Court Opinion

ID: 2722344
Source: CourtListenerOpinion
Date Created: 2014-08-30 00:00:48.182288+00
Date Added: 2024-06-11T15:38:55.871538
License: Public Domain

FILED
                                                                  AUG 29 2014
 1
                                                              SUSAN M. SPRAUL, CLERK
                                                                U.S. BKCY. APP. PANEL
 2                                                              OF THE NINTH CIRCUIT

 3                   UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                             OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No.      CC-13-1554-KiTaD
                                   )
 6   GUIDO YAROL CRUZ,             )      Bk. No.      06:13-20368-MH
                                   )
 7                  Debtor.        )
                                   )
 8                                 )
     GUIDO YAROL CRUZ,             )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      O P I N I O N
11                                 )
     STEIN STRAUSS TRUST #1361,    )
12   PDQ INVESTMENTS, LLC,         )
                                   )
13                  Appellee.      )
     ______________________________)
14
15                       Submitted Without Oral Argument
                                on June 26, 2014
16
                             Filed - August 29, 2014
17
                  Appeal from the United States Bankruptcy Court
18                    for the Central District of California
19             Honorable Mark D. Houle, Bankruptcy Judge, Presiding
20
21   Appearances:     Appellant Guido Yarol Cruz appeared pro se on
                      brief; Joseph C. Delmotte, Esq. of Pite Duncan, LLP
22                    appeared on brief for appellee, Stein Strauss Trust
                      #1361, PDQ Investments, LLC.
23
24   Before:    KIRSCHER, TAYLOR and DUNN, Bankruptcy Judges.
25
26
27
28
 1   KIRSCHER, Bankruptcy Judge:
 2
 3        Guido Yarol Cruz (“Cruz”) appeals the order granting the
 4   motion of PDQ Investments, LLC as trustee for the Stein Strauss
 5   Trust #1361 (“SS Trust”) to annul retroactively the automatic stay
 6   or, in the alternative, to confirm that no stay was in effect, and
 7   he appeals the order denying reconsideration of the prior order.
 8   We AFFIRM.
 9                I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
10   A.    Prepetition events
11         Mr. Doo Ko obtained a loan from IndyMac Bank, FSB (“IndyMac”)
12   to purchase a residence located on Stein Strauss Street in
13   Fullerton, California (“Property”).    The deed of trust in favor of
14   IndyMac was recorded on June 8, 2007.   On June 25, 2007, Mr. Ko
15   transferred his 100% interest in the Property to a Ms. Eun H. Ko
16   by way of a grant deed for no consideration.   The grant deed was
17   recorded on June 28, 2007.
18         Ultimately, the loan went into default, and a Notice of
19   Default was recorded against the Property on February 9, 2009.     A
20   Notice of Sale was recorded some three years later on September
21   25, 2012.    A trustee’s sale was set for October 24, 2012.
22         The parties have not explained why it took over three years
23   before the Notice of Sale was recorded.   We discovered in
24   reviewing the bankruptcy court docket, however, that Ms. Ko, under
25   the names “Eun H. Ko” and “Eun Ko” (same Social Security Number),
26   filed no less than six bankruptcy cases in the Central District of
27
28

                                      -2-
 1   California between November 2009 and February 2013.1    All cases
 2   were skeletal filings and dismissed for either failing to file
 3   documents or to appear at the § 341(a)2 meeting of creditors after
 4   multiple continuances.   Mr. Ko filed three bankruptcy cases in
 5   2009, all of which were skeletal filings and dismissed for failing
 6   to file documents.
 7         Notably, in Ms. Ko’s third case filed on November 5, 2010,
 8   the servicer for IndyMac sought relief from stay against the
 9   Property.   The moving papers referenced a grant deed (not noted in
10   this case) executed on January 20, 2010, and recorded on January
11   22, 2010, wherein Ms. Ko purported to transfer a 5% interest in
12   the Property back to Mr. Ko and a 5% interest to a Mr. Tae Hoon
13   Ko.   Mr. Tae Hoon Ko filed one skeletal chapter 13 bankruptcy case
14   on January 4, 2010, which was converted to chapter 7 and
15   ultimately dismissed for failing to appear at the § 341(a)
16   meeting.    IndyMac was granted stay relief on May 31, 2011, and the
17   order included a bad faith finding under § 362(d)(4).    The two-
18   year in rem bar contained in that order presumably expired on or
19   about May 31, 2013, which is about two weeks before Cruz filed his
20   chapter 7 case.3
21
22         1
             We have taken judicial notice of Ms. Ko’s multiple cases
     filed with the bankruptcy court through its electronic docketing
23   system. See O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert,
     Inc.), 887 F.2d 955, 957-58 (9th Cir. 1989); Atwood v. Chase
24   Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th
     Cir. BAP 2003).
25
          2
             Unless specified otherwise, all chapter,   code and rule
26   references are to the Bankruptcy Code, 11 U.S.C.   §§ 101-1532, and
     the Federal Rules of Bankruptcy Procedure, Rules   1001-9037. The
27   Federal Rules of Civil Procedure are referred to   as “Civil Rules.”
28         3
             Clearly, Ms. Ko has a history of filing multiple
     bankruptcy cases and transferring fractional interests in the
                                                          (continued...)

