Hernandez v. Wells Fargo Bank, N.A., et al. (In re Hernandez)

Hernandez v. Wells Fargo Bank, N.A., et al. (In re Hernandez), BAP No. NC-15-1044-TaDJu (BAP 9th Cir. Nov. 3, 2015)
The BAP for the 9th Circuit affirmed the bankruptcy court (N.D. Ca.) order dismissing plaintiff/debtor's adversary complaint with prejudice under Rule 12(b)(6). The BAP found no abuse of discretion in the bankruptcy court's determination that plaintiff failed to state a claim upon which relief could be granted in alleging that creditor violated automatic stay, and fraudulently transferred assets, among other claims, in process of merger and transfer of claim, or in process of obtaining adequate protection order following chapter 13 debtor plaintiff's mortgage payment default under confirmed plan. BAP noted that plaintiff/debtor/appellant's briefing was so deficient as to warrant dismissal of appeal. However, even on merits, neither appellant nor the record suggested any colorable basis for reversal. Appellants inability to identify any curative benefit of amending complaint justified dismissal of mixture of state law, non-bankruptcy federal law, and bankruptcy claims with prejudice.
Procedural context:
Debtor/plaintiff sued creditor, and creditor moved to dismiss under Rule 12(b)(6). Following hearing, court granted motion, and dismissed complaint with prejudice. Debtor/plaintiff appealed to BAP for 9th Circuit.
Chapter 13 debtors confirmed plan that included obligation to make monthly payments to senior mortgage holder. A year and a half later, debtors defaulted under the plan by failing to make payments to senior mortgage holder. Creditor moved for relief from stay. The bankruptcy court entered an adequate protection order providing for additional monthly payments to the bank to cure the default arrearages. Debtors sued bank for five claims: (1) fraudulent transfer; (2) determination of validity of lien; (3) willful and malicious injury; (4) injunctive relief; and (5) declaratory relief. Debtors alleged that in conjunction with a merger, bank was not the proper holder of the promissory note and had fraudulent transferred the claim against debtors in violation of the automatic stay. Debtors further alleged that bank's pursuit of relief from stay, and receipt of adequate protection order, also violated stay and constituted fraudulent transfer, among other claims.
Taylor, Dunn, Jury

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