1 

### NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: JOSE HUMBERTO AGUILAR GALVAN , Debtor

. BAP No. C C

- 22

- 1 10 6

- L C F

Bk. No. 2 : 2 1

- bk

- 1 4 8 7 2

- BR

MEMOR AN DUM ∗ JOSE HUMBERTO AGUILAR GALVAN , Ap pell ant , v. P HH MORTG AGE CORP ORATION , Appellee

. Appeal from the United States Bankruptc y Court for the Cen tr al District of California Barry Russell , Bankruptcy Judge, Pres i d ing

Before: LAFFER T Y, CORBIT , and FARIS , Ban kruptcy Judges.

I N T R ODUCT ION Chapter 7 1 d e btor Jo se 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 pay ments had been made on the obligatio n

∗ Th is d i s p o s it i on is n ot a ppro pr i at e f or pu blic ation

. Alt h ou g h i t ma y b e cited fo r wh a t ever pe r su as i v e val ue it ma y h a ve, se e Fe d. R

. A p p

. P. 32

. 1, it has n o p recedent ial

v al ue , see 9t h C ir. BA P R u l e 8 0 24

- 1.

1 Unl es s s p ec i fi e d o t her w ise, a ll ch a p te r a n d s e cti on re f e re nces are to t h e B a nk r up tc y C ode , 1 1 U.S.C. §§ 10 1

– 1 5 3 2 , a n d “ Rule ” ref erence s are t o the Fed er a l R ules 

# FILED

JAN 30 2023
SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT2 secur ed by the subject property

. D uring that time , i nterests in th e 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 h er hu s band. Most of those cases were dismissed shortly after filing. The p roperty was also the s ubject of a n expired in rem order in one of th e bankruptcy cas es

. I n this case, Debtor obtained an interest in the property post petition
and then filed va rious mot io ns 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 modi fication

. The bankruptcy court rejected his arguments, overruled his objection , and granted in rem relief. We AFFIRM.
F AC TS This appeal involves a loan secured by real property in Los A ngeles , Califo r nia (the “Property ”) . The Property is owned , at least in part, by
De b tor ’s parents , Jose Jo el Aguilar and Guillermina Aguilar ( alt hou gh , a s discussed below , it has been subje ct to many transfers)

. The Property is encumbered by a deed of trust , or iginally in favor of IndyMac Bank, F.S.B. Through a series of assignments, PHH obtain e d a beneficia l interest in the
note and d eed of trust

. 2 Ms. Aguilar is the only borrower named in th e
p romissory n ote , b ut both Aguilars are grantors under the deed of tr ust

.

of Ban kruptcy Proc edure

. 2 According to documents in the record, t he deed of trus t was assigned to On eWest Bank in 2009, to Oc we n Loan S erv icing LLC ( “ Ocwe n ” ) in 2013, and to PHH in 2019.3 T he dee d of trust provides that t he collateral may not be transferred
without the prior written cons ent of the beneficiary. The loan has been delinquent since August 2009 and has a n out standing balance of over $900,000, which includes a n arrearage of more than $500,000

. Be tween 2009 and 2021, the Property was the subject of several
transf e rs and bankruptcy cases , as follows:

Re cording or Filing Date Action

November 13, 2009 Quitcla im deed gifting Property from Guillermina Aguilar to David Zepeda, Trust ee of th e David Rose, Chris Rose, Sam Kirby, Iv y Kirby, Jack Cadman, Lydia Cadman, Alb e rt Guston, France Guston Trust J uly 30 , 20 10 Quitclaim dee d gifting Property from David Zepeda a s Trust ee of the Rose et al. Trust to David Zepeda as Trustee of the Rober t Mann, Janis Mann, Fran Gilbert, France Guston, Evan Patch, Juan Galv on, Patty Galv o n, Kay Patch, Tom Me yer, Li n da Meyer, Tom Chase, Mit ch ell Chase, Peter Moore , Sandra Mo ore Trust M arch 7, 2011 Quitclaim deed gifting P roperty from Jo el T . Ag uilar to Joe l T

. Aguilar and Zoila A g uilar March 8, 2011 Guillermina Aguilar ’ s first bankruptcy f i ling (chapter 13) (1:11