                                      -3-
 1   B.   Postpetition events
 2        Cruz, pro se, filed a skeletal chapter 7 bankruptcy case on
 3   June 13, 2013.   Pursuant to Rule 1007(c), Cruz was ordered to file
 4   his schedules and other requisite documents by June 27.     On June
 5   27, Cruz sought an extension to July 11 to file all documents,
 6   which was granted.   Cruz failed to file all required documents by
 7   July 11, no further extensions were requested, and his bankruptcy
 8   case was dismissed on July 17, 2013 (“Dismissal Order”).4    In the
 9   Dismissal Order, the bankruptcy court retained jurisdiction “on
10   all issues arising under Bankruptcy Code § 110, 329 and 362.”
11   Cruz did not appeal the Dismissal Order.5
12        1.   SS Trust’s motion for relief from stay
13        On July 15, 2013, Ms. Ko, who now held only an 80% interest
14   in the Property, executed a grant deed purporting to transfer a 5%
15   interest in the Property to Cruz (the “Cruz Deed”).    The Cruz Deed
16   was recorded at 12:52 p.m. on July 15, 2013.    On that same day at
17   approximately 2:18 p.m., the Property was sold by the lender at a
18   trustee’s sale to SS Trust, who was the highest bidder at
19
          3
           (...continued)
20   Property to persons in bankruptcy in an attempt to subvert the
     foreclosure process. We have no doubt Cruz, who now claims to
21   live with Ms. Ko at the Property, is yet another participant in
     her ongoing scheme.
22
          4
23           Cruz did, however, file   some documents untimely on July 15
     at 2:13 p.m., which is the same   day he acquired his 5% interest in
24   the Property and about one hour   after the Cruz Deed was recorded.
     He did not claim an interest in   the Property in his Schedule A.
25        5
             Cruz filed a motion to reconsider the Dismissal Order
26   under Civil Rule 60(b)(1) about two months after the order’s
     entry. The bankruptcy court denied it. Because the motion to
27   reconsider was not filed within 14 days of the entry of the
     Dismissal Order, the time to appeal the Dismissal Order was not
28   tolled. Rule 8002(b). Therefore, Cruz’s arguments about the
     merits of the Dismissal Order are untimely, and we lack
     jurisdiction to consider them.

                                       -4-
 1   $711,000.   SS Trust established that it had no knowledge of the
 2   Cruz Deed or of Cruz’s bankruptcy case at the time of the sale.
 3        Shortly thereafter, SS Trust became aware of Cruz’s
 4   bankruptcy.   On August 13, 2013, after Cruz’s case had been
 5   dismissed, SS Trust moved to annul the automatic stay to validate
 6   the sale or, in the alternative, to confirm that no stay was in
 7   effect at the time of the sale (“Stay Relief Motion”).   SS Trust
 8   also sought a finding that Cruz’s bankruptcy case was filed as
 9   part of a bad faith scheme to delay, hinder and defraud creditors
10   under § 362(d)(4).6
11        Specifically, SS Trust argued that because Cruz, a chapter 7
12   debtor, did not acquire his interest in the Property until after
13   he filed for bankruptcy, the Property was never property of the
14   estate.   Consequently, his bankruptcy filing had no effect on the
15   validity of the sale.   Alternatively, SS Trust argued that even if
16   the Property was estate property and the sale violated the
17   automatic stay, cause existed to annul the stay because:   (1) SS
18   Trust was a bona fide purchaser who purchased the Property without
19   any knowledge of Cruz’s bankruptcy or of the Cruz Deed recorded
20   the day of the sale; (2) SS Trust took immediate action to annul
21
22        6
             SS Trust used the mandatory local form,
23   F 4001-1.RFS.RP.MOTION, required by bankruptcy court, which in
     compliance with amendments of the Bankruptcy Abuse Prevention and
24   Consumer Protection Act of 2005,contained the statutory language
     of “delay, hinder, and defraud[,]” as required by § 362(d)(4).
25   The mandatory order, F 4001-1.RFS.RP.ORDER, required by the local
     forms and issued by the bankruptcy court, contained this same
26   statutory language. The Bankruptcy Technical Corrections Act of
     2010 amended the statutory language to read “delay, hinder, or
27   defraud[.]” The statutory amendment changed the proof of the
     required elements from the conjunctive to the disjunctive.
28   Subsequent to the filing of this appeal, the bankruptcy court has
     amended its mandatory forms to contain the 2010 amended statutory
     language. See Bankruptcy Technical Corrections Act of 2010, Pub.
     L. No. 111-327, 124 Stat 3557.

