Opinion ID: 3168222
Heading Depth: 4
Heading Rank: 2

Heading: judicial efficiency; (3) the systemic

Text: interest in preserving the bankruptcy court’s role as the finder of fact; and (4) whether delaying review would cause either party irreparable harm. In re Landmark Fence, 801 F.3d at 1102 (citation and internal quotation marks omitted); see also Meyer v. U.S. Trustee (In re Scholz), 699 F.3d 1167, 1170 (9th Cir. 2012). In other instances, we look to whether the bankruptcy court’s decision: “1) resolves and seriously affects substantive rights and 2) finally determines the discrete issue to which it is addressed.” SS Farms, LLC v. Sharp (In re SK Foods, L.P.), 676 F.3d 798, 802 (9th Cir. 2012) (citation omitted); see also Law Offices of Nicholas A. Franke v. Tiffany (In re Lewis), 113 F.3d 1040, 1043 (9th Cir. 1997). A survey of our precedent reveals that the four-part finality test articulated in In re Landmark Fence is utilized almost exclusively when determining the finality of a case involving a remand to the bankruptcy court. See In re Landmark Fence, 801 F.3d at 1101–02; see also In re Scholz, 699 F.3d at 1170; In re Lakeshore Vill., 81 F.3d at 104, 106; Congrejo Invs., LLC v. Mann (In re Bender), 586 F.3d 1159, 1161, 1164 (9th Cir. 2009); Saxman v. Educ. Credit Mgmt. Corp. (In re Saxman), 325 F.3d 1168, 1171 (9th Cir. 2003); Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1182, 1187 (9th Cir. 2003); Scovis v. Henrichsen (In re Scovis), 249 F.3d 975, 978, 980 (9th Cir. 2001); Lundell v. Anchor Constr. Specialists, Inc. (In re Lundell), 223 F.3d 1035, 1038 (9th Cir. 2000); Walthall v. United States, 131 F.3d 1289, 1292–93 (9th Cir. 1997); Bonner Mall P’ship v. U.S. Bancorp Mortg. IN RE PERL 11 Co. (In re Bonner Mall P’ship), 2 F.3d 899, 902, 904 (9th Cir. 1993). On the other hand, when the decision of the bankruptcy court is affirmed or reversed, rather than remanded, we have applied the two-part finality test articulated in In re SK Foods, 676 F.3d at 802. See In re Rosson, 545 F.3d at 769; see also In re Lewis, 113 F.3d at 1043; Dye v. Brown (In re AFI Holding, Inc.), 530 F.3d 832, 836 (9th Cir. 2008); Schulman v. California (In re Lazar), 237 F.3d 967, 974, 985 (9th Cir. 2001); Duckor Spradling & Metzger v. Baum Trust (In re P.R.T.C., Inc.), 177 F.3d 774, 777, 780 (9th Cir. 1999); New Life Health Ctr. Co. v. I.R.S. (In re New Life Health Ctr. Co.), 102 F.3d 428, 429 (9th Cir. 1996) (per curiam); United States v. Stone (In re Stone), 6 F.3d 581, 583 (9th Cir. 1993); Elliott v. Four Seasons Props. (In re Frontier Props., Inc.), 979 F.2d 1358, 1361, 1364 (9th Cir. 1992); Turgeon v. Victoria Station Inc. (In re Victoria Station Inc.), 840 F.2d 682, 683–84 (9th Cir. 1988); United States v. Technical Knockout Graphics, Inc. (In re Technical Knockout Graphics, Inc.), 833 F.2d 797, 798, 801 (9th Cir. 1987); Farber v. 405 N. Bedford Dr. Corp. (In re 405 N. Bedford Dr. Corp.), 778 F.2d 1374, 1376–77 (9th Cir. 1985). Because this case did not involve a remand, application of the two-part finality test is appropriate. See In re SK Foods, 676 F.3d at 802. Notwithstanding the fact that no financial penalty or sanction has yet been assessed against Eden Place, the bankruptcy court’s determination that Eden Place violated the automatic stay is a substantive ruling with real effects, including money damages that could be sought by Perl indefinitely. See Price v. Rochford, 947 F.2d 829, 831–32 (7th Cir. 1991) (holding that a cause of action for violation of the automatic stay survives the termination of the bankruptcy 12 IN RE PERL proceeding). The bankruptcy court’s order determined the discrete issue of whether there was a stay violation, which was the only issue litigated in the bankruptcy proceedings and before the BAP. See In re SK Foods, 676 F.3d at 802 (discussing finality in the bankruptcy context). As a practical matter, resolution of this issue resolved the entire case and thereby qualifies as a final decision under our pragmatic approach to finality in the bankruptcy context. See id. We respectfully part company with our dissenting colleague’s view of the finality of the bankruptcy court’s order, largely because the cases relied on by the dissent were decided in the context of general civil litigation rather than in the bankruptcy context, where “[t]he rules are different . . .” Bullard, 135 S. Ct. at 1692. Neither are we persuaded by the out-of-circuit authority cited in the dissent. Rather, we look to our precedent specifically addressing finality in the bankruptcy context. That precedent persuades us that the ruling by the bankruptcy court that Eden Place violated the automatic stay resolved the only issue in the case, and seriously affected substantive rights related to damages. There is no question that the discrete issue addressed by the bankruptcy court—violation of the automatic stay—has been definitively and finally resolved. Resolution of that issue is as final