In Re Eli Kenneth Mellor and Lisa Mellor, Debtors. Raymond G. Pistole and Raymond R. Bragg v. Eli Kenneth Mellor and Lisa Mellor
Opinion
Opinion
Alarcon, J.
Eli Kenneth Mellor and Lisa Mellor (the Mellors) seek reversal of the decision of the Bankruptcy Appellate Panel which upheld the bankruptcy court’s annulment of the automatic stay.
The bankruptcy court held that relief from the automatic stay of any creditor action against the debtor's estate was proper in this matter because the facts showed that the interest of Raymond G. Pistole and Raymond L. Bragg (the sellers) in the debt- or’s residence (the Upland residence) was inadequately protected. We must decide whether the bankruptcy court may consider junior encumbrances in determining whether a debtor’s estate provides adequate protection for a senior lien. It is our view that the bankruptcy court erred in considering the amount of the junior en- cumbranees in granting relief from the automatic stay. Accordingly, we must reverse the judgment of the Bankruptcy Appellate Panel.
PERTINENT FACTS
Raymond G. Pistole (Pistole) purchased the Upland residence in June 1977. Part of the purchase price was paid out of the proceeds of a loan from the Weyerhauser Mortgage Corporation (Weyerhauser). The mortgage was in the amount of $68,450. Weyerhauser received a trust deed as security for…