                                     -5-
 1   the stay once it learned of Cruz’s bankruptcy filing, whereas Cruz
 2   had not taken any action to set the sale aside; (3) the facts and
 3   circumstances suggested Cruz’s bankruptcy case was filed as part
 4   of a bad faith scheme to delay and/or hinder the sale; and (4)
 5   both SS Trust and the lender who sold the Property would be
 6   prejudiced if the sale were deemed void.
 7        In support of the Stay Relief Motion, SS Trust offered copies
 8   of the various grant deeds and the recorded Notice of Default and
 9   Notice of Sale.   SS Trust did not submit a trustee’s deed, but it
10   did submit a copy of a document entitled “Trustee’s Sale Results”
11   that showed SS Trust was the winning bidder at the July 15 sale.
12        Cruz opposed the Stay Relief Motion, contending that SS Trust
13   had failed to prove it was the new owner of the Property; no
14   trustee’s deed had been shown or recorded.   He further argued SS
15   Trust was not a BFP.   In his supporting declaration, Cruz stated
16   that he had notified the sale trustee by fax at 1:03 p.m. on July
17   15, 2013, about thirty minutes before the scheduled sale, of his
18   bankruptcy filing on June 13, 2013.   Nonetheless, the sale trustee
19   “ignored [his] bankruptcy stay and sold to an unknown third party
20   investor.”   Cruz also stated that even though his paralegal friend
21   helped him fill out his untimely filed schedules, he did not know
22   where in the schedules to list his interest in the Property.   Cruz
23   further stated that the lender was looking into the alleged
24   improper trustee’s sale.
25        Attached to Cruz’s opposition was a copy of the “Notice of
26   Bankruptcy Case Filing” Cruz asserted he faxed to the lender just
27   minutes before the trustee’s sale and the cover sheet to a
28   complaint Cruz filed in state court on August 26, 2013, against

                                     -6-
 1   the lender and SS Trust to set aside the sale.
 2        In reply, SS Trust argued that it was a BFP without notice of
 3   Cruz’s bankruptcy.   SS Trust also argued that it had standing to
 4   bring the Stay Relief Motion despite the lack of a recorded
 5   trustee’s deed; it became the beneficiary of the trustee’s deed by
 6   being the successful bidder at the sale.
 7        The bankruptcy court issued a tentative ruling on the Stay
 8   Relief Motion on September 9, 2013, which it adopted as its final
 9   ruling at the related hearing on September 10, 2013.   Cruz did not
10   appear.   The bankruptcy court found that the automatic stay never
11   took effect as to the Property and that it was never property of
12   the estate because Cruz acquired his interest in it postpetition.
13   Alternatively, cause existed to annul the stay based on the
14   postpetition transfer of a fractionalized interest to Cruz on the
15   day of the foreclosure sale.   In addition, the court found that
16   Cruz’s bankruptcy was part of a scheme to hinder, delay and7
17   defraud creditors because:   (1) he filed a skeletal petition; (2)
18   a partial interest in the Property was transferred to him
19   postpetition; (3) he failed to list the Property on Schedule A or
20   amend it after obtaining an interest; and (4) despite receiving an
21   extension to file all necessary bankruptcy documents, he still
22   failed to cure the deficiencies and the case was dismissed.
23        The bankruptcy court entered an order granting the Stay
24   Relief Motion under § 362(d)(1) and (d)(4) on September 25, 2013
25
          7
26           At all times relevant to this appeal, § 362(d)(4) required
     a finding that the filing of debtor’s petition was part of a
27   scheme to delay, hinder or defraud creditors. The bankruptcy
     court’s order found that Cruz’s petition was filed as part of a
28   scheme to delay, hinder and defraud creditors. Cruz does not
     assign any error by the bankruptcy court on this specific issue.
     In any event, it has no bearing on the outcome of this appeal.

