Dugas

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW MEXICO

In re: LAURA LYNNE DUGAS, No. 24-10834-j13

Debtor.

LAURA KELLY DUGAS,

Plaintiff, Adversary No. 24-1029-j

v.

STEPHEN NATELSON,

LAW OFFICES OF STEPHEN NATELSON, and

IKE GALLEGOS,

Defendants.

MEMORANDUM OPINION REGARDING

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

THIS MATTER is before the Court on a motion for summary judgment

(the “Summary Judgment Motion” – AP Doc. 46),1 filed by defendant Stephen Natelson, and a

joinder (the “Joinder” – AP Doc. 55) filed by defendant Ike Gallegos (together with Mr.

Natelson, “Movants”). Movants seek (1) summary judgment in their favor on a claim for

damages for violation of the automatic stay because they assert no stay violation occurred and

(2) dismissal of all other claims for lack of subject matter jurisdiction. Alternatively, Movants

request that the Court permissively abstain from hearing all claims; they further assert that

certain requested relief is barred by the Rooker-Feldman doctrine.2

1 References to “Doc.” are to the docket in the underlying bankruptcy case, Case No. 24-10834-j13

(referred to below as the Second Bankruptcy Case), and references to “AP Doc.” are to the docket in this

adversary proceeding, Adv. Proc. No. 24-1029-j.

2 The Summary Judgment Motion is filed by Mr. Natelson in his individual capacity, but given the

circumstances, the Court will construe the Summary Judgment Motion as requesting summary judgment

on behalf of the Law Offices of Stephen Natelson as well. Further, in joining the Summary Judgment

In her adversary complaint, debtor-plaintiff Laura Dugas alleges that she and another

party, Kurt Young, were purchasers of real property (the “Property”) under a real estate contract

with Mr. Gallegos. At some point, Mr. Gallegos—with Mr. Natelson acting as his attorney—

brought a foreclosure action against her in New Mexico state court (the “State Court”), and the

State Court entered a foreclosure judgment against her (the “2023 Dugas Foreclosure

Judgment”). Ms. Dugas subsequently filed a chapter 13 bankruptcy case, which was dismissed,

and then a second chapter 13 bankruptcy case within a year of the dismissal of the first

bankruptcy case (the “Second Bankruptcy Case”).3

Ms. Dugas’s primary grievance against Mr. Gallegos and his state court attorney, Mr.

Natelson, is that they violated the automatic stay in the Second Bankruptcy Case by filing a

motion for ejectment and writ of restitution in the State Court, seeking to eject her from the

Property (the “Ejectment Motion”). Ms. Dugas also asserts that additional filings in the State

Court against Mr. Young violated the automatic stay, and she asserts additional claims against

Mr. Gallegos and Mr. Natelson for violation of her right of due process and violation of

procedural requirements in the foreclosure action. The Second Bankruptcy Case has since been

dismissed.4

Ms. Dugas filed a response in opposition to the Summary Judgment Motion

(AP Doc. 51), and Mr. Natelson filed a reply (AP Doc. 54). After consideration of the Summary

Judgment Motion, the evidence submitted in support of the Summary Judgment Motion, the

Motion, Mr. Gallegos does not expressly state that he is requesting summary judgment in his own favor

for the same reasons as set forth in the Summary Judgment Motion, but the Court will construe the

Joinder that way.

3 The “Second Bankruptcy Case” is Case No. 24-10834-j13.

4 See Doc. 127.

Joinder, the response, and the reply, the Court will grant the Summary Judgment Motion in part

and deny it in part.

As explained below, with respect to the stay violation claim, the Court will not abstain

from hearing such claim. The Court determines that the automatic stay terminated with respect to

Ms. Dugas on the 30th day after commencement of the Second Bankruptcy Case, pursuant to

§ 362(c)(3)(A),5 but remained in effect with respect to property of the estate. The filing of the

Ejectment Motion did not impact the stay against property of the estate, but the additional filings

in State Court may have. The other claims asserted by Ms. Dugas are non-core claims relating to

occurrences in the Foreclosure Action. Even if the Court had subject matter jurisdiction over

these claims during the pendency of the Second Bankruptcy Case, the Court will not retain

jurisdiction over them following the dismissal of the Second Bankruptcy Case; alternatively, the

Court will permissively abstain from hearing such claims. Finally, the Rooker-Feldman doctrine

does not preclude any requested relief on the basis of the 2023 Dugas Foreclosure Judgment

because it was not a final judgment.

Thus, the Court will grant summary judgment in the Movants’ favor on (1) the stay

violation claim as it relates to the Ejectment Motion and (2) the other claims brought against

them, and the Court will deny summary judgment on the stay violation claim as it relates to the

additional filings in State Court.

I. SUMMARY JUDGMENT STANDARDS

Summary judgment will be granted when the movant demonstrates that there is no

genuine issue of material fact and that the movant is entitled to judgment as a matter of law.

5 Unless otherwise noted, references to “§” and “section” are to sections of the Bankruptcy Code, which is

title 11 of the United States Code.

See Fed. R. Civ. P. 56(a).6 The “party seeking summary judgment always bears the initial

responsibility of informing the . . . court of the basis for its motion, and . . . demonstrat[ing] the

absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986);

see also Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991) (“The

moving party has the initial burden to show that there is an absence of evidence to support the

nonmoving party’s case.”) (internal quotation marks omitted).

Only if the properly supported material facts entitle the requesting party to judgment as a

matter of law is it appropriate for the court to grant summary judgment. Celotex, 477 U.S. at 322.

In moving for summary judgment, the party “must support the assertion” that “a fact cannot

be . . . genuinely disputed” by: (1) “citing to particular parts of materials in the record, including

depositions, documents, electronically stored information, affidavits or declarations,

stipulations . . . , admissions, interrogatory answers, or other materials” or (2) “showing that the

materials cited [by the opposing party] do not establish the . . . presence of a genuine dispute.”

Fed. R. Civ. P. 56(c)(1).

The court’s role is not to weigh the evidence, but to assess the threshold issue of whether

a genuine issue exists as to material facts requiring a trial. Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 249-50 (1986). A dispute is “genuine” where “the evidence is such that a reasonable

jury could return a verdict for the nonmoving party.” Id. at 248. A fact is “material” if it “might

affect the outcome of the suit under the governing law.” Id. In considering a motion

for summary judgment, the court must resolve all reasonable inferences and doubts in favor of

the non-moving party and construe all evidence in the light most favorable to the non-moving

party. See Hunt v. Cromartie, 526 U.S. 541, 552 (1999); Genberg v. Porter, 882 F.3d 1249, 1253

6 Fed. R. Civ. P. 56 applies in bankruptcy adversary proceedings per Fed. R. Bankr. P. 7056.

(10th Cir. 2018). Where a rational trier of fact, considering the record as a whole, could not find

for the non-moving party, there is no genuine issue for trial. See Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986). Thus, summary judgment is appropriate “if the

evidence points only one way and no reasonable inferences could support the non-moving

party’s position.” Genberg, 882 F.3d at 1253.

II. PROCEDURAL BACKGROUND

Ms. Dugas commenced her first bankruptcy case on May 10, 2024, with the filing of a

voluntary chapter 13 petition, Case No. 24-10472-t13 (the “First Bankruptcy Case”). The First

Bankruptcy Case was dismissed on July 10, 2024.

Ms. Dugas commenced her Second Bankruptcy Case on August 14, 2024, with the filing

of a second voluntary chapter 13 petition, Case No. 24-10834-j13.

On November 6, 2024, Ms. Dugas filed the complaint in this adversary proceeding,

Adv. Proc. No. 24-1029-j (the “Adversary Complaint” – AP Doc. 1). The Adversary Complaint

asserts three claims against Mr. Natelson, Mr. Gallegos, and the Law Offices of Stephen

Natelson:

Count 1—Violation of Due Process in the Foreclosure Action,7

Count 2—Violation of Procedural Guidelines in the Foreclosure Action, and

Count 3—Violation of the Automatic Stay.8

7 Count 1 also includes an assertion of violation of the automatic stay. Since that portion is duplicative of

Count 3, the Court will consider the assertion of violation of the automatic stay in its consideration of

Count 3.

8 In addition to the three counts set forth above, Ms. Dugas also includes a “statement of claims” which

lists: abuse of process, unjust enrichment, negligence, violation of constitutional right to due process,

fraud and conspiracy to commit fraud, and federal abuse of bankruptcy process/procedure and violation of

the bankruptcy stay. To the extent these are duplicative of Counts 1-3, the Court considers them in the

Discussion section. To the extent this list includes additional claims, it is a bare list with no explanation

for why such claims are applicable and thus has failed to state a claim upon which relief may be granted.

