Case Name: In re BFP, a Partnership, Debtor. BFP, a Partnership, Appellant/Plaintiff, v. IMPERIAL SAVINGS & LOAN ASSOCIATION, a California corporation, Appellee/Defendant
Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1991-11-05
Citations: 132 B.R. 748
Docket Number: BAP No. CC-90-1712-JVP; Bankruptcy No. SA-89-06771-JR; Adv. No. SA-89-0977-JR
Parties: In re BFP, a Partnership, Debtor. BFP, a Partnership, Appellant/Plaintiff, v. IMPERIAL SAVINGS & LOAN ASSOCIATION, a California corporation, Appellee/Defendant.
Judges: Before JONES, VOLINN and PERRIS, Bankruptcy Judges.
Reporter: West's Bankruptcy Reporter
Volume: 132
Pages: 748–752

Head Matter:
In re BFP, a Partnership, Debtor. BFP, a Partnership, Appellant/Plaintiff, v. IMPERIAL SAVINGS & LOAN ASSOCIATION, a California corporation, Appellee/Defendant.
BAP No. CC-90-1712-JVP.
Bankruptcy No. SA-89-06771-JR.
Adv. No. SA-89-0977-JR.
United States Bankruptcy Appellate Panel, for the Ninth Circuit.
Argued and Submitted March 20, 1991.
Decided Nov. 5, 1991.
Roy Woolsey, Newport Beach, Cal., for appellant/plaintiff.
Edward G. Schloss, Los Angeles, Cal., for appellee/defendant.
Before JONES, VOLINN and PERRIS, Bankruptcy Judges.

Opinion:
OPINION
JONES, Bankruptcy Judge:
Appellee/Defendant Imperial Savings & Loan Association ("Imperial") sold real property at a foreclosure sale. Thereafter Appellant/Plaintiff BFP filed its Chapter 11 petition and brought an adversary suit to avoid the sale as a § 548(a)(2) transfer for less than reasonably equivalent value. Imperial moved for and was granted summary judgment. BFP appealed. We AFFIRM.
BACKGROUND
In 1987 several parties got together to buy the home of Sheldon and Ann Foreman in Newport Beach, California, planning to remodel and sell it. Wayne Pedersen was to be the purchaser, but after the property entered escrow the agreement was orally changed. Instead of Wayne Pedersen being the sole buyer, a partnership, BFP, was formed. On August 27, 1987, the Fore-mans deeded the property to Wayne and Marlene Pedersen, who on the same day deeded the property to BFP. Wayne Ped-ersen borrowed $356,250 from Imperial and BFP borrowed $200,000 from the Foremans to make the purchase — both loans were secured by deeds of trust.
Despite the fact that the Pedersens had conveyed the property to BFP, they subsequently conveyed the property to another entity, Off-Road Vehicles — Recreation & Family Campground, Inc. ("Off-Road"). BFP and the Foremans brought suit against Off-Road in state court to quiet title.
Before the state court could decide the case, Imperial entered a notice of default under the first deed of trust and scheduled a properly noticed foreclosure sale. Off-Road prevented the sale by filing an involuntary Chapter 11 petition against BFP. BFP moved to dismiss the involuntary petition, and Imperial moved to lift stay. Both motions were granted on or about June 14, 1989, and the subject property was sold to third parties at a foreclosure sale, apparently without further notice, on July 12, 1989.
Three months later the state court ruled on the quiet title action, rescinding the conveyance between the Foremans and the Pedersens. Thereafter BFP filed a voluntary Chapter 11 petition and brought the instant adversary suit seeking to nullify the foreclosure sale as a transfer for less than reasonably equivalent value under § 548(a)(2).
Imperial moved for summary judgment. The bankruptcy court granted the motion, holding that reasonably equivalent value was received at the foreclosure sale and that the foreclosure sale was "regularly conducted."
ISSUE
Whether the bankruptcy court erred in granting Imperial's motion for summary judgment, holding that reasonably equivalent value was received at the foreclosure sale.
STANDARD OF REVIEW
We review the granting of a motion for summary judgment de novo. E.g., In re Kirkland, 915 F.2d 1236, 1238 (9th Cir.1990). We review issues of fact for clear error, and conclusions of law de novo. Pullman-Standard v. Swint, 456 U.S. 273, 277, 102 S.Ct. 1781, 1784, 72 L.Ed.2d 66 (1982); Vesey v. United States, 626 F.2d 627, 629 (9th Cir.1980).
DISCUSSION
Reasonably Equivalent Value
BFP argues that the foreclosure sale should be invalidated or damages awarded pursuant to § 548(a)(2). BFP argues that the subject property was worth in excess of $700,000, and that the sale price of $433,000 was not reasonably equivalent value.
The BAP has previously held:
A non-collusive and regularly conducted nonjudicial foreclosure sale prior to the filing of a bankruptcy case cannot be challenged as a fraudulent conveyance because the consideration received in such a sale establishes "reasonably equivalent value" as a matter of law.
In re Madrid, 21 B.R. 424 (9th Cir.BAP 1982), aff'd, 725 F.2d 1197 (9th Cir.1984), cert. denied, 469 U.S. 833, 105 S.Ct. 125, 83 L.Ed.2d 66 (1984). In other words, the price received at the foreclosure sale is, by definition, reasonably equivalent value unless the foreclosure sale is not "regularly conducted," or unless there is collusion.
Regularly Conducted Foreclosure Sale
BFP argues that it did not receive proper notice of the foreclosure sale. Since the bankruptcy case had been dismissed, proper notice is determined by looking to California law.
The bankruptcy court made the following findings of fact with respect to the foreclosure sale:
A Notice of Default was recorded on July 29,1988. A Trustee's sale was originally scheduled for December 29, 1988. Notice of the Sale was published for three consecutive weeks as required by the laws of the State of California.

