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28 1 While Gasprom’s Notice of Appeal named all of the abovereferenced appellees as parties to the order on appeal, the only

named appellee who has participated in this appeal is Michelle

Fateh.

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-12-1567-KuKiTa

)

GASPROM, INC., ) Bk. No. ND 12-10772-RR

)

Debtor. )

______________________________)

)

GASPROM, INC., )

)

Appellant, )

)

v. ) OPINION

)

MICHELLE FATEH; FRED FATEH; )

SANDRA MCBETH, Chapter 7 )

Trustee; PARKER FORECLOSURE )

SERVICES; COLONIAL PACIFIC )

LEASING CORP.; JULIAN BACH; )

GREEN ENERGY HOLDINGS, LLC; )

UNITED STATES TRUSTEE, )

)

Appellees.1 )

______________________________)

Argued and Submitted on September 19, 2013 

at Pasadena, California

Filed – October 28, 2013

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Robin L. Riblet, Bankruptcy Judge, Presiding

 

Appearances: Michael R. Sment argued for appellant Gasprom,

Inc.; Peter A. Goldenring of Goldenring & Prosser

argued for appellee Michelle Fateh.

 

Before: KURTZ, KIRSCHER and TAYLOR, Bankruptcy Judges.

FILED

OCT 28 2013

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
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2 Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.

2

KURTZ, Bankruptcy Judge:

INTRODUCTION

Chapter 72

 debtor Gasprom, Inc. (“Gasprom”) appeals from a

bankruptcy court order holding that the postpetition foreclosure

of Gasprom’s principal asset, a gas station, did not violate the

automatic stay because the stay had terminated by operation of

law as a result of the chapter 7 trustee’s abandonment of the gas

station. The bankruptcy court based this holding on an incorrect

legal analysis regarding the effect of the abandonment on the

automatic stay.

In the same order, the bankruptcy court held in the

alternative that it would annul the stay in order to

retroactively validate the foreclosure sale and the actions of

the parties who conducted the foreclosure sale. But the

bankruptcy court abused its discretion in annulling the stay. 

The court did not apply the appropriate legal standard for

determining whether the stay should be annulled. Nor did the

court give the parties any opportunity to develop the record

regarding the equities of their respective positions. 

Consequently, we VACATE AND REMAND for further proceedings.

FACTS

Gasprom commenced its chapter 11 bankruptcy case in February

2012. Within roughly a month, the bankruptcy court converted

Gasprom’s case to chapter 7, and Sandra McBeth was appointed to
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serve as chapter 7 trustee (“Trustee”).

Gasprom’s only asset of significance was a non-operational

gas station in Oxnard, California (“Gas Station”). In June 2012,

the Trustee filed a notice of intention to abandon the Gas

Station. Gasprom filed a two-page objection to the proposed

abandonment, stating that the Trustee should not be permitted to

abandon the Gas Station because it had “significant equity

potential.” Gasprom further asserted that the Gas Station

suffered from hazardous waste contamination and that state law

prohibited the Trustee from abandoning contaminated property. 

Gasprom offered no evidence or legal authority to support its

assertions.

The Trustee then submitted evidence in support of her

intention to abandon the Gas Station and noticed her proposed

abandonment for hearing. According to the Trustee’s evidence,

she did not have any funds available to render the Gas Station

operational. Nor did she have any funds available to address a

number of troublesome issues concerning permitting, hazardous

waste contamination and underground storage tank compliance. As

the Trustee explained, the Gas Station’s value was significantly

impaired by these issues and by its nonoperational status, and

the Gas Station also was fully encumbered.

On July 27, 2012, a few days before the hearing on the

proposed abandonment, Michelle Fateh (“Fateh”) filed a memorandum

and a declaration in support of the Trustee’s proposed

abandonment. Fateh asserted that she was the holder of a first

deed of trust (“Deed Of Trust”) against the Gas Station, that the

obligation secured by the Deed Of Trust exceeded $1 million and
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3

 Fateh originally noticed her foreclosure sale for

February 24, 2012, the day Gasprom filed its chapter 11

bankruptcy case. In light of the bankruptcy filing and the

automatic stay, Fateh apparently continued the foreclosure sale.

4

 The transcript of the Abandonment Hearing that Gasprom

attached to its excerpts of record does not appear to be an

official transcript. Nonetheless, because both sides have relied

on this unofficial transcript in proceedings held in the

bankruptcy court and on appeal, we will accept the transcript as

providing a generally accurate account of the Abandonment Hearing

and the bankruptcy court’s key comments and rulings. See First

St. Holdings NV, LLC v. MS Mission Holdings, LLC (In re First St.

