Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01417/USCOURTS-azd-2_12-cv-01417-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

John N. Bevell and Sean A. Bevell,

Debtors. _________________________________

John N. Bevell and Sean A. Bevell, 

Appellants, 

vs.

Deutsche Bank National Trust Company,

Appellee. 

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Dist. Ct. CV 12-1417-PHX-JAT

BK No. 2:10-bk-24724-RTB

ORDER

Pending before the Court is the Debtors’ motion for expedited stay pending appeal.

Doc. 4. Specifically, the Debtors seek to have this Court stay the Bankruptcy Court’s Order

(BK Doc. 87) in which the Bankruptcy Court granted Appellee’s motion to lift the automatic

stay. In that Order, the Bankruptcy Court lifted the stay as it relates to a pending Trustee sale

of the Debtors’ residence. The Debtors claim the sale of their residence is scheduled for July

12, 2012. Doc. 4 at 1.

Whether to grant or deny a request for a stay is “an exercise of judicial discretion,”

the proprietary of which is “dependent upon the circumstances of the particular case.”

Virginian R. Co. v. United States, 272 U.S. 658, 672-73 (1926). “A stay is not a matter of

right, even if irreparable injury might otherwise result.” Id. at 672. “The party requesting

Case 2:12-cv-01417-JAT Document 6 Filed 07/10/12 Page 1 of 3
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a stay bears the burden of showing that the circumstances justify an exercise of that

discretion.” Nken v. Holder, 556 U.S. 418, 433-34 (2009).

In order for this Court to grant or deny a request for a stay, the Court must consider

four factors: “(1) whether the stay applicant has made a strong showing that he is likely to

succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3)

whether issuance of the stay will substantially injure the other parties interested in the

proceeding; and (4) where the public interest lies.” Hilton v. Braunskill, 481 U.S. 770, 776

(1987). The first of two of these factors “are the most critical,” and “[i]t is not enough that

the chance of success on the merits be ‘better than negligible.’” Nken, 556 U.S. at 434

(quoting Sofinet v. INS, 188 F.3d 703, 707 (7th Cir. 1999)).

Prior to coming to this Court, the Debtors moved the Bankruptcy Court for a stay

pending appeal. The Bankruptcy Court denied that request because the Court found that the

Debtors had not shown any likelihood of success on appeal. BK Doc. 119.

In the motion to stay before this Court, the Debtors argue

The “special endorsement” the bankruptcy court relied on to bootstrap

[footnote omitted] “Deutsche Bank” into having standing was effectively

nullified by our First Objections to its amended motion for relief from stay and

by our first Judicial Notice. [footnote omitted] The “special endorsement”

Judge Baum relied on was examined in our Objections’ page 8 under the bold

heading “FOURTH.” As all can see we challenged it as unauthorized,

unauthenticated alteration under Arizona law, and the lost note law should

have been applied.

Doc. 4 at 3. The Debtors then conclude that the Bankruptcy Court lifting the automatic

bankruptcy stay in this case was an abuse of discretion. Id. at 5.

In sum, the Debtors disagree with the Bankruptcy Judge’s conclusion that the note

was properly indorsed to Appellee. The Debtors then conclude that because the indorsement

was defective, Appellee does not have standing to have a Trustee sale of the residence.

It appears that the Debtors argue that the indorsement was defective because it was

on a copy of the note, rather than on the original note. Id. at 4. Other than their own

argument, the Debtors offer no evidence that Appellee does not possess the original note.

However, even if the Debtors’ allegations are true, the Arizona Supreme Court has held that

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a secured lender does not have to produce the original note to conduct a Trustee sale. Hogan

v. Wash. Mut. Bank, 277 P.3d 781, 782 ¶ 5 (Ariz. 2012) (rejecting the “show-me-the-note”

argument). 

Thus, because the Debtors’ only claim for relief fails, this Court agrees with the

Bankruptcy Court that the Debtors have not shown a likelihood of success on appeal.

Accordingly, under Hilton, their request for a stay of the Bankruptcy Court’s order lifting the

automatic stay pending appeal will be denied.

Based on the foregoing,

IT IS ORDERED that the Debtors’ motion for expedited stay pending appeal (Doc.

4) is denied.

DATED this 10th day of July, 2012.

Case 2:12-cv-01417-JAT Document 6 Filed 07/10/12 Page 3 of 3