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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re:

JOSE HUMBERTO AGUILAR GALVAN,

Debtor.

BAP No. CC-22-1106-LCF

Bk. No. 2:21-bk-14872-BR

MEMORANDUM∗

JOSE HUMBERTO AGUILAR GALVAN,

Appellant,

v.

PHH MORTGAGE CORPORATION,

Appellee.

Appeal from the United States Bankruptcy Court

for the Central District of California

Barry Russell, Bankruptcy Judge, Presiding

Before: LAFFERTY, CORBIT, and FARIS, Bankruptcy Judges.

INTRODUCTION

Chapter 71 debtor Jose Galvan (“Debtor”) appeals the bankruptcy

court’s order granting in rem relief from stay under § 362(d)(4) to appellee 

PHH Mortgage Corporation (“PHH”). Over the dozen or more years before 

the order was entered, no payments had been made on the obligation 

∗ 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.

1 Unless specified otherwise, all chapter and section references are to the 

Bankruptcy Code, 11 U.S.C. §§ 101–1532, and “Rule” references are to the Federal Rules 

FILED

JAN 30 2023

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
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secured by the subject property. During that time, interests in the property 

were transferred numerous times, and Debtor’s mother, who is on title to 

the property, filed numerous bankruptcy cases, sometimes on her own and 

other times jointly with her husband. Most of those cases were dismissed

shortly after filing. The property was also the subject of an expired in rem 

order in one of the bankruptcy cases. 

In this case, Debtor obtained an interest in the property postpetition

and then filed various motions arguing that there was no debt owing to 

PHH. He also objected to in rem relief from stay, arguing that there was a 

pending loan modification. The bankruptcy court rejected his arguments, 

overruled his objection, and granted in rem relief. We AFFIRM.

FACTS

This appeal involves a loan secured by real property in Los Angeles, 

California (the “Property”). The Property is owned, at least in part, by 

Debtor’s parents, Jose Joel Aguilar and Guillermina Aguilar (although, as 

discussed below, it has been subject to many transfers). The Property is

encumbered by a deed of trust, originally in favor of IndyMac Bank, F.S.B. 

Through a series of assignments, PHH obtained a beneficial interest in the 

note and deed of trust.

2 Ms. Aguilar is the only borrower named in the 

promissory note, but both Aguilars are grantors under the deed of trust.

of Bankruptcy Procedure.

2 According to documents in the record, the deed of trust was assigned to 

OneWest Bank in 2009, to Ocwen Loan Servicing LLC (“Ocwen”) in 2013, and to PHH 

in 2019.
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The deed of trust provides that the collateral may not be transferred 

without the prior written consent of the beneficiary. The loan has been 

delinquent since August 2009 and has an outstanding balance of over 

$900,000, which includes an arrearage of more than $500,000.

Between 2009 and 2021, the Property was the subject of several 

transfers and bankruptcy cases, as follows:

Recording or Filing 

Date

Action

November 13, 2009 Quitclaim deed gifting Property from Guillermina Aguilar to 

David Zepeda, Trustee of the David Rose, Chris Rose, Sam 

Kirby, Ivy Kirby, Jack Cadman, Lydia Cadman, Albert Guston,

France Guston Trust

July 30, 2010 Quitclaim deed gifting Property from David Zepeda as Trustee

of the Rose et al. Trust to David Zepeda as Trustee of the Robert 

Mann, Janis Mann, Fran Gilbert, France Guston, Evan Patch, 

Juan Galvon, Patty Galvon, Kay Patch, Tom Meyer, Linda 

Meyer, Tom Chase, Mitchell Chase, Peter Moore, Sandra Moore 

Trust

March 7, 2011 Quitclaim deed gifting Property from Joel T. Aguilar to Joel T. 

