David Dwayne Benefield and Cynthia Sue Benefield

1 As noted in the companion memorandum opinion, Debtors filed
their voluntary chapter 11 petition on March 5, 2010 (doc 1), the
first two motions were filed on March 10, and the stay relief
motion on March 11. 	The Court conducted the final hearing on the
motions on April 22 and June 18, 2010 (combined minutes – doc
(continued...)
Page 1 of 	36
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXICO
In re:
DAVID DWAYNE BENEFIELD and
CYNTHIA SUE BENEFIELD,
Debtors. 	No. 11-10-11077 SA
MEMORANDUM OPINION IN SUPPORT OF ORDER
DENYING EMERGENCY MOTION TO DECLARE
AUTOMATIC STAY IN EFFECT
PURSUANT TO SECTION 362(c)(4)
Before the Court were three motions and the objections
thereto: the Motion for Determination that Stay is Not in Effect
Pursuant to 11 U.S.C. § 362(c)(4) filed by Creditors Danny and
Shirley Slaysman (doc 7) and the response thereto (doc 24) by
Debtors Cynthia Sue Benefield and David Dwayne Benefield,
Debtors’ Emergency Motion to Declare the Automatic Stay in Effect
or in the Alternative to Reinstate Automatic Stay Pursuant to
Section 362(c)(4) (doc 8), and Creditors’ Motion for Order
Retroactively Annuling [sic] Automatic Stay (doc 11) and Debtors’
response thereto (doc 26). 	On August 20, 2010 the Court issued a
memorandum opinion and order granting Creditors’ Motion for
Determination that the Stay is Not in Effect (doc 7) and denying
Creditors’ Motion for Stay Relief (doc 11) as moot. 1 	Docs 66
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1
(...continued)
54). 	Debtors filed their motion to impose the stay timely; i.e.,
within thirty days of the filing of the petition. 	§
362(c)(4)(B). 	That section does not impose a time limit for the
court to conduct a hearing on the motion. 	In contrast, §
362(c)(3)(B), applicable when only a single case has been pending
in the previous year, requires the hearing to take place within
the thirty days following the filing of the petition. 	The reason
for a debtor not having to obtain a ruling on the motion within
thirty days under § 362(c)(4) is obvious: there is no automatic
stay that ends in thirty days. 	However, that lack of limitation
is really a disadvantage, since time is a debtor’s enemy in a
race with a creditor to impose a stay; the longer it takes the
debtor to get to the courthouse for relief (much less get the
relief itself), the more advantage the creditor can take.
2 The Court incorporates by reference the analysis and more
detailed background from the companion memorandum opinion. 	Doc
66.
3 28 U.S.C. § 157(b)(2)(G) “includes” as core proceedings
“motions to terminate, annul, or modify the automatic stay;...”
Strictly speaking, a motion to impose the stay is none of the
above, but the term “includes”, and a dollop of common sense,
provides sufficient reason to conclude that this proceeding is
core.
Page 2 of 	36
(memorandum opinion), 67 (order declaring stay not in effect) and
68 (order denying motion for stay relief as moot). 	This
memorandum opinion is issued in support of an order denying
Debtors’ Emergency Motion to Declare the Stay in Effect or to
Reinstate the Stay (doc 8). 2 	These are core proceedings pursuant
to 28 U.S.C. § 157(b)(2)(A) and (G) 3.
Background
On December 31, 2008 Debtors filed a chapter 12 bankruptcy
petition in order to prevent the foreclosure of their cattle
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4 Debtors have not filed a plan and disclosure statement; they
did however timely file a motion to extend the exclusive period
within which they may file the plan and disclosure statement (doc
55), to which Creditors objected. 	Doc 58.
Page 3 of 	36
operation. 	In re David and Cynthia Benefield, No. 12-08-14483.
That case was dismissed on October 14, 2009 for Debtors’ failure
to timely file a plan of reorganization. 	Doc 87. 	In the oral
findings of fact and conclusions of law upon which the ruling was
predicated, this Court specifically found that Debtors had not
acted in bad faith. 	Debtors filed another chapter 12 case on
November 12, 2009. 	In re David and Cynthia Benefield, No. 12-09-
15173. 	Creditors quickly filed Slaysmans’ Emergency Motion to
Dismiss Debtors’ Chapter 12 Bankruptcy Pursuant to 11 U.S.C. §
109 (doc 10), which came on for a final hearing on February 4,
2010, was continued on February 10, and concluded on February 11.
The Court again recited findings of fact and conclusions of law
orally on the record and entered an order dismissing the chapter
12 case on February 12, 2010. 	The instant case promptly ensued
three weeks later. 4 	The Court conducted a trial on the merits of
the various motions on April 22 and June 18, 2010 (doc 54 –
combined minutes).
Discussion
The remaining issue in this case is whether the automatic
stay in this case, Debtors’ third, should be imposed despite the
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5 Sic. 	Cases are not “filed” under § 707(b). 	Congress
presumably intended to state “other than a case refiled after
dismissal under section 707(b)...,” wording which would parallel
the analogous provision of § 362(c)(3).
Page 4 of 	36
dismissal of two previous cases within the preceding year. 	The
relevant portion of the applicable statute – § 362(c) – is as
follows:
(4)(A)(i) 	if 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 section
707(b), 5 the stay under subsection (a) shall not go
into effect upon the filing of the later case; and
(ii) ...;
(B) if, within 30 days after the filing of the later
case, a party in interest requests the court may order
the stay to take effect in the case as to any or all
creditors (subject to such conditions or limitations as
the court may impose), after notice and a hearing, 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;
(C) a stay imposed under subparagraph (B) shall be
effective on the date of the entry of the order
allowing the stay to go into effect; and
(D) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such
presumption may be rebutted by clear and convincing
evidence to the contrary)--
(i) as to all creditors if--
(I) 2 or more previous cases under this title
in which the individual was a debtor were
pending within the 1-year period;
(II) a previous case under this title in
which the individual was a debtor was
dismissed within the time period stated in
this paragraph after the debtor failed to
file or amend the petition or other documents
as required by this title or the court
without substantial excuse (but mere
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6 Sic. 	The extra “not” appears to produce a result precisely the
opposite of what Congress intended.