Holdings NV, LLC), 2012 WL 6050459, at *7 n.12 (mem. dec. 9th

Cir. BAP 2012) (accepting unofficial transcript under similar

circumstances).

4

that Gasprom’s opposition to the proposed abandonment was

meritless. More importantly for our purposes, Fateh asserted

that, if the court authorized the Trustee to abandon the Gas

Station, the abandonment effectively would terminate the § 362

automatic stay as to the Gas Station and thereby would enable

Fateh to proceed with her pending foreclosure sale against the

Gas Station.3

The bankruptcy court held the hearing on the proposed

abandonment on August 1, 2012 (“Abandonment Hearing”).4 At the

hearing, Gasprom asserted that the court should continue the

Abandonment Hearing to “prevent any rash or sudden actions” by

the creditors asserting liens against the Gas Station. Hr’g Tr.

(Aug. 1, 2012) at 6:15-8:13. The bankruptcy court rejected

Gasprom’s argument for a continuance. As the court put it,

Gasprom only sought to prevent the Trustee from abandoning the

Gas Station so that the automatic stay would continue to enjoin

other parties claiming an interest in the Gas Station from

pursuing their rights in state court. The court further opined
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 At the conclusion of the hearing, the court reiterated

its view that, upon abandonment, the automatic stay would no

longer protect the Gas Station from foreclosure:

MS. LINTON [Gasprom’s counsel]: Your honor, if I %% if

I may clarify. The %% the stay remains in effect, even

after this [Abandonment Order].

[COURT]: No. Once the [Gas Station] is no longer

property of the estate, if it’s abandoned, the stay as

to the [Gas Station] terminates.

Hr’g Tr. (Aug. 1, 2012) at 12:5-10. 

5

that it would be improper to prohibit or delay abandonment only

so that the automatic stay would continue to cover the Gas

Station and would continue to enjoin interested parties from

pursuing their state law rights and remedies.

After the bankruptcy court orally ruled that it would

authorize the Trustee’s proposed abandonment, Gasprom requested

that the court delay entry of the abandonment order. If the

court immediately entered the abandonment order, Gasprom

explained, it feared that Fateh would immediately proceed with a

foreclosure sale she had scheduled for that day. But the court

declined to delay entry of the abandonment order and instead

suggested that, if Gasprom sought to further enjoin Fateh’s

foreclosure sale, Gasprom should seek an injunction from a state

court.5

On the same day as the Abandonment Hearing, August 1, 2012,

the bankruptcy court signed and entered the Trustee’s proposed

form of order authorizing the abandonment and declaring the Gas
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6 The Abandonment Order was not appealed by either side and

is beyond the scope of our review in this appeal.

6

Station abandoned (“Abandonment Order”).6 Even though the

Abandonment Order was silent regarding the automatic stay,

Fateh’s affiliate and her successor in interest under the Deed of

Trust Green Energy Holdings (“Green”) proceeded with the

foreclosure sale later that same day.

Before the Abandonment Hearing, on July 9, 2012, the Trustee

issued a final report reflecting that there were no estate assets

available for distribution. Thereafter, on August 16, 2012, the

bankruptcy case was closed. As a combined result of the August

1, 2012 abandonment and the August 16, 2012 case closure, the

automatic stay terminated for all purposes with respect to the

Gas Station on August 16, 2012, a short time after the

foreclosure sale. See § 362(c).

In September 2012, Gasprom moved to reopen its bankruptcy

case, so that it could seek to set aside the foreclosure sale and

commence contempt proceedings against Fateh, Green and others for

violation of the automatic stay. According to Gasprom, the

Abandonment Order caused the estate’s interest in the Gas Station

to revert to it, and notwithstanding the court’s comments

regarding the automatic stay at the Abandonment Hearing,

§§ 362(a)(5) and (a)(6) continued to protect Gasprom from

Fateh/Green’s foreclosure. As a result, Gasprom asserted, when

Fateh/Green proceeded with the foreclosure sale on August 1,

2012, they wilfully violated the stay, and the foreclosure sale

was void as a violation of the stay.
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Fateh opposed the motion to reopen, arguing that Gasprom was

not entitled to any of the relief that it intended to pursue upon

reopening. Relying principally on a single Minnesota bankruptcy

case, In re D’Annies Rest., Inc. v. N.W. Nat. Bank of Mankato

(In re D’Annies Rest., Inc.), 15 B.R. 828 (Bankr. D. Minn. 1981),

Fateh asserted that no aspect of the stay had survived the entry

of the Abandonment Order. According to Fateh and In re D’Annies,

when property of the estate is abandoned and the debtor is a

corporation (as opposed to an individual debtor), the stay no

longer protects either the debtor or the subject property from

lien enforcement. Id. at 831-32. 

