# Dugas

> United States Bankruptcy Court, D. New Mexico · May 14, 2026

URL: https://www.frixlaw.com/law-library/cases/11326541

## Case

- **Full name:** In re: Laura Lynne Dugas; Laura Kelly Dugas v. Stephen Natelson; Law Offices of Stephen Natelson; Ike Gallegos
- **Court:** United States Bankruptcy Court, D. New Mexico
- **Decided:** May 14, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11326541. Public record. Not legal advice.