Page 5 of 	36
inadvertence or negligence shall not be
substantial excuse unless the dismissal was
caused by the negligence of the debtor's
attorney)...; or
(III) there has not been a substantial change
in the financial or personal affairs of the
debtor since the dismissal of the next most
previous case under this title, or any other
reason to conclude that the later case will
not 6 be concluded, if a case under chapter 7,
with a discharge, and if a case under chapter
11 or 13, with a confirmed plan that will be
fully performed; or
(ii) as to any creditor that commenced an action
under subsection (d) in a previous case in which
the individual was a debtor if, as of the date of
dismissal of such case, such action was still
pending or had been resolved by terminating,
conditioning, or limiting the stay as to such
action of such creditor.
Section 362(c)(4).
The remaining issue before the Court is whether Debtors
filed the current case in “good faith”, as that term is used in
this particular statute, thereby allowing them to now obtain the
benefit of the stay. 	Summarizing the relevant portion of the
statute in question, a court may impose the stay (but not
retroactively) if a party in interest (in this case Debtors)
timely makes such a request and can prove that the current case
was filed in good faith. 	But a case is presumptively not filed
in good faith –- alternatively put, is presumed to have been
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7 Rather than using the term “bad faith”, portions of the statute
use the phrase “not in good faith”, e.g., §362(c)(4)(D), in
precise contrast to those parts of the statute which require a
demonstration of “good faith”. 	E.g., §362(c)(4)(B). 	In this
memorandum opinion the Court will sometimes use “bad faith” to
mean “not in good faith”. 	See Williams, 2 Bankruptcy Practice
Handbook § 9.3 (2 nd ed. June 2010).
Page 6 of 	36
filed in bad faith 7 -- and thus the automatic stay may not be
imposed where (as applicable to the facts of this case) (1) two
or more prior cases were pending within one year, (2) debtors
failed to file required documents without substantial excuse in a
previous case, which failure to file led to a dismissal, or (3)
there has not been a substantial change in the debtors’ financial
or personal affairs since the dismissal of the next most previous
case, nor is there any other reason to think that the latest
filed case will result in the confirmation and full performance
of a chapter 11 plan. 	If a presumption of bad faith arises, the
party in interest may rebut the presumption, but it may do so
only by clear and convincing evidence to the contrary. 	Finally,
as to any specific creditor, there is a presumption of bad faith
in filing the current case if the creditor in question had filed
a motion for stay relief “in a previous case” and that motion was
either pending when the previous case was dismissed or had been
resolved by terminating, conditioning or limiting the stay
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8 	If met, the clear-and-convincing evidentiary standard
[places] in the ultimate factfinder an abiding
conviction that the truth of [the party’s] factual
contentions are “highly probable.” See C. McCormick,
Law of Evidence § 320, p. 679 (1954). This would be
true, of course, only if the material [the party]
offered instantly tilted the evidentiary scales in the
affirmative when weighed against the evidence [the
other party] offered in opposition. See generally
McBaine, Burden of Proof: Degrees of Belief, 32
Calif.L.Rev. 242, 251254 (1944).
Colorado v. New Mexico, 467 U.S. 310, 316 (1984). 	Compare Shafer
v. Army & Air Force Exch. Serv., 376 F.3d 386, 396 (5 th Cir.
2004) which defined “clear and convincing evidence” as
that weight of proof which produces in the mind of the
trier of fact a firm belief or conviction as to the
truth of the allegations sought to be established,
evidence so clear, direct and weighty and convincing as
to enable the fact finder to come to a clear
conviction, without hesitancy, of the truth of the
precise facts of the case.
See also Black’s Law Dictionary 577 (7 th ed. 1999) (“highly
probable or reasonably certain”).
Page 7 of 	36
(emphasis added). 	Any rebuttal of that presumption must also be
by clear and convincing evidence. 8
Even though only one of the circumstances explicated in §
362(c)(4)(D)(i) needs to exist for the presumption of bad faith
to arise as to all creditors, In re Hurt, 369 B.R. 274, 278 n. 7
(Bankr. W.D. Va. 2007), all three circumstances exist in this
case. 	Similarly, as to Creditors specifically, Creditors sought
stay relief in the first case (12-08-14483), which request was
not simply denied. 	Therefore, the presumption of bad faith
arises as to them specifically. 	Debtors have not established by
clear and convincing evidence that the present case was filed in
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9 Courts have ruled that because of the similarities between §
362(c)(3) and § 362(c)(4), cases construing one provision are
helpful in construing the other [assuming the provisions being
compared are similar]. 	Ferguson, 376 B.R. 109, 119 n. 19 (Bankr.
E.D. Pa. 2007) (citing Hurt, 369 B.R. at 278-79).
10 The Whitaker court, unable to fit the debtors’ situation into
either § 362(c)(3) (debtors’ counsel filed the motion too late)
or § 362(c)(4) (debtors had only one prior case), fell back on §
105 to impose a stay. 	341 B.R. at 346-48. 	The Court is not
citing Whitaker for that ruling.
Page 8 of 	36
“good faith” as that term is operationally defined for this part
of the Code.
Courts disagree about how a debtor proves good faith. 	For
example, In re Whitaker, 341 B.R. 336, 345-46 (Bankr. S.D. Ga.
