The Court denied creditor’s request for relief from the automatic stay under § 362(d)(1) and § 362(d)(4). Debtor filed a prior chapter 7 case six years earlier, failed to disclose a second rental property on two loan modification applications submitted to creditor, made only one payment on the two loan modifications, and filed a second bankruptcy case under chapter 13 on the eve of a scheduled foreclosure trial. Creditor asserted that debtor intentionally undervalued the property subject to the creditor’s second lien in her bankruptcy schedules so that she could seek to strip off creditor’s mortgage through her chapter 13 plan. The Court could not determine the value of the property because creditor’s appraiser made an extraordinary assumption concerning the property’s condition. The Court determined that debtor’s conduct did not rise to the level of bad faith necessary to constitute “cause” for relief from the stay under § 362(d)(1) and did not evidence a scheme to hinder, delay, or defraud creditor sufficient to grant in rem stay relief under § 362(d)(4). Debtor’s schedules showed changed circumstances in her financial condition, and property valuation would be determined at confirmation.

Issue preclusion, but not claim preclusion or Rooker-Feldman, prevented Debtor from relitigating whether mortgage creditor had standing to seek relief from the automatic stay. Creditor obtained a final judgment against debtor following a trial on the merits in state court determining that it was the holder of the note and mortgage and ordering foreclosure. Notwithstanding debtor’s appeal of the state court judgment, the judgment remained a final order entitled to preclusive effect.

The Court granted, in part, creditors motion for relief from stay as to certain real property, and denied the creditor’s motion for relief from stay as to other real property and two vehicles, which were necessary to debtor’s reorganization efforts, on the condition that the debtor make adequate protection payments to the creditor.

The Court determined that the mortgage lender willfully violated the automatic stay by continuing to rely on the validity of its foreclosure judgment entered after debtor filed her bankruptcy case. The entry of the foreclosure judgment did not constitute a “ministerial act” not subject to the automatic stay. The Court awarded the debtor her attorney’s fees as actual damages, but determined that the debtor could not recover damages for emotional distress.  Punitive damages were not warranted under the circumstances. Laches did not bar the debtor’s stay violation claim even though the debtor delayed filing her motion for willful violation of the automatic stay for more than five years and returned to the bankruptcy court only after she lost her appeal in state court.  Mortgage lender did not violate the discharge injunction.