Aguilar and Zoila Aguilar

March 8, 2011 Guillermina Aguilar’s first bankruptcy filing (chapter 13) (1:11-

bk-12880-MT); dismissed April 22, 2011 for failure to file 

documents

December 7, 2011 Grant deed gifting Property from Guillermina Aguilar to herself 

and Isabel Raya Ramirez

June 21, 2012 Grant deed gifting Property from Guillermina Aguilar to Kelvin 

Griffin and Guillermina Aguilar as joint tenants

January 24, 2013 Guillermina Aguilar’s second bankruptcy filing (chapter 7) (2:13-

bk-11933-ER); dismissed February 13, 2013 for failure to file 

documents

February 19, 2013 Guillermina Aguilar’s third bankruptcy filing (chapter 7) (2:13-

bk-14222-RN); dismissed March 14, 2013 for failure to file 

certificate of credit counseling

March 22, 2013 Guillermina Aguilar’s fourth bankruptcy filing (chapter 7) (2:13-

bk-17436-SB); case closed without discharge July 17, 2013
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May 22, 2013 Guillermina Aguilar’s fifth bankruptcy filing (chapter 13) (2:13-

bk-23380-WB) jointly filed with spouse Jose Joel Aguilar; 

dismissed July 24, 2013

July 18, 2013 Guillermina Aguilar’s sixth bankruptcy filing (chapter 7) (2:13-

bk-28245-BR); discharge entered February 27, 2018 and case 

closed. In this case, PHH’s predecessor obtained an order 

granting in rem relief from stay, which was upheld on appeal.

Ms. Aguilar filed an adversary proceeding against PHH’s 

predecessor, which was dismissed; dismissal was upheld on 

appeal.

August 28, 2013 Guillermina Aguilar’s seventh bankruptcy filing (chapter 13)

(2:13-bk-31634-NB) jointly filed with spouse Jose Joel Aguilar; 

dismissed September 23, 2013 with 180-day bar

January 7, 2019 Guillermina Aguilar’s eighth bankruptcy filing (chapter 13) 

(2:19-bk-10116-NB) jointly filed with spouse Jose Joel Aguilar; 

dismissed April 22, 2019. Dismissal was upheld on appeal.

Ms. Aguilar filed another adversary proceeding against PHH’s 

predecessor, which was dismissed; dismissal was upheld on 

appeal.

June 14, 2021 Jose Galvan’s bankruptcy filing (the instant case)

December 16, 2021 Grant deed from Jose and Guillermina Aguilar to Debtor

B. Bankruptcy Events

Debtor filed the instant chapter 7 case in June 2021. Despite having 

no recorded interest in the Property on the petition date, he listed it on

Schedule A, describing it as “disputed title” held as a “joint tenancy in 

common.” Debtor also listed the debt to PHH on Schedule D even though 

he is not a borrower on the loan.

The chapter 7 trustee filed Report of No Distribution, and the case 

was discharged in October 2021. In the meantime, Debtor filed a motion to 
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avoid PHH’s lien on the Property under § 522(f), which the bankruptcy 

court denied because a consensual lien is not avoidable under that section.

Debtor then filed an objection to PHH’s claim. The bankruptcy court 

overruled the objection because PHH had not filed a proof of claim, finding 

that the objection was “an improper attempt to avoid PHH’s Deed of Trust 

through a contested bankruptcy matter.” The bankruptcy court also denied 

Debtor’s motion for reconsideration. Debtor appealed those rulings to this 

Panel, which recently affirmed.

In the meantime, PHH filed a motion for in rem relief from the 

automatic stay under § 362(d)(4), asserting that it was entitled to the 

requested relief because the bankruptcy case was filed as part of a bad faith 

scheme to hinder, delay, or defraud PHH and because monthly payments 

were not being made and there is no equity cushion. The accompanying 

declaration stated that PHH had physical possession of the promissory 

note and attached copies of the promissory note, deed of trust, and 

recorded assignments.