2006), looked only to what led the debtors in that case to be
invoking § 362(c)(3) 9, whether there had been a substantial
change in the debtor’s personal or financial circumstances since
the last case and whether the current case was likely to result
in a successful chapter 13 plan. 	Id., at 345-46. 	That is, the
Whitaker approach looks only at the circumstances specified in
the statute to see if the presumption has been rebutted, and does
not require an overall good faith examination under a “totality
of the circumstances” test. 10 	On the other hand, In re Ferguson,
376 B.R. 109 reasoned that the “totality of circumstances” test
had been used for so long that Congress must have been aware of
its long usage and intended the courts to use it in connection
with this portion of the Code. 	Id., at 120, citing In re
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Page 9 of 	36
Montoya, 333 B.R. 449, 457-58 (Bankr. D. Utah 2005). 	Other
courts combine the two, by establishing a dual “objectively
futile and subjective bad faith” test. 	E.g., Hurt, at 279-281
(stay imposed when debtor had confirmed a chapter 13 plan in his
third case). 	See also In re Jenkins, 2010 WL 1558678 (Bankr.
N.D. Tex.) at *2-3 (summarizing four approaches: totality of
circumstances, factor-driven or checklist, updated good faith
test employing standards found in §§ 362(c)(3) and (4), and a
test combining the first three approaches); In re Carr, 344 B.R.
776, 781-82 (Bankr. N.D. W. Va. 2006) (in ruling on uncontested §
362(c)(3) motion to continue the stay in a chapter 13 case, court
assessed good faith using six-part test that necessarily differed
from the good faith test for confirming a chapter 13 plan); 	In
re Galanis, 334 B.R. 685, 691-93 (Bankr. D. Utah 2005) (revised
totality of circumstances test for determining good faith in
filing a chapter 13 case, relying in part on Gier v. Farmer’s
Bank of Lucas (In re Gier), 986 F.2d 1326 (10th Cir. 1993)); 	In
re Sarafoglou, 345 B.R. 19, 24-25 (Bankr. D. Mass. 2006)
(streamlined four-part test).
What seems clear from the statute is that Congress expected
a debtor to address directly any of the applicable circumstances
arising from § 362(c)(4)(D) which apply to the debtor. 	And by
“address”, the Court means that a debtor, by clear and convincing
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Page 10 of 	36
evidence, must “explain away” or justify the debtor’s role in
those circumstances, and further explain why the Court should be
confident that the current case will be successful when the
previous cases were not. 	This is what some courts usefully term
the “objective futility” test. 	E.g., Hurt, at 279 (citing
Carolin Corp. v. Miller, 886 F.2d 693, 699 (4 th Cir. 1989)
(analysis of good faith in the context of a motion to dismiss a
chapter 11 case)). 	To do no more than apply the usual totality
of circumstances test would seem to effectively ignore the
addition of §§ 362(c)(3) and (4) to the Code by the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”).
Thus at a minimum a court should first apply the “objective
futility” test. 	If the debtor cannot pass that test, there is no
need to move on to the totality of circumstances test, even if
that second test is required. 	See In re Collins, 335 B.R. 646,
653 (Bankr. S.D. Tex. 2005) (in a § 362(c)(3) case, debtor failed
to prove that new case would likely end in a discharge, so that
court did not do a totality of circumstances examination.
“Failure to meet the objective good faith requirement ends the
analysis. 	Subjective good faith is consequently irrelevant.”
(Citation omitted.)).
Debtors first argue that the Court, in dismissing the
previous case (No. 12-09-15173), ruled that Debtors had acted in
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Page 11 of 	36
good faith in filing the second case and that that finding has
collateral estoppel effect such that the Court cannot dismiss
this case for bad faith. 	Debtors’ Brief at 7-12 (doc 28).
Debtors’ construct the argument’s starting point – the finding of
good faith – in part by noting, correctly, that the Court did not
make a finding in the second case that Debtors acted in bad
faith, despite being so requested by Creditors, and in part by
noting the Court’s statements that Debtors always told the truth
as best they saw it. 	Debtors’ exhibit 40 (Transcript of February
11, 2010 hearing) p. 14, ll. 12-17 and p. 23 ll. 2-6. 	From there
they argue that just as a finding of bad faith in the second case
would “follow them” into the third case, so also must a finding
of good faith.
The argument, while superficially attractive, does not work.
To begin with, and to clarify, in making findings of fact and
conclusions of law in the course of dismissing Debtors’ second
case on February 11, 2010, the Court commented that the Debtors
had always told the truth as they perceived it and that nothing
the Court had decided was intended to suggest otherwise.
Further, the Court was merely saying that Debtors’ intent in
filing the second case, as it was in filing the first case, was a
desperate effort to hold on to the cattle operation, and Debtors
were not filing the cases “to cause hardship or delay to
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11 Not that counsel should be criticized for making the argument.
In all, counsel did a creditable job in representing Debtors who
(continued...)
Page 12 of 	36
creditors by resort to the chapter [12] device merely for the
purpose of invoking the automatic stay, without intent or ability
to reorganize [their] financial activities”. 	Hurt, 369 B.R. at
280 (citation and internal quotation marks omitted). 	That
language was not intended to adjudicate Debtors’ compliance with
the specific requirements of any part of § 362, including §
362(c)(3), nor to address a possible subsequent filing by
Debtors, even though practically speaking it might reasonably be
construed as a finding of Debtors’ good faith as that term is
generally understood without reference to the operational
definitions contained in §§ 362(c)(3) and (4).
That said, the mere fact that Debtors were acting in good
faith in pursuing their second case cannot mean that they must
have been acting in good faith in filing the third case. 	The
doctrine of collateral estoppel addresses matters that were or
could have been litigated in the previous litigation; no one
could have litigated the Debtors’ good faith in connection with a
case not yet filed. 	That is, it is the act of filing the third
case itself that brings on the good faith/bad faith scrutiny,
albeit that scrutiny consists in part at least of looking to the
debtor’s past behavior under §§ 362(c)(3) and (4). 11
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11
(...continued)
have found themselves in a position very difficult to defend.
12 By definition this circumstance will arise in every § 362(c)(4)
case. 	Presumably this circumstance is listed in order to require
every debtor in this sort of case to justify how he or she got to
this stage.