“[I]t is well-settled that even if a party does not make a formal motion to dismiss, the Court may on its

Among the relief sought, Ms. Dugas requests that the Court dismiss the foreclosure action and

return the Property to her.9

On January 7, 2025, Ms. Dugas filed a motion in the Second Bankruptcy Case requesting

an extension of the automatic stay beyond thirty (30) days after the commencement of the

Second Bankruptcy Case.10 The Court determined that the request was untimely pursuant to

§ 362(c)(3)(B) and denied the request for an extension of the automatic stay.11

The Second Bankruptcy Case was dismissed on July 8, 2025, but this adversary

proceeding remained pending.

Mr. Natelson filed the Summary Judgment Motion in this adversary proceeding on

August 8, 2025, and Mr. Gallegos filed the Joinder on September 5, 2025. Ms. Dugas filed her

response opposing summary judgment on August 19, 2025, and on September 3, 2025, Mr.

Natelson filed a reply.

own initiative dismiss the complaint for failure to state a claim upon which relief can be granted . . .

where the inadequacy of the complaint is apparent as a matter of law.” In re New Century TRS Holdings,

Inc., 423 B.R. 467, 469 n.6 (Bankr. D. Del. 2010) (quoting Wash. Petroleum & Supply Co. v. Girard

Bank, 629 F. Supp. 1224, 1230-31 (M.D. Pa. 1983)) (internal quotation marks omitted).

9 The full list of relief sought is: “1. To Stay all action in the State Court due to the Automatic Stay being

in full force and Effect. 2. To quash all Orders filed by the State District Court in regards to this case after

the filing of the case. 3. To Bar Stephen Natelson from representing Ike Gallegos as he is now a witness

and a defendant against his client. 4. To Dismiss the action in State Court or in the alternate stay all

actions therein. 5. To award[] Compensatory plus Treble $350,000 (plus Treble)[.] 6. Punitive Damages

of $1,500,000[.] 7. To return the home to Laura Kelly[.] 8. To Recommend to disbar [sic] to the State Bar

association to disbar Stephen Natelson for malicious abuse of Process[.] 9. For such other and further

relief as the Court deems just and proper under the Circumstances.” Adv. Compl. at pp. 14-15.

10 Doc. 63.

11 Doc. 72.

III. FACTUAL BACKGROUND12

a. Facts Not Subject to Genuine Dispute

For purposes of this decision, the Court finds that the following facts are not in genuine

dispute.

On March 16, 2023, Mr. Gallegos, through his attorney Mr. Natelson, filed a Complaint

for Money Due on Promissory Note and for Declaratory Judgment to Accelerate Payment on

Promissory Note (the “State Court Complaint”), in Ike Gallegos v. Laura Kelly,

D-820-CV-2023-00093 (the “Foreclosure Action”) in the Eighth Judicial District Court for the

State of New Mexico.

The State Court Complaint prayed inter alia “[f]or an order determining that as a

consequence of the Defendant’s [Ms. Dugas] substantial default that the Plaintiff [Mr. Gallegos]

be allowed to accelerate the remaining principal balance due and to foreclose any interest in the

real property that Defendant [Ms. Dugas] may have by judicial sale affording the Defendant

[Ms. Dugas] a nine (9) month right of redemption.”13

Laura Kelly, named in the State Court Complaint, is the same as the debtor and plaintiff

Laura Dugas in this case.

On April 13, 2023, Laura Dugas appeared pro se in the Foreclosure Action and filed what

was in substance an answer.

12 The Court takes judicial notice of the docket and claims register, and the documents therein, in the First

Bankruptcy Case (Case No. 24-10472-t13) and the Second Bankruptcy Case (Case No. 24-10834-j13), as

well as the docket and documents on the docket in this adversary proceeding (Adv. Proc. No. 24-1029-j).

See Fed. R. Evid. 201(b)(2) and (c); St. Louis Baptist Temple, Inc. v. Fed. Deposit Ins. Corp., 605 F.2d

1169, 1172 (10th Cir. 1979) (holding that a court may sua sponte take judicial notice of its own docket),

abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946 (10th Cir. 2001); LeBlanc v. Salem (In

re Mailman Steam Carpet Cleaning Corp.), 196 F.3d 1, 8 (1st Cir. 1999) (“[T]he bankruptcy court

appropriately took judicial notice of its own docket[.]”).

13 AP Doc. 46-1 at p. 9.

On June 13, 2023, Mr. Gallegos, through his attorney Mr. Natelson, filed a motion for

summary judgment in the Foreclosure Action.

On July 12, 2023, Laura Dugas filed a brief in opposition to the motion for summary

judgment in the Foreclosure Action.

On August 21, 2023, the State Court issued the 2023 Dugas Foreclosure Judgment

awarding Mr. Gallegos a money judgment and decreeing inter alia that “Plaintiff [Mr. Gallegos]

is restored possession and ownership of the property located at 58 Lower Arroyo Hondo Road,

Taos County, New Mexico [and a] Writ of Restitution shall be issued in favor of Ike Gallegos.”14

No appeal was taken from the 2023 Dugas Foreclosure Judgment.

On October 10, 2023, the State Court entered an Order Approving Special Master’s

Report and Confirming Foreclosure Sale.

A Special Master’s Deed was delivered and recorded.

On October 17, 2023, Laura Dugas filed a notice of appeal of the Order Approving

Special Master’s Report and Confirming Foreclosure Sale.

On the same day, she filed a document in the Foreclosure Action titled “Motion to Set

Aside Default and Summary Judgment Rule 60 B” requesting inter alia “[t]o set aside Order

Approving Special Master’s Report and Confirming Foreclosure Sale.”15

Ms. Dugas’s appeal was dismissed for lack of finality due to the filing of her motion to

set aside the judgment.

On April 23, 2024, the State Court withdrew its Order Approving Special Master’s

Report and Confirming Foreclosure Sale.

14 AP Doc. 46-1 at p. 55.

15 AP Doc. 46-1 at p. 2.

On May 10, 2024, Ms. Dugas filed a voluntary petition under chapter 13 of the United

States Bankruptcy Code in Case No. 24-10472-t13 (i.e., the First Bankruptcy Case). That case

was dismissed on July 10, 2024, for Ms. Dugas’s failure to timely file a chapter 13 plan and to

provide the trustee with requested financial documents and information.

On August 14, 2024, Ms. Dugas filed the Second Bankruptcy Case.

Ms. Dugas’s request in the Second Bankruptcy Case to extend the automatic stay was

denied.16

In the Second Bankruptcy Case, Kurt Young was not listed as a co-debtor on Ms.

Dugas’s Schedule H.17

Mr. Natelson and Mr. Gallegos undertook no activity in the Foreclosure Action from the

time the Second Bankruptcy Case was filed until September 27, 2024, when Mr. Gallegos,

through his attorney Mr. Natelson, filed the Ejectment Motion seeking ejectment of Ms. Dugas

from the Property and a writ of restitution. The Ejectment Motion was filed more than 30 days

after the Second Bankruptcy Case was commenced.

The writ of restitution was issued in the Foreclosure Action on the same day that the

Ejectment Motion was filed and was returned in October 2024.

On October 11, 2024, Mr. Gallegos, through his attorney Mr. Natelson, filed a motion for

summary judgment in the Foreclosure Action on claims against Mr. Young asserted in a

supplemental complaint (the “Motion for Summary Judgment Against Young”). That motion

was granted on December 17, 2024 (“2024 Young Partial Summary Judgment”).

16 Doc. 72

17 Doc. 1 at p. 36.

The balance of the State Court Foreclosure Action, consisting of Mr. Young’s

counterclaims, was disposed of after trial by entry of a judgment on April 17, 2025

(“2025 Dugas-Young Post-Trial Judgment”), which determined that Mr. Young had an interest

in the Property and directed that a new foreclosure sale take place, with the redemption period

for Ms. Dugas and Mr. Young to run from the date of the new sale. The new sale had not yet

occurred at the time the Summary Judgment Motion was filed in this adversary proceeding.

The only motion for ejectment that Mr. Gallegos, through his attorney Mr. Natelson, filed

in the Foreclosure Action was on September 27, 2024. The only motions for summary judgment

that Mr. Gallegos, through his attorney Mr. Natelson, filed in the Foreclosure Action were on

June 13, 2023, and on October 11, 2024.

The 2023 Foreclosure Judgment determined that as of February 7, 2023, Ms. Dugas was

in default under the Option Money Promissory Note secured by the Property in the amount of

$11,410, plus $375 in late fees, plus interest of $945.06 through July 7, 2023, plus default

interest thereafter at 18% per year.

Ms. Dugas’s Second Bankruptcy Case was dismissed on July 8, 2025.

