Good Service Isn’t Automatic When The Stay Isn’t Either

Sometimes it seems that the substance of the law is easier than procedure.  Adequate service is both essential and ephemeral.

We’ve been struggling for some time about who to serve and how to do it on the issue of stripping underwater mortgages.

Locally, the spotlight seems to have shifted to service when you move to extend the stay in the case of a debtor with a prior dismissal.

So it helps when we get guidance from the bench.

Tip of the hat to Judge Arthur Weissbrodt who prepared and posted on the ND CA  court site the following practice tip.

 Motions to Extend or Impose an Automatic Stay

When a debtor timely moves to extend or impose an automatic stay under 11 U.S.C. §§ 362(c)(3)(B) or (4)(B), the Court may only extend or impose the stay “after notice and a hearing.”

Under B.L.R. 4001-2(a), the motion is filed in accordance with Fed. R. Bankr. P. 9013 and initiates a contested matter under Fed. R. Bankr. P. 9014.

Service of the motion must be on all creditors to be stayed, the United States Trustee, any trustee appointed in the case, and the debtor (if the debtor is not the moving party). See B.L.R. 4001-2(c).

Unless the Court orders otherwise, service of the motion must comply with Fed. R. Bankr. P. 7004, but if the party being served has previously appeared in the case, service need only comply with Fed. R. Bankr. P. 7005. See B.L.R. 4001-2(c).

Under Fed. R. Bankr. P. 1004(b), service of a motion to extend or impose the automatic stay generally must be by first class mail, except that a depository institution which is insured by the FDIC must be served in accordance with Fed. R. Bankr. P. 7004(h). Therefore, an FDIC insured institution must be served by certified mail upon an officer of the institution, unless an exception within Rule 7004(11) applies.

For information on how to serve an FDIC-insured institution, please refer to the Practice Tip: Service by Mail on Corporations, Partnerships and Financial Institutions,

Under Fed. R. Bankr. P. 7005, which incorporates Fed. R. Civ. P. 5, service can be accomplished in several ways, including:

• handing the document to the person being served;
• leaving the document at the person’s office, either with a clerk or person in charge, or in a conspicuous place;
• leaving the document at the person’s dwelling or place of abode with a person of suitable age and discretion;
• mailing the document to the person’s last known address;
• leaving the document with a court clerk if there is no known address;
• sending the document electronically if there is written consent for electronic service; or
• delivering the document in any other manner consented to in writing by the person being served. Fed. R. Civ. P. 5(b)(2).

Service on a represented person must be on the party’s attorney, unless the Court orders otherwise. Fed. R. Civ. P. 5(b)(1).

Thanks, Judge.

Image courtesy of  Marcello Testi