Imperial did not have any business relationship with the third party purchasers at any time prior to the Trustee's Sale of the subject property, nor did Imperial receive any benefit by virtue of the fact that the property was purchased by a third party at the Trustee's Sale.
Appellant's Excerpts at 244-45. BFP does not challenge these findings, but merely states that it received no notice. Pursuant to California law, publication for three consecutive weeks is sufficient notice, even under the facts of this case where the sale was postponed due to bankruptcy, and not renoticed after bankruptcy. See Lupertino v. Carbahal, 35 Cal.App.3d 742, 746-747, 111 Cal.Rptr. 112, 115 (1973).
BFP next argues a kind of estoppel, stating that it was misled by Imperial into believing that the foreclosure sale would not be held until the state court proceedings had concluded:
Russell Barton's declaration showed that after the hearing on the involuntary petition (the prior petition) filed by Off-Road, he heard the attorney for appellee [Imperial] say that they would not have the foreclosure sale until after the hearing in the pending quiet title action set for July 17, 1989....
Appellant's Opening Brief at 11. Such an argument does not state a claim for estop-pel. Furthermore, Imperial denies that there was a verbal agreement, and further argues that a verbal agreement to continue a trustee's sale is unenforceable under California law. Appellee's Opening Brief at 22-23. (quoting Karlsen v. American Sav. & Loan Ass'n, 15 Cal.App.3d 112, 121, 92 Cal.Rptr. 851, 856 (1971)).
BFP has failed to show that the bankruptcy court erred in concluding that reasonably equivalent value was given for the subject property. Therefore, the bankruptcy court order granting summary judgment is AFFIRMED.
. The BFP partnership originally consisted of Wayne and Marlene Pedersen and Russell Barton.
. This loan was secured by a first deed of trust, apparently with Wayne Pedersen as trustor and Imperial's predecessor in interest as beneficiary. The deed was recorded August 25, 1987.
. This loan was secured by a second deed of trust, apparently with BFP as trustor and the Foremans as the beneficiaries.
.The bankruptcy court also held that BFP lacked any interest in the subject property: if the Pedersens had no interest in the property, then BFP had no interest in the property. The court failed to recognize that the same could be said of Imperial's interest in the property. Therefore, we hesitate to use the state court rescission to determine the interests of these parties or to dispose of this appeal.
. On appeal, the Ninth Circuit found that the foreclosure sale was not a transfer, and therefore did not address the issue of reasonably equivalent value. In re Madrid, 725 F.2d 1197, 1199 (9th Cir.1984). The 1984 Bankruptcy Amendments determined that a foreclosure sale was, after all, a transfer. However, the BAP rule regarding reasonably equivalent value is still applicable. In re Ehring, 91 B.R. 897, 901 (9th Cir.BAP 1988), aff'd, 900 F.2d 184 (9th Cir.1990). Contra In re Lindsay, 98 B.R. 983 (Bankr.S.D.Cal.1989) (the bid price at a foreclosure sale does not establish reasonably equivalent value).
. BFP also argues that it did not receive proper notice of the motion to lift stay. Imperial argues convincingly that the dismissal of the involuntary bankruptcy petition made notice under the motion to lift stay irrelevant.