No new foreclosure sale was noticed or took place prior to the dismissal of the Second

Bankruptcy Case.

b. The Remaining Asserted Facts

Any other remaining facts asserted by Mr. Natelson in his statement of undisputed

material facts, and adopted by Mr. Gallegos in the Joinder, are either legal conclusions or not

material to the Court’s determination of summary judgment. Ms. Dugas also asserted facts,18 but

did not submit any evidence in support of her facts. Further, many of Ms. Dugas’s asserted facts

18 AP Doc. 51 at pp. 1-7.

are either legal conclusions, in accordance with the Movants’ facts, or not material to the Court’s

determination of summary judgment.

IV. DISCUSSION

Movants raise several grounds for summary judgment in their favor: first, that the Court

lacks subject matter jurisdiction over Counts 1 and 2 because they are non-core claims; second,

that the Rooker-Feldman doctrine precludes Ms. Dugas’s requests for this Court to dismiss the

Foreclosure Action in State Court and return the Property to Ms. Dugas; third, to the extent the

Court has jurisdiction, that it should permissively abstain from hearing all claims; and fourth,

that no violation of the automatic stay occurred.19

As discussed below, the Court determines that Movants are entitled to summary

judgment in their favor on Counts 1 and 2, as well as Count 3 with respect to the Ejectment

Motion. However, the Court will deny summary judgment on Count 3 with respect to the Motion

for Summary Judgment Against Young and related documents.

a. Subject Matter Jurisdiction

The Court first examines whether it has subject matter jurisdiction over the claims

asserted in the Adversary Complaint.

Movants assert that the Court lacks subject matter jurisdiction on two bases: (1) that the

underlying bankruptcy case has been dismissed, and therefore the Court does not retain

jurisdiction over non-core matters and (2) that certain of Ms. Dugas’s claims and requests for

relief are outside of the Court’s “related to” jurisdiction to begin with.

19 Mr. Natelson did not raise the issue in his Summary Judgment Motion of whether an attorney who

represents a client in taking an action that violates the automatic stay also violates the stay. Therefore, the

Court will not address the issue in this summary judgment opinion.

The Court further has an independent duty to examine its jurisdiction.20 The subject

matter jurisdiction of bankruptcy courts is derived from the jurisdiction granted to federal district

courts,21 which is limited by 28 U.S.C. § 1334 to four matters: “(1) cases under title 11,

(2) proceedings arising under title 11, (3) proceedings arising in a case under title 11, and

(4) proceedings related to a case under title 11.” Wynn v. Innovations Credit Union (In re Wynn),

No. 15-12771, 2018 WL 4998099, at *2 (Bankr. D.N.M. Oct. 15, 2018) (quoting In re Marcus

Hook Dev. Park, Inc., 943 F.2d 261, 264 (3rd Cir. 1991)).

The bankruptcy courts, through referral from the district courts, have “original but not

exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to

cases under title 11.” 28 U.S.C. § 1334(b).22 Such proceedings can be divided into two types:

core and non-core. “[C]ore proceedings are those that arise in a bankruptcy case or under

[t]itle 11.” Stern v. Marshall, 564 U.S. 462, 476 (2011) (clarifying that there is no category of

20 See 1mage Software, Inc. v. Reynolds & Reynolds Co., 459 F.3d 1044, 1048 (10th Cir. 2006) (“Federal

courts ‘have an independent obligation to determine whether subject-matter jurisdiction exists, even in the

absence of a challenge from any party,’ and thus a court may sua sponte raise the question of whether

there is subject matter jurisdiction ‘at any stage in the litigation.’”) (quoting Arbaugh v. Y&H Corp., 546

U.S. 500, 506 (2006)); Williams v. Life Sav. & Loan, 802 F.2d 1200, 1202 (10th Cir. 1986) (“It is well

settled that a federal court must dismiss a case for lack of subject matter jurisdiction, even should the

parties fail to raise the issue.”); Kline v. Tiedemann (In re Kline), 424 B.R. 516, 528 n.30 (Bankr. D.N.M.

2010) (“[T]his Court has an obligation to dismiss a claim sua sponte if the court has no subject matter

jurisdiction.”).

21 Pettine v. Direct Biologics, LLC (In re Pettine), 655 B.R. 196, 209 (10th Cir. BAP 2023) (“A district

court authorizes a bankruptcy court to hear, or to hear and determine, bankruptcy cases and proceedings

by referring cases and proceedings to the bankruptcy court for the district under § 157(a). A bankruptcy

court’s authority to hear, or to hear and determine, cases and proceedings is dependent on such a referral,

which constitutes the district court’s grant of authority to the bankruptcy court to exercise the jurisdiction

vested in the district court under § 1334, on the conditions and subject to the limitations set forth in

§ 157(b) to (e).”)

22 28 U.S.C. § 1334(a) grants “original and exclusive jurisdiction of all cases under title 11.” See also

Footnote 21 above.

core proceedings outside of proceedings that “arise in” or “arise under” title 11).23 Thus, “[c]ore

proceedings involve rights created by bankruptcy law, or proceedings that would arise only

within a bankruptcy case.” United Tort Claimants v. Quorum Health Res. (In re Otero Cnty.

Hosp. Ass’n, Inc.), 617 B.R. 699, 704 (Bankr. D.N.M. 2020) (citing Gardner v. United States (In

re Gardner), 913 F.2d 1515, 1518 (10th Cir. 1990)).24

In contrast, “[p]roceedings that fall within the Court’s ‘related to’ jurisdiction are non-

core proceedings.” Otero Cnty. Hosp., 617 B.R. at 704. “Related proceedings are civil

proceedings that, in the absence of a bankruptcy petition, could have been brought in a district

court or state court.” Gardner, 913 F.2d at 1518 (citing Nat’l Acceptance Co. of America v. Price

(In re Colorado Energy Supply, Inc.), 728 F.2d 1283, 1286 (10th Cir. 1984)). “[T]he test for

determining whether a civil proceeding is related [to] bankruptcy is whether the outcome of that

proceeding could conceivably have any effect on the estate being administered in bankruptcy.”

Gardner, 913 F.2d at 1518 (quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984),

abrogated on other grounds by Things Remembered, Inc. v. Petrarca, 516 U.S. 124 (1995)). “[I]f

the outcome could alter the debtor’s rights, liabilities, options, or freedom of action in any way,

thereby impacting on the handling and administration of the bankruptcy estate,” the “proceeding

is related to the bankruptcy.” Gardner, 913 F.2d at 1518 (citing Pacor, 743 F.2d at 994).

In this adversary proceeding, the claims can be divided into two categories: the stay

violation claim (Count 3) and claims arising from violations of due process and procedure in the

Foreclosure Action in State Court (Counts 1 and 2).

23 See also United Tort Claimants v. Quorum Health Res. (In re Otero Cnty. Hosp. Ass’n, Inc.), 617 B.R.

699, 704 (Bankr. D.N.M. 2020) (“Proceedings ‘arising under title 11, or arising in a case under title 11’

are core proceedings.”) (quoting 28 U.S.C. § 157(b)(1)).

24 28 U.S.C 157(b)(2) sets forth a non-exhaustive list of core proceedings.

It is clear that the Court has subject matter jurisdiction to hear the stay violation claim. It

is a core matter because it involves a claim which has no existence absent the filing of a

bankruptcy case—the automatic stay at issue arose upon the filing of Ms. Dugas’s bankruptcy

petition in the Second Bankruptcy Case and exists only in connection with such bankruptcy case.

Even after the dismissal of a bankruptcy case, it is appropriate for bankruptcy courts to maintain

jurisdiction of proceedings involving stay violations. See Johnson v. Smith (In re Johnson), 575

F.3d 1079, 1083-84 (10th Cir. 2009) (holding that bankruptcy court had jurisdiction in adversary

proceeding seeking damages under § 362(k)(1) for willful stay violation following dismissal of

the underlying bankruptcy case and citing cases); Kline v. Tiedemann (In re Kline), 424 B.R.

516, 528 (Bankr. D.N.M. 2010) (“[T]he bankruptcy court has jurisdiction over certain matters

after dismissal of a bankruptcy case, such as jurisdiction over a claim for willful violation of the

stay[.]”), abrogated on other grounds by TW Telecom Holdings Inc. v. Carolina Internet Ltd.,

661 F.3d 495, 497 (10th Cir. 2011). There is no requirement that the bankruptcy court expressly

retain jurisdiction over a stay violation proceeding when it dismisses the underlying chapter 13

case. See Johnson, 575 F.3d at 1084 (“[W]e see no basis for requiring a bankruptcy court to state

explicitly that it is retaining jurisdiction over a § 362(k)(1) adversary proceeding when it

dismisses an underlying Chapter 13 case[.]”).

