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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. NC-13-1558-KuDJu

 )

MARIA RIVERA BARRAGAN, ) Bk. No. None

 )

Debtor. ) Adv. No. 13-05143

________________________________)

 )

MARIA RIVERA BARRAGAN, )

 )

Appellant, )

 )

v. ) MEMORANDUM*

 )

PETER BRAZIL; COMINOS LAW )

OFFICE; MALIBU RECONVEYANCE; )

SIBONRY A. MONGE; LPS AGENCY )

SALES AND POSTING; JOSEFINA )

MORALES; JUAN MORALES, )

 )

Appellees. )

________________________________)

Argued and Submitted on July 24, 2014

at San Francisco, California

Filed – August 26, 2014

Appeal from the United States Bankruptcy Court

for the Northern District of California

Honorable Charles D. Novack, Bankruptcy Judge, Presiding

 

Appearances: Appellant Maria Rivera Barragan argued pro se.**

 

Before: KURTZ, DUNN and JURY, Bankruptcy Judges.

FILED

AUG 26 2014

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

*This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8013-1.

**While appellant named a number of parties as appellees

herein, none of them filed a responsive brief or otherwise

participated in this appeal.
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INTRODUCTION

Chapter 131 debtor Maria Rivera Barragan appeals from an

order dismissing her adversary proceeding against Juan Morales,

Josefina Morales, and others. The bankruptcy court concluded

that it lacked subject matter jurisdiction over the adversary

proceeding because, at the time Barragan filed her complaint, the

adversary proceeding did not arise in, arise under or relate to a

bankruptcy case, as required under 28 U.S.C. § 1334(b). Barragan

did not commence her chapter 13 bankruptcy case until several

weeks after she filed her complaint.

Even though the bankruptcy court was aware of Barragan’s

newly-filed case at the time it ordered her adversary proceeding

dismissed, the court was not obliged to sua sponte grant Barragan

leave to file a supplemental complaint to cure the jurisdictional

defect, especially when the court made it clear at the dismissal

hearing and in its dismissal order that the dismissal was without

prejudice to Barragan’s claims and that Barragan was free to seek

appropriate relief in her newly-filed bankruptcy case.

Accordingly, we AFFIRM.

FACTS

In 2006, Barragan purchased a residence from the Moraleses

for $650,000. Barragan's purchase of the residence was partly

financed by the Moraleses providing Barragan with a loan secured

by a junior deed of trust against the residence.

1Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all "Rule" references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037. All "Civil Rule" references are to

the Federal Rules of Civil Procedure.

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Within roughly a year, Barragan refinanced her residence. 

To facilitate her refinancing, the Moraleses apparently agreed to

temporarily release their junior lien against the residence until

the refinancing was complete. In furtherance of this goal, the

Moraleses executed a deed of reconveyance in favor of Barragan.

After Barragan completed her refinancing, she signed what

she believed was a new deed of trust in favor of the Moraleses to

secure the remaining loan balance owed to them in the amount of

$155,000. In reality, in 2007 she signed a grant deed in favor

of the Moraleses. Barragan claims that the Moraleses

intentionally tricked her into signing a grant deed instead of a

deed of trust. According to Barragan, in 2008 she discovered the

Moraleses' fraud and hence stopped making payments on the Morales

loan.

In 2010, the Moraleses sued Barragan in the Monterey County

Superior Court (Case No. M 105511). In their complaint, the

Moraleses alleged that the mistake regarding Barragan's execution

of the grant deed was inadvertent on the part of both parties but

that Barragan still owed them roughly $155,000 plus interest. 

They further alleged that this amount should be secured by a

junior deed of trust against the residence. They requested,

among other things, equitable reformation of the grant deed into

a deed of trust to conform to the parties' actual agreement.

In August 2011, the state court entered a default judgment

against Barragan effectively granting the Moraleses' request to

reform the grant deed into a deed of trust securing the Morales

loan in the amount of $155,000. A new deed of trust was recorded

in the Monterey County Recorder's Office on August 25, 2011.

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Barragan appealed the August 2011 default judgment (Case

No. H037387), but the California Court of Appeal, Sixth District,

affirmed the judgment in an opinion issued in October 2012.2 

For reasons that are not explained, the Moraleses apparently

executed a quitclaim deed in September 2011 in favor of Barragan,

which quitclaim deed was recorded in October 2011 in the Monterey

County Recorder's Office. In her appeal brief to this Panel,

Barragan asserts that the Moraleses were compelled to do so by

court order, but she has not submitted a copy of that court

order, nor did she even identify the court that entered this

order. Presumably, the purpose of the quitclaim deed was to

reverse the effect on title of the 2007 grant deed inadvertently

executed by Barragan in favor of the Moraleses. We further

presume, for background purposes only, that the October 2011

quitclaim deed was not meant to affect the August 2011 deed of

trust.