                                     -7-
 1   (“Stay Relief Order”).
 2        2.     Cruz’s motion to reconsider
 3        Cruz timely moved for reconsideration of the Stay Relief
 4   Order under Civil Rule 60(b)(1) (“Motion to Reconsider”).    Cruz
 5   contended the Stay Relief Order should be vacated due to excusable
 6   neglect because his counsel failed to appear at the hearing and
 7   because he had “new” evidence establishing the court should not
 8   have granted it.   Cruz reasserted his argument that SS Trust
 9   lacked standing to bring the Stay Relief Motion and he raised a
10   new argument, without any supporting evidence, that the sale was
11   void because the trustee was not authorized to conduct it.
12        SS Trust opposed the Motion to Reconsider, contending that
13   the failure of Cruz’s alleged attorney to attend the hearing on
14   the Stay Relief Motion did not establish excusable neglect under
15   Civil Rule 60(b)(1).   Cruz had no attorney of record; no evidence
16   from any attorney was offered to explain why he or she was not
17   there.    Although not raised by Cruz, SS Trust also argued he was
18   not entitled to relief under Civil Rule 60(b)(6).
19        Cruz’s reply reiterated his prior arguments and he argued for
20   the first time:    that SS Trust lacked standing to seek relief from
21   stay because it was not registered with the California Secretary
22   of State; that the Cruz Deed was valid upon delivery; and that the
23   foreclosure sale was being litigated in state court.   Finally,
24   Cruz contended that his attorney, Jessica De Anda Leon, appeared
25   for the stay relief hearing, albeit, thirty minutes late.
26        Attached to Cruz’s reply was a photo copy of a business card
27   from Ms. De Anda Leon.   Attached also was a copy of a demurrer
28   dated September 9, 2013, filed in state court by the Property

                                      -8-
 1   lender (OneWest Bank, FSB) in response to Ms. Ko’s complaint to
 2   set aside the sale.   Curiously, the lender’s demurrer stated that
 3   the foreclosure sale had not yet taken place.
 4        The bankruptcy court issued its tentative ruling denying the
 5   Motion to Reconsider, which it adopted as its final ruling at the
 6   related hearing.   Pursuant to Local Bankruptcy Rule 9013-1(g)(1),
 7   the court refused to consider new arguments raised by Cruz that
 8   were not responsive to SS Trust’s opposition, such as the
 9   foreclosure sale was being litigated, that SS Trust was not
10   registered with the California Secretary of State, and that the
11   Cruz Deed was a lawful transfer.   In reviewing the factors set
12   forth in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship,
13   507 U.S. 380, 385 (1993), the bankruptcy court determined Cruz had
14   failed to establish excusable neglect because:   (1) he provided no
15   evidence that he was unable to attend the stay relief hearing; (2)
16   the Motion to Reconsider did not include a declaration from Ms. De
17   Anda Leon; and (3) Cruz had no attorney of record.
18        The bankruptcy court also found Cruz had failed to establish
19   entitlement to relief under Civil Rule 60(b)(2), because even
20   though he claimed he had “new” evidence, he failed to state what
21   that evidence was.
22        Lastly, the bankruptcy court determined relief also was not
23   warranted under Civil Rule 60(b)(6).   Cruz had not offered any
24   authority for a reversal of the bad faith finding, and, in any
25   event, vacation of a bad faith finding was not grounds for
26   reconsideration under Civil Rule 60(b).   Further, despite Cruz’s
27   arguments to the contrary, SS Trust had established a colorable
28   claim to the Property with the “Trustee’s Sale Results” document.

                                     -9-
 1   Finally, the stay was never in effect as to the Property because
 2   Cruz acquired his 5% interest in it postpetition.
 3        At the hearing on the Motion to Reconsider, attorney Robert
 4   L. Bachman specially appeared for Cruz.    Mr. Bachman explained
 5   that Cruz’s “new” evidence was the demurrer filed by the lender in
 6   the state court action, in which the lender had asserted that the
 7   foreclosure sale had not yet taken place.    In response, the
 8   bankruptcy court opined, and Mr. Bachman agreed, that the demurrer
 9   filed on September 9 was filed after the hearing on the Stay
10   Relief Motion and, therefore, that it could not be “newly”
11   discovered evidence.
12        An order denying the Motion to Reconsider the Stay Relief
13   Order was entered on November 1, 2013 (“Reconsideration Order”).
14   This timely appeal followed.
15                             II. JURISDICTION
16        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
17   and 157(b)(2)(G).   We have jurisdiction under 28 U.S.C. § 158.
18                                III. ISSUES
19   1.   Did the bankruptcy court abuse its discretion when it granted
20   the Stay Relief Motion?
21   2.   Did the bankruptcy court abuse its discretion when it denied
22   Cruz’s Motion to Reconsider?
23                          IV. STANDARDS OF REVIEW
24        Standing is a legal issue we review de novo.    Loyd v. Paine
25   Webber, Inc., 208 F.3d 755, 758 (9th Cir. 2000); Kronemyer v. Am.
26   Contractors Indem. Co. (In re Kronemyer), 405 B.R. 915, 919 (9th
27   Cir. BAP 2009).
28        A bankruptcy court’s decision to grant retroactive relief