With respect to the other claims for violations of due process and procedure in the state

court foreclosure litigation, even assuming these are independent causes of action, they are non-

core claims that at most would have been “related to” the underlying bankruptcy proceeding.25, 26

“For non-core proceedings, the case law directs the Court to use its discretion to determine

whether to retain jurisdiction over related adversary proceedings following dismissal of the

underlying bankruptcy case, taking the following factors into consideration ‘(1) judicial

economy; (2) fairness and convenience to the litigants; and (3) the degree of difficulty of the

related legal issues involved.’” Viper Servs., LLC v. Fora Fin. Bus. Loans, LLC (In re Viper

Servs., LLC), No. 15-11259, 2017 WL 5499155, at *3 n.5 (Bankr. D.N.M. Nov. 15, 2017)

(quoting Fidelity & Deposit Co. of Maryland v. Morris (In re Morris), 950 F.2d 1531, 1535

(11th Cir. 1992)).

Taking the above factors into consideration, the Court determines that even if

(1) independent causes of action existed for the claims arising out of the Foreclosure Action in

State Court and (2) it would have had “related to” jurisdiction over such claims during the

pendency of the Second Bankruptcy Case, the Court will not retain jurisdiction over such

claims.27 Judicial economy would be best served by the claims being decided by the State Court

in which the alleged actions took place, as the State Court has the familiarity with its own record.

Fairness and convenience to the litigants is neutral, as the parties have been litigating in both this

25 Generally, assertions of violation of due process and procedure during the course of litigation are not

independent causes of action. Instead, they must be raised in the case in which the violations are alleged

to have occurred. Since Movants do not seek summary judgment on this ground, and the Court concludes

that it would not have jurisdiction over such claims anyway, the Court will not address the question of

whether such independent causes of action exist.

26 See In re Payne, No. 17-25504, 2017 WL 4271082, at *2 (Bankr. E.D. Wis. Sept. 22, 2017) (“The

outcome of the foreclosure action could have an impact on real estate that is part of the debtor’s estate,

making it related to his bankruptcy case.”).

27 The Court also notes that the Rooker-Feldman doctrine may prohibit consideration of such claims on

the basis of the 2025 Dugas-Young Post-Trial Judgment. See Section IV.b. of this Opinion. However,

there is a wrinkle that the 2025 Dugas-Young Post-Trial Judgment was not in existence at the time Ms.

Dugas filed the Adversary Complaint. Since the Court concludes that it does not have jurisdiction

anyway, the Court will not analyze such issue in depth.

Court and the State Court. Based on the lack of detail in the Adversary Complaint, the degree of

difficulty of the legal issues is unclear; however, the State Court has the expertise on the

applicable laws and procedures involved. Therefore, given that the underlying bankruptcy has

been dismissed, the Court will not retain jurisdiction over Counts 1 and 2.

b. Rooker-Feldman Doctrine

Movants further assert that Ms. Dugas’s requests for this Court to dismiss the Foreclosure

Action and return the Property to her are barred on the basis of the Rooker-Feldman doctrine as

an impermissible collateral attack on the 2023 Dugas Foreclosure Judgment. For the reasons set

forth below, the Court determines that the 2023 Dugas Foreclosure Judgment is not a final

judgment and therefore the Rooker-Feldman doctrine does not apply to it.28

“The Rooker-Feldman doctrine precludes a losing party in state court who complains of

injury caused by the state-court judgment from bringing a case seeking review and rejection of

that judgment in federal court.” Miller v. Deutsche Bank Nat’l Tr. Co. (In re Miller), 666 F.3d

1255, 1261 (10th Cir. 2012) (citing Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S.

280, 291-92 (2005)). Movants argue that Ms. Dugas’s requests for the return of ownership and

possession of the Property and dismissal of the Foreclosure Action in effect seek to overrule the

2023 Dugas Foreclosure Judgment.

The Rooker-Feldman doctrine precludes the Court from reviewing on the merits,

modifying, or setting aside a state court judgment. See Mayotte v. U.S. Bank N.A., 880 F.3d

1169, 1174 (10th Cir. 2018) (“What is prohibited under Rooker-Feldman is a federal action that

tries to modify or set aside a state-court judgment because the state proceedings should not have

28 Mr. Natelson and Mr. Gallegos do not assert that the Rooker-Feldman doctrine bars any other claims or

relief requested. And indeed, with respect to the stay violation claim, “Rooker-Feldman places no bar to a

bankruptcy court’s authority to determine the extent of, and enforce, the automatic stay.” In re Shook,

No. 24-10724, 2024 WL 4270570, at *6 (Bankr. D.N.M. Sept. 20, 2024).

led to that judgment.”) (emphasis in original); Charchenko v. City of Stillwater, 47 F.3d 981, 983

(8th Cir. 1995) (“Rooker-Feldman precludes a federal action if the relief requested in the federal

action would effectively reverse the state court decision or void its ruling.”) (citing Landers Seed

Co. v. Champaign Nat'l Bank, 15 F.3d 729, 732 (7th Cir. 1994)). “Rooker-Feldman is

jurisdictional in the sense that federal courts do not have jurisdiction to modify or set aside a

state court judgment because the state proceedings should not have led to that judgment.” Bednar

v. RCB Bank (In re Bednar), No. 18-099, 2019 WL 3928844, at *7 (10th Cir. BAP Aug. 20,

2019) (citing Mayotte, 880 F.3d at 1170).

However, “Rooker-Feldman and its progeny do ‘not deprive a federal court of

jurisdiction to hear a claim just because it could result in a judgment inconsistent with a state-

court judgment.’” Bednar, 2019 WL 3928844, at *7 (quoting Mayotte, 880 F.3d at 1174).

Although Rooker-Feldman prevents federal courts from in effect acting as an appellate court to

review the merits of or modify a state court judgment or order, it does not apply to override the

authority of bankruptcy courts to apply provisions of the Bankruptcy Code that affect state court

judgments. As observed by the Ninth Circuit, “[t]he Rooker-Feldman doctrine has little or no

application to bankruptcy proceedings that invoke substantive rights under the Bankruptcy Code,

or that, by their nature, could arise only in the context of a federal bankruptcy case.” Sasson v.

Sokoloff (In re Sasson), 424 F.3d 864, 871 (9th Cir. 2005). For example, the Rooker-Feldman

doctrine does not preclude bankruptcy courts from “modifying contractual obligations that have

been reduced to judgment in state court, avoiding liens found to be valid and enforceable in a

state court judgment, or discharging debts upon which a state court judgment is based, pursuant

to provisions of the Bankruptcy Code.” In re S-Tek 1, LLC, 625 B.R. 519, 525 (Bankr. D.N.M.

2020).

In this adversary proceeding, the Court first examines the finality of the state court

judgment. “Only final state court judgments and orders are entitled to [the application of]

Rooker-Feldman.” Bednar, 2019 WL 3928844, at *7 (citing Exxon Mobil, 544 U.S. at 293).29

“New Mexico courts generally consider a judgment final when ‘all issues of law and fact have

been determined and the case disposed of by the trial court to the fullest extent possible.’” Capco

Acquisub, Inc. v. Greka Energy Corp., 2007-NMCA-011, ¶ 17 (quoting Principal Mut. Life Ins.

Co. v. Straus, 1993-NMSC-058, ¶ 6); see also McCutcheon v. Davide (In re Davide),

No. 24-11223, 2025 WL 2848337, at *6 (Bankr. D.N.M. Oct. 7, 2025) (“Generally, a final

judgment must adjudicate all claims in the action.”). With respect to New Mexico foreclosure

judgments specifically, the foreclosure judgment is generally a final judgment with respect to the

declaration of the parties’ rights unless modified:

We have held that the district court’s decree of foreclosure is both final and interlocutory

in its operation. The decree serves two functions: first, it determines the rights of the

parties in the property; and, second, it fixes the manner and terms of the foreclosure sale.

Whereas, the court’s judgment with respect to the manner and terms of sale is

interlocutory, the declaration of the parties’ rights may be construed as a final judgment

unless modified under the provisions of NMSA 1978, Section 39-1-1 (1917).

Grygorwicz v. Trujillo, 2009-NMSC-009, ¶ 8 (internal citations omitted).30, 31

In this matter, Movants assert that the 2023 Dugas Foreclosure Judgment is a final

judgment with respect to its ruling that “Plaintiff [Mr. Gallegos] is restored possession and

29 See also Lance v. Dennis, 546 U.S. 459, 463 (2006) (“[U]nder what has come to be known as the

Rooker-Feldman doctrine, lower federal courts are precluded from exercising appellate jurisdiction over

final state-court judgments.”) (emphasis added).

30 NMSA 1978, § 39-1-1 provides a 30-day period for the filing of motions directed against final

judgments and decrees, and an additional 30 days from the filing of any such motion for the state district

court to dispose of the motion or it shall be deemed denied.

