Court Opinion

ID: 4194198
Source: CourtListenerOpinion
Date Created: 2017-08-08 19:01:56.254962+00
Date Added: 2024-06-11T14:39:58.091720
License: Public Domain

FILED
                                                             AUG 08 2017
 1                         NOT FOR PUBLICATION
                                                         SUSAN M. SPRAUL, CLERK
                                                           U.S. BKCY. APP. PANEL
 2                                                         OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
                              OF THE NINTH CIRCUIT
 4
 5   In re:                        )       BAP No.    NC-17-1001-FBJu
                                   )
 6   SONJA RITTER,                 )       Bk. No.    13-40868
                                   )
 7                  Debtor.        )
     _____________________________ )
 8                                 )
     SONJA RITTER,                 )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )       MEMORANDUM*
11                                 )
     LOIS I. BRADY, Chapter 7      )
12   Trustee,                      )
                                   )
13                  Appellee.      )
     ______________________________)
14
                Submitted Without Argument on July 27, 2017
15
                             Filed – August 8, 2017
16
              Appeal from the United States Bankruptcy Court
17                for the Northern District of California
18      Honorable William J. Lafferty, Bankruptcy Judge, Presiding
19
     Appearances:     Appellant Sonja Ritter, pro se, on brief.
20
21   Before: FARIS, BRAND, and JURY, Bankruptcy Judges.
22
23
24
25
26        *
            This disposition is not appropriate for publication.
27   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
28   9th Cir. BAP Rule 8024-1.

                                       1
 1                               INTRODUCTION
 2        Debtor Sonja Ritter appeals the bankruptcy court’s denial of
 3   her motion to reopen her chapter 71 bankruptcy case.   The
 4   bankruptcy court correctly ruled that reopening her case would
 5   have been futile; even if the bankruptcy court reopened her case,
 6   she would not have been able to accomplish her objective, which
 7   was to strip off her junior mortgage lien.    We AFFIRM.
 8                           FACTUAL BACKGROUND2
 9        When Ms. Ritter filed her chapter 7 bankruptcy petition, she
10   owned real property (the “Property”) valued at $185,000.     Bank of
11   America held a first lien against her Property with a claim for
12   $297,229.   PNC Bank held a second lien with a claim for $42,416.
13        Ms. Ritter filed a motion to avoid PNC Bank’s lien (“Motion
14   to Avoid Lien”).   She stated that the senior lien exceeded the
15   value of the Property and requested that the court determine that
16   PNC Bank’s lien was unsecured under § 506.    According to
17   Ms. Ritter, she prepared and submitted a proposed order granting
18   the Motion to Avoid Lien.
19        The bankruptcy court granted Ms. Ritter a discharge.
20   Without ruling on the Motion to Avoid Lien, it closed the case.
21
22        1
            Unless specified otherwise, all chapter and section
23   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all
     “Rule” references are to the Federal Rules of Bankruptcy
24   Procedure, and all “Civil Rule” references are to the Federal
     Rules of Civil Procedure.
25
          2
26          Other than a hearing transcript, Ms. Ritter did not
     provide the Panel with any excerpts of record. We exercise our
27   discretion to review the bankruptcy court’s docket. See O’Rourke
     v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955,
28   957–58 (9th Cir. 1989).

                                      2
 1        Over three years later, Ms. Ritter filed a motion to reopen
 2   the case and to avoid PNC Bank’s lien (“Motion to Reopen”).      She
 3   requested that the court reopen her case and sign the order
 4   avoiding PNC Bank’s lien because “no objection was filed and my
 5   Court order was never signed.”
 6        The court denied the motion, stating that it would not
 7   reopen the case because it could not strip off the lien under
 8   Bank of America, N.A. v. Caulkett, 135 S. Ct. 1995 (2015).
 9        Ms. Ritter filed a motion to reconsider the denial of the
10   Motion to Reopen (“Motion for Reconsideration”).    She reiterated
11   that she had filed the Motion to Avoid Lien and that, because PNC
12   Bank did not oppose it, the court should have granted it.    At the
13   hearing on the Motion for Reconsideration, Ms. Ritter questioned
14   whether Caulkett was applicable, given that she had filed her
15   Motion to Avoid Lien two years prior to that decision.
16        The bankruptcy court entered an order denying the Motion for
17   Reconsideration.   It explained that, based on Caulkett, it could
18   not grant Ms. Ritter’s request to strip off PNC Bank’s junior
19   lien on the Property.    The court held that Ms. Ritter did not
20   articulate any basis for reconsideration under Civil Rule 60.
21        Ms. Ritter timely appealed the denial of the Motion to
22   Reopen and Motion for Reconsideration.
23                               JURISDICTION
24        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
25   §§ 1334 and 157(b)(1).    We have jurisdiction under 28 U.S.C.
26   § 158.
27                                    ISSUE
28        Whether the bankruptcy court erred in denying Ms. Ritter’s