as it will ever be in this case. We also look to the clear language of the bankruptcy appeals statute, which as the Supreme Court noted, “authorizes appeals as of right not only from final judgments in cases but from final judgments, orders, and decrees in cases and proceedings.” Id. (quoting 28 U.S.C. § 158(a)) (alteration and internal quotation marks omitted). After considering our applicable precedent and the clear language of the statute, we hold that the bankruptcy court’s order that IN RE PERL 13 Eden Place violated the automatic stay was final and appealable. See 28 U.S.C. § 158(d). B. Merits - Violation of Automatic Stay Having resolved the issue of finality, we now turn to the merits of this case—whether Eden Place violated the automatic stay. We start from the premise that the filing of a bankruptcy petition creates the bankruptcy estate, which includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C. 541(a)(1). The bankruptcy filing acts as an automatic stay of “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. . . .” 11 U.S.C. § 362(a)(3). The violation of the automatic stay inquiry determines whether the debtor, in isolation, has any protectable legal, equitable, or possessory interest. See Ramirez v. Fuselier (In re Ramirez), 183 B.R. 583, 587 (B.A.P. 9th Cir. 1995); see also 11 U.S.C. § 362(a)(3). Thus, the question in this case is whether Perl had any remaining legal or equitable possessory interest in the property after Eden Place properly recorded the trustee’s deed from the non-judicial foreclosure sale, and after the state court fully adjudicated in the unlawful detainer proceedings Perl’s remaining possessory interest in the premises. See id. We look to state law to determine property interests in bankruptcy proceedings. See Butner v. United States, 440 U.S. 48, 54–55 (1979). We conclude that under California law, entry of judgment and a writ of possession following unlawful detainer proceedings extinguishes all other legal and equitable possessory interests in the real property at issue. See Vella v. Hudgins, 572 P.2d 28, 30 (Cal. 1977). 14 IN RE PERL The BAP correctly determined that Perl had no remaining legal interest in the property because, when Eden Place purchased the property at the foreclosure sale and recorded its deed within fifteen days of the sale, any legal interest Perl retained in the property was extinguished. See Wells Fargo Bank v. Neilsen, 178 Cal. App. 4th 602, 613–14 (2009), as modified; see also Cal. Civ. Code. § 2924h(c). But, the BAP went further, reasoning that Perl’s unlawful possession bestowed equitable possessory rights upon him, which he retained until the Sheriff actually dispossessed him of the property by executing the writ of possession. See In re Perl, 513 B.R. at 574–76. However, whether Perl had actual possession of the property when he filed for bankruptcy has no bearing on whether he had a cognizable possessory interest in the property. In resolving this issue, the unlawful detainer statutory provisions are the point of departure for our analysis. California’s unlawful detainer statutory scheme was designed to adjudicate the right to possession of realty between a landlord and tenant when the tenant is in violation of the lease. See Knowles v. Robinson, 387 P.2d 833, 836–37 (Cal. 1963). The unlawful detainer provisions authorize a summary proceeding that adjudicates the right to immediate possession of the property. See Vella, 572 P.2d at 30. For this reason, claims regarding title to the property are not generally litigated in an unlawful detainer proceeding. See id. One exception to the rule that title is not generally determined in an unlawful detainer proceeding is found in California Code of Civil Procedure § 1161a, governing the right of possession by a party initiating an unlawful detainer proceeding after obtaining title at a nonjudicial foreclosure IN RE PERL 15 sale.4 See id. The exception allows for “a narrow and 4 California Code of Civil Procedure § 1161a provides in relevant part: (b) In any of the following cases, a person who holds over and continues in possession of a manufactured home, mobilehome, floating home, or real property after a three-day written notice to quit the property has been served upon the person, or if there is a subtenant in actual occupation of the premises, also upon such subtenant, as prescribed in Section 1162, may be removed therefrom as prescribed in this chapter: (1) Where the property has been sold pursuant to a writ of execution against such person, or a person under whom such person claims, and the title under the sale has been duly perfected. (2) Where the property has been sold pursuant to a writ of sale, upon the foreclosure by proceedings taken as prescribed in this code of a mortgage, or under an express power of sale contained therein, executed by such person, or a person under whom such person claims, and the title under the foreclosure has been duly perfected.