31 See also In re Murphey, 563 B.R. 373, 378 (Bankr. D.N.M. 2016) (“Under New Mexico law, a

judgment for foreclosure is final with respect to the rights of the parties in the property, and interlocutory

with respect to the manner and terms of the foreclosure sale.”) (citing Grygorwicz, 2009-NMSC-009, ¶ 8

and Speckner v. Riebold, 86 N.M. 275, 277 (1974)).

ownership of the property located at 58 Lower Arroyo Hondo Road, Taos County, New Mexico

[and a] Writ of Restitution shall be issued in favor of Ike Gallegos.” However, the 2023 Dugas

Foreclosure Judgment also awarded Mr. Gallegos a money judgment, which is inconsistent with

the award of ownership of the Property, and the State Court subsequently approved a foreclosure

sale of the Property—presumably to be applied to the money judgment—which is also

inconsistent with the award of ownership of the Property. The subsequent occurrence of the

foreclosure sale and approval of the foreclosure sale thus renders non-final or supersedes the

ruling restoring ownership of the Property to Mr. Gallegos. Therefore, based on the undisputed

material facts, the Rooker-Feldman doctrine does not apply to bar relief on the basis of the 2023

Dugas Foreclosure Judgment.

c. Claim Preclusion and Issue Preclusion

Movants did not explicitly assert claim preclusion or issue preclusion, which if applicable

would “bar subsequent litigation in bankruptcy court of claims and issues determined in a prior

final state court judgment.” In re Lopez, No. 21-10836, 2022 WL 1160607, at *2 (Bankr. D.N.M.

Apr. 19, 2022). “Under the Full Faith and Credit statute, 28 U.S.C. § 1738, ‘a federal court must

give to a state-court judgment the same preclusive effect as would [be] given that judgment

under the law of the State in which the judgment was rendered.’” Id. (quoting Migra v. Warren

City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984)).

Bankruptcy courts may raise claim preclusion and issue preclusion sua sponte, although

they are “advised to be ‘cautious’ in doing so.” Arrieta v. Smith (In re Smith), 673 B.R. 1, 9 (8th

Cir. BAP 2025).32 Here, Movants assert that the Court should follow the 2023 Dugas Foreclosure

32 See also In re First Premier Funding, LLC, 654 B.R. 142, 150 n.5 (Bankr. N.D. Ill. 2023), aff'd sub

nom. First Premier Funding, LLC v. Cnty. of Cook (In re First Premier Funding, LLC), No. 23-CV-

14854, 2024 WL 5040837 (N.D. Ill. Dec. 9, 2024) (“The Court may raise an issue of collateral estoppel

sua sponte if it gives the parties an opportunity to argue the issue.”) (quoting Nguyen v. Kaiser Found.

Judgment’s adjudication of the rights between the parties on the basis that it is a final

judgment—this operates substantively as a request for the Court to give such adjudication issue

preclusive effect. Therefore, the Court will analyze issue preclusion.33

“Issue preclusion . . . prevents a party who lost on an issue decided in a prior lawsuit

from relitigating the same issue in a subsequent suit.” Rael v. Gonzales (In re Gonzales), 667

B.R. 357, 367 (Bankr. D.N.M. 2025) (citing Melnor, Inc. v. Corey (In re Corey), 583 F.3d 1249,

1251 (10th Cir. 2009)). “Issue preclusion may be invoked to bar relitigation of issues of fact

determined in a prior state court action resulting in a final judgment[.]” Gonzales, 667 B.R. at

367 (citing Klemens v. Wallace (In re Wallace), 840 F.2d 762, 764 (10th Cir. 1988)). In order for

a final judgment to have issue preclusive effect under New Mexico law, there are four requisite

elements: “first, the parties in the second suit must be the same or in privity with the parties in

the first suit; second, the causes of action must be different; third, the issue or fact must have

been actually litigated in the first case; and fourth, the issue must have been necessarily

Health Plan, Inc., No. 17-905, 2019 WL 3769967, at *9 n.4 (C.D. Cal. June 27, 2019)); Arizona v.

California, 530 U.S. 392, 412 (2000), supplemented by 531 U.S. 1 (2000) (“[I]f a court is on notice that it

has previously decided the issue presented, the court may dismiss the action sua sponte, even though the

defense has not been raised. This result is fully consistent with the policies underlying res judicata: it is

not based solely on the defendant’s interest in avoiding the burdens of twice defending a suit, but is also

based on the avoidance of unnecessary judicial waste.”) (internal citation and quotation marks omitted).

33 It does not appear that claim preclusion is relevant. “Claim preclusion, sometimes referred to as res

judicata, prohibits relitigation of any claims that were raised or could have been raised in a prior action

between the same parties or their privies. The doctrine serves to promote judicial efficiency by preventing

multiple lawsuits and to enable the parties to rely on the finality of adjudications.” Greenstein v. Wells

Fargo Bank, N.A. (In re Greenstein), No. 14-1101, 2016 WL 305345, at *7 (9th Cir. BAP Jan. 26, 2016)

(internal citations and quotation marks omitted). In order for a final judgment to have claim preclusive

effect under New Mexico law, “there are four requisite elements[:] . . . (1) the same party or parties in

privity; (2) the identity of capacity or character of persons for or against whom the claim is made; (3) the

same subject matter; and (4) the same cause of action in both suits.’” Pidcock v. McCune (In re McCune),

No. 21-1013, 2023 WL 2879278, at *6 (Bankr. D.N.M. Apr. 10, 2023) (quoting Strickland v. City of

Albuquerque, 130 F.3d 1408, 1411 (10th Cir. 1997) (citing Myers v. Olson, 1984-NMSC-015, ¶ 9)). In

addition, “the party to be precluded must have had a ‘full and fair’ opportunity to litigate the claim in the

prior action.” McCune, 2023 WL 2879278, at *6 (citing Bank of Santa Fe v. Marcy Plaza Assocs., 2002-

NMCA-014, ¶ 14).

determined in that case.” In re Lopez, No. 21-10836, 2022 WL 1160607, at *2 (Bankr. D.N.M.

Apr. 19, 2022) (quoting Blea v. Sandoval, 1988-NMCA-036, ¶ 18).

Further, “[w]hether the doctrine [of issue preclusion] should be applied is within the

[trial] court’s discretion.” Strategic Funding Source, Inc. v. Evans (In re Evans), 667 B.R. 162,

171 (Bankr. D.N.M. 2025) (quoting Shovelin v. Cent. New Mexico Elec. Co-op., Inc.,

1993-NMSC-015, ¶ 14). Issue preclusion is “not mandated in the Constitution or by statute”—it

is instead “the product of court precedent based on a court’s exercise of its equitable powers.”

Welch v. Giron (In re Giron), 610 B.R. 670, 677 (Bankr. D.N.M. 2019) (quoting Acacia Villa v.

United States, 24 Cl. Ct. 445, 448 (1991)). Therefore, “[e]ven when the elements of collateral

estoppel are present, the decision whether to apply the doctrine is within the discretion of the

trial court.” Giron, 610 B.R. at 677 (quoting United States v. Kaytso, 868 F.2d 1020, 1022 (9th

Cir. 1988)); see also Arapahoe Cnty. Pub. Airport Auth. v. FAA, 242 F.3d 1213, 1220 (10th Cir.

2001) (favorably citing cases which hold that issue preclusion is an equitable doctrine applied at

the court’s discretion).

In this matter, the Court first considers the prerequisite that in order to be entitled to issue

preclusion, a judgment must be a final judgment. For the reasons set forth above in Section IV.b.,

the 2023 Dugas Foreclosure Judgment is not a final judgment. Therefore, it is not entitled to

issue preclusive effect. Further, even if the 2023 Dugas Foreclosure Judgment were a final

judgment, this Court would exercise its discretion not to give it issue preclusive effect due to the

irregularities in the Foreclosure Action.

d. Permissive Abstention

Movants assert that, to the extent the Court has jurisdiction over the claims, the Court

should permissively abstain from hearing them. For the reasons set forth below, the Court will

not abstain from deciding the stay violation claim (Count 3), but in the event that it has

jurisdiction over the other claims (Counts 1 and 2), the Court will permissively abstain from

hearing such claims.

The non-exclusive permissive abstention factors the Court may consider include:

(1) The effect of abstention and remand on the administration of the bankruptcy estate,

including whether claims could be timely adjudicated in state court to meet the

needs of the bankruptcy case;

(2) The extent to which state law issues predominate over bankruptcy issues;

(3) The difficult or unsettled nature of the applicable law;

(4) Whether abstention and remand serves principles of judicial economy;

(5) The presence of a related proceeding commenced in state court or another non-

bankruptcy court;

(6) The feasibility of severing non-core state law claims from core bankruptcy claims;

(7) The jurisdictional basis for the bankruptcy court to hear the claims in the removed

proceeding, if any, other than “related to” jurisdiction;

(8) Whether the removed proceeding is a core proceeding;

(9) The likelihood that commencement of the proceeding in bankruptcy court involves

forum shopping by one of the parties;

(10) The existence of a right to jury trial;

(11) The presence of non-debtor parties;

(12) The burden the proceeding places on the bankruptcy court’s docket;

(13) Whether remand lessens the possibility of inconsistent results;

(14) Whether the court where the action originated has greater expertise;

(15) The status of the proceeding in the state court prior to removal and the status of the

proceeding in bankruptcy court; and

(16) Whether the nature of the proceeding is better suited for state court or bankruptcy

court.