The bankruptcy court held a hearing on the motion to reopen

on October 23, 2012. As a threshold matter, the court granted

the motion to reopen. No one has challenged that ruling on

appeal. The court further held that the parties had fully

briefed the issues concerning Gasprom’s anticipated motion to set

aside the foreclosure and Gasprom’s anticipated motion for an

order to show cause why Fateh, Green and others should not be

held in contempt. Hence, the court explained, it was prepared to

dispose of those matters as well.

The court essentially adopted Fateh’s position that, upon

entry of the Abandonment Order, the automatic stay no longer

enjoined Fateh/Green’s foreclosure sale of the Gas Station. In

so ruling, the court relied on In re D’Annies and two other cases

from outside the Ninth Circuit.

In the alternative, the court ruled that it was prepared to

annul the automatic stay. Even though neither party in their

papers had discussed or even mentioned the possibility of
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annulment of the stay, the court ruled that, to the extent

necessary to “validate the foreclosure,” it would sua sponte

grant relief from the stay retroactively and nunc pro tunc. Hr’g

Tr. (Oct. 23, 2012) at 4:19-23. Indicating that it had been its

intent at the Abandonment Hearing to permit the foreclosure sale

to immediately proceed upon entry of the Abandonment Order, the

court deemed it proper to further that intent by sua sponte

annulling the stay, as a “belt and suspenders” measure. Id.

The bankruptcy court thereafter entered a written order

granting the motion to reopen. It also entered on December 4,

2012, a separate written order denying the anticipated motion to

set aside the foreclosure and denying the anticipated motion for

an order to show cause re contempt. Gasprom timely appealed the

the December 4, 2012 order.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(A), and we have jurisdiction under 28

U.S.C. § 158.

ISSUES

Did the bankruptcy court err when it held in the December 4,

2012 order that Fateh/Green’s foreclosure sale did not violate

the automatic stay?

Did the bankruptcy court abuse its discretion when it

annulled the automatic stay in order to retroactively validate

Fateh/Green’s foreclosure sale?

STANDARDS OF REVIEW

We review de novo the bankruptcy court’s interpretation of

the Bankruptcy Code. See Danielson v. Flores (In re Flores), 
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-- F.3d --, 2013 WL 4566428, at *1 n.4 (9th Cir. Aug. 29, 2013)

(en banc).

A bankruptcy court’s decision to retroactively annul the

automatic stay is reviewed for an abuse of discretion. Nat’l

Envtl. Waste Corp. v. City of Riverside (In re Nat’l Envtl. Waste

Corp.), 129 F.3d 1052, 1054 (9th Cir. 1997); Williams v. Levi (In

re Williams), 323 B.R. 691, 696 (9th Cir. BAP 2005).

A bankruptcy court abuses its discretion if its decision is

based on an incorrect legal rule, or if its findings of fact were

illogical, implausible, or without support in the record. United

States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).

DISCUSSION

Generally speaking, actions taken in violation of the

automatic stay are considered void ab initio. Griffin v.

Wardrobe (In re Wardrobe), 559 F.3d 932, 934 (9th Cir. 2009);

Schwartz v. United States (In re Schwartz), 954 F.2d 569, 571

(9th Cir. 1992). And creditors who attempt to enforce their

nonbankruptcy rights against a debtor or its property without

first obtaining relief from the stay may be held liable for

damages for contempt of court. See Johnston Envtl. Corp. v.

Knight (In re Goodman), 991 F.2d 613, 620 (9th Cir. 1993)

(holding that a corporation may recover civil contempt damages

for an automatic stay violation).

The bankruptcy court here concluded that the August 1, 2012

foreclosure sale had not violated the automatic stay. The

bankruptcy court reasoned that the Trustee’s abandonment of the

Gas Station earlier that same day had fully terminated the stay

as to the Gas Station. We disagree. By operation of law, the
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August 1, 2012 Abandonment Order only terminated one aspect of

the stay, the aspect protecting the Gas Station as “property of

the estate.” Upon abandonment, the Gas Station no longer was

property of the estate; title to the Gas Station reverted to

Gasprom. See Catalano v. Comm’r, 279 F.3d 682, 685 (9th Cir.

