Ellis v. Yu (In re Ellis)
- Summarized by Jon Powers , White and Williams LLP
- 10 years 1 month ago
- Citation:
- NC-14-1052-PAJuKu (B.A.P. 9th Cir. November 19, 2014)
- Tag(s):
-
- Ruling:
- The BAP panel dismissed appeal as moot. After filing the appeal, Debtor's Chapter 13 case was converted to a Chapter 7 and a discharge was entered. The BAP held it could not exercise jurisdiction over a moot appeal and that issues can become moot while the appeal is pending. Here, debtor moved to convert the Chapter 13 case to a Chapter 7 while the appeal was pending and a discharge was granted. Under Section 362(c)(2)(C), the automatic stay terminates at the time a discharge is granted or denied. Because the stay terminated as a matter of law, no effective relief could be granted and the appeal was moot. Notably, in dicta, the Court also went on to find the bankruptcy court abused its discretion in granting "in rem" stay relief under Section 362(d)(4) because the party seeking stay relief was not a "creditor whose claim is secured by an interest in such real property" as required by that section. Here, the movant was not (and never claimed to be) a secured creditor, but rather an owner of the property after the bank's foreclosure and sale to the movant. In short, a party seeking "in rem" stay relief must demonstrate it is a secured creditor and a foreclosure sale extinguishes any security interest in the property.
- Procedural context:
- Appeal to the Ninth Circuit Bankruptcy Appellate Panel from a bankruptcy court order granting automatic stay relief under Sections 362(d)(1), (d)(2) and (d)(4).
- Facts:
- Debtor filed Chapter 13 protection in December 2013. Debtor acquired subject residence in 2005, and defaulted in mid-2008. Between this default and the instant Chapter 13 petition, Debtor had filed five prior Chapter 7 and 13 cases--all of which were dismissed for failing to file required documents or make plan payments. During an interim period between dismissals, the original lender foreclosed on the property, obtained an unlawful detainer judgment, and then sold the property and assigned the unlawful detainer judgment to a private party. Shortly after filing instant Chapter 13 petition, the new owner moved for stay relief under Sections 362(d)(2) and (d)(4) on shortened time, alleging Debtor lacked a cognizable interest in the property and the history of prior filings indicated an attempt to delay, hinder, and defraud the rightful owner. The bankruptcy court determined stay relief was appropriate under Section 362(d)(1)and (d)(4), as well as under 362(d)(1) for cause--a provision the movant did not assert.
- Judge(s):
- BAP Panel: Pappas, Jury, and Kurtz.
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