Page 13 of 	36
A. 	TWO OR MORE PRIOR CASES PENDING WITHIN ONE YEAR
The record is clear that Debtors had two cases pending, 12
indeed dismissed, within one year of the filing of the current
bankruptcy case on March 5, 2010. The first case was dismissed on
October 14, 2009, and the second on February 12, 2010. 	Debtors’
explanation for the two dismissed cases focused largely on
blaming both of their former bankruptcy counsel for the dismissal
of the first case. 	But the Court finds from the testimony of
their second attorney Chris Pierce who did the bulk of the work,
that he labored continually and successfully, until the very end,
to make the chapter 12 work for Debtors. 	He did this in the face
of not just determined opposition from a well represented foe,
but also with a frequent lack of basic support from his clients.
His testimony about the continual air of crisis which stemmed
from Debtors’ apparent inability to understand the significance
of various tasks with deadlines and to then timely complete the
tasks – whether providing documents, making payments, reviewing
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13 For example, Mr. Pierce testified that it took Debtors from
April until August just to approve a plan for filing.
Page 14 of 	36
pleadings or approving a plan 13 – was compelling. 	Obviously Mr.
Pierce was not saying that Debtors acted the way they did
deliberately or in bad faith in order to sabotage their case;
rather this was and is simply the way they are. 	Somehow there
was always something to be done or something that had happened
that made accomplishing tasks and meeting deadlines difficult:
bad weather, lack of communications technology, horses to be
watered and fed, neighbors’ cattle to be tended,
misunderstandings about requirements, bounced checks, etc.
Successfully completing a chapter 12 or chapter 11 case requires
a certain level of competence and commitment, and that was simply
lacking in the first case, and to a real extent, as explained
next, in the second case as well. 	Ironically, the very reason
Debtors cannot be charged with deliberately acting in bad faith
is the reason the Court cannot find that they will be successful
in confirming and completing a plan: they seem to sabotage
themselves at every turn, albeit unintentionally.
In consequence the Court cannot find by clear and convincing
evidence that Debtors should not be held responsible for the
dismissal of the two previous cases.
B. 	FAILURE TO FILE DOCUMENTS IN A PRIOR CASE
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14 Benefield exhibit 40.
Page 15 of 	36
When Debtors’ second case was dismissed, the Court cited on
the record in its oral findings of fact and conclusions of law
Debtors’ failure to obtain the prepetition budget and credit
counseling required by § 109(h) within the 180-day period
preceding the filing of the petition, failure to file a chapter
12 plan timely (§ 1221), and ineligibility for Chapter 12 (§§
101(18) and 109(f)) as “family farmers”. 14 	The failure to file
the chapter 12 plan within the ninety-day deadline required by §
1221 constitutes a failure to “file . . . [a document] as
required by this title....” 	§ 362(c)(4)(D)(i)(II). 	Obviously
this omission was an oversight arising out of inadvertence,
ignorance of the statute or, at worst, negligence. 	Debtors did
not offer a specific explanation or defense of this omission.
And because Debtors were self-represented throughout the second
case, they cannot rely on the defense that counsel was
responsible for the omission. 	Thus the Court has no basis to
treat the failure to file a plan timely as other than “bad faith”
as operationally defined in the statute.
C. 	NO SUBSTANTIAL CHANGE IN FINANCIAL OR PERSONAL AFFAIRS OF
DEBTORS NOR ANY OTHER REASON TO CONCLUDE THAT THIS CHAPTER
11 CASE WILL BE CONCLUDED WITH A CONFIRMED PLAN THAT WILL BE
FULLY PERFORMED
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15 No evidence was offered about any change in Debtors’ personal
affairs as opposed to their financial affairs.
16 Given the facts of this case, the Court need not decide whether
the changes must have taken place within the three-week period
between February 12 and March 5, or whether changes after the
March 5 petition date in the current case can also be taken into
account.
17 	There is some question whether this testimony is consistent
with Schedule I (filed March 19, 2010 – doc 23) which reports a
monthly gross income for Ms. Benefield of $9,526.27 and net
(continued...)
Page 16 of 	36
Debtors argued that there were several changes in their
financial affairs 15 that overcame the presumption of the bad
faith filing: Cynthia Benefield’s salary increase, David
Benefield’s increased income, and the expectation of a better
calf crop this year. 	The statute requires that the changes be
“substantial” and that they have taken place “since the dismissal
of the next most previous case....” 	Thus the changes must have
taken place after February 12, 2010. 16 	The Court also considers
the likelihood of Debtors’ successfully confirming and performing
under a plan.
1. Salary increase of Cynthia Benefield in December 2009:
Ms. Benefield, an employee of the Albuquerque Public Schools
(“APS”), testified that she received a promotion in October, with
the first payment received in December 2010, and that she is
currently earning approximately $62,000 per year as an assistant
principal and special education coordinator. 17 	The raise took
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17
(...continued)
income of $7,473.66. 	Twelve months of gross income would total
$114,315.24; nine months of net income would total $67,062.94.
The discrepancy, if any, would benefit Debtors by suggesting a
basis for thinking they could confirm and successfully complete a
plan, if the increase had taken place in the correct time frame.
18 08-14483, Doc 14. 	Debtors did not file schedules in their
second case.
Page 17 of 	36
place before the next most previous case was dismissed on
February 12, 2010. 	It therefore cannot be considered as a
substantial change in circumstances since the dismissal of the
next most previous case.
2. David Benefield’s income:
Mr. Benefield testified that he earns $800 per month from
the Chavez Ranch. 	That is consistent with the income, including
the $1,116.67 that he earns from the cattle operation, reported
on Schedule I (doc 23). 	Schedule I in Debtors’ first case is
identical. 18 	At the April 22, 2010 hearing, Mr. Benefield
testified that he hoped to earn an extra $500 per month with the
addition of cattle to the Chavez Ranch; no evidence has been
submitted that that has happened.