- bk

- 12880

- MT) ; dismissed April 2 2, 2011 for failure to file documents D ecem ber 7 , 201 1 Grant deed gifting Proper ty from Guillermina Aguilar to hers elf and Isabel Raya Ramirez June 21 , 2012 Grant deed gifting Property from Gui llerm i na Aguilar to Kelvin Griffin and Guillermina Aguilar as joint ten ants January 24 , 2013 Guiller mina Agui lar ’ s second bankrupt cy filing (chapter 7) (2:13

- b k

- 11933

- ER) ; dism is sed February 13 , 2013 for failure to f ile documents February 19, 2013 Guillermina A g uil ar ’ s third bankruptcy filing (chapter 7) (2:13

- bk

- 14222

- RN) ; dismissed March 14, 20 13 for failure to fi le certificate of credit counseling March 22, 2013 Guillermina Agu ilar ’ s fourth bankruptcy filing (chapter 7) (2:13

- b k

- 17436

- S B ) ; case closed without di s charge July 17, 20134 May 22, 2013 Guillermina Aguilar ’ s fifth bankruptcy filing (chapter 13) (2:13

- b k

- 233 80

- WB) jointly filed with spouse Jose Joel Aguil ar; dismiss ed July 24, 2013 July 18, 20 13 Gui llermina Aguilar ’ s sixth bankruptcy filing (chapter 7) ( 2:1 3

- b k

- 2 8245

- BR) ; discharge entered Feb ruary 27, 2018 and case closed

. In this case, PHH ’ s predecessor obta ined an order granting in rem relief from stay , which was up held on appeal

. Ms. Aguilar filed a n a dversary proceeding against PHH ’ s pr edece s sor, which was d ismissed; dismissal was upheld on appeal. August 28, 2013 Guillermina Aguilar ’ s seventh bankrup tcy f iling (chapter 13) (2:13

- bk

- 31634

- NB) jointly filed with spouse Jos e Joel Aguilar; dismissed September 23, 2013 with 18 0

- da y bar January 7, 2019 Guill ermina Agui lar ’ s ei g hth bankruptcy filing (chapter 13) (2:19

- bk

- 10116

- NB) jo int ly fi led with spouse Jo se Jo el Aguilar; dismissed April 22, 2 019

. Dismissal was upheld on appea l.
Ms. Aguil ar filed another adversary proceeding against P HH ’ s p redecessor , which was dismissed; d ismissal was upheld on appeal. June 14, 2021 Jose Galvan ’ s bankru ptcy filing (the insta nt ca se) December 16, 2021 Grant deed from Jose and Guillermina Aguilar to Debtor

B. Bankruptcy Even ts
Debtor filed the instant chap ter 7 case in June 2 021. D e spite having

no recorded interest in the Property on t he petition date, he listed it on
S ched ule A , describing it as “ disputed titl e ” held as a “ joint t en an cy in

com mon. ” Debtor also listed the debt to PHH on Sch edule D e ven though
h e is not a borrower on the loa n

. The chapter 7 trustee filed R eport of N o D istribution , and t he case was discharged in Octo ber 2 021. In the meantime, Debtor filed a motion to5 avoid PHH ’ s lien on the Property under § 522( f ) , which the bankruptcy
court denied because a c onsensual lien is not a voidable under that section.
Debtor then f iled an objecti on t o PHH ’ s claim

. The bankrup tcy c our t overruled the objection because PHH had not filed a proof of c laim , finding
that the objection was “ an improper attempt to avoid PHH ’ s Deed of Tr ust through a contested bankruptcy matter

. ” The bankruptcy court also d enied
Debtor ’ s motion for recons ide ration. Debtor app e aled those rulings to this Panel, which recently affirmed.
In the meantime , PHH fil ed a motion for in rem relief from the
automati c stay under § 362(d)(4) , asserting that it was entitled to the request ed relief because the b ankruptcy case was filed as part of a bad faith
scheme to hind er, delay , or def raud PHH and because monthly payments

were not being ma de and there is no equity cushion

. The accompanying
declaration sta ted that PHH ha d physical posses sion of the promissory

note and atta ched cop ies of the prom issory note , deed of trust , and recorded assignm ents.
Debtor filed a n opposition in which he asserted that there was no
debt owed to PHH , not i ng that PHH had not filed a proof of claim , and allegi ng th at th e original debt had been pa id off by private mortgage
insurance. He also alleged that PHH ’ s predecessor lacked author i t y to
transfe r the l oan to PHH