                                     -10-
 1   from the automatic stay is reviewed for an abuse of discretion.
 2   Nat’l Envtl. Waste Corp. v. City of Riverside (In re Nat’l Envtl.
 3   Waste Corp.), 129 F.3d 1052, 1054 (9th Cir. 1997); Williams v.
 4   Levi (In re Williams), 323 B.R. 691, 696 (9th Cir. BAP 2005).         We
 5   also review the bankruptcy court’s denial of a motion for
 6   reconsideration for an abuse of discretion.    Tracht Gut, LLC v.
 7   Cnty. of L.A. Treasurer & Tax Collector (In re Tracht Gut, LLC),
 8   503 B.R. 804, 810 (9th Cir. BAP 2014).    A bankruptcy court abuses
 9   its discretion if it applied the wrong legal standard or its
10   findings were illogical, implausible or without support in the
11   record.   TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820,
12   832 (9th Cir. 2011).
13                          V. DISCUSSION
14        As a threshold argument, SS Trust contends the Stay Relief
15   Order is not reviewable on appeal.     We disagree.   When a motion
16   for reconsideration under Civil Rule 60(b), applicable here by
17   Rule 9024, is filed within 14 days of entry of the underlying
18   order, as it was here, we have jurisdiction to review both the
19   underlying order and the order denying reconsideration.     Wall St.
20   Plaza, LLC v. JSJF Corp. (In re JSJF Corp.), 344 B.R. 94, 99 (9th
21   Cir. BAP 2006)(applying former 10-day rule); Rule 8002(b).
22   Nonetheless, Cruz designated and attached to his notice of appeal
23   only the Reconsideration Order, not the Stay Relief Order.
24   Although Rule 8001(a) does not require a notice of appeal to
25   designate the order or judgment from which an appeal is taken, our
26   Local Rule 8001(a)-1 does.   However, we may depart from our local
27   rules absent prejudice.   In re JSJF Corp., 344 B.R. at 100 (citing
28   Alfred M. Lewis, Inc. v. Holzman (In re Telemart Enters., Inc.),

                                     -11-
 1   524 F.2d 761, 766 (9th Cir. 1975)).    No prejudice is present here
 2   because the parties have briefed the issues regarding the Stay
 3   Relief Order.   Accordingly, the Stay Relief Order and the
 4   Reconsideration Order are properly before us.   See United States
 5   v. Arkison (In re Cascade Rds., Inc.), 34 F.3d 756, 761 (9th Cir.
 6   1994)(appellate court may review merits of a bankruptcy court
 7   order where parties have fully briefed those issues even if the
 8   order was not identified in the notice of appeal).
 9   A.   The bankruptcy court did not abuse its discretion when it
          granted the Stay Relief Motion.
10
          Cruz raises a variety of arguments asserting that the
11
     bankruptcy court abused its discretion in granting the Stay Relief
12
     Motion.   We address each in turn.
13
          1.    The bankruptcy court had jurisdiction to consider the
14              Stay Relief Motion.
15        Cruz first argues the bankruptcy court lacked jurisdiction to
16   consider the Stay Relief Motion because his bankruptcy case had
17   been dismissed.   Cruz is incorrect.   In the Dismissal Order, the
18   bankruptcy court expressly reserved jurisdiction over all issues
19   arising under § 362.   Further, after a case is dismissed, “the
20   court may annul the automatic stay, thereby retroactively
21   ratifying an act otherwise violative of the stay.”   Johnson v. TRE
22   Holdings LLC (In re Johnson), 346 B.R. 190, 194 (9th Cir. BAP
23   2006).
24        2.    SS Trust established it had a colorable claim to the
                Property.
25
26        Cruz contends SS Trust was not the real party in interest and
27   lacked standing to seek relief from stay.   We disagree.
28        The filing of a petition for bankruptcy relief automatically

                                     -12-
 1   stays the commencement of any act to obtain possession of or to
 2   enforce a lien against property of the debtor or of the estate.
 3   See § 362(a)(3), (a)(4) and (a)(5).      The automatic stay does not
 4   apply to property that is not property of the estate.      It does,
 5   however, stay the enforcement of a lien securing a prepetition
 6   claim against property of the debtor, which includes property
 7   acquired by an individual debtor postpetition.     3 COLLIER   ON

 8   BANKRUPTCY ¶ 362.03[7] (Alan N. Resnick & Henry J. Sommers, eds.,
 9   16th ed. 2012).
10           Under § 362(d), a “party in interest” may request relief from
11   the stay.    A “party in interest” can include any party that has a
12   pecuniary interest in the matter, that has a practical stake in
13   the resolution of the matter or that is impacted by the automatic
14   stay.    Brown v. Sobczak (In re Sobczak), 369 B.R. 512, 517-18 (9th
15   Cir. BAP 2007).    Proceedings to decide motions for relief from the
16   automatic stay are very limited.    “[A] party seeking relief from
17   stay need only establish that it has a colorable claim to enforce
18   a right against property of the estate.”     Veal v. Am. Home Mortg.
19   Servicing, Inc. (In re Veal), 450 B.R. 897, 914-15 (9th Cir. BAP
20   2011).    A party has a “colorable claim” sufficient to establish
21   standing to prosecute the motion if it has an ownership interest
22   in the subject property.    Id. at 913; Edwards v. Wells Fargo Bank,
23   N.A. (In re Edwards), 454 B.R. 100, 105 (9th Cir. BAP 2011).
24           Cruz appears to argue that SS Trust failed to establish a
25   colorable claim to the Property because it did not record a
26   trustee’s deed.    Without a recorded trustee’s deed, Cruz argues,
27   the foreclosure sale cannot be deemed final, SS Trust’s alleged
28   interest in the Property was not perfected and, thus, his interest