Also at the April hearing Mr. Benefield testified that he
was qualified to sell solar panels, that he was in the process of
obtaining certification to install solar panels, and that he was
pursuing those opportunities. 	He testified he had not made any
money as of the April hearing from solar panel sales or
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Page 18 of 	36
installations, although a sale would be worth approximately
$20,000. 	He projected $60,000 per year income from three sales
per year. 	Mr. Benefield contended that he had yet to close a
sale because it takes approximately one year to close a sale and
this case has interfered with his sales and installation
opportunities. 	Ms. Benefield testified at the June hearing that
Mr. Benefield had by then received his installation
certification.
The Court is not convinced that the ability and
opportunity to sell and instal solar panels will result in any
significant amount of income any time soon, especially if,
ironically but not surprisingly, the burden of being a debtor in
possession is one of the things preventing Mr. Benefield from
benefitting from this development. 	Thus his solar panel training
and qualification cannot be considered as a qualifying change in
circumstances.
3. The 2010 calf crop
Finally, Mr. Benefield testified that he expects a healthy
calf crop for this year unlike the prior calf crop which suffered
from tainted semen. 	He anticipates this will yield additional
but unspecified income. 	This evidence is too speculative to
rebut the presumption of bad faith.
4. Any other reason to assume Debtors will confirm a plan
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19 From the outset in all three cases, Debtors have wanted the
chance to argue the merits of the foreclosure action and in
particular their view that their problems derive almost
exclusively from Creditors’ failure to comply with the Purchase
Agreement. 	By failing to respond to the foreclosure complaint,
Debtors in effect gave up their right to argue those issues.
However, they received at least some opportunity to present the
merits of their argument in the course of litigating these
motions.
20 Benefield exhibit 38.
21 Id.
Page 19 of 	36
The statute also allows Debtors to prove that there is “any
other reason to conclude that [this chapter 11 case will] be
concluded . . . with a confirmed plan that will be fully
performed.” 	Unfortunately for Debtors, for whatever reason and
whether it is their fault or not, the evidence from all the New
Mexico litigation is that Debtors are almost invariably unable to
meet deadlines or other objectives in order to protect their
interests and successfully consummate their bankruptcy cases.
The prelude to the New Mexico bankruptcy cases was
Debtors’ inability to meet the payment schedule of the purchase
agreement, even when it was extended. 19 	In the contract, Debtors
agreed to monthly interest-only payments at a six percent
interest rate for two years with the full balance coming due at
the end of the two-year period. 20 	Debtors made a $100,000 down
payment on the property at closing on December 22, 2006. 21 	The
remaining principle balance of $330,000 was due in December
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22 Id.
23 Mr. Slaysman testified that Ms. Benefield told him that they
were experiencing financial hardship and he proposed deferring
the payments until the 2008 balloon payment. Ms. Benefield
testified that she proposed the modification because the
financial hardship was due to the extensive repairs to the
property. 	Whichever party is correct is not material.
Page 20 of 	36
2008. 22 	When Debtors began having difficulties making the
monthly payments, the parties agreed to the interest payments due
in October, November and December 2007 being deferred until
December 2008. 23 	Debtors blamed circumstances outside their
control for the need for the deferral, including the replacement
of equipment, winterizing the house, a delay in expanding the
Bureau of Land Management (“BLM”) lease capacity, tainted semen,
etc. 	The exhibits and the testimony of Mr. Slaysman and of
Debtors adequately explained why at least a good part of the
problems that Debtors experienced were of their own doing.
For example, Debtors passed up the opportunity to have an
inspection of the house in order to save money, an inspection
which would probably have shown that the house was simply not
habitable in the winter (nor had it been intended to be).
Indeed, it appears that Creditors had done relatively little
during the winter to run the operation; Debtors on the other hand
attempted to fully run the operation year round. 	As a result
winters presented a particularly difficult time for Debtors to be
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24 Apparently Creditors used four-wheeled all terrain vehicles
(“quads”) to herd the cattle. 	Benefield exhibit 39, p. 12, ll.
17-18.
The purchase agreement provided that five days after the
execution of the purchase agreement, and long before closing,
documentation concerning the water rights, the well, leases and
permits was supposed to be made available by seller to
purchasers. 	Id. at 5, ¶ 15. 	The blanks setting a deadline for
purchasers (Debtors) to object were left blank. 	Thus Debtors,
(continued...)
Page 21 of 	36
away from the ranch at least in part because of weather and
because to run the operation they used horses which require daily
care. 24
Similarly Debtors claimed their problems stemming from
not owning the propane tank, from the well transfer that did not
take place and from the lack of contact with the person who had
purchased the calves from Creditors, were attributable to
Creditors. 	It is not clear exactly what obligations Creditors
owed with respect to these items. 	It appears that no one had
seriously investigated (rather than make assumptions about) the
status of the propane tank prior to the closing. 	The fact that
neither Creditors nor the well servicing company had good records
on the wells is not the fault of Creditors. 	Nor was it
Creditors’ fault that their former cattle purchaser never
responded to Debtors. 	In any event these are the things that are
supposed to be clarified before closing and transacted at
closing. 25
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(...continued)
probably through their real estate agent, could have demanded
that documentation to insure they knew what they were getting, or
not getting. 	Apparently their real estate agent, who had trouble
from the outset documenting the transaction (he used Arizona
forms instead of the New Mexico forms), did not perform that
function for Debtors.
26 Persons interested in hunting various game animals apply to the
New Mexico Department of Game and Fish for the chance to be
awarded a license for a particular year and specific sorts of
animals. 	The licenses are awarded on a computer-managed modified
first-come-first-serve/lottery basis to qualified applicants.
Licensees receive both a license and a “carcass tag”, the latter
of which, as the name suggests, is to be attached to a carcass
which results from a successful hunt. 	Qualified landowners who
sign elk agreements with the Department receive elk landowner
authorizations for the upcoming season and can barter, sell or
trade those authorizations. 	Information for E-PLUS [Elk -
Private Lands Use System] Landowners, as of July 25, 2008, at
http://wildlife.state.nm.us/recreation/hunting (last visited on
September 10, 2010).
