TD Bank, N.A. v. LaPointe

Summarized by David Baker , Law Office of David G. Baker
12 years 4 days ago

Citation:

TD Bank, N.A. v. LaPointe; BAP No. NH 13-029

Tag(s):

Ruling:

Bankruptcy court's order denying relief from the automatic stay reversed.

Procedural context:

Appellant TD Bank sought relief from the automatic stay, claiming that a foreclosure sale took place before the petition was filed and thus the property was not property of the bankruptcy estate.

Facts:

In 2009, debtor LaPointe took a loan and granted a mortgage on property in New Hampshire. After defaulting, TD Bank foreclosed the mortgage on March 20, 2013. The next day, LaPointe filed a chapter 13 petition, but the foreclosure deed had not been recorded. The bank moved for relief from stay, claiming that the property was not property of the bankruptcy estate because it had been sold pre-petition. The bankruptcy court disagreed and denied the motion. On permissive interlocutory appeal, the BAP held that the bankruptcy court had erred because under state law, the "gavel" approach (which New Hampshire follows), the property is "sold" when the gavel falls, or at the latest when the memorandum of sale is executed. Although title does not pass until the foreclosure deed is recorded, nonetheless the borrower/debtor has no further redemption rights as to the mortgage once the gavel falls. Thus the BAP held that the bankruptcy court erred in denying relief from stay.

Judge(s):

BK judges FInkle, Feeney (author) and Tester.

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