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FILED

JUN 29 2015

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. AZ-14-1402-KiPaJu

)

JOSEPH P. PALMISANO and ) Bk. No. 2:09-29570-GBN

AMY K. PALMISANO, )

)

Debtors. )

 )

)

JOSEPH P. PALMISANO; )

AMY K. PALMISANO, )

)

Appellants, )

)

v. ) M E M O R A N D U M1

)

THE BANK OF NEW YORK MELLON )

TRUST COMPANY, N.A., f/k/a )

THE BANK OF NEW YORK TRUST )

COMPANY, N.A., AS TRUSTEE FOR )

CHASEFLEX TRUST SERIES 2007-2,)

)

Appellee. )

______________________________)

Argued and Submitted on June 19, 2015, 

at Phoenix, Arizona

Filed - June 29, 2015

Appeal from the United States Bankruptcy Court

for the District of Arizona

Honorable George B. Nielsen, Jr., Bankruptcy Judge, Presiding

 

Appearances: Appellant Joseph P. Palmisano argued pro se; Kyle

S. Hirsch of Bryan Cave LLP argued for appellee,

The Bank of New York Mellon Trust Company, N.A.

 

Before: KIRSCHER, PAPPAS and JURY, Bankruptcy Judges.

1 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 8024-1.
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Appellants, chapter 112 debtors Joseph and Amy Palmisano

("Debtors"), appeal an order granting the motion of appellee, The

Bank of New York Mellon Trust Company, N.A., f/k/a The Bank of New

York Trust Company, N.A. as Trustee for Chaseflex Trust Series

2007-2 (the "Bank"), for relief from the automatic stay. The

bankruptcy court determined that Debtors' failure to make multiple

post-confirmation mortgage payments to the Bank constituted

"cause" to terminate the stay under § 362(d)(1).3 We DISMISS the

appeal as MOOT because Debtors' case has since been closed. 

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Debtors commenced a chapter 11 bankruptcy case on

November 17, 2009. The property at issue is Debtors' home located

on East Melody Court in Gilbert, Arizona ("Property"). Debtors

obtained a $900,000 loan from JPMorgan Chase Bank ("Chase") for

2 Unless specified otherwise, all chapter, code and rule

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

the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.

3 Debtors also attempt to appeal the bankruptcy court's order

denying reconsideration of the stay relief order. Debtors timely

appealed the stay relief order, but then filed a motion to

reconsider that order. At a hearing on September 24, 2014, the

bankruptcy court determined that it lacked jurisdiction to review

the motion to reconsider because Debtors had appealed the stay

relief order. On October 6, 2014, we granted limited remand for

the bankruptcy court to rule on the reconsideration motion. The

bankruptcy court denied that motion on November 6, 2014. Debtors

did not file an amended notice of appeal. 

Consequently, on March 18, 2015, after Debtors had filed

their opening brief, we issued an order denying the Bank's motion

to dismiss but informing the parties that only the stay relief

order was the subject of this appeal; we lacked jurisdiction to

review the order denying reconsideration due to Debtors' failure

to file an amended notice of appeal. See Rule 8002(b)(3). 

Therefore, we do not consider the documents submitted in Debtors'

excerpts of record that were presented to the bankruptcy court for

the motion to reconsider. We also do not consider any of Debtors'

arguments with respect to the bankruptcy court's denial of that

motion.

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the Property in January 2007. In exchange for the funds, Debtors

executed a promissory note and first deed of trust in favor of

Chase to secure the note. 

Chase filed a proof of claim for $995,067.90. In June 2010,

Chase recorded an Assignment of Deed of Trust, assigning its

interest in the note and deed of trust to the Bank.

The bankruptcy court confirmed Debtors' chapter 11 plan in

January 2011 ("Plan"). Under the Plan, Debtors and Chase4 agreed

to value the Property at $600,000 and agreed that Chase held a

secured claim in that amount; the remaining amount of Chase's

claim was treated as an allowed unsecured claim. The Plan

required Debtors to make monthly payments of $3,207.61 to Chase. 