                                       -13-
 1   is superior.   Cruz misinterprets California law.
 2        Section 2924h(c) of the California Civil Code provides that
 3   for the purposes of this subsection (dealing with finalizing a
 4   trustee’s sale), “the sale shall be deemed final upon the
 5   acceptance of the last and highest bid.”   It then discusses when
 6   the sale "is perfected," based on timing of recordation of the
 7   trustee’s deed within 15 days.   See also 4 Harry D. Miller &
 8   Marvin B. Starr, CAL. REAL ESTATE § 10:252 (3d ed. 2013)(Under
 9   California law “[t]he purchaser at the foreclosure sale receives
10   title free and clear of any right, title, or interest of the
11   trustor or any grantee or successor of the trustor.”).    Therefore,
12   title technically transferred to SS Trust, by law, even without
13   recordation of a trustee’s deed on sale.
14        In support of its Stay Relief Motion, SS Trust provided a
15   declaration from an employee who testified that he attended the
16   sale on July 15, 2013, and purchased the Property.    Although a
17   trustee’s deed had not yet been recorded at that time, SS Trust
18   offered a document entitled “Trustee’s Sale Results,” which
19   indicated that SS Trust had purchased the Property for $711,000.8
20   Accordingly, SS Trust’s ownership interest in the Property
21   established a “colorable claim” and, hence, standing to prosecute
22   the Stay Relief Motion.
23        3.   The Property was not property of the estate, but it was
               property of the debtor.
24
25        Cruz contends the Property was estate property because he
26
          8
             Cruz has attached in his reply brief a copy of the now-
27   recorded trustee’s deed, recorded on October 1, 2013, which states
     that SS Trust, “being the highest bidder” at the sale on July 15,
28   2013, “was the beneficiary of said Deed of Trust at the Time of
     said Trustee’s Sale.”

                                      -14-
 1   received a grant deed from Ms. Ko.      Even presuming the Cruz Deed
 2   was valid, the record reflects that he did not obtain an interest
 3   in the Property until July 15, 2013, when the Cruz Deed was
 4   executed and recorded.    Therefore, the Property was not estate
 5   property because Cruz, a chapter 7 debtor, acquired his interest
 6   in it after the commencement of the case.      See § 541(a)(1)
 7   (property of the estate is defined as “all legal or equitable
 8   interests of the debtor in property as of the commencement of the
 9   case”)(emphasis added).    Because of this, the bankruptcy court
10   found that the Property was never protected by the automatic stay.
11        We agree the Property was not “property of the estate,” but
12   it arguably was “property of the debtor” and still protected by
13   the stay under § 362(a)(5)9 at the time of the sale.     However, any
14   potential stay violation was cured by the bankruptcy court’s
15   proper annulment of the stay.
16        4.   Cause existed to annul the stay.
17        Actions taken in violation of the automatic stay are void.
18   However, an action taken in violation of the automatic stay that
19   would otherwise be void may be declared valid if cause exists for
20   retroactive annulment of the stay.      Schwartz v. United States (In
21   re Schwartz), 954 F.2d 569, 573 (9th Cir. 1992).      Section 362(d)
22   empowers the bankruptcy court to annul the stay.     It provides:
23        (d) On request of a party in interest and after notice
          and a hearing, the court shall grant relief from the stay
24        provided under subsection (a) of this section, such as by
25
          9
             Section 362(a)(5) provides that a bankruptcy petition
26   stays “any act to create, perfect, or enforce against property of
     the debtor any lien to the extent that such lien secures a claim
27   that arose before the commencement of the case under this title.”
28

