcy

court1granting First Central Bank McCook ("Bank") relief from the automatic stay. 

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 158(b). We affirm.

BACKGROUND

Debtor filed a petition for relief under chapter 12 of the bankruptcy code. 

The bankruptcy court confirmed Debtor's third amended plan2("Debtor's plan"), 

which obligated Debtor to pay Bank $87,077.56–comprising a $50,861.18 payment

on a loan guaranteed by Farm Service Agency ("the FSA-guaranteed loan") and a

$36,216.38 payment on a loan not guaranteed by Farm Service Agency–on January

15, 2020.

3 Debtor paid Bank $55,000.00 but failed to pay the remaining $32,077.56

by the January 15 deadline.

Debtor's plan included the following default provisions:

25. In the event any payment owed to Bank is not made

within ten (10) days of the date it is due, the Debtors [sic]

shall be "in default" under the terms of this Plan. . . .

1The Honorable Thomas L. Saladino, Chief Judge, United States Bankruptcy

Court for the District of Nebraska.

2Three earlier iterations of Debtor's plan had not been confirmed. With certain

exceptions, the proponent of a chapter 12 plan may modify his or her plan at any time

either before or after confirmation. 11 U.S.C. §§ 1223 (modification of plan before

confirmation) and 1229 (modification of plan after confirmation). In some

jurisdictions, such modified plans are referred to as amended plans.

3The FSA-guaranteed loan is secured by real estate described in Debtor's plan

as "[Debtor's] FSA real estate." (Bk. Doc. 206, p. 7). The other loan is secured by

real estate described in Debtor's plan as "[Debtor's] Real Estate." (Bk. Doc. 206,

p. 4).

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26. In the event the Debtors [sic] are "in default" for the

reasons set forth above, then Bank shall be entitled to an

Order for Relief from the Automatic Stay in this case . . .

without further notice or hearing upon the filing of an

Affidavit with the Bankruptcy Court specifying that a

default has occurred, that the Debtors [sic] failed to cure

the default, that Bank has complied with the terms of the

Plan, and that Bank is entitled to the entry of an Order for

Relief without the necessity of a hearing.

(Bk. Doc. 206, p. 12).

Relying on this "drop dead" provision, Bank sought relief from the automatic

stay.

4 Debtor objected, and the matter was heard. The bankruptcy court

memorialized its oral ruling in a "text order" that granted Bank the requested relief. 

(Bk. Doc. 239). Debtor timely appealed.

STANDARD OF REVIEW

We review the bankruptcy court's decision to grant relief from the automatic

stay for an abuse of discretion. CitiMortgage, Inc. v. Borm (In re Borm), 508 B.R.

104, 106 (B.A.P. 8th Cir. 2014) (citation omitted). We likewise review the

bankruptcy court's interpretation of Debtor's confirmed plan for an abuse of

discretion. JCB, Inc. v. Union Planters Bank, NA, 539 F.3d 862, 869 (8th Cir. 2008)

(citation omitted).

A court abuses its discretion when a relevant factor that

should have been given significant weight is not

considered; when an irrelevant or improper factor is

4For its own reasons, Bank decided to proceed by motion rather than by

affidavit of default. Debtor does not challenge Bank's decision to do so.

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considered and given significant weight; or when all proper

factors and no improper ones are considered, but the court

commits a clear error of judgment in weighing those

factors.

City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 702 F.3d 1147, 1152

(8th Cir. 2013).

In conducting our review, we liberally construe the bankruptcy court's oral

findings and conclusions. Fonder v. U.S., 974 F.2d 996, 999-1000 (8th Cir. 1992)

(citation omitted).

DISCUSSION

The filing of a petition for relief under the bankruptcy code stays a variety of

acts to collect or otherwise enforce a pre-petition debt. 11 U.S.C. § 362(a). 

This "automatic stay" may be terminated, annulled, modified, or conditioned for

"cause." 11 U.S.C. § 362(d)(1). Such cause includes, but is not limited to, a lack of

adequate protection of the moving party'sinterest in property. Id.; 11 U.S.C. § 102(3)

("'includes' and 'including' are not limiting").

However, while Debtor suggests otherwise, this appeal is not really about

§ 362. It is about Debtor's obligations under his plan and the consequences of his

failure to meet those obligations. 

The bankruptcy court found the default provisions set forth above to be

dispositive of Bank's motion:

[U]nder the terms of this plan, the debtor had certain

obligations on January 15th, and that was to make two

payments totaling 80 some thousand dollars, if I

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understand it right. The fact is, debtor did not make those

payments. There is no evidence to the contrary. So, under

the express terms of the plan, . . . the creditor is entitled to

relief from the automatic stay.

We agree.

Debtor argues he was not in default because under a separate provision of his

plan, if Farm Service Agency consented, Bank agreed to attempt to renegotiate the

FSA-guaranteed loan. Since that had not happened, Debtor believes the $50,861.18

payment on that loan was not due on January 15.

The provision on which Debtor relies provides:

a. The terms of the FSA loan on [Debtor's] FSA real

estate

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shall remain unchanged. In the event FSA will

allow [Debtor] and the Bank to renegotiate that loan, then

the parties agree to attempt to renegotiate the loan on terms

similar to the terms for repayment of the balance of

[Debtor's] debt.

(Bk. Doc. 206, p. 7).

The bankruptcy court considered and rejected Debtor's argument: "[Debtor]

may have thought, well, we're going to renegotiate this thing. But when it wasn't

renegotiated by January 15th, those payments became due. Period." The bankruptcy

court was right to do so.

The cited provision does not place the onus on Bank to commence the

negotiations between and among Debtor, Bank, and Farm Service Agency. It does

5This is the FSA-guaranteed loan. See n.3, supra.

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not set either a deadline by which such negotiations were to commence or a deadline

by which such negotiations were to be completed. Most importantly, it does not

condition the January 15 payment on the status of those negotiations; to the contrary,

it states unambiguously the terms of the FSA-guaranteed loan "shall remain

unchanged." All of which is consistent with the plan's default provisions, which do

not either expressly or impliedly excuse a failure to make the January 15 payment in

the event the parties were unable to renegotiate the terms of the FSA-guaranteed loan

by that date.

Debtor admits he agreed to make certain payments on January 15, 2020. 

Debtor admits he made only a portion of those payments. Consequently, Debtor was

in default under his plan, and Bank was entitled to relief from the automatic stay. 

Under the circumstances, the bankruptcy court did not abuse its discretion in granting

Bank such relief. Cf. Borm, 508 B.R. at 106 (bankruptcy court abused its discretion

in not granting relief from the automatic stay where the debtorsfailed to comply with

their obligations under their plan).

CONCLUSION

For the reasons stated, we affirm the bankruptcy court's May 27, 2020 order

granting Bank relief from the automatic stay.

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