The Bank moved for relief from the automatic stay on

January 2, 2013 ("Stay Relief Motion"), alleging that Debtors had

failed to make post-confirmation mortgage payments in accordance

with the Plan since September 2011. The Bank argued that Debtors'

default constituted "cause" for relief under § 362(d)(1). Debtors

opposed the Stay Relief Motion, denying the Bank's allegation of

any missed mortgage payments. A hearing on the Stay Relief Motion

was continued several times to accommodate the parties' settlement

attempts. 

After settlement negotiations failed, the bankruptcy court

held a hearing on the Stay Relief Motion on August 5, 2014. The

Bank filed a reply brief the day before, reasserting that Debtors

had failed to make monthly mortgage payments per the Plan since

4 The Plan still referred to Chase as the first-position

lender on the Property even though its interest in the note and

deed of trust had already been assigned to the Bank.

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September 2011, rendering them $96,250.00 in default. 

Debtors were represented by their proposed new counsel, Alan

Meda. Mr. Meda admitted he was "still getting up to speed" on the

Stay Relief Motion, but said he could address the issue "at the

appropriate time." After brief argument by the parties, Mr. Meda

conceded to the court that Debtors had failed to make some of the

payments in accordance with the Plan. Based on the Bank’s and

Mr. Meda’s representations, the bankruptcy court granted the Stay

Relief Motion.

Debtors, acting pro se, timely appealed the order granting

the Stay Relief Motion for “cause” entered on August 8, 2014

("Stay Relief Order").5 Per their request, Debtors' chapter 11

case was closed on January 9, 2015.

II. JURISDICTION 

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334

and 157(b)(2)(G). Our jurisdiction is based upon 28 U.S.C. § 158,

which we discuss below. 

III. ISSUES

Is the Stay Relief Order moot? If not, did the bankruptcy

court abuse its discretion in granting the Stay Relief Motion? 

IV. STANDARD OF REVIEW

We review our own jurisdiction, including questions of

mootness, de novo. Ellis v. Yu (In re Ellis), 523 B.R. 673, 677

(9th Cir. BAP 2014)(citing Silver Sage Partners, Ltd. v. City of

Desert Hot Springs (In re City of Desert Hot Springs), 339 F.3d

5 The Bank agreed to stay any foreclosure sale pending the

appeal so long as Debtors tendered monthly mortgage payments of

$2,750.00.

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782, 787 (9th Cir. 2003)). 

V. DISCUSSION

The appeal of the Stay Relief Order is moot.

We lack jurisdiction to hear moot appeals. Id. (citing

United States v. Pattullo (In re Pattullo), 271 F.3d 898, 901 (9th

Cir. 2001); GTE Cal., Inc. v. FCC, 39 F.3d 940, 945 (9th Cir.

1994)). Federal courts may only adjudicate actual cases and

controversies. Motor Vehicle Cas. Co. v. Thorpe Insulation Co.

(In re Thorpe Insulation Co.), 677 F.3d 869, 880 (9th Cir. 2012). 

A moot case is one where the issues presented are no longer live

and no case or controversy exists. In re Ellis, 523 B.R. at 677

(citing Pilate v. Burrell (In re Burrell), 415 F.3d 994, 998 (9th

Cir. 2005)). The test for mootness is whether an appellate court

can still grant the appellant effective relief if it decides the

merits in his or her favor. Id. If an issue becomes moot while

the appeal is pending, an appellate court must dismiss the appeal. 

Id. (citing In re Pattullo, 271 F.3d at 900). "We may take

judicial notice of events in the bankruptcy case occurring

subsequent to the filing of an appeal if they resolve the dispute

between the parties." Id. (citing Pitts v. Terrible Herbst, Inc.,

653 F.3d 1081, 1087 (9th Cir. 2011)("[I]f events subsequent to the

filing of the case resolve the parties' dispute, we must dismiss

the case as moot."). 