2002). Hence, the aspect of the stay protecting estate property

no longer applied. See § 362(c)(1).

But the abandonment did not by operation of law terminate

the aspect of the stay arising from § 362(a)(5), which protects

“property of the debtor.” Absent a ruling by the court granting

relief from stay under § 362(d) so as to permit foreclosure to

occur, § 362(a)(5) continued to protect the Gas Station from

foreclosure, at least until the bankruptcy court closed Gasprom’s

bankruptcy case on August 16, 2012. See § 362(c)(2).

The canons of statutory interpretation support our

construction of § 362(a)(5). In accordance with those canons,

our analysis must begin with the statutory text. See Lamie v.

United States Trustee, 540 U.S. 526, 534 (2004). Our analysis

also must end with the statutory text if “‘the statutory language

is unambiguous’ . . . and ‘the statutory scheme is coherent and

consistent.’” Schindler Elevator Corp. v. United States ex rel.

Kirk, –– U.S. ––, 131 S.Ct. 1885, 1893 (2011) (quoting Robinson

v. Shell Oil Co., 519 U.S. 337, 340 (1997)). Put another way,

when the plain and unambiguous language of the statute does not

lead to absurd results, the courts’ only role is to apply the

statute according to its terms. See Lamie, 540 U.S. at 534.

Section 362(a)(5) extends the protection of the automatic

stay to “property of the debtor.” “Debtor” is a defined term in
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the Bankruptcy Code, so there can be no doubt as to what Congress

intended that word to mean. The term “debtor” means any “person

or municipality” for which a bankruptcy case has been commenced. 

See § 101(13). In turn, for purposes of the Bankruptcy Code, a

“person” is explicitly defined as including individuals,

partnerships and corporations. § 101(41).

Nor can there be any genuine doubt what the entire phrase

“property of the debtor” means. Without any limiting or

qualifying language in the statutory text, the phrase must refer

to property interests held by any of the above-referenced types

of debtors. If Congress wanted to limit “property of the debtor”

to exclude property of corporate and partnership debtors, it only

would have needed to add the word “individual” before the word

“debtor”. Or it could have used the same phraseology it used in

§ 362(c)(3), in which it refers to “a debtor who is an

individual.” Congress obviously knew how to limit the term

debtor when it wanted to do so. It did not so limit the phrase

“property of the debtor” in § 362(a)(5). We cannot and will not

read the additional word “individual” into the statute, when it

appears that Congress affirmatively and specifically omitted that

word. See Lamie, 540 U.S. at 538. If Congress actually intended

to so limit § 362(a)(5), then it will need to amend the statute. 

Id. at 542. 

Several bankruptcy cases from both within and without the

Ninth Circuit have similarly interpreted the effect of

abandonment on the automatic stay. See, e.g., Mut. Ins. Co. of

New York v. County of Fresno (In re D. Papagni Fruit Co.), 132

B.R. 42, 45 (Bankr. E.D. Cal. 1991); Coronado v. Beach Furniture
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& Appliance (In re Coronado), 11 B.R. 8, 9 (Bankr. D. Ariz.

1981); Guild Mortgage Co. v. Cornist (In re Cornist), 7 B.R. 118,

120 (Bankr. S.D. Cal. 1980); see also Gen. Motors Acceptance

Corp. v. Bell (In re Bell), 700 F.2d 1053, 1057–58 (6th Cir.

1983); Young v. Twin States Fin., Inc. (In re Young), 2012 WL

1189900, at **5-6 (Bankr. S.D. Miss. 2012); In re Vicente, 446

B.R. 26, 29-30 (Bankr. D. Mass. 2011); Adams v. Hartconn Assocs.,

Inc. (In re Adams), 212 B.R. 703, 710 (Bankr. D. Mass. 1997); In

re Lair, 235 B.R. 1, 21-22 (Bankr. M.D. La. 1999); Gassaway v.

Fed. Land Bank of New Orleans (In re Gassaway), 28 B.R. 842, 846

(Bankr. N.D. Miss. 1983); In re Cruseturner, 8 B.R. 581, 592

(Bankr. D. Utah 1981). These cases stand for the general

proposition that abandoned property continues to be protected by

the automatic stay to the extent it has reverted back to the

debtor, unless and until the case is closed or dismissed, or a

discharge is granted or denied. Accord, H.R. Rep. No. 95-595 at

343 (1977)(stating that, while § 362(c)(1) terminates the

automatic stay as to estate property when the subject property is

no longer estate property, that provision “does not terminate the

stay against property of the debtor if the property leaves the

estate and goes to the debtor.”).