Bright Green Corp. v. Fikany (In re Bright Green Corp.), 671 B.R. 280, 292 (Bankr. D.N.M.

2025) (citing cases). “Bankruptcy courts have discretion to determine the relative weight to give

each factor.” Id.

In this adversary proceeding, the Court determines that the state law claims in Counts 1

and 2 can easily be severed from the stay violation claim in Count 3. The actions that Ms. Dugas

argues violated the automatic stay in the Second Bankruptcy Case (Count 3) are not part of the

allegations of violations of due process (Count 1) and procedural guidelines (Count 2) in the

Foreclosure Action.34

Reviewing the remaining permissive abstention factors in light of the ability to sever the

bankruptcy claim from the state law claims, the Court concludes that even if it has jurisdiction

over the non-core state law claims, it is appropriate to permissively abstain from hearing them.

Factors (1), (2), (5), (7), (8), and (16) weigh in favor of permissive abstention from the state law

claims: factor (1)—the Second Bankruptcy Case has been dismissed, so determination of these

claims will have no impact on an ongoing bankruptcy case; factor (2)—these are purely state law

issues; factor (5)—the Foreclosure Action is still proceeding; factor (7)—the Court does not have

a jurisdictional basis other than “related to” jurisdiction to hear the state law claims; factor (8)—

the state law claims are non-core matters; and factor (16)—the state law claims are better suited

for state court. The other abstention factors are either neutral, not relevant, or would be given

little weight.

In contrast, reviewing the remaining permissive abstention factors in light of the ability to

sever the bankruptcy claim from the state law claims, the Court concludes that it is not

appropriate to permissively abstain from hearing the bankruptcy claim regarding stay violation.

Factors (2), (3), (7), (8), and (16) weigh against permissive abstention from the stay violation

claim: factor (2)—this is purely a matter of bankruptcy law; factor (3)—there is a circuit split on

the extent to which the automatic stay was in effect; factor (7)—a stay violation claim arises

34 Except to the extent Count 1 is duplicative of Count 3 in asserting violation of the automatic stay.

under title 11; factor (8)—the stay violation claim is a core matter; and factor (16)—the stay

violation claim is better suited for bankruptcy court. The other abstention factors are either

neutral, not relevant, or would be given little weight.

Thus, to the extent the Court has jurisdiction over the state law claims, the Court will

permissively abstain from hearing such claims. However, the Court will not abstain from

determining the stay violation claim.

e. Stay violation claim

1. To what extent did the automatic stay terminate on the 30th day after

commencement of the Second Bankruptcy Case?

Having determined that the Court retains jurisdiction over the stay violation claim and

that it will not permissively abstain from hearing and determining the claim, the Court considers

the merits of the stay violation claim. Movants assert that they are entitled to judgment in their

favor as a matter of law on Ms. Dugas’s claim for stay violation because, pursuant to

§ 362(c)(3)(A), the automatic stay terminated thirty (30) days after the filing of the Second

Bankruptcy Case. Section 362(c)(3) applies when a second bankruptcy case is filed within one

year following the dismissal of a prior bankruptcy case. There is a circuit split as to the effect of

§ 362(c)(3)(A), and whether the entire stay terminates on the 30th day after commencement of

the second case, or whether the stay remains in effect with respect to property of the estate.35 If

35 There is also a third approach—the Bender approach—which is “a hybrid approach of agreeing with

the minority that ‘with respect to the debtor’ does not limit the termination of the automatic stay as to

property of the estate but following Paschal in finding that the termination is limited to the continuation

of formal ‘actions taken’ prior to the bankruptcy filing.” In re Dev, 593 B.R. 435, 445 (Bankr. E.D.N.C.

2018) (citing In re Bender, 562 B.R. 578, 583 (Bankr. E.D.N.Y. 2016) and In re Paschal, 337 B.R. 274

(Bankr. E.D.N.C. 2006)). This approach focuses on the first part of § 362(c)(3)(A) which terminates the

stay “with respect to any action taken” and concludes that “this phrase means that the § 362(a) stay is

only terminated . . . with respect to continuation of formal legal proceedings that were commenced

against the debtor pre-petition.” Bender, 562 B.R. at 582 (citing Paschal, 337 B.R. at 280). Thus, the

Bender approach provides that “under § 362(c)(3), the § 362(a) stay is only terminated as to the

the entire stay terminated 30 days after the filing of the Second Bankruptcy Case, there would

clearly be no stay violation because the actions at issue all occurred more than 30 days after the

filing. The Court will review the positions and reasoning on both sides of the circuit split below.

Both the majority view (that the stay remains in effect with respect to property of the

estate) and the significant minority view (that the entire stay terminates on the 30th day after case

commencement) begin with recognition that the automatic stay is an important protection in

bankruptcy. E.g., Smith v. Maine Bureau of Revenue Servs. (In re Smith), 910 F.3d 576, 580

(1st Cir. 2018) (“The automatic stay is a ‘fundamental . . . protection[] provided by the

bankruptcy laws.’”) (quoting Midlantic Nat’l Bank v. N.J. Dep’t of Env’t Prot., 474 U.S. 494,

503 (1986)). Courts then turn to the language of § 362(c)(3).

Section 362(c)(3) provides:

[I]f a single or joint case is filed by or against a debtor who is an individual in a

case under chapter 7, 11, or 13, and if a single or joint case of the debtor was

pending within the preceding 1-year period but was dismissed, other than a case

refiled under a chapter other than chapter 7 after dismissal under section 707(b)—

(A) the stay under subsection (a) with respect to any action taken with

respect to a debt or property securing such debt or with respect to any

lease shall terminate with respect to the debtor on the 30th day after

the filing of the later case; [and]

(B) on the motion of a party in interest for continuation of the automatic

stay and upon notice and a hearing, the court may extend the stay in

particular cases as to any or all creditors (subject to such conditions or

limitations as the court may then impose) after notice and a hearing

completed before the expiration of the 30-day period only if the party

in interest demonstrates that the filing of the later case is in good faith

as to the creditors to be stayed[.]

continuation of judicial, administrative or other proceedings commenced prior to the bankruptcy filing.”

Bender, 562 B.R. at 583.

A. The majority view

The majority view, which has been adopted by the Fifth Circuit Court of Appeals as well

as the Tenth Circuit Bankruptcy Appellate Panel (BAP), is that the stay terminates under

§ 362(c)(3)(A) as to actions against the debtor but remains in effect with respect to actions

against property of the estate.36 Under this view, the plain language of § 362(c)(3)(A) governs

and the meaning of the phrase “with respect to the debtor” is clear.37 In Rose v. Select Portfolio

Servicing, Inc., the Fifth Circuit explained, “In § 362(c)(3)(A), Congress stated that ‘the stay

under [§ 362(a)] . . . shall terminate with respect to the debtor.’ There is no mention of the

bankruptcy estate, and we decline to read in such language.” 945 F.3d 226, 230 (5th Cir. 2019)

(modifications in Rose).

The majority view also relies on the proposition that “Congress knew how to [eliminate]

the entire stay, and in fact did so in the very next section of the statute.” Rose, 945 F.3d at 230

(quoting In re Williford, No. 13-31738, 2013 WL 3772840, at *3 (Bankr. N.D. Tex. July 17,

2013)); see also In re McGrath, 621 B.R. 260, 265 (Bankr. D.N.M. 2020) (explaining that

“Congress knew how to terminate the stay entirely” and citing § 362(c)(4)(A)(i)).

Section 362(c)(4)(A)(i) provides:

[I]f a single or joint case is filed by or against a debtor who is an individual under this

title, and if 2 or more single or joint cases of the debtor were pending within the previous

year but were dismissed, other than a case refiled under a chapter other than chapter 7

36 E.g., Rose v. Select Portfolio Servicing, Inc., 945 F.3d 226 (5th Cir. 2019); Holcomb v. Hardeman (In

re Holcomb), 380 B.R. 813 (10th Cir. BAP 2008); First Fin. Bank v. Clark, 627 B.R. 663 (N.D. Ind.

2021); In re Madsen, 639 B.R. 761 (Bankr. E.D. Cal. 2022); In re McGrath, 621 B.R. 260 (Bankr.

D.N.M. 2020); In re Markoch, 583 B.R. 911 (Bankr. W.D. Mich. 2018); In re Roach, 555 B.R. 840

(Bankr. M.D. Ala. 2016); In re Hale, 535 B.R. 520 (Bankr. E.D.N.Y. 2015); In re Johnson, 335 B.R. 805

(Bankr. W.D. Tenn. 2006); In re Jones, 339 B.R. 360 (Bankr. E.D.N.C. 2006); see also Bender, 562 B.R.

at 579 n.1 (collecting cases).