Under § 362(a), when a petition is filed an automatic stay

becomes effective which operates to enjoin, among other things:

(3) any act to obtain possession of property of the estate

or of property from the estate or to exercise control over

property of the estate; 

(4) any act to create, perfect, or enforce any lien

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against property of the estate;

(5) any act to create, perfect, or enforce against

property of the debtor any lien to the extent that such

lien secures a claim that arose before the commencement of

the case under this title[.]

§ 362(a)(3)-(5). 

However, the stay is not permanent. Section 362(c) sets

forth the time limitations governing its duration: 

(1) the stay of an act against property of the estate

under subsection (a) of this section continues until such

property is no longer property of the estate; 

(2) the stay of any other act under subsection (a) of this

section continues until the earliest of — 

(A) the time the case is closed;

(B) the time the case is dismissed; or

(C) if the case is a case under chapter 7 of this

title concerning an individual or a case under

chapter 9, 11, or 13 of this title, the time a

discharge is granted or denied.

§ 362(c)(1), (2).

The Plan provided that as of the confirmation date, all

property of the estate reverted to Debtors and would no longer be

considered property of the estate as defined in § 541. Thus, the

stay established by § 362(a)(3) and (4) was terminated upon

confirmation since the Property was no longer "property of the

estate." Guild Mortg. Co. v. Cornist (In re Cornist), 7 B.R. 118,

120 (Bankr. S.D. Cal. 1980); § 362(c)(1); see also Gasprom, Inc.

v. Fateh (In re Gasprom, Inc.), 500 B.R. 598, 604 (9th Cir. BAP

2013)(title to property reverted to debtor once trustee abandoned

it and was no longer "property of the estate," so the aspect of

the stay protecting estate property no longer applied). 

But confirmation of Debtors’ Plan did not by operation of law

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terminate the aspect of the stay arising from § 362(a)(5), which

protects "property of the debtor." In re Gasprom, Inc., 500 B.R.

at 604 (section 362(a)(5) continued to protect “property of the

debtor” from foreclosure); In re Cornist, 7 B.R. at 120

(section 362(a)(5) automatically stays a wide variety of actions

against the debtor's property, including private foreclosure

sales)(citing 2 COLLIER ON BANKRUPTCY ¶ 362.04(5) at 362-34 (15th

ed.)). However, the stay under § 362(a)(5) is also one of limited

duration and terminates automatically under § 362(c)(2) when a

discharge is granted or denied or when the case is closed or

dismissed. In re Cornist, 7 B.R. at 120; see also In re Gasprom,

Inc., 500 B.R. at 604 (absent a ruling granting relief under

§ 362(d) to permit foreclosure to occur, § 362(a)(5) continues to

protect debtor’s property from foreclosure, at least until the

bankruptcy court closes debtor's case). Therefore, no stay has

been in effect since Debtors' case was closed on January 9, 2015. 

Consequently, even if we were to reverse the Stay Relief Order

which terminated the automatic stay in the Bank's favor under

§ 362(d)(1), that stay has now terminated as a matter of law.6 As

a result, we are unable to provide any effective relief to

Debtors, and therefore the appeal is moot. 

////

6 The Bank contends, alternatively, that it was not required

to seek an order terminating the stay because the stay terminated

by operation of law when Debtors' Plan was confirmed and they

received their discharge. Although the confirmation order states

that Debtors would receive a discharge upon Plan confirmation, the

Bank is incorrect. Because Debtors are individuals, they will not

receive a discharge until all plan payments have been made,

sometime around the end of 2016. See § 1141(d)(5). The order

closing Debtors' case reaffirms that they will not receive a

discharge until all plan payments have been made.

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VI. CONCLUSION

For the foregoing reasons, we DISMISS this appeal as MOOT.

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