                                      -15-
 1        terminating, annulling, modifying, or conditioning such
          stay—
 2
          (1) for cause, including the lack of adequate protection
 3        of an interest in property of such party in interest[.]
 4   § 362(d)(1); In re Schwartz, 954 F.2d at 572 (“[S]ection 362(d)
 5   gives the bankruptcy court wide latitude in crafting relief from
 6   the automatic stay, including the power to grant retroactive
 7   relief from the stay.”).
 8        In deciding whether “cause” exists to annul the stay, a
 9   bankruptcy court should examine the circumstances of the specific
10   case and balance the equities of the parties’ respective
11   positions.   Gasprom, Inc. v. Fateh (In re Gasprom, Inc.), 500 B.R.
12   598, 607 (9th Cir. BAP 2013)(citing In re Nat’l Envtl. Waste
13   Corp., 129 F.3d at 1055); Fjelsted v. Lien (In re Fjelsted), 293
14   B.R. 12, 24 (9th Cir. BAP 2003).   Under this approach, the
15   bankruptcy court considers (1) whether the creditor was aware of
16   the bankruptcy petition and automatic stay and (2) whether the
17   debtor engaged in unreasonable or inequitable conduct.   In re
18   Nat’l Envtl. Waste Corp., 129 F.3d at 1055.   In Fjelsted, we
19   approved additional factors for consideration in assessing the
20   equities:
21   1.   Number of [bankruptcy] filings;
22   2.   Whether, in a repeat filing case, the circumstances indicate
          an intention to delay and hinder creditors;
23
     3.   A weighing of the extent of prejudice to creditors or third
24        parties if the stay relief is not made retroactive, including
          whether harm exists to a bona fide purchaser;
25
     4.   The [d]ebtor’s overall good faith (totality of circumstances
26        test)(citation omitted);
27   5.   Whether creditors knew of the stay but nonetheless took
          action, thus compounding the problem;
28
     6.   Whether the debtor has complied, and is otherwise complying,

                                     -16-
 1           with the Bankruptcy Code and Rules;
 2   7.      The relative ease of restoring the parties to the status quo
             ante;
 3
     8.      The costs of annulment to debtors and creditors;
 4
     9.      How quickly creditors moved for annulment, or how quickly
 5           debtors moved to set aside the sale or violative conduct;
 6   10.   Whether, after learning of the bankruptcy, creditors
           proceeded to take steps in continued violation of the stay,
 7         or whether they moved expeditiously to gain relief;
 8   11.   Whether annulment of the stay will cause irreparable injury
           to the debtor; and
 9
     12.   Whether stay relief will promote judicial economy or other
10         efficiencies.
11   293 B.R. at 25.    These factors merely present a framework for
12   analysis and “[i]n any given case, one factor may so outweigh the
13   others as to be dispositive.”    Id.
14           The record supports the bankruptcy court’s decision to grant
15   the Stay Relief Motion on the alternate basis that cause existed
16   to annul the stay.    The court identified only one factor as
17   justifying annulment of the stay:      the postpetition transfer of a
18   fractionalized interest in the Property to Cruz on the day of the
19   sale.    In other words, Cruz had engaged in unreasonable or
20   inequitable conduct, or the court certainly questioned his overall
21   good faith, which satisfies factor four.      The court’s additional
22   findings under § 362(d)(4) also support annulment.     In particular,
23   Cruz was found to have filed his case in bad faith as part of a
24   scheme to delay, hinder and defraud creditors.     This finding
25   satisfies factor four.    Cruz denies that he filed his case in bad
26   faith and contends the bankruptcy court erred by not considering
27   all of the facts.    We disagree.    Our review of the record shows
28   the court considered all of the facts.     Further, Cruz’s skeletal

                                         -17-
 1   filing, his failure to file all necessary bankruptcy documents
 2   resulting in dismissal of his case and his failure to list the
 3   Property on his Schedule A or to amend it after obtaining his
 4   interest satisfies factor six.
 5        In addition, the record reflects that SS Trust was unaware of
 6   the stay at the time of the sale, which satisfies factor five.
 7   Cruz disputes this.   It is highly unlikely that SS Trust, a third-
 8   party purchaser, was on notice of Cruz’s bankruptcy case when he
 9   faxed his Notice of Bankruptcy Filing to the lender and recorded
10   the Cruz Deed just minutes before the sale.   Moreover, SS Trust
11   presented uncontroverted evidence that it was not aware of Cruz’s
12   bankruptcy filing.    Once SS Trust learned of Cruz’s bankruptcy, it
13   did not take any further steps which could violate the automatic
14   stay and it promptly moved for relief, which satisfies factors
15   nine and ten.
16        We conclude the bankruptcy court did not abuse its discretion
17   in finding that cause existed for retroactive annulment of the
18   stay to validate the foreclosure sale.
19   B.   The bankruptcy court did not abuse its discretion in denying
          the Motion to Reconsider.
20
21        Cruz did not present any argument in his opening brief as to
22   how the bankruptcy court abused its discretion by denying the
23   Motion to Reconsider the Stay Relief Order.   However, he attempted
24   to do so in his reply brief.   Generally, we will not consider
25   arguments raised for the first time in the reply.   Sec. Pac. Nat’l
26   Bank v. Kirkland (In re Kirkland), 915 F.2d 1236, 1241 n.7 (9th
27   Cir. 1990).   But, considering Cruz’s pro se status, which dictates
28   that we must construe his briefs liberally, and that SS Trust has

