Court Opinion

ID: 4209076
Source: CourtListenerOpinion
Date Created: 2017-10-04 18:00:50.736422+00
Date Added: 2024-06-11T14:40:53.919303
License: Public Domain

Case: 17-10357      Document: 00514182424         Page: 1    Date Filed: 10/04/2017

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                    No. 17-10357                                FILED
                                  Summary Calendar                        October 4, 2017
                                                                           Lyle W. Cayce
                                                                                Clerk
AUDREY DICK,

                                                 Plaintiff - Appellant
v.

COLORADO   HOUSING    ENTERPRISES, L.L.C.; COMMUNITY
RESOURCES AND HOUSING DEVELOPMENT CORPORATION,

                                                 Defendants - Appellees

                   Appeal from the United States District Court
                        for the Northern District of Texas
                              USDC No. 3:17-CV-533

Before BENAVIDES, SOUTHWICK, and COSTA, Circuit Judges.
PER CURIAM:
       This interlocutory appeal is from an order denying a motion for a
preliminary injunction to stop a foreclosure sale. 1 We DISMISS the appeal as
MOOT.
       I.     FACTUAL AND PROCEDURAL HISTORY
       In 2014, Plaintiff Audrey Dick (“Plaintiff”) and her husband borrowed
$100,000 from Colorado Housing Enterprises, L.L.C. and Community

1 The denial of a preliminary injunction is appealable as an exception to the final-judgment
rule. 28 U.S.C. § 1292(a)(1); See Lakedreams v. Taylor, 932 F.2d 1103, 1107 (5th Cir. 1991).
    Case: 17-10357    Document: 00514182424     Page: 2   Date Filed: 10/04/2017

                                 No. 17-10357
Resources and Housing Development Corporation (“Defendants”). The loan
was secured with a deed of trust that granted the Defendants a lien on certain
real property owned by Plaintiff. In 2015, Plaintiff defaulted on the loan
payments.
      Over the course of the year in 2016, Plaintiff obtained the stay of three,
separately scheduled foreclosure sales by filing for bankruptcy three different
times (either for herself or on behalf of her husband). All three bankruptcy
proceedings were dismissed, and the last bankruptcy proceeding was
dismissed with prejudice for two years.
      In January of 2017, Plaintiff was notified that a foreclosure sale was
scheduled for February 7. In response, Plaintiff filed suit in Texas state court
on February 2. Plaintiff sought an ex parte temporary restraining order, which
the state court granted. Defendants removed the case to federal district court
on February 23. In a letter dated March 1, Defendants gave notice that a
foreclosure sale was scheduled for April 4. On March 23, Plaintiff filed a
motion seeking a temporary restraining order and preliminary injunction to
stop the sale. On March 30, Defendants filed a response to the motion. The
next day, the district court denied the motion. On April 2, Plaintiff filed a
notice of interlocutory appeal from the order denying the motion for a
preliminary injunction.
      On April 3, Plaintiff-Appellant filed in this court an opposed emergency
motion for stay of foreclosure proceedings pending appeal. On April 4, the
trustee accepted a successful bid for the property at the foreclosure sale.
Approximately two hours later, this court issued an order granting the motion
to stay foreclosure proceedings pending appeal.
      II.   MOOTNESS
      In their brief on appeal, the Defendants-Appellees argue that this appeal
from the denial of the preliminary injunction is moot because the subject
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                                 No. 17-10357
property was sold at the April 4 foreclosure sale. “Ordinarily, an appeal will
be moot when the property underlying the dispute has been sold at a
foreclosure sale because this court cannot fashion adequate relief, i.e., cannot
reverse the transaction.” Christopher Village, Ltd. P’ship v. Retsinas, 190 F.3d
310, 314 (5th Cir. 1999). See also NCNB Tex. Nat’l Bank v. Southwold Assocs.,
909 F.2d 128, 129 (5th Cir. 1990) (explaining that because the lien on the
property had been foreclosed, the propriety of the preliminary injunction was
rendered moot).
      Plaintiff-Appellant acknowledges the above precedent.         Nonetheless,
Plaintiff-Appellant asserts that because the Defendants-Appellees were the
successful bidders at the foreclosure sale, this court can order them to cancel
or rescind the foreclosure sale. Relying on Knoles v. Wells Fargo Bank, N.A.,
Plaintiff-Appellant contends that this appeal is not moot. 513 F. App’x 414
(5th Cir. 2013).     In Knoles, the plaintiff’s residence had been sold at a
foreclosure sale to Wells Fargo Bank. Id. However, the plaintiff did not vacate
the property, and Wells Fargo brought a successful forcible detainer action. Id.
That judgment was not appealed. Id. Thereafter, plaintiff brought suit against
Wells Fargo in state court, challenging the foreclosure.      Id.   Wells Fargo
removed the case to federal court, and the plaintiff moved for a temporary
restraining order to prevent his eviction. Id. The district court denied the
motion, and the plaintiff took an interlocutory appeal to this court. Id. Wells
Fargo argued that the appeal was moot because the plaintiff had already been
evicted. Id. at 415. We recognized the rule that “a request for injunctive relief
generally becomes moot upon the happening of the event sought to be
enjoined.” Id. (internal quotation marks and citation omitted). Nevertheless,
we rejected the mootness argument, opining that “an order of this court that
Knoles be restored to possession would constitute relief even if belated.” Id.
We further opined that the “parties have not presented other arguments
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                                  No. 17-10357
regarding mootness, such as the possible effect of a sale of the premises to an
alleged bona fide purchaser.” Id. Thus, because the evicted tenant and the
purchaser of the property were before it on appeal, this court rejected the claim
that the appeal was moot.
      We decline to apply the reasoning in Knoles to the instant appeal. Knoles
is an unpublished opinion and thus does not constitute controlling precedent.
See 5th Cir. R. 47.5.4. Moreover, as explained below, we have controlling
precedent that would conflict with our extending the reasoning in Knoles to the
case at bar. “It is a well-settled Fifth Circuit rule of orderliness that one panel
of our court may not overturn another panel’s decision, absent an intervening
change in the law, such as by a statutory amendment, or the Supreme Court,
or our en banc court.” Jacobs v. Nat’l Drug Intelligence Ctr., 548 F.3d 375, 378
(5th Cir. 2008).
       In Matter of Sullivan Cent. Plaza, I, Ltd., the debtor failed to make
payments on a construction loan secured by a high rise tower, and the bank
scