Seymour v. Bank of America, N.A. (In re Seymour)

Summarized by Thomas Phinney , Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP
12 years 10 months ago

Citation:

BAP No. EC-11-1669 (9th Cir. BAP) (entered April 23, 2013)

Tag(s):

Ruling:

BAP affirmed dismissal without leave to amend of the Debtor's adversary complaint seeking to enjoin Bank of America from foreclosing on the Debtor's residence. The BAP held that the Debtor lacked standing because the lawsuit was based upon prepetition events, and thus the alleged claims were held by the Chapter 7 trustee. The BAP also held that the dismissal was properly granted without leave to amend to allege that the Deed of Trust was rendered void based on post-petition events, on the grounds that any such amendment would have been futile.

Procedural context:

The Debtor initially filed a lawsuit in district court against Bank of America and several other parties which alleged a variety of misconduct related to the origination of her home loan, its securitization, its servicing, and its enforcement. The district court dismissed the lawsuit and the Debtor appealed to the Ninth Circuit. The Debtor then filed a chapter 7 petition (a second bankruptcy) and filed a new lawsuit against Bank of America as described above. Bank of America filed a Motion to Dismiss the lawsuit under FRCP 12(b), which the bankruptcy court granted on the grounds of lack of standing, lack of subject matter jurisdiction, and claim preclusion. The BAP affirmed based upon lack of standing.

Facts:

The Debtor acknowledged that the home loan at issue had been made, and that she had defaulted on the payments. She alleged, nonetheless, the lender could not foreclose due to vaguely-alleged problems with the origination of her home loan, its securitization, its servicing, and its enforcement. Among other things, the Debtor contended (in the district court action, and then on appeal of the dismissal of the adversary complaint) that defendants were not "persons entitled to enforce" ("PETEs") the security interest under CA Commercial Code section 3301. The BAP noted other California law (e.g., CA Civil Code section 2924(a)(1) and 2924(b)(4)) govern the enforcement of deeds of trust, but did not further address the issue because the issue was not before the bankruptcy court.

Judge(s):

Markell, Dunn, Jury

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