                                      -18-
 1   fully briefed this issue, we will consider his argument.
 2        Cruz first argues the bankruptcy court erred by not granting
 3   the Motion to Reconsider under Civil Rule 60(b)(2) based on his
 4   newly discovered evidence of the lender’s demurrer filed in the
 5   state court action, in which the lender stated the sale had not
 6   yet occurred.   Civil Rule 60(b)(2) provides relief from a judgment
 7   or order based on “newly discovered evidence that, with reasonable
 8   diligence, could not have been discovered in time to move for a
 9   new trial under [Civil] Rule 59(b).”   In general, the evidence
10   must have existed at the time the judgment or order was entered.
11   See Fantasyland Video, Inc. v. Cnty. of San Diego, 505 F.3d 996,
12   1005 (9th Cir. 2007); Jones v. Aero/Chem Corp., 921 F.2d 875, 878
13   (9th Cir. 1990)(relief under Civil Rule 60(b)(2) requires that the
14   evidence:   (1) existed at the time of the trial; (2) could not
15   have been discovered through due diligence; and (3) was of such
16   magnitude that production of it earlier would have been likely to
17   change the disposition of the case).   In other words, the evidence
18   must be “newly discovered” by the movant rather than simply “new.”
19        In reviewing the transcript from the reconsideration hearing,
20   the bankruptcy court made incorrect statements about the record.
21   The demurrer, filed on September 9, 2013, came before the hearing
22   on the Stay Relief Motion, which was held on September 10, 2013,
23   and before the Stay Relief Order entered on September 25, 2013.
24   Thus, it could have been “newly discovered” evidence; it existed
25   at the time of trial, could not have been discovered through due
26   diligence because it was filed just one day before the stay relief
27   hearing, and it was potentially of such magnitude that production
28   of it earlier could have undermined SS Trust’s standing to seek

                                     -19-
 1   relief from stay.   Nonetheless, the court’s error here was
 2   harmless.   Cruz admitted the sale had occurred on July 15, 2013,
 3   rightfully or wrongfully, and that SS Trust was the buyer.    Thus,
 4   his own admission negates any potential relevance the lender’s
 5   statement about the sale could have had.   Further, we know now
 6   that the sale did occur on July 15, 2013, as evidenced by the now-
 7   recorded trustee’s deed, which Cruz submitted to the Panel.
 8         Cruz also appears to argue the bankruptcy court erred by not
 9   granting the Motion to Reconsider under Civil Rule 60(b)(6), but
10   he fails to articulate any argument to support entitlement to such
11   relief.   Civil Rule 60(b)(6) provides for relief from a judgment
12   or order based on “any other reason that justifies relief.”     This
13   rule is “used sparingly as an equitable remedy to prevent manifest
14   injustice and is to be utilized only where extraordinary
15   circumstances prevented a party from taking timely action to
16   prevent or correct an erroneous judgment.”   Latshaw v. Trainer
17   Wortham & Co., 452 F.3d 1097, 1103 (9th Cir. 2006)(internal
18   quotations omitted).   Cruz had to demonstrate both injury and
19   circumstances beyond his control which prevented him from
20   proceeding with the defense of the action in a proper fashion.
21   Id.
22         The bankruptcy court ruled that relief under Civil Rule
23   60(b)(6) was not warranted “[g]iven the facts of the case,
24   including post-petition transfer of the Property to Debtor on the
25   eve of bankruptcy filing[.]”   Tentative Ruling (Oct. 23, 2013) 10-
26   11.   This is incorrect factually.   Cruz engaged in a postpetition
27   transfer of the Property, but it was not on the eve of his
28   bankruptcy filing; it occurred after the fact.   Nonetheless, the

                                     -20-
 1   record does not support relief for Cruz under Civil Rule 60(b)(6).
 2   Cruz did not present any evidence establishing that circumstances
 3   beyond his control kept him from defending against the Stay Relief
 4   Motion.   In fact, he diligently defended against it, filing his
 5   opposition, declaration and supporting documents.    Although his
 6   alleged attorney failed to appear at the hearing, no evidence
 7   suggests it would have changed the outcome of the bankruptcy
 8   court’s ruling had she appeared.   Given the facts before the
 9   court, which Cruz’s attorney would have been limited to, SS Trust
10   established that it was entitled to stay relief.10
11        Accordingly, we conclude the bankruptcy court did not abuse
12   its discretion in denying the Motion to Reconsider.
13                              VI. CONCLUSION
14        For the foregoing reasons, we AFFIRM.
15
16
17
18
19
20
21
22
23
24
25
26
          10
             Although Cruz was also denied relief under Civil Rule
27   60(b)(1), he did not articulate any argument regarding this issue.
     In any event, the record reflects the bankruptcy court applied the
28   correct law, and none of its findings appear to be clearly
     erroneous.

                                     -21-