Page 22 of 	36
Debtors heavily emphasized the sale by Mr. Slaysman of the
2006 elk tag 26 which Debtors insisted was part of what was
advertised as being sold and which Creditors insisted was not
part of the sale. 	What both sides agree on is that Mr. Slaysman
sold the tag (for $3,500, according to Mr. Slaysman) and talked
about it to Debtors months before the closing in December.
Despite that, Debtors closed anyway because, according to Ms.
Benefield, they did not want to upset the closing. 	Aside from
the fact that the $3,500 is a fairly small amount of money in the
scheme of things, it is also the case that Debtors made a
deliberate choice to waive this problem.
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27 Slaysman exhibit 21.
28 Slaysman exhibit 9. 	In order to obtain a lease of BLM or U.S.
Forest Service land on which to graze cattle, the lessee must
have some ownership or control of an interest in “attached”
grazing land. 	That interest may be a fee interest or a lease
interest.
Addendum no. 3 to the purchase agreement, Benefield exhibit 38,
provides in part: “Count to be 31 cows, 2 bulls, and unsold bull
calves.” 	This addendum was executed the day of the closing,
December 22, 2006.
It appears to the Court that Creditors had been informally
(continued...)
Page 23 of 	36
Another example of Debtors’ difficulties not being
attributable to Creditors stems from Debtors’ insistence all
along that Creditors’ failure to timely transfer to them the
Aldeghi lease 27 precluded them from grazing additional cattle on
their BLM lease. 28
Mr. Slaysman testified that prior to the execution of the
contract, Debtors explained that 24 cattle would not be enough to
make the operation work; they needed at least 30. 	By virtue of
the Aldeghi lease and the resulting increase in the animal units
per month (“AUMs”) permitted on the BLM lease, the operation
could consist of 33 head. 29 	Based on the evidence the Court
believes that Mr. Slaysman acted reasonably diligently in
obtaining the documentation for the transfer of the Aldeghi lease
and the BLM increased allotment, albeit his performance was tardy
as measured by the closing date of December 22, 2006. 30
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(...continued)
renting the Aldeghi land prior to August 5, 2006, when they
obtained from Mr. Aldeghi somewhat more formal documentation of
that arrangement, Slaysman exhibit 21, perhaps in anticipation of
the sale of the operation.
31 Slaysman exhibit 9.
32 Id.
33 Mr. Benefield testified that the BLM had a copy of the Aldeghi
lease in its files although Debtors did not have a copy of it;
what the BLM apparently required was a specific assignment of the
lease to Debtors for the BLM files.
Page 24 of 	36
Mr. Slaysman executed the BLM lease transfer on January 31,
2007 31 , and delivered it to Debtors promptly thereafter, and the
BLM grazing permit, allowing 33 CYL (“cattle yearlong”) in total,
was issued June 8, 2007, effective retroactively to March 1,
2007. 32 	Mr. Benefield testified that the BLM required that the
Aldeghi lease be in the Debtors’ names in order to have the
benefit of the increased AUMs on the BLM lease, and that in fact
at one point the BLM threatened Debtors with the immediate loss
of nine CYL on the BLM land if Debtors did not get the Aldeghi
lease in their names. 33 	Mr. Benefield testified that they never
received an assignment of the lease. 	However, the problem was
apparently solved when Debtors moved to assume the Aldeghi lease
on June 5, 2009 (No. 12-08-14483, doc 49) and the order granting
that motion was entered July 2, 2009 (doc 56). 	In the meantime,
according to Mr. Benefield, when the BLM lease was first issued
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34 Serene Properties, Inc. was the actual owner of the property;
Brian Aldeghi was Serene Properties’ president. 	Throughout these
proceedings the parties have referred to the “Aldeghi lease”.
Page 25 of 	36
to Debtors in June 2007, the BLM committed to working with
Debtors until the Aldeghi lease was put in their names. 	And,
critical to the decision on this issue, there was no evidence
that Debtors ever in fact had their allotment reduced due to not
having a formal assignment of the Aldeghi lease.
The Aldeghi lease was for approximately 500 acres of “open
range” within a larger parcel of land named Antelope Run
Subdivision. 	It permitted grazing on any of the unsold land –
the 500 acres -- but reserved lessor’s right to continue to
market the unsold land. 34 	The order permitting the assumption
explicitly provided that nothing in the assumption order would
“impair” lessor from selling any of the remaining unsold portions
of the leased land (doc 56). 	And in fact, when the lessor
(Aldeghi through counsel) responded on June 18 to the motion to
assume, it stated that since the lease had been executed in
August 2006, the unsold acreage had been reduced to about 300
acres (doc 54). 	The BLM permit was executed by Debtors on June
7, 2007 and approved by the BLM on June 8, 2007, with the
standard (and in this case, retroactive) effective period of
March 1, 2007 - February 28, 2008. 	It permitted 33 cattle (CYL)
at 67% active usage, for total AUMs of (33 x 12 months x .67 =)
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Page 26 of 	36
265. 	The lease explicitly included nine CYL on the BLM land, as
follows:
ADDITIONAL 9 CYL FOR THE TERM OF 9/1/2006 TO
2/28/2016 BASED ON AGREEMENT TO GRAZE THIRD PARTY
PRIVATE LAND IN ALLOTMENT. 	LIVESTOCK NUMBERS WIL
[sic] BE REDUCED IF THIRD PARTY PRIVATE LAND
DECREASES BELOW 500 ACRES. 	SEE AGREEMENT DATED
AUGUST 5, 2006 [the Aldeghi lease].
Notwithstanding the documentation and the testimony, there
was no evidence exactly what losses Debtors suffered that could
be attributable to whatever delay there was in delivering the
assignment of the Aldeghi lease. 	Mr. Slaysman testified that he
obtained the additional AUMs based on the Aldeghi lease before
the closing took place, and since the cattle were part of the
sale to Debtors, presumably in situ, it appears that Debtors in
effect had the full benefit of the Aldeghi lease as written. 	Mr.