37 E.g., Rose, 945 F.3d at 230 (citing the “plain language of the provision”); Holcomb, 380 B.R. at 816

(“[W]e see no ambiguity in the language of the statute. . . . As observed in Jones, ‘a plain reading of those

words [‘with respect to the debtor’] makes sense[.]’” (citing Jones, 339 B.R. at 363)).

after dismissal under section 707(b), the stay under subsection (a) shall not go into effect

upon filing of the later case.

(emphasis added). Courts in the majority contrast the language providing that the stay “shall not

go into effect” in § 362(c)(4)(A)(i) with the language providing that the stay “shall terminate

with respect to the debtor” in § 362(c)(3)(A), and reason that “with respect to the debtor” is a

“qualifier . . . [which] can only be interpreted as implying a limitation upon the scope of the

termination of the automatic stay.” McGrath, 621 B.R. at 265 (quoting Rose, 945 F.3d at 231).

The majority view further reasons that its reading of § 362(c)(3)(A) is consistent with the

other provisions of the Bankruptcy Code, as well as the policies behind bankruptcy law. With

respect to other provisions, the Fifth Circuit provides that § 362(c)(3)(A) “must be read in

conjunction with § 362(a)” which “operates as a stay of certain actions in three categories:

against the debtor, the debtor’s property, and property of the bankruptcy estate.” Rose, 945 F.3d

at 230 (citing Smith, 910 F.3d at 580). Since § 362(c)(3)(A) references the stay “with respect to

the debtor” terminating on the 30th day, the majority reasons that the stay remains in place with

respect to property of the bankruptcy estate.

Regarding the policies behind bankruptcy law, the majority approach emphasizes that

“[a]t the core of bankruptcy law is the policy of ‘obtaining a maximum and equitable distribution

for creditors.’” Holcomb, 380 B.R. at 816 (quoting BFP v. Resolution Trust Corp., 511 U.S. 531,

563 (1994)). Keeping the stay in place with respect to property of the estate prevents the

situation where “a single creditor, who may be oversecured, [has] full access to property that

would otherwise be property of the estate.” Id. The majority reasons that “[s]uch property may

be necessary to implement a debtor’s Chapter 13 plan; or, in a Chapter 7 case, equity in the

property above the creditor’s secured interest could be realized by the trustee to pay a dividend to

creditors. . . . Maintaining the stay with respect to such property is an important creditor

protection.” Id.

Finally, the majority approach notes that “there is an easy creditor remedy if the limited

stay relief of § 362(c)(3)(A) proves inadequate: a motion for relief from stay.” McGrath, 621

B.R. at 266. “On a showing of cause for stay relief, § 362(d) requires prompt action. If no

grounds exist, on the other hand, then the estate and/or other creditors may benefit by leaving the

stay in place.” Id.

B. The significant minority view

In contrast, the significant minority view, which has been adopted by the First Circuit

Court of Appeals, concludes that under § 362(c)(3)(A) the automatic stay terminates in its

entirety on the 30th day after the filing of the second bankruptcy case.38

Courts adopting the minority view have determined that § 362(c)(3)(A) is ambiguous and

the “meaning is not plain.” Smith, 910 F.3d at 581. Even many of the courts which adopt the

majority approach concede that § 362(c)(3)(A) is inartfully drafted.39

38 E.g., Smith v. Maine Bureau of Revenue Servs. (In re Smith), 910 F.3d 576 (1st Cir. 2018); Reswick v.

Reswick (In re Reswick), 446 B.R. 362 (9th Cir. BAP 2011); Vitalich v. Bank of N.Y. Mellon, 569 B.R.

502 (N.D. Cal. 2016); St. Anne's Credit Union v. Ackell, 490 B.R. 141 (D. Mass. 2013); In re Daniel, 404

B.R. 318 (Bankr. N.D. Ill. 2009); In re Jupiter, 344 B.R. 754 (Bankr. D.S.C. 2006).

39 E.g., McGrath, 621 B.R. at 264 (“It is no revelation to say that § 362(c)(3)(A) is not well drafted.”

(citing In re Baldassaro, 338 B.R. 178, 182 (Bankr. D.N.H. 2006) (“§ 362(c)(3) is very poorly written.”);

In re Charles, 332 B.R. 538, 541 (Bankr. S.D. Tex. 2005) (providing that § 362(c)(3) is “at best,

particularly difficult to parse and, at worst, virtually incoherent”); In re Paschal, 337 B.R. 274, 277

(Bankr. E.D.N.C. 2006) (“In an Act [BAPCPA] in which head-scratching opportunities abound for both

attorneys and judges alike, § 362(c)(3)(A) stands out.”)); Roach, 555 B.R. at 845 (“Nearly all courts agree

that § 362(c)(3)(A) is not a model of skillful draftsmanship.”); Jones, 339 B.R. at 363 (“Once again,

warily . . . the court re-enters the briar patch that is § 362(c)(3)(A)”).

i. Under the significant minority view, § 362(c)(3)(A) is ambiguous

In determining that there is no plain meaning, the First Circuit explains that a “primary

obstacle to [the majority’s] reading is that the phrase ‘with respect to the debtor’ would most

naturally be read to terminate the stay only for actions against the debtor, and not . . . for actions

against both the debtor and the debtor’s property.” Smith, 910 F.3d at 582 (citing In re Daniel,

404 B.R. 318, 323 (Bank. N.D. Ill. 2009) (noting this anomaly); In re Bender, 562 B.R. 578, 583

(Bankr. E.D.N.Y. 2016) (same). Yet “[n]o court decision has adopted this narrow interpretation.”

See Reswick v. Reswick (In re Reswick), 446 B.R. 362, 367-68 (9th Cir. BAP 2011).

Further, the minority approach finds that the majority view “gives no force to the first

three ‘with respect to’ clauses.” Smith, 910 F.3d at 584. As a reminder, § 362(c)(3)(A) provides

that in a second bankruptcy case where certain conditions are met, “the stay under

subsection (a) with respect to any action taken with respect to a debt or property securing such

debt or with respect to any lease shall terminate with respect to the debtor on the 30th day after

the filing of the later case” (emphasis added). The First Circuit determines that, “The provision is

a collection of ‘with respect to’ phrases, and it is not obvious how the phrases relate to each

other, or how the phrases connect to other related provisions.” Smith, 910 F.3d at 584. Therefore,

the First Circuit concludes that “the preference against superfluities is of limited help.” Id. (citing

Ardente v. Standard Fire Ins. Co., 744 F.3d 815, 819 (1st Cir. 2014) (rejecting application of the

rule against superfluities where “redundancies abound” (quoting TMW Enters., Inc. v. Fed. Ins.

Co., 619 F.3d 574, 577 (6th Cir. 2010)))).40

40 The First Circuit also finds other canons of statutory interpretation unhelpful in light of the inartful

drafting of § 362(c)(3)(A). Smith, 910 F.3d at 583.

The minority view further bolsters its conclusion that the phrase “with respect to the

debtor” is superfluous in § 362(c)(3)(A) by referencing a survey of the phrase in BAPCPA.

Smith, 910 F.3d at 585 (citing Peter E. Meltzer, Won’t You Stay a Little Longer? Rejecting the

Majority Interpretation of Bankruptcy Code § 362(c)(3)(A), 86 Am. Bankr. L.J. 407, 430-31

(2012)). The survey found that all ten stand-alone uses of the phrase “with respect to the debtor”/

“with respect to a debtor” in the Bankruptcy Code were added by BAPCPA and all could be read

as “filler.” Smith, 910 F.3d at 585 (citing Meltzer, supra, at 430-31). The First Circuit concluded

that:

Congress may have used the phrase “with respect to a” or “the debtor” in BAPCA to

reemphasize that a provision applied to the debtor rather than to add new information

about the meaning or scope of a provision. In light of this pattern across BAPCPA . . . it

would be odd for Congress to have chosen “with respect to the debtor” to articulate an

important reform, one placing a highly consequential limit on termination of the stay.

Smith, 910 F.3d at 585.

ii. The minority view then applies statutory context and

congressional purpose to interpret § 362(c)(3)(A) and construes it to

terminate the entire stay

Concluding that the use of the phrase “with respect to the debtor” is ambiguous in

§ 362(c)(3), the minority approach looks to statutory context and congressional purpose to

interpret § 362(c)(3)(A). First, the minority view evaluates § 362(c)(3)(A) in the context of stay

termination more broadly:

The automatic stay operates differently for first-time, second-time, and subsequent filers.

For first-time filers, the stay is automatic and permanent, at least until the bankruptcy

case closes or a court acts to modify the stay. See 11 U.S.C. §§ 362(a)(1)-(2); id.

