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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 8013-1.

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-12-1395-DKiTa

)

ALEN L. LY, ) Bk. No. LA 12-25257-TD

)

Debtor. )

______________________________)

)

ALEN L. Ly, )

)

Appellant, )

)

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

)

MICHELLE V. CHE, )

)

Appellee. )

______________________________)

Argued and Submitted on May 15, 2013

at Pasadena, California

Filed - May 29, 2013

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Thomas B. Donovan, Bankruptcy Judge, Presiding 

Appearances: Edgardo M. Lopez, Esq. argued for Appellant 

Alen L. Ly; Caroline S. Kim, Esq. argued

for Appellee Michelle V. Che. 

Before: DUNN, KIRSCHER, and TAYLOR, Bankruptcy Judges.

FILED

MAY 29 2013

SUSAN M SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
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2 Unless otherwise indicated, 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. The Federal Rules of Civil Procedure

are referred to as “Civil Rules.”

3

 The original excerpts of record submitted by Ly did not

include any of the exhibits filed by Che to her Declarations

filed in support of her motion for relief from stay. After Che

filed a Motion to Augment Record with this Panel and the

subsequent order of the motions panel requiring Ly to supplement

(continued...)

-2-

The appellant, Alen L. Ly (“Ly”), appeals the decision of

the bankruptcy court granting relief from stay for cause to the

appellee, Michelle V. Che (“Che”), to pursue her California state

law unlawful detainer action against Ly for all purposes. 

Subsequent to this appeal being filed, Che filed a motion with

this Panel for sanctions (“Sanctions Motion”) against Ly and his

counsel for pursuing a frivolous appeal. We AFFIRM the

bankruptcy court’s relief from stay order, and we GRANT the

Sanctions Motion and award sanctions in the amount of Che’s

attorney’s fees, totaling $6,650, and costs in the amount of

$114, for a total award of $6,764, jointly and severally against

Ly and his attorney.

I. FACTS

Although the parties dispute one another’s accounts of

prebankruptcy events, what occurred in Ly’s chapter 72 case is

essentially undisputed.

In Appellant’s Opening Brief, Ly states that he filed his

bankruptcy petition on May 14, 2012. The record reflects that

Ly’s bankruptcy petition actually was filed on April 30, 2012.3
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3

(...continued)

the record, Ly filed supplemental excerpts of record, including

the critical exhibits for our review.

-3-

On June 20, 2012, Che filed a motion for relief from stay

(“Stay Motion”) with respect to certain residential property in

Long Beach, California (“Property”). In his Schedule A, Ly

declared that he owned the Property. In the Stay Motion, Che

stated that she was a “Holder of Deed of Trust.” In her Real

Property Declaration, however, Che stated that she was “the

Movant and owner of the Property.” In her further Declaration

(“Further Declaration”) in support of the Stay Motion, Che stated

that she had leased the Property to Ly’s sister, Vanessa A. Ly

(“Vanessa”), on or about March 1, 2006. Che further stated that

she did not find out that Ly was residing at the Property until

October 2008. Che also stated that after making one rent

payment, neither Vanessa nor Ly paid any further rent.

In the Further Declaration, Che stated that Ly “forged my

signature and transferred the [Property] to himself.” Che stated

that she sued Ly in 2009 for the alleged fraudulent transfer of

the Property (“State Court Lawsuit”) and obtained a judgment

(“Judgment”). A certified copy of the Judgment was attached as

Exhibit A to the Further Declaration. The Judgment, that was

entered on Ly’s default, included a specific description of the

Property and ordered that it be transferred from Ly to Che. The

Judgment included the following additional provisions:

2) The previously recorded Grant Deed, Los Angeles

County recorder number 061576358 recorded on July 18,

2006 is hereby declared void based upon the forged

signature of Michelle Che.

3) The clerk of this court is empowered and ordered to
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sign a quit claim deed and all of the related papers on

behalf of Alen Lang Ly and to Plaintiff Michelle Che.

4) Defendant Alen Lang Ly is hereby prohibited from

approaching less than 100 yards from said [Property].

Ly, through his counsel, Edgardo M. Lopez (“Lopez”), opposed

the Stay Motion (“Opposition”). In his Declaration in support of

the Opposition (“Opposition Declaration”), Ly stated that he

purchased the Property from Che in July 2006 for $525,000. He

further stated that he had been living on the Property as his

primary residence since July 2006 and had paid monthly mortgage

payments and annual property taxes.

Ly admitted in the Opposition Declaration that he had

received service of the summons and Che’s complaint in the State

Court Lawsuit. He further declared that he had retained counsel

to represent him in the State Court Lawsuit who assured him that

“he will take care of everything.” Thereafter, he stated that he

was “completely shocked” when he received a five-day notice to

vacate the Property from Che’s attorney and blamed attorney

neglect for the entry of the Judgment against him. In the

Memorandum of Points and Authorities filed in support of the

Opposition, Lopez argued that stay relief should be denied

because Che was not a real party in interest and therefore lacked

standing to seek stay relief, and Che was not a secured creditor

entitled to invoke § 362(d)(1) to argue a lack of adequate

protection of her interest in the Property. 

Che filed a Reply (“Reply”) to the Opposition. In her

Memorandum of Points and Authorities filed in support of the

Reply, Che argued that she never sold the Property to Ly, and

Che’s standing arose from the fact that Che was the “legal owner
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-5-

of the Property.” Among other things, Che argued that “cause” to

grant the Stay Motion existed to allow Che to undo Ly’s

“fraudulent transaction.”

The bankruptcy court heard argument (“Hearing”) on the Stay

Motion on July 12, 2012. At the outset of the Hearing, the

bankruptcy court stated its tentative conclusions that Che had

produced evidence, including the Judgment, that she owned the

Property and was entitled to relief to pursue her unlawful

detainer action in state court. Lopez essentially argued that

the fact that the Judgment was obtained by default cut against

Che’s position that she retained an ownership interest in the

Property. Reminding Lopez that, “A judgment is a judgment,” the

bankruptcy court overruled Ly’s argument and advised the parties

that he would grant the Stay Motion but would not waive the

fourteen-day stay of the effectiveness of his order under

Rule 4001(a)(3).

On July 26, 2012, the bankruptcy court entered an order

(“Order”) granting the Stay Motion for cause under § 362(d)(1) to

allow Che to “pursue her state court unlawful detainer suit

against [Ly] for all purposes.” In effect, the bankruptcy court

granted relief from stay to allow the parties to resolve their

competing claims to the Property in state court. Ly filed a

timely notice of appeal on August 7, 2012.

Che filed the Sanctions Motion with this Panel, requesting

an award of sanctions against both Ly and his counsel, Lopez, for

filing a frivolous, meritless appeal, on November 16, 2012. Ly

has not responded to the Sanctions Motion.

///
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4 In Appellant’s Statement of Issues on Appeal, Ly also

asserts as an issue whether the bankruptcy court erred in

granting the Stay Motion under § 362. However, in Appellant’s

Opening Brief, Ly only argues that Che lacked standing to seek

stay relief. Accordingly, any argument that the Stay Motion was

improperly granted, beyond the question of Che’s standing, is

waived. City of Emeryville v. Robinson, 621 F.3d 1251, 1261 (9th

Cir. 2010) (Appellate courts in this circuit “will not review

issues which are not argued specifically and distinctly in a

party’s opening brief.”).

-6-

II. JURISDICTION

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

§§ 1334 and 157(b)(2)(A) and (G). We have jurisdiction under

28 U.S.C. § 158.

III. ISSUES

1. Did the bankruptcy court err in determining that Che had

standing to pursue the Stay Motion?4

2. Should sanctions be awarded against Ly and Lopez under

Rule 8020 for filing and pursuing a frivolous appeal? 

IV. STANDARD OF REVIEW

Standing is an issue that we review de novo. Loyd v. Paine

Webber, Inc., 208 F.3d 755, 758 (9th Cir. 2000); Kronemyer v. Am.

Contractors Indem. Co. (In re Kronemyer), 405 B.R. 915, 919 (9th

Cir. BAP 2009). De novo review requires that we consider a

matter anew, as if it had not been heard before, and as if no

decision had been rendered previously. United States v.

Silverman, 861 F.2d 571, 576 (9th Cir. 1988); B-Real, LLC v.

Chaussee (In re Chaussee), 399 B.R. 225, 229 (9th Cir. BAP 2008).

///

///
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5 Constitutional standing relates to whether a party’s stake

in a matter is adequate to create a “case or controversy” to

which the federal judicial authority under Article III of the

Constitution may apply. Warth v. Seldin, 422 U.S. at 498-99;

Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-60 (1992). In

her Further Declaration, Che declared that she had been paid no

rent for the Property, occupied by Ly, since March 2006 and that

Ly had forged her signature to engineer a fraudulent transfer of

the Property to himself. That evidence is adequate to establish

Che’s constitutional standing to file and prosecute the Stay

Motion.

-7-

V. DISCUSSION

1. Che had standing to seek stay relief.

Ly argues one issue on appeal: whether Che had standing to

seek relief from the automatic stay in Ly’s bankruptcy case.

Whether a party has standing to pursue a claim is a

“threshold question in every federal case, determining the power

of the court to entertain the suit.” Warth v. Seldin, 422 U.S.

490, 498 (1975); Edwards v. Wells Fargo Bank, N.A.

(In re Edwards), 454 B.R. 100, 104 (9th Cir. BAP 2011). 

“Standing” has both constitutional and prudential aspects, but Ly

only challenges Che’s standing as a prudential matter.5

Ly argues that Che has no prudential standing because she is

not a real party in interest. Appellant’s Opening Brief at 6-10. 

In stay relief proceedings, the moving party bears the burden of

proof to establish that it has standing to prosecute the motion. 

See In re Wilhelm, 407 B.R. 392, 399-400 (Bankr. D. Id. 2009),

citing Lujan v. Defenders of Wildlife, 504 U.S. at 561. Under

§ 362(d), a “party in interest” may request relief from the

automatic stay. Because “party in interest” is not defined in

the Bankruptcy Code, whether a party moving for relief from stay
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-8-

has the status of a party in interest under § 362(d) is a factbased inquiry, determined on a case-by-case basis, considering

the claimed interest of the moving party and the impact of the

stay on that interest. In re Kronemyer, 405 B.R. at 919. A

party in interest can include any party that has a pecuniary

interest in the matter, a practical stake in its resolution or

whose interest is impacted by the stay. Brown v. Sobczak

(In re Sobczak), 369 B.R. 512, 517-18 (9th Cir. BAP 2007). 

Motions for relief from stay are contested matters. See

Rules 4001(a) and 9014(a). Rule 9014(c) provides that Rule 7017

applies in contested matters. Rule 7017 incorporates Civil

Rule 17(a), which provides that “[a]n action must be prosecuted

in the name of the real party in interest. . . .” Considering

the application of these rules, as a threshold matter, relief

from stay proceedings are very limited in scope.

Given the limited grounds for obtaining . . . relief

from stay, read in conjunction with the expedited

schedule for a hearing on the motion, most courts hold

that motion for relief from stay hearings should not

involve an adjudication on the merits of claims,

defenses, or counterclaims, but simply determine

whether the creditor has a colorable claim to the

property of the estate.

Biggs v. Stovin (In re Luz Int’l), 219 B.R. 837, 842 (9th Cir.

BAP 1998) (emphasis added). See, e.g., Johnson v. Righetti

(In re Johnson), 756 F.2d 738, 740-41 (9th Cir. 1985).

Cornell University Law School’s Legal Information Institute

defines a “colorable claim” as:

A plausible legal claim. In other words, a claim

strong enough to have a reasonable chance of being

valid if the legal basis is generally correct and the

facts can be proven in court. The claim need not

actually result in a win.
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http://topics.law.cornell.edu/wex/colorable_claim.

As noted above, in her Real Property Declaration filed in

support of the Stay Motion, Che stated that she was the “Movant

and owner of the Property.” Attached as Exhibit A to her Further

Declaration was a certified copy of the Judgment voiding Ly’s

deed to the Property as obtained through forgery and ordering

that the Property be transferred from Ly to Che. That the

Judgment was obtained by default does not negate its impact as

providing clear evidence that Che had at least a “colorable

claim” to ownership of the Property. In fact, there is no

evidence in the record before us that Ly ever moved to set aside

the default or appealed the Judgment. At oral argument, Lopez

confirmed that the Judgment had become final. A party moving for

stay relief has a colorable claim sufficient to establish

standing to prosecute the motion if it has an ownership interest

in the subject property. In re Edwards, 454 B.R. at 105; Veal v.

Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 913

(9th Cir. BAP 2011).

Ly lays down a red herring when he argues, “It is clear from

[Che’s] relief from stay motion that she is seeking to enforce

the right of a holder of a deed of trust on the subject property

. . . ; [Che] claims as a holder of the deed of trust and to have

an interest on the [Property] given as collateral.” Appellant’s

opening Brief at 8-9. The bankruptcy court did not take that

bait, and neither do we.

It is true that when the Stay Motion was filed, Che’s

counsel checked the box on the motion form stating that “Movant
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6 The other two choices on the motion form that were not

checked were: “Assignee of Holder of Deed of Trust,” and

“Servicing Agent for Holder of Deed of Trust or Assignee of

Holder of Deed of Trust.”

-10-

is the (check one) Holder of Deed of Trust.”6 However, again as

noted above, Che’s declarations filed in support of the Stay

Motion asserted and provided evidence to support her claim that

she owned the Property. The Judgment provided admissible

evidence, independent of Che’s own self-serving statements, of

her ownership interest in the Property.

Based on the evidence before the bankruptcy court, focusing

on the Judgment, the bankruptcy court did not err in finding that

Che had standing to file and prosecute the Stay Motion as a real

party in interest. As the bankruptcy court aptly noted, “A

judgment is a judgment.” Ly’s appeal of the Order, based solely

on his argument that Che lacked prudential standing to pursue

stay relief, is patently meritless.

2. Che’s motion to sanction Ly and his counsel for pursuing a

frivolous appeal should be granted.

In the Sanctions Motion, Che requested sanctions against Ly

and his counsel for filing a meritless and frivolous appeal

pursuant to Federal Rule of Appellate Procedure (“FRAP”) 38. The

relevant Rule before this Panel is Rule 8020. Rule 8020, which

conforms to the language of FRAP 38, provides in relevant part

that:

If a . . . bankruptcy appellate panel determines that

an appeal from an order . . . of a bankruptcy judge is

frivolous, it may, after a separately filed

motion . . . and reasonable opportunity to respond,

award just damages and single or double costs to the

appellee.
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-11-

As previously noted, Che filed the Sanctions Motion on

November 16, 2012. Ly has not filed any response to the

Sanctions Motion. However, in response to the Clerk’s Notice of

Possible Mootness of this appeal, Ly responded that the appeal

was not moot because the Property now was subject to a pending

adversary proceeding in Ly’s bankruptcy, and “the state court

action affecting the subject [Property] has been held in

abeyance.” Compliance Statement Re: Notice of Possible Mootness,

filed with this Panel on February 11, 2013.

Rule 8020 requires that all filed papers, including appeal

briefs, be signed, “thereby certifying that the signer has done

appropriate legal and factual research and believes that the

submission of the paper has merit.” 10 Collier on Bankruptcy

¶ 8020.02 (Alan N. Resnick and Henry J. Sommer eds., 16th ed.

2013). The Panel may impose sanctions to penalize an appellant

and/or counsel who pursue a frivolous appeal and to compensate

the appellee for the delay and expense of defending the appeal. 

Id. ¶ 8020.03. Cf. Burlington N. R. Co. v. Woods, 480 U.S. 1, 7

(1987).

“An appeal is frivolous if the result is obvious or the

arguments of error are wholly without merit.” Coghlan v.

Starkey, 852 F.2d 806, 811 (5th Cir. 1988). See Henry v. Farmer

City State Bank, 808 F.2d 1228, 1241 (7th Cir. 1986); Cannon v.

The Hawaii Corp. (In re The Hawaii Corp.), 796 F.2d 1139, 1144

(9th Cir. 1986). Unfortunately, this appeal meets that standard

on both counts.

Lopez should have known from our published opinions in

In re Veal and In re Edwards that Panel precedent quite clearly
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recognizes that a party moving for relief from stay who has a

colorable claim to ownership of the subject property has

prudential standing. We assume that he read the Panel’s opinion

in In re Veal because he cited it to us in Appellant’s Opening

Brief specifically for its “exhaustive” discussion of standing

and real party in interest issues. See Appellant’s Opening Brief

at 8.

Particularly troubling to us is the fact that when Lopez

submitted Ly’s original excerpts of record, he omitted to include

the exhibits to Che’s Declarations filed in support of the Stay

Motion, including the certified copy of the Judgment, even though

he did include the exhibits to Ly’s Declaration filed in

opposition to the Stay Motion. Lopez had to be aware that the

Judgment was a critical part of the evidentiary record before the

bankruptcy court supporting its finding that Che had standing to

seek stay relief, because the bankruptcy court specifically

discussed the importance of the Judgment to its decision at the

Hearing in its direct responses to Lopez’s arguments. Lopez

supplemented the excerpts of record to include the Judgment

exhibit only after Che’s counsel filed her motions requesting

judicial notice and to supplement the record and the Sanctions

Motion, and the motions panel ordered Ly to supplement the record

with a complete copy, “including exhibits,” of the Stay Motion.

As we previously have determined, Ly’s appeal on the issue

of Che’s standing lacks merit, and that lack of merit is obvious

from review of the Judgment alone. We conclude that Ly’s appeal

is both meritless and frivolous, justifying the imposition of

sanctions.
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“If we determine that an appeal is frivolous, then damages

and single or double costs may be awarded to the appellee.” 

Burkhart v. Fed. Deposit Ins. Corp. (In re Burkhart), 84 B.R.

658, 661 (9th Cir. BAP 1988). In conjunction with the Sanctions

Motion, Kim filed her Declaration itemizing her attorney’s fees

in this appeal totaling $6,650 and costs totaling $114 “for

attorney service” to file Appellee’s Brief and the Sanctions

Motion. We find the attorney’s fees and costs requested to be

reasonable. In the circumstances of this appeal, we conclude

that the Sanctions Motion should be granted, and we award Che

attorney’s fees of $6,650 and costs in the amount of $114, for

total sanctions of $6,764, jointly and severally against Ly and

Lopez.

VI. CONCLUSION

Based on the foregoing analysis, findings and conclusions,

we AFFIRM the Order granting relief from stay to Che and GRANT

the Sanctions Motion, awarding sanctions for pursuing a frivolous

appeal totaling $6,764 jointly and severally against Ly and his

counsel, Lopez.