Fateh/Green doubtlessly would argue that the above-cited

cases are distinguishable because the debtors in these cases

typically were individuals and not corporations like Gasprom. 

However, as we have explained above, there is no proper legal

basis for excluding corporate debtors from the protection

explicitly afforded to all debtors under § 362(a)(5).

The rules of statutory construction require us to
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additionally determine whether the meaning we have derived from

the text of the statute is part of a coherent and consistent

statutory scheme. See Schindler Elevator Corp., –– U.S. at ––,

131 S.Ct. at 1893 (2011); see also Gale v. First Franklin Loan

Servs., 701 F.3d 1240, 1244 (9th Cir. 2012) (holding that the 

court must consider the statutory text in context and with a view

to the entire statutory scheme).

Nothing in the context or scheme of § 362 requires us to

interpret “property of the debtor” differently. The two

articulated purposes of the automatic stay are broad. See

Burkart v. Coleman (In re Tippett), 542 F.3d 684, 689-90 (9th

Cir. 2008). First, the stay gives the debtor respite from any

creditor efforts to enforce rights against the debtor and its

property. Id. And second, it also protects the creditors from

each other, as it prevents the creditors from racing to be the

first to claim the debtor’s limited assets. Id. In turn, these

two purposes facilitate and promote the tandem bankruptcy goals

of a fresh start for the the debtor and equitable distribution

for creditors. See id. 

In light of § 362’s purposes, the scope of the stay granted

in § 362(a) is interpreted very broadly, and the exceptions set

forth in § 362(b) are interpreted narrowly. See Snavely v.

Miller (In re Miller), 397 F.3d 726, 730-31 (9th Cir. 2005)

(citing Stringer v. Huet (In re Stringer), 847 F.2d 549, 552 n.4

(9th Cir. 1988)). Thus, the context and statutory scheme in

which Congress used the phrase “property of the debtor” in

§ 362(a)(5) supports our refusal to read into the text any

limiting or qualifying language that Congress chose not to
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include. 

Relying on In re D’Annies, 15 B.R. at 831, the bankruptcy

court held that, after abandonment of estate property,

§ 362(a)(5) only protects a debtor from foreclosure of that

property if that debtor is an individual. We decline to follow

In re D’Annies. In re D’Annies invoked certain policy concerns

in an attempt to justify a narrow interpretation of § 362(a)(5),

an interpretation that would exclude corporate and partnership

debtors from the protections afforded under § 362(a)(5). But In

re D’Annies’ narrow interpretation is inconsistent with the plain

reading of the statutory text and with the statutory scheme and

context we described above. Even if there were some validity to

In re D’Annies’ policy concerns, those concerns do not permit us

to alter the meaning of Congress’s plain and unambiguous

statutory language. See Lamie, 540 U.S. at 538. As the Ninth

Circuit has noted, the Supreme Court “frowns” on courts that

attempt to modify unambiguous provisions of the Bankruptcy Code

for policy reasons. See Sherwood Partners, Inc. v. Lycos, Inc.,

394 F.3d 1198, 1202 n.4 (9th Cir. 2005) (citing Hartford

Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1,

14 (2000)).

The bankruptcy court also relied on Dewsnup v. Timm (In re

Dewsnup), 908 F.2d 588, 590 (10th Cir. 1990), aff’d, 502 U.S. 410

(1992). At the October 23, 2012 hearing, the bankruptcy court

recited and relied upon the following language from Dewsnup: 

[Section 554(a)] allows abandonment of property that

“is burdensome to the estate or that is of

inconsequential value and benefit to the estate.”

Property abandoned under this section ceases to be part
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of the estate. It reverts to the debtor and stands as

if no bankruptcy petition was filed.

Id. at 590 (citations omitted and emphasis added).

We do not dispute the correctness of this statement. 

Indeed, the Ninth Circuit Court of Appeals has made similar

statements. See, e.g., Catalano, 279 F.3d at 685 (“Upon

abandonment, the debtor’s interest in the property is restored

nunc pro tunc as of the filing of the bankruptcy petition.”). 