Pierce testified that the BLM then did reduce the number of
cattle allowed to graze due to a reduction in the available
grazing area in the Aldeghi lease, and he also testified that BLM
was informed that other parcels of the Aldeghi lease land had
become available for grazing again, but that the BLM was not
taking into consideration the newly (or again) available land and
that Aldeghi would not cooperate in their dispute with the BLM.
None of these particular post-transfer complications were
Creditors’ fault, of course.
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35 The 2006 P&L is somewhat puzzling. 	It projects a gain of
$16,496 using the “current program”, but suggests that the
“alternative method” of running the operation, by selling all
calves produced at weaning (rather than keeping the bulls calves
until breeding age) “would dramatically reduce the annual feed
and vet bills by nearly $10,000 on average”. 	The comparative
numbers appear to be $10,500 in the current program for those two
items and $3,250 in the alternative program. 	In any event, the
(continued...)
Page 27 of 	36
Related to the BLM lease issue was Debtors’ gamble that they
could take an operation that netted between $11,000 and $18,000
per year and with the addition of a few CYL, make a living off
the operation. 	Mr. Slaysman testified that he told Debtors that
he and Ms. Slaysman held down full-time jobs that supported them
while they managed the operation. 	Debtors did not contest this
evidence.
The profit and loss statements for the Slaysman cattle
operation provide some support for Creditors’ testimony. 	Debtors
did not successfully challenge that evidence. 	Mr. Slaysman
testified that he provided Debtors the profit and loss statements
(the last four pages of Benefield exhibit 38) to help make it
clear to Debtors just how little profit they could expect from
the operation if they were going to purchase it (a level of
apparently voluntary disclosure from a seller so considerable
that it raises some question of credibility). 	Those statements
were for calendar years 2003 (net gain $11,067), 2004 ($12,794),
2005 ($18,041) and (projected) 2006 ($16,496 or $15,496). 35
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35
(...continued)
earlier sale of all calves that leads to reduced expenses also
leads to far less income ($29,200 vs. $20,200), so that the
alternative program results in a less profitable operation.
Page 28 of 	36
Mr. Benefield testified that they only received from Mr.
Slaysman one of the profit and loss statements, the “Projected
2006 P&L”, which they went over with their accountant. 	(Mr.
Benefield said they got the other statements after the closing.)
He also testified that when they discussed the numbers on the
2006 statement with Mr. Slaysman, Mr. Slaysman chuckled and in
effect stated that for tax reasons not all the income was
disclosed, and that Debtors relied on that oral statement (and
perhaps the chuckle as well) for assurance that the operation
would be sufficiently profitable. 	Whether or not Mr. Slaysman
actually made that statement, the Court finds that Debtors were
sufficiently on notice of the problematic profitability of the
operation to have required them to more fully investigate this
issue prior to the closing since, after all, their plan to make a
living from this operation would obviously have to be bottomed on
how much profit they could make. 	Thus if Debtors had not
obtained all the profit and loss statements before closing, they
should not have closed (or, for that matter, signed the contract)
until they had the statements and had fully investigated the
finances of the operation. 	This was not the fault of Creditors.
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Page 29 of 	36
The dispute about when profit and loss statements were
delivered is merely one of many instances that raises the
question generally about credibility of both sides and whom the
Court finds more credible. 	To be clear, the Court finds that at
no time have Debtors ever deliberately or intentionally
misrepresented anything to the Court, and that Debtors genuinely
believe what they are saying. 	The Court is convinced that some
of Debtors’ statements are incorrect simply because Debtors are
innocently or perhaps negligently mistaken. 	Debtors feel very
intensely about all that has gone on (not inappropriately, given
the stakes), and further have a sense that they are just not
getting anyone to listen to them, factors which combine to
metaphorically produce increasing amounts of heat to the
detriment of the light which would be more useful. 	Particularly
is this true of Mr. Benefield.
One example is Debtors’ overall assertion that, in effect, a
series of attorneys all malpracticed continually in representing
Debtors, with Debtors having little responsibility for the poor
outcomes. 	It may be that there was some malpractice – more
specifically, as an example, Debtors stated that one of their
state court attorneys failed to timely appeal the state court
decision denying their motion to set aside the default
foreclosure judgment because he was off skiing at Park City,
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Page 30 of 	36
testimony that was not rebutted although the likely success of
such an appeal would be minimal – but to assert that every one of
the more than half dozen attorneys they have dealt with made
major mistakes that put them in their dire straits, and some of
the attorneys effectively admitted that to them, is simply not
credible.
Another example of Debtors’ inaccuracy is Mr. Benefield’s
representations to the state court judge about this Court’s
ruling dismissing the second chapter 12 filing. 	In the course of
that oral ruling, the Court confirmed that the ruling dismissing
the case was not subject to the stay provided by F.R.B.P.
4001(a)(3) because the ruling was not a stay modification. 	The
Court then explained to Mr. Benefield how the rule worked, but
stressed that it was not applicable to that proceeding.
Benefield exhibit 40, p. 19, l. 21 through p. 22, l. 25,
Nevertheless, at the subsequent state court hearing approximately
a month later, Mr. Benefield earnestly asserted to the state
court judge that this Court had ruled that Creditors were stayed
for ten days following the dismissal from taking any action to
pursue the foreclosure. 	Benefield exhibit 39, p. 6, l. 25
through p. 7, l. 20. 	On both occasions Mr. Benefield was hearing
from each court some very bad news, undoubtedly generating an
intensely unpleasant emotional reaction, and perhaps that
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Page 31 of 	36
explains his wildly inaccurate statements to the state court
judge. 	In any event there is no question in this Court’s mind
that Mr. Benefield genuinely remembered the Court’s explanation
the way he explained it to the state court judge, completely
wrong as that recollection was. 	These examples illustrate why
Debtors’ testimony in many respects is not credible, without the
Court in any way suggesting that Debtors are lying.