                                        3
 1   Motion to Reopen and Motion for Reconsideration so that she could
 2   avoid PNC Bank’s second mortgage lien.
 3                           STANDARD OF REVIEW
 4        We review for abuse of discretion the denial of a motion to
 5   reopen a bankruptcy case.   Staffer v. Predovich (In re Staffer),
 6   306 F.3d 967, 971 (9th Cir. 2002).   We also review for abuse of
 7   discretion the denial of a motion for reconsideration.    N. Alaska
 8   Envtl. Ctr. v. Lujan, 961 F.2d 886, 889 (9th Cir. 1992).
 9        To determine whether the bankruptcy court has abused its
10   discretion, we conduct a two-step inquiry: (1) we review de novo
11   whether the bankruptcy court “identified the correct legal rule
12   to apply to the relief requested” and (2) if it did, we consider
13   whether the bankruptcy court’s application of the legal standard
14   was illogical, implausible or “without support in inferences that
15   may be drawn from the facts in the record.”   United States v.
16   Hinkson, 585 F.3d 1247, 1261–62 & n.21 (9th Cir. 2009) (en banc).
17                               DISCUSSION
18        Ms. Ritter sought to reopen her bankruptcy case to void PNC
19   Bank’s lien because she believed that the lien should have been
20   stripped off in her initial chapter 7 case.   When the bankruptcy
21   court denied her motion, she sought reconsideration, repeating
22   the same arguments.   The bankruptcy court did not err.
23        Section 350(b) states that “[a] case may be reopened in
24   the court in which such case was closed to administer assets,
25   to accord relief to the debtor, or for other cause.”   “[A]lthough
26   a motion to reopen is addressed to the sound discretion of the
27   bankruptcy court, ‘the court has the duty to reopen an estate
28   whenever prima facie proof is made that it has not been fully

                                      4
 1   administered.’”    Lopez v. Speciality Rests. Corp. (In re Lopez),
 2   283 B.R. 22, 27 (9th Cir. BAP 2002) (citation omitted).
 3   “[R]eopening a case is typically ministerial and ‘presents only a
 4   narrow range of issues: whether further administration appears to
 5   be warranted; whether a trustee should be appointed; and whether
 6   the circumstances of reopening necessitate payment of another
 7   filing fee.’”    Id. at 26 (citation omitted).
 8        Nevertheless, a bankruptcy court should decline to reopen a
 9   case when doing so would be a “pointless exercise.”     Beezley v.
10   Cal. Land Title Co. (In re Beezley), 994 F.2d 1433, 1434 (9th
11   Cir. 1993); see Cortez v. Am. Wheel, Inc. (In re Cortez),
12   191 B.R. 174, 179 (9th Cir. BAP 1995) (“The bankruptcy court did
13   not abuse its discretion by denying the debtors’ motion to reopen
14   their bankruptcy case when there was no legal basis for granting
15   the relief sought.”).
16        The bankruptcy court properly denied the Motion to Reopen
17   because it could not strip off PNC Bank’s junior lien.      In
18   Caulkett, the Supreme Court held that “a debtor in a Chapter 7
19   bankruptcy proceeding may not void a junior mortgage lien under
20   § 506(d) when the debt owed on a senior mortgage lien exceeds the
21   current value of the collateral.” 135 S. Ct. at 2001.   The Court
22   relied on its previous decision in Dewsnup v. Timm, 502 U.S. 410
23   (1992).
24        Similarly, Ms. Ritter is seeking to strip off PNC Bank’s
25   junior lien because her home was worth less than the amount owed
26   on her first mortgage.    But Caulkett forbids a bankruptcy court
27   from doing so.
28        In her Motion for Reconsideration, Ms. Ritter questioned

                                       5
 1   whether Caulkett, decided in 2015, was applicable to her 2013
 2   bankruptcy case.   The bankruptcy court correctly explained that
 3   Caulkett restated the law as it had existed since the Supreme
 4   Court’s 1992 decision in Dewsnup.
 5        Ms. Ritter argues that PNC Bank did not oppose the Motion to
 6   Avoid Lien.   But the bankruptcy court can deny a motion, even if
 7   no one opposed it, if the motion lacks legal merit.    See Local
 8   Bankruptcy Rule 9014-1(b)(4) (allowing, but not requiring, a
 9   court to grant an unopposed motion by default); Edward H. Bohlin
10   Co. v. Banning Co., 6 F.3d 350, 356 (5th Cir. 1993) (Under
11   similar Texas law, “[a]lthough failure to respond to a motion
12   will be considered a statement of no opposition, the court is not
13   required to grant every unopposed motion.”).
14        Even if the bankruptcy court had reopened Ms. Ritter’s case,
15   it could not void PNC Bank’s lien.   Because the Motion to Reopen
16   was futile, the court did not abuse its discretion when it denied
17   the Motion to Reopen and Motion for Reconsideration.
18                               CONCLUSION
19        For the reasons set forth above, the bankruptcy court did
20   not err.   Accordingly, we AFFIRM.
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