## Facts

- Tiphany Butler rented a residential apartment from Westside Apartments, LLC on a month-to-month tenancy and fell behind on rent.
- Westside served a three-day pay-or-quit notice and then filed an unlawful detainer action in California state court.
- The state court entered judgment for possession for Westside, and a writ of possession issued authorizing the sheriff to evict Butler.
- Butler filed a Chapter 7 bankruptcy petition while still in physical possession of the unit.
- After the filing, the sheriff served notice of eviction and indicated eviction could proceed despite the bankruptcy; Butler sought emergency relief, and Westside moved for relief from the automatic stay under 11 U.S.C. § 362.
- Westside relied in part on California Code of Civil Procedure § 715.050, which purports to permit execution of a writ of possession notwithstanding a tenant’s post-judgment bankruptcy filing.

## Issues

1. Whether a residential tenant’s continued physical possession after an unlawful detainer judgment and writ of possession constitutes an equitable or possessory interest that becomes property of the estate under 11 U.S.C. § 541 and is protected by the automatic stay under 11 U.S.C. § 362(a).
2. Whether California Code of Civil Procedure § 715.050 is preempted by the Bankruptcy Code’s automatic stay and therefore invalid under the Supremacy Clause.
3. Whether the landlord was entitled to relief from the automatic stay under 11 U.S.C. § 362(d) to proceed with eviction.

## Decision

- The court held that Butler’s continued possession on the petition date constituted an equitable/possessory interest under California law and became property of the estate protected by the automatic stay.
- The court held that California Code of Civil Procedure § 715.050 conflicts with the automatic stay and is preempted by federal law, rendering it unconstitutional under the Supremacy Clause.
- The court nonetheless granted Westside relief from the automatic stay under § 362(d), permitting eviction to proceed through bankruptcy stay-relief procedures rather than under the state statute’s “notwithstanding bankruptcy” directive.

## Legal Principles

- “Property of the estate” under 11 U.S.C. § 541 is broad and includes a debtor’s legal and equitable interests existing at the commencement of the case, including certain possessory interests recognized by state law.
- Under California Civil Code § 1006, occupancy can confer a form of title sufficient against all but those with superior rights; continued physical possession may therefore qualify as an equitable or possessory interest.
- The automatic stay under 11 U.S.C. § 362(a) bars acts to obtain possession of, or to exercise control over, property of the estate upon the filing of the petition.
- A state statute authorizing eviction enforcement “notwithstanding” a post-petition bankruptcy filing conflicts with § 362(a) and is preempted under the Supremacy Clause.
- Relief from the automatic stay may be granted under 11 U.S.C. § 362(d) for cause; in a Chapter 7 case, the absence of any reorganization purpose may support stay relief where the landlord holds a prepetition judgment for possession.

## Conclusion

The court recognized that a debtor-tenant’s post-judgment physical possession can constitute estate property protected by the automatic stay and ruled that California’s statute permitting eviction enforcement despite a post-judgment bankruptcy filing is preempted, yet still lifted the stay on case-specific grounds to allow the landlord to proceed with eviction.


In re Butler, 271 B.R. 867 (Bankr. C.D. Cal. 2002)