§ 362(d). And when a debtor has pending in one year three or more petitions for

bankruptcy, § 362(c)(4) provides that “the stay under subsection (a) shall not go into

effect upon the filing of the [third or subsequent] case.” Id. § 362(c)(4). Section 362(c)

seems to establish a system of progressive protections, so protections for second-time

filers should fall, as the bankruptcy court put it, “[i]n the middle.”

Smith, 910 F.3d at 586.

The minority approach also examines § 362(c)(3)(A) in connection with § 362(c)(3)(B),

which provides that:

[O]n the motion of a party in interest for continuation of the automatic stay and upon

notice and a hearing, the court may extend the stay in particular cases as to any or all

creditors (subject to such conditions or limitations as the court may then impose) after

notice and a hearing completed before the expiration of the 30-day period only if the

party in interest demonstrates that the filing of the later case is in good faith as to

the creditors to be stayed[.]

§ 362(c)(3)(B) (emphasis added). The First Circuit explains:

For purposes of the extension, “a case is presumptively filed not in good faith” for several

categories of filers, including filers like Smith whose previous case was dismissed for

failure to “perform the terms of a plan confirmed by the court.” § 362(c)(3)(C). However,

that “presumption may be rebutted by clear and convincing evidence.” Id.

***

When read alongside § 362(c)(3)(B)’s extension process, [the] interpretation of

§ 362(c)(3)(A) [as terminating the entire stay] is consistent with these goals of

bankruptcy. A second-time filer with a meritorious bankruptcy case, or a creditor whose

self-interest dictates it, may get an extension of the stay on “demonstrat[ing] that the

filing of the later case is in good faith as to the creditors to be stayed.” 11 U.S.C.

§ 362(c)(3)(B). Notably, courts must act quickly on these requests; Congress provided

that any hearing on a request for an extension must be “completed before the expiration

of the 30-day period.” Id. Section 362(c)(3)(B) reflects an attempt by Congress to ensure

that certain second-time filers who meet an enhanced burden have an escape route from

the termination of the entire automatic stay, including as to actions against estate

property.

Smith, 910 F.3d at 588.

Finally, the minority view concludes that termination of the entire stay on the 30th day is

consistent with congressional intent:

At “[t]he heart of [BAPCPA’s] consumer bankruptcy reforms,” the House Judiciary

Committee report accompanying BAPCPA said, were “provisions intended to deter serial

and abusive bankruptcy filings.” H.R. Rep. No. 109–31(I), at 2 (2005); see also Sara

Sternberg Greene, The Failed Reform: Congressional Crackdown on Repeat Chapter 13

Bankruptcy Filers, 89 Am. Bankr. L.J. 241, 242 (2015). Among these reforms was

§ 362(c)(3)(A). Congress described that provision as an “amend[ment to] section 362(c)

of the Bankruptcy Code to terminate the automatic stay within 30 days in a chapter 7, 11,

or 13 case filed by or against an individual if such individual was a debtor in a previously

dismissed case pending within the preceding one-year period.” H.R. Rep. No. 109-31(I),

at 69 (2005).

Smith, 910 F.3d at 589-90.

C. This Court will follow the 10th Circuit BAP

Having reviewed the majority and significant minority approaches, the Court will follow

the majority approach because it was adopted by the 10th Circuit BAP in a published opinion,

this Court is within the Tenth Circuit, and there is no compelling reason to depart from that

approach.

Though this Court may not technically be bound by the decisions of the Tenth Circuit

Bankruptcy Appellate Panel (the “Tenth Circuit BAP”), the Court will generally treat

published Tenth Circuit BAP decisions as persuasive authority. See In re Wenzel, 415

B.R. 510, 516-17 (Bankr. D. Kan. 2009) (acknowledging that the bankruptcy court might

not be bound to follow a BAP decision, but that the “Court’s practice is to give

appropriate deference to published BAP decisions and treat them as persuasive authority,

absent a compelling reason to depart.”).

In re Rodriguez, 487 B.R. 275, 288 (Bankr. D.N.M. 2013). In this case, the Court does not weigh

in on the merits of the two approaches other than to conclude that there is no compelling reason

to depart from the 10th Circuit BAP, and the Court will therefore follow Holcomb, which adopts

the majority view. Holcomb v. Hardeman (In re Holcomb), 380 B.R. 813 (10th Cir. BAP

2008).41 Thus, in this instance the automatic stay in the underlying bankruptcy case—the Second

Bankruptcy Case—terminated as to actions taken against the debtor on the 30th day but remained

in place as to actions taken against property of the estate.

41 Indeed, this Court has followed Holcomb on this issue before. Rodriguez, 487 B.R. at 288 (“[T]he

Court regards Holcomb as persuasive authority.”).

2. With the stay in place as to property of the estate, did the actions taken violate the

automatic stay?

Ms. Dugas asserts that the automatic stay in the Second Bankruptcy Case was violated by

the filing of the following documents in the Foreclosure Action: (1) the Ejectment Motion,

(2) the Motion for Summary Judgment Against Young, (3) the memorandum in support of the

Motion for Summary Judgment Against Young, (4) the reply in support of the Motion for

Summary Judgment Against Young, (5) the notice of completion of briefing, and (6) the request

for hearing.

There is no dispute that the actions affecting the property to collect a debt took place

beyond the 30th day after commencement of the Second Bankruptcy Case. The Second

Bankruptcy Case commenced on August 14, 2024. The 30th day after the Second Bankruptcy

Case commenced was September 13, 2024. Movants took no action in the Foreclosure Action

from the commencement of the Second Bankruptcy Case until September 27, 2024, when they

filed the Ejectment Motion seeking ejectment of Ms. Dugas from the Property and a writ of

restitution. They filed the Motion for Summary Judgment Against Young and memorandum in

support of such motion on October 11, 2024. Therefore, the automatic stay had terminated with

respect to Ms. Dugas but remained in place with respect to property of the estate at the time of

the relevant actions.

The first issue in determining whether a stay violation occurred where the stay remained

in place with respect to property of the estate is what relevant property of the estate existed at the

time of the commencement of the Second Bankruptcy Case. In this matter, since the State Court

entered the order withdrawing approval of the foreclosure sale, Ms. Dugas may have had an

ownership interest in the Property at the time the Second Bankruptcy Case was commenced

which became property of the bankruptcy estate. See, e.g., In re Milasinovich, No. 13-12294,

2014 WL 644455, at *5 (Bankr. D.N.M. Feb. 19, 2014) (providing that debtor lost ownership

interest in the house, other than redemption right, upon entry of order approving special master’s

sale); Plaza Nat’l Bank v. Valdez, 1987-NMSC-105, ¶ 12 (providing that title to foreclosed

property transfers upon entry of order approving special master’s sale).

Next, the Court examines the actions which Ms. Dugas assert violated the stay. The

Ejectment Motion which sought to eject Ms. Dugas from the Property and obtain a writ of

restitution was brought against Ms. Dugas personally. The automatic stay was terminated with

respect to Ms. Dugas prior to the filing of the Ejectment Motion, and the Ejectment Motion does

not impact any potential bankruptcy estate interest in the Property. Removing Ms. Dugas from

the Property did not affect any potential bankruptcy estate interest in the Property, and therefore

did not violate the automatic stay. The Court will therefore grant summary judgment in the

Movants’ favor on this issue.

The other filings at issue—the Motion for Summary Judgment Against Young,

memorandum in support of such motion, reply in support of such motion, notice of completion

of briefing, and request for hearing—could have affected the bankruptcy estate’s potential

ownership interest in the Property, because they seek to adjudicate ownership of the Property. A

determination that Mr. Young had a valid 50% ownership interest in the Property would have

meant that the bankruptcy estate’s potential ownership interest was reduced. Therefore, the Court

is unable to rule as a matter of law that such filings did not violate the automatic stay. The Court

will deny summary judgment on this issue.42

42 The Court notes that it appears damages, if any, would be nominal even if it were determined that a stay

violation occurred.

V. CONCLUSION

For the reasons set forth in this Memorandum Opinion, the Court will enter an order

granting the Summary Judgment Motion in part and denying it in part.

ROBERT H. JACOBVITZ

United States Bankruptcy Judge

Date entered on docket: May 14, 2026

COPY TO:

Debtor-Plaintiff

Laura Kelly Dugas, pro se

709 Parkland Cir SE

Albuquerque, NM 87108

Via U.S. Mail

Counsel for Defendant Stephen Natelson

Charles R. Hughson

Rodey, Dickason, Sloan, Akin & Robb, P.A

Electronic notice via CM/ECF

Counsel for Defendant Ike Gallegos

Christopher M. Gatton

Marcus Anthony Sedillo

Gatton & Associates

Electronic notice via CM/ECF

35