These statements reflect the unremarkable proposition that, after

an abandonment of estate property, the debtor holds the same

legal interest in the abandoned property that it held at the time

of its bankruptcy filing. The bankruptcy court here misconstrued

these statements. It conflated the issue of the debtor’s legal

interest in abandoned property with the issue of the impact of

abandonment on the automatic stay.

In sum, the bankruptcy court erred as a matter of law when

it concluded that, immediately upon abandonment, the automatic

stay no longer enjoined Fateh/Green from foreclosing on the Gas

Station.

The bankruptcy court’s December 4, 2012 order also provided

for annulment of the automatic stay, for the nunc pro tunc

termination of the stay as to the Gas Station in order to

retroactively validate the foreclosure sale. The bankruptcy

court relied on this annulment as an alternate basis for

concluding that the foreclosure sale did not violate the

automatic stay.

In deciding whether to annul the stay, a bankruptcy court

ordinarily should examine the circumstances of the specific case
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and balance the equities of the parties’ respective positions. 

See Nat’l Envtl. Waste Corp., 129 F.3d at 1055; Fjeldsted v. Lien

(In re Fjeldsted), 293 B.R. 12, 24 (9th Cir. BAP 2003). In

balancing the equities, the court may consider a number of

different factors. In re Fjeldsted, 293 B.R. at 24-25. While

any specific list of relevant factors is subject to modification

depending on the circumstances of the particular case, In re

Fjeldsted suggested that the following list of factors could be

used as a general guideline or framework for assessing the

equities:

1. Number of filings;

2. Whether, in a repeat filing case, the circumstances

indicate an intention to delay and hinder creditors;

3. A weighing of the extent of prejudice to creditors

or third parties if the stay relief is not made

retroactive, including whether harm exists to a bona

fide purchaser;

4. The Debtor’s overall good faith (totality of

circumstances test);

5. Whether creditors knew of stay but nonetheless took

action, thus compounding the problem;

6. Whether the debtor has complied, and is otherwise

complying, with the Bankruptcy Code and Rules;

7. The relative ease of restoring parties to the status

quo ante;

8. The costs of annulment to debtors and creditors;

9. How quickly creditors moved for annulment, or how

quickly debtors moved to set aside the sale or

violative conduct;

10. Whether, after learning of the bankruptcy,

creditors proceeded to take steps in continued

violation of the stay, or whether they moved

expeditiously to gain relief;

11. Whether annulment of the stay will cause

irreparable injury to the debtor;

12. Whether stay relief will promote judicial economy

or other efficiencies.

Id. at 25 (citations omitted).

Here, the bankruptcy court identified only a single factor

as justifying annulment of the stay: because it previously had

indicated at the Abandonment Hearing that Fateh/Green could
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 In light of our decision, we decline to express any

opinion at this time regarding the propriety of the bankruptcy

court sua sponte granting annulment. Of course, the court on

remand is not required to further consider annulment unless

Fateh/Green should see fit to formally request such relief by

filing an appropriate motion. Nor would it be necessary for the

court to reopen the bankruptcy case in order to address such a

motion. See Aheong v. Mellon Mortgage Co. (In re Aheong), 276

B.R. 233, 242 (9th Cir. BAP 2002)(holding that bankruptcy court

had ancillary jurisdiction to decide motion to annul the stay

(continued...)

17

proceed with the foreclosure, it sua sponte concluded that

annulment should be granted. And it reached this conclusion

without any advance notice to the parties and without any

opportunity for the parties to submit any evidence or argument

concerning the equities.

In balancing the equities, a single factor may so outweigh

the consideration of all other factors that the single factor may

be dispositive. Id. Here, however, the record reflects that the

bankruptcy court did not actually attempt to weigh anything. In

other words, the bankruptcy court did not utilize the appropriate

legal framework because there is no indication that it attempted

to balance the equities. Nor did it give the parties any

opportunity to develop the record concerning the equities. As a

result, the bankruptcy court abused its discretion when it ruled

that the stay should be annulled. See Hinkson, 585 F.3d at 1262

(holding that trial court abuses its discretion if it does not

identify the correct legal rule to apply).

On remand, the bankruptcy court must give the parties an

opportunity to brief and present evidence regarding the equities

of granting an annulment if the court is intent on moving

forward, sua sponte, with stay annulment proceedings.7
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(...continued)

without reopening the bankruptcy case or vacating the case

dismissal order).

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 CONCLUSION

For the reasons set forth above, the December 4, 2012 order

is VACATED, and this matter is hereby REMANDED for further

proceedings consistent with this decision.