Aftandilian v. Prestige Management Group, LLC

Summarized by Benjamin Ellison , Salish Sea Legal PLLC
11 years 11 months ago

Citation:

Slip Copy, 2014 WL 1244789 (9th Cir.BAP (Cal.) (not appropriate for publication)

Tag(s):

Ruling:

The Bankruptcy Appellate Panel first found that though Creditor had taken various steps in reliance of the completed nonjudicial sale, the appeal was not moot. The BAP also concluded that the Bankruptcy Court did not err in denying the Debtor's declaratory relief motion. Debtor should have brought his challenge as an adversary proceeding, not as a contested matter. The Appellate Panel likewise disagreed with Debtor's interpretation of the Bankruptcy Court's prior motion for relief from stay order, noting that trial courts were entitld to deference in interpeting their own orders.

Procedural context:

After the nonjudicial foreclosure was complete, Debtor filed a state court proceeding against Creditor which was removed to bankruptcy court and was dismissed with prejudice. Debtor also simultaneously filed a motion in its main case, arguing that the nonjudicial foreclosure violated the terms the Bankruptcy Court's prior motion for relief from stay order. Specifically, Debtor argued that because he was current on adequate protection payments, Creditor could not foreclose. The Bankruptcy Court denied the motion, noting that its prior order contained no such limitation on Creditor action, and finding that the motion was procedurally improper and should have been filed as an adversary proceedng. Bankruptcy Court also noted that the motion was duplicative of the prior adversary proceeding it had dismissed.

Facts:

Debtor filed Chapter 11 bankruptcy and listed creditor Prestige Management Group, LLC as the secured lender on his commercial property. Creditor filed motion for relief from stay and was awarded adequate protection payments. Discovering additional indebtedness, Creditor later moved again for relief from stay and Bankruptcy Court granted the motion, but allowed the possiblity for Debtor to continue making payments for a fixed amount of time wthout foreclosure. Creditor accepted payments from Debtor, but after the fixed amount of time expired, continued with a nonjudicial foreclosure sale, at which it credit bid and purchased Debtor's commercial property. Debtor filed contested matter, seeking declaratory judgment, stating the sale was void. Debtor had previously challenged the sale in a prior adversary proceeding, however, that case was dismissed with prejudice.

Judge(s):

Kurtz, Pappas, Tayor

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