. At the same time, he claimed that a loan modification was currently under review with PHH.6 Aft er a hearing, the bankruptcy court granted PHH ’ s motio n. The court rejecte d Deb tor ’ s request for a continuance to permit the lo a n modification process to go forward, noting that because Debtor was not the borrower on the loan, there c ould be no mo difi catio n as to him. The bankrupt c y cour t concluded: “ This is probably one of the worst bad faith
cases I have seen in a v ery long time

. T he . . . mu ltiple appeals and . . . filings . . . in my court[] were all fr ivolous, that is, motions f iled by you,
Mr. Galvan.

. . . “ Debtor timely appealed. J U RIS D ICTI ON
The ba nkru p tcy co urt h a d ju r is dict i o n un de r 28 U.S.C. § § 13 3 4 and
15 7 (b )( 2 ) ( G )

. W e h a ve ju r is d i c tion u nder 28 U .S .C

. § 15 8

. I S SUE
D id the bankruptc y court abuse its discretion in granting PHH ’ s motion for in r em re lief from stay ?
S T A N DARD OF R EVIE W
We review the ban k ruptcy co urt ’ s gran t of a motion for relief from stay for abu se o f discretion

. First Yorkshire Holdings, Inc. v. Pacific a L 22, LLC (I n re First Yorkshire Holdings, Inc. ) , 470 B.R. 864 , 868 (9th Ci r. BA P 201 2 )

. A bankruptcy court abuses its discretion if it appl i es an i n corr ect legal standard or its factual findings are i llogical, implausible, or w ithout support in the record. TrafficSchool.com , Inc. v. Edriver Inc. , 653 F.3d 82 0 , 832 ( 9th Cir. 2011 ).7 D I SC U SS I O N Section 362(d)(4) provides: On request of a party in i n terest a nd a fter 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 condit ionin g s uch stay

—

. . . (4) with respect to a stay of an act against r e al prop e rty under subsection (a), by a c reditor whose claim is secured by an interest in such real property, if the court finds that the filing of the petition wa s part of a scheme to delay , h inder, or defraud creditors that involved either

-- (A) transfer of all o r pa rt ownership of, or other in terest in, such real property without the consent of the secured creditor or court approval; or (B) multiple bankruptcy fi lings affecting such r eal p rop erty. The statute also provides that if an order granting reli e f under this section is recorded in compliance with state law, it shall be binding in any

su bsequent bankruptcy case for two years.
To obtain relief under this statute, the credit o r m ust establish three
elements : First, debtor ’ s bankruptcy filing must have be e n pa rt 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 r eal property8 without the secured creditor ’ s consent or court appro v al, or ( b) m ultiple bankruptcy filings affecting the property. In re First Yorkshire Holdings, Inc. , 470 B.R. at 870

. In this case, t he bankrupt cy court ’ s order granting in re m relief f rom stay contains the requisite find ings , an d tho se find ings are supported by
the record. As can be seen by the cha r t, the A guil ars attempted numerous
times to transfer int erests in the Property to other parties without the
consent of the secured creditor and , along with Debtor, filed nine bankruptc y cas es 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 b y pri vate mortgage insurance and that the assignment of the
deeds of trust f r om O cwen to PHH was not v alid. He again points out that
PHH d id not file a proof of claim in his bankruptcy case. Neve rtheless, h e argues that PHH misrepresented the accuracy of its ac counting in violation
of Rule 3001(f). T o the extent tho se argu ments n e e d to be ad dressed, Debtor provided no admissible evidence that the loan had been paid off

. Further , the attachmen ts to PHH ’ s motion established that PHH had a
colorable claim to the Pr operty, w hich is all that is require d to establish that
it is a party i n interest entitled to obtain relie f from the automatic stay. See
Veal v. Am. Home Mortg. Servicing, Inc. (In re Veal ) , 450 B.R. 8 97 , 91 7

- 18 ( 9 th Cir BAP 2011). Fi nally , the fact tha t P HH did not file a proof of claim in9 Debtor ’ s bankruptcy case ha d no impact o n wh ether i t was entitled to in
rem relief from the automatic stay

. C O N C L US ION
The bankruptcy court did not abuse its discret ion in granting in rem stay relief. W e th ere fo re AF FIRM

.