In November 2011, Barragan filed a complaint against the

Moraleses and their counsel in the United States District Court

for the Northern District of California (Case No. CV11-05463). 

In September 2012, the district court entered an order dismissing

the case for lack of subject matter jurisdiction. Barragan

appealed, but the Ninth Circuit disposed of Barragan's appeal by

summary affirmance in December 2012. 

In October 2013, Barragan filed an adversary complaint

2We have ascertained the status of Barragan’s state court

appeal by accessing the California Court of Appeal’s electronic

docket. We can and do take judicial notice of its contents. See

Estate of Blue v. County of Los Angeles, 120 F.3d 982, 984 (9th

Cir. 1997).

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against the Moraleses and others in the United States Bankruptcy

Court for the Northern District of California. Oddly, Barragan

did not file a bankruptcy case before she commenced her adversary

proceeding. Several days later, the bankruptcy court issued an

order to show cause why the adversary proceeding should not be

dismissed for lack of subject matter jurisdiction in light of the

fact that Barragan had not filed a bankruptcy case and hence her

adversary proceeding did not arise in, arise under or relate to

any bankruptcy case. Plaintiff responded to the order to show

cause, in part, by filing a chapter 13 bankruptcy case on

October 28, 2013 (Case No. 13-55661).

At the hearing on the order to show cause, the bankruptcy

court acknowledged Barragan's belated commencement of a

bankruptcy case but in essence held that the commencement of the

case did not, by itself, permit the bankruptcy court to exercise

subject matter jurisdiction over the adversary proceeding. The

bankruptcy court attempted several times during the hearing to

convey to Barragan that a jurisdictional dismissal would not bar

her from seeking the same relief by refiling for such relief in

her bankruptcy case. For example, the court stated at the

hearing:

. . . Ms. Barragan, if you want to refile — now that

you've filed a 13, and if you and your lawyer believe I

have jurisdiction and the constitutional authority to

enter a [final] judgment, then you should proceed. But

I don't have jurisdiction over this case because it was

filed before you filed any Chapter 13, and I'm not

going to consider it. I'm not going to consider this —

this litigation. And [you] should talk to [your

bankruptcy counsel] about whether [you] should file and

where [you] should file any other piece of litigation

[you] may have.

Hr’g Tr. (November 5, 2013) at 5:17-6:1.

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The bankruptcy court later on at the same hearing stated:

Okay. Then I'm dismissing this adversary proceeding

for lack of jurisdiction as set forth in my order to

show cause. And it's without prejudice for [you] . . . 

asserting these claims in an appropriate court.

* * *

Now I'm not saying this Court isn't the appropriate

court, but that is something [you] should discuss with

[your bankruptcy counsel]. I'm not making any decision

about where the case should be filed. That's between

[your attorney and you]. Okay?

Hr’g Tr. (November 5, 2013) at 6:8-16.

The bankruptcy court entered an order on November 12, 2013,

dismissing the adversary proceeding without prejudice for lack of

jurisdiction. Barragan timely filed a notice of appeal on

November 15, 2013.

JURISDICTION

Subject to the mootness and standing discussions set forth

below, we have jurisdiction over this appeal pursuant to

28 U.S.C. § 158. We also discuss below the bankruptcy court’s

jurisdiction.

ISSUE

Did the bankruptcy court err when it dismissed Barragan’s

adversary proceeding for lack of jurisdiction?

STANDARDS OF REVIEW

We review jurisdictional issues de novo. See Wilshire

Courtyard v. Cal. Franchise Tax Bd. (In re Wilshire Courtyard),

729 F.3d 1279, 1284 (9th Cir. 2013). “The burden of establishing

subject matter jurisdiction rests on the party asserting that the

court has jurisdiction.” Id.

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DISCUSSION

We have an independent duty to consider sua sponte whether

an appeal is moot. Pilate v. Burrell (In re Burrell), 415 F.3d

994, 997 (9th Cir. 2005). An appeal is moot when it would be

impossible for us to grant meaningful relief even if the

appellant were to prevail. Id. at 998; I.R.S. v. Pattullo

(In re Pattullo), 271 F.3d 898, 901 (9th Cir. 2001).

In this appeal, we question whether we could grant any

meaningful relief because we do not understand why Barragan did

not simply re-file her adversary proceeding in her bankruptcy

case. While not directly on point, we have held that appeals

from orders temporarily barring a debtor from re-filing a

dismissed bankruptcy case become moot when the impediment to

refiling has terminated by its own terms. See, e.g., Tennant v.

Rojas (In re Tennant), 318 B.R. 860, 867 (9th Cir. 2004);

Fernandez v. GE Capital Mortg. Servs., Inc. (In re Fernandez),

227 B.R. 174, 178 (9th Cir. BAP 1998). Such appeals become moot

when the impediment no longer exists because the appellant-debtor

no longer needs any relief from the appellate court to set aside

the impediment.

Here, as best as we can tell, there was and is no huge

impediment to Barragan re-filing her complaint. On the other

hand, Barragan would be required to pay a new filing fee. The

bankruptcy court’s adversary proceeding docket indicates that

Barragan paid a $293 filing fee when she filed her complaint, and

she would need to pay another $293 fee if she were to re-file. 

If we were to reverse or vacate the bankruptcy court’s

jurisdictional dismissal, Barragan would be able to resume the

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prosecution of her adversary proceeding without paying another

$293. While this is a slender reed on which to conclude that

this appeal is not moot, our potential ability to save Barragan,

a debtor in a bankruptcy case, $293 constitutes “meaningful

relief” for purposes of determining the mootness of this appeal.

Additionally, it is conceivable that, sometime after her

adversary proceeding was dismissed, the limitation period may

have run on one or more of the claims Barragan attempted to

allege in her adversary proceeding. If we were to reverse or

vacate the jurisdictional dismissal, the original adversary

proceeding would be reinstated and any such time-barred claims

would be preserved. While Barragan has not identified any

potentially time-barred claims, Barragan does not bear the burden

of proof to establish that her appeal is not moot. The burden

regarding mootness is borne by the party (if any) advocating in

favor of mootness. See Focus Media, Inc. v. Nat'l Broad. Co.

Inc. (In re Focus Media, Inc.), 378 F.3d 916, 923 (9th Cir.

2004).

Under these circumstances, this appeal is not moot.

For similar reasons, we also conclude that Barragan has

standing to appeal. Bankruptcy appellate standing is a

prudential standing doctrine requiring an appellant to

demonstrate that he or she has been "directly and adversely

affected pecuniarily" by the order on appeal. Palmdale Hills

Prop., LLC v. Lehman Commercial Paper, Inc (In re Palmdale Hills

Prop., LLC), 654 F.3d 868, 873 (9th Cir. 2011). To satisfy this

requirement, Barragan needed to show that the order appealed

diminished her property, increased her financial burdens, or

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detrimentally affected her rights. Fondiller v. Robertson

(In re Fondiller), 707 F.2d 441, 442 (9th Cir. 1983). The $293

fee that Barragan would need to pay to re-file and the potential

that some of her claims might now be time-barred are sufficient

to satisfy her appellate standing burden.

Having dispensed with the mootness and standing issues, we

turn our attention to the issue of whether the bankruptcy court

correctly determined that it lacked subject matter jurisdiction

over the adversary proceeding.

It is beyond dispute that, in the absence of a bankruptcy

case, the bankruptcy court lacked subject matter jurisdiction

over Barragan’s adversary proceeding. Bankruptcy court

jurisdiction is created and circumscribed by statute. Under the

relevant statutes, 28 U.S.C. § 1334(b) and 28 U.S.C. § 157(b)(1),

bankruptcy court jurisdiction hinges on the existence of a case

under Title 11 of the United States Code – more commonly known as

the Bankruptcy Code. See generally In re Wilshire Courtyard,

729 F.3d at 1284-85 (“Bankruptcy courts have subject matter

jurisdiction over proceedings ‘arising under title 11, or arising

in or related to cases under title 11.’”). 

At the time Barragan filed her adversary complaint, she had

not yet filed bankruptcy. Consequently, it is apparent here that

the bankruptcy court lacked subject matter jurisdiction at that

time. 

However, within a few weeks of her commencement of the

adversary proceeding and before the bankruptcy court dismissed

her adversary proceeding, Barragan did file a chapter 13

bankruptcy case. Thus, the real question we must resolve is

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whether Barragan’s bankruptcy filing, by itself, automatically

cured the jurisdictional defect such that the bankruptcy court

committed reversible error when it ruled, after the bankruptcy

case was filed, that the adversary proceeding should be dismissed

for lack of jurisdiction.

We begin our analysis with the proposition that a federal

court’s jurisdiction ordinarily is assessed as of the date the

complaint is filed. Newman-Green, Inc. v. Alfonzo-Larrain,

490 U.S. 826, 830 (1989)(“The existence of federal jurisdiction

ordinarily depends on the facts as they exist when the complaint

is filed”); see also Lujan v. Defenders of Wildlife, 504 U.S.

555, 571 n.4 (1992). We know of no rationale or precedent

indicating that this rule should not generally apply in the

context of bankruptcy courts exercising jurisdiction under

28 U.S.C. § 1334(b).

But what should happen when, as here, the facts pertinent to

the court’s jurisdiction change after the filing of the

complaint, such that those facts support the exercise of 

bankruptcy court jurisdiction even though the bankruptcy court

clearly did not have such jurisdiction at the time the complaint

was filed?

The answer to this question is found in Civil Rule 15(d),

which is made applicable in adversary proceedings by Rule 7015. 

Civil Rule 15(d) provides:

On motion and reasonable notice, the court may, on just

terms, permit a party to serve a supplemental pleading

setting out any transaction, occurrence, or event that

happened after the date of the pleading to be

supplemented. The court may permit supplementation

even though the original pleading is defective in

stating a claim or defense. The court may order that

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the opposing party plead to the supplemental pleading

within a specified time.

Civil Rule 15(d) permits litigants to supplement their

pleadings to allege a valid jurisdictional basis for their legal

action when events occurring after the commencement of the action

support that jurisdictional basis. See Mathews v. Diaz, 426 U.S.

67, 75 (1976); Black v. Sec’y of Health and Human Servs., 93 F.3d

781, 789-90 (Fed. Cir. 1996); Enesco Grp., Inc. v. Campanaro

(In re Enesco Grp., Inc.), 2013 WL 4045756, at *10 (Bankr. N.D.

Ill. 2013).

Federal courts enjoy broad discretion to grant Civil

Rule 15(d) motions to supplement, and the rule must be liberally

interpreted and broadly applied to promote the interests of

justice and judicial economy. See Keith v. Volpe, 858 F.2d 467,

473-75 (9th Cir. 1988). Here, however, Barragan never asked for

leave to supplement her complaint to reference her subsequent

bankruptcy filing. While the bankruptcy court, if asked, would

have needed to consider whether it should exercise its discretion

to grant such a request, we are not aware of any authority

compelling the bankruptcy court to sua sponte grant leave to

supplement under these circumstances. To the contrary, we

believe that it would be inappropriate to reverse on this basis. 

See James Cape & Sons Co. v. PCC Constr. Co., 453 F.3d 396,

400-01 (7th Cir. 2006).

This is especially true here, because the bankruptcy court

dismissed the adversary proceeding without prejudice and even

suggested to Barragan that she might want to re-file her action

in her newly-filed bankruptcy case. In response, Barragan never

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articulated any reason why she could not do so, nor has she

suggested on appeal that any real impediment exists.

We acknowledge that technical defects in pleading subject

matter jurisdiction often are ignored in the federal courts when

the entirety of the complaint demonstrates a valid basis for the

courts to exercise jurisdiction. See, e.g., Gerritsen v. de la

Madrid Hurtado, 819 F.2d 1511, 1515 (9th Cir. 1987); LeBlanc v.

Salem (In re Mailman Steam Carpet Cleaning Corp.), 196 F.3d 1, 5

(1st Cir. 1999). But this line of authority is inapposite here. 

The jurisdictional defect in Barragan’s complaint may have been

transitory, but it was not a merely technical one. Rather, it

was genuine and significant, and nothing else in Barragan’s

complaint demonstrated a valid basis for jurisdiction.

We also acknowledge that Barragan filed her complaint in

propria persona and that we must construe pro se pleadings

liberally. See Balistreri v. Pacifica Police Dep't, 901 F.2d

696, 699 (9th Cir. 1988). Nonetheless, even pro se litigants

must follow procedural rules. See Clinton v. Deutsche Bank Nat'l

Trust Co. (In re Clinton), 449 B.R. 79, 83 (9th Cir. BAP 2011);

see also Briones v. Riviera Hotel & Casino, 116 F.3d 379, 382

(9th Cir. 1997) (stating that “pro se litigants are not excused

from following court rules.”). In accordance with Civil

Rules 8(a) and 15(d), there were simple steps Barragan could have

taken on her own behalf to advance her litigation interests in

the bankruptcy court. She did not do so. These missed

opportunities ultimately proved fatal to her adversary

proceeding. On this record, we will not reverse the bankruptcy

court for not sua sponte initiating these steps on Barragan’s

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behalf.

CONCLUSION

For the reasons set forth above, we AFFIRM the bankruptcy

court’s jurisdictional dismissal of Barragan’s adversary

proceeding.

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