Debtor filed an opposition in which he asserted that there was no 

debt owed to PHH, noting that PHH had not filed a proof of claim, and 

alleging that the original debt had been paid off by private mortgage 

insurance. He also alleged that PHH’s predecessor lacked authority to

transfer the loan to PHH. At the same time, he claimed that a loan 

modification was currently under review with PHH.
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After a hearing, the bankruptcy court granted PHH’s motion. The 

court rejected Debtor’s request for a continuance to permit the loan 

modification process to go forward, noting that because Debtor was not the 

borrower on the loan, there could be no modification as to him. The 

bankruptcy court concluded: “This is probably one of the worst bad faith 

cases I have seen in a very long time. The . . . multiple appeals and . . . 

filings . . . in my court[] were all frivolous, that is, motions filed by you, 

Mr. Galvan. . . . “ Debtor timely appealed.

JURISDICTION

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

157(b)(2)(G). We have jurisdiction under 28 U.S.C. § 158.

ISSUE

Did the bankruptcy court abuse its discretion in granting PHH’s 

motion for in rem relief from stay?

STANDARD OF REVIEW

We review the bankruptcy court’s grant of a motion for relief from 

stay for abuse of discretion. First Yorkshire Holdings, Inc. v. Pacifica L 22, LLC

(In re First Yorkshire Holdings, Inc.), 470 B.R. 864, 868 (9th Cir. BAP 2012). A 

bankruptcy court abuses its discretion if it applies an incorrect legal 

standard or its factual findings are illogical, implausible, or without 

support in the record. TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832 

(9th Cir. 2011).
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DISCUSSION

Section 362(d)(4) provides: 

On request of a party in interest and after notice and a 

hearing, the court shall grant relief from the stay provided 

under subsection (a) of this section, such as by terminating, 

annulling, modifying, or conditioning such stay—

. . . 

(4) with respect to a stay of an act against real 

property under subsection (a), by a creditor whose 

claim is secured by an interest in such real property, 

if the court finds that the filing of the petition was 

part of a scheme to delay, hinder, or defraud 

creditors that involved either--

(A) transfer of all or part ownership of, 

or other interest in, such real property 

without the consent of the secured 

creditor or court approval; or

(B) multiple bankruptcy filings affecting 

such real property.

The statute also provides that if an order granting relief under this

section is recorded in compliance with state law, it shall be binding in any 

subsequent bankruptcy case for two years.

To obtain relief under this statute, the creditor must establish three 

elements:

First, debtor’s bankruptcy filing must have been part of a 

scheme. Second, the object of the scheme must be to delay, 

hinder, or defraud creditors. Third, the scheme must involve 

either (a) the transfer of some interest in the real property 
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without the secured creditor’s consent or court approval, or 

(b) multiple bankruptcy filings affecting the property.

In re First Yorkshire Holdings, Inc., 470 B.R. at 870.

In this case, the bankruptcy court’s order granting in rem relief from 

stay contains the requisite findings, and those findings are supported by 

the record. As can be seen by the chart, the Aguilars attempted numerous 

times to transfer interests in the Property to other parties without the 

consent of the secured creditor and, along with Debtor, filed nine 

bankruptcy cases to avoid foreclosure, all the while failing to make 

payments on the loan secured by the Property.

Debtor’s arguments on appeal do not directly address whether in 

rem relief was appropriate. Instead, he continues to assert that the loan was 

paid off by private mortgage insurance and that the assignment of the 

deeds of trust from Ocwen to PHH was not valid. He again points out that 

PHH did not file a proof of claim in his bankruptcy case. Nevertheless, he 

argues that PHH misrepresented the accuracy of its accounting in violation 

of Rule 3001(f). To the extent those arguments need to be addressed, 

Debtor provided no admissible evidence that the loan had been paid off. 

Further, the attachments to PHH’s motion established that PHH had a 

colorable claim to the Property, which is all that is required to establish that 

it is a party in interest entitled to obtain relief from the automatic stay. See 

Veal v. Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 917-18 (9th 

Cir BAP 2011). Finally, the fact that PHH did not file a proof of claim in 
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Debtor’s bankruptcy case had no impact on whether it was entitled to in 

rem relief from the automatic stay.

CONCLUSION

The bankruptcy court did not abuse its discretion in granting in rem 

stay relief. We therefore AFFIRM.