Oya v. Wells Fargo, N.A. (In re Oya)

The debtors didn’t have a great case for a stay violation after filing six chapter 13 petitions and living rent-free for five years.

- Rochelle Quick Take

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Case Type:
Case Status:
BAP No. SC-19-1095-BKuL (9th Circuit, Oct 18,2019) Not Published
BAP for 9th Circuit affirmed ruling of bankruptcy court (SD Cal.) retroactively annulling automatic stay after creditor with notice of bankruptcy proceeded with foreclosure sale. Bankruptcy court appropriately annulled stay based on debtor repeatedly and serially filing bare-bones bankruptcy cases for the obvious purpose to prevent foreclosure. Debtors had not made a mortgage payment for over four years, and bankruptcy court did not abuse discretion after properly weighing factors under 9th Circuit case law.
Procedural context:
Bankruptcy court (SD Cal.) granted creditor's motion to retroactively annul automatic stay over Chapter 13 debtor's objection. Debtor appealed to BAP for 9th Cir.
Chapter 13 debtor (Aki Oya) and her husband (Souichi Oya) acquired their residence in 2002 ("Property"). In 2007, the couple executed a promissory note and deed of trust for a $600,000 loan, for which their residence served as security. Wells Fargo acquired the note and deed of trust in 2013. The couple defaulted on the loan in 2014 and did not make a payment thereafter. In response to at least two scheduled foreclosure sales, the Oyas filed a series of five alternating individual chapter 13 bankruptcy cases between September 2016 and April 2018, filing separate cases to avoid invoking 11 USC 362(c)(4). No case was successful; all were dismissed for failure to file the required documents or a plan. At least two of the five cases were filed the day before a scheduled foreclosure sale. Following these five unsuccessful bankruptcy cases, another foreclosure sale was set for Monday, June 18, 2018. Aki contacted the loan servicer repeatedly to request postponement. On Friday, June 15, 2018, Aki filed the instant chapter 13 bankruptcy case, the sixth case filed between the Oyas in less than two years and Aki's fourth case. It too was a "bare-bones" filing, lacking any schedules, a statement of financial affairs, or a plan. On the day of the foreclosure sale, the loan servicer spoke with Aki, who indicated she had filed bankruptcy. The loan servicer failed to advise the foreclosure trustee, and the foreclosure proceeded with a sale to "Magnum." Wells Fargo rescinded the sale the next day. Magnum moved to annul the automatic stay. Prior to ruling on the motion, the bankruptcy court (SD Cal) dismissed the bankruptcy case. The bankruptcy court (SD Cal.) then granted Magnum's motion to annul the stay, deeming the foreclosure sale valid.
Brand, Kurtz, Lafferty

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