In Re Dorothy Thelma Alexander, Debtor. Ronald R. Benevides and Karole L. Benevides v. Dorothy Thelma Alexander

Defendant Alexander entered into a deposit receipt sales contract to sell her house to plaintiffs, the Benevides, for the sum of $73,000 under certain conditions to be met in 60 days. Plaintiffs deposited $1,000 in escrow, the balance being payable in 60 days.

On the date for closing, plaintiffs deposited additional funds necessary to close, and had a loan commitment from Bank of America for the balance. Thus, plaintiffs tendered full performance. Although plaintiffs tendered performance, the defendant refused to convey title or surrender possession. The Benevides then brought an action for specific, performance in state court. On the day that the trial was finally scheduled, defendant filed a petition for bankruptcy under Chapter 13 (Adjustment of Debts of an Individual with Regular Income). The filing of the Chapter 13 petition automatically stayed plaintiffs’ state court action.

The defendant’s Chapter 13 Plan provided, inter alia, as follows:

The proposed plan was confirmed by the bankruptcy judge.

Plaintiffs then began an adversary proceeding in bankruptcy seeking relief from the stay of their state court action. Defendant argued that the sales contract was executory…