Ms. Slaysman did not testify. 	Mr. Slaysman was far more
precise and organized in his presentations than Mr. Benefield
(not unlike Ms. Benefield compared with Mr. Benefield), and
provided a concise and internally consistent narrative, whether
under direct or cross examination. 	Additionally the documents
all seem consistent with his statements. 	Perhaps this was the
result of many hours of preparation with his counsel and
reviewing the documents, but (without disparaging counsel) the
Court does not think so. 	There were times when Mr. Slaysman
testified that he simply did not know the answer to a question or
where something was in a document, responses which seem to the
Court to belie an explanation of too much preparation. 	For these
reasons, the Court finds that Mr. Slaysman’s testimony was more
credible than Debtors’ testimony as a general rule, but of course
the Court weighs the evidence – documents and testimony – on each
issue.
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36 For example, even at the final hearing on their motion to
impose a stay, when it was critical to demonstrate that they
could confirm and perform under a plan, Debtors provided almost
no evidence at all of their actual ability to do so. 	When asked
by her counsel if they could make monthly mortgage payments of
$1,800, Ms. Benefield, the debtor more attuned to the financial
details, responded that she thought so “without looking at the
budget particularly closely at this time.” 	If there was any time
to look closely at the budget to confirm an ability to make
payments, this hearing was it.
37 The parties presented considerable evidence about the seven (7)
previous bankruptcy filings by Debtors in the District of Arizona
prior to Debtors’ marriage late in 2004. 	The Court does not need
to take that evidence into account since it goes to Debtors’ good
faith in general, an issue which the Court has determined it need
not decide.
Page 32 of 	36
Generally, Debtors insist that they could have made it
all work had Creditors been honest with them and performed
Creditors’ obligations under the Purchase Agreement timely. 	The
Court is not convinced. 	But even without deciding for this
purpose the accuracy of Debtors’ accusations against Creditors,
the fact is that Debtors never presented evidence of a business
plan, or even a budget, that demonstrated that possibility. 36
Reviewing the evidence about what led up to the
bankruptcy filings, and then how Debtors managed their previous
bankruptcy cases in this district 37 , the Court is not clearly
convinced that Debtors have changed, or that there is any other
reason, to believe that Debtors will have the discipline and
organization, and for that matter the funds, to confirm a chapter
11 case and then successfully perform under it. 	For that reason
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Page 33 of 	36
the statute does not permit Debtors, through an imposition by
this Court of a stay, to restrain Creditors from acting to
repossess and dispose of their collateral.
Summarizing § 362(c)(4)(D)(i), and regardless of the literal
wording of the statute, there is clearly a reasonable objective
sought by the statute: a debtor must explain why the debtor was
unsuccessful previously and why the debtor should not be held
responsible for that lack of success, and why the court should
think the debtor will be successful in the current case. 	Thus
the logic of the statutory scheme is that the debtor must prove
good faith as to each of the circumstances designated by the
statute since, for example, it would not make sense for a debtor
to excuse prior filings but not be able to show she or he will be
successful in the current filing. 	Nor, reflecting Congress’
impatience with serial filers, should the debtor have the
opportunity to try again (with the benefit of the stay), even if
likely to be successful, if she or he had no good reason for the
dismissal of the previous cases. 	Debtors have not carried their
burden of persuasion with respect to each or any circumstance, so
they must lose their motion to impose the stay as to all
creditors in their current case.
D. 	CREDITORS COMMENCED A STAY RELIEF ACTION IN ONE OF THE
PREVIOUS CASES WHICH HAD BEEN RESOLVED BY CONDITIONING
THE STAY
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Page 34 of 	36
In addition to the protection any creditor is afforded by
§ 362(c)(4)(D)(i), § 362(c)(4)(D)(ii) provides individualized
protection for creditors who in a prior case had obtained some
measure of stay relief. 	In the first of the New Mexico cases
filed by Debtors, no. 12-08-14483, Creditors filed a motion for
stay relief. 	Doc 16. 	The Stipulated Order Resolving Slaysmans’
Motion for Relief from Automatic Stay and Providing Adequate
Protection for Slaysmans’ Interest in Property (doc 45) disposed
of the motion. 	That order provided among other things that
Debtors would make monthly payments to Creditors. 	Id., at 3. 	It
required Debtors to do a number of other things as well,
including providing proof of insurance on the improvements, pay
the real estate taxes, etc. 	Id., at 3-5. 	And the Stipulated
Order had a “drop dead” provision; that is, the agreement by
Debtors that if they did not cure any payment (or other) default
within a given amount of time following notice of the default,
Creditors could file an affidavit to that effect and the stay
would be modified without a further hearing. 	Id., at 4.
Given the wording of the statute, it would appear that
any order arising from a motion for stay relief that did not
simply deny the motion outright would provide a basis for finding
a lack of good faith on the part of a refiling debtor. 	In this
instance, the stipulated order as described obviously
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Page 35 of 	36
“conditioned” the stay. 	In consequence, Debtors need to have
rebutted the presumption of bad faith by clear and convincing
evidence. 	This they did not do.
Conclusion
As to all creditors, since Debtors have not met the
objective futility test, there is no need to examine the motion
from a general good faith perspective, as in cases such as Gier
and Galanis. 	And in any event, as to Creditors specifically,
Debtors cannot escape the collateral consequences of the stay
relief accorded Creditors in the first case. 	Therefore the Court
will enter an order denying Debtors’ Emergency Motion to Declare
the Automatic Stay in Effect or in the Alternative to Reinstate
Automatic Stay Pursuant to Section 362(c)(4) (doc 8).
Honorable James S. Starzynski
United States Bankruptcy Judge
Date Entered on Docket: 	September 14, 2010
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Page 36 of 	36
Copies to:
Cynthia Sue Benefield
David Dwayne Benefield
HC 32 Box 216
Quemado, NM 87829
Jennie D Behles
PO Box 7070
Albuquerque, NM 87194-7070
Danny M. Slaysman
PO Box 1641
Eager, AZ 85925
Christopher M. Gatton
Law Office of George Dave Giddens, PC
10400 Academy Rd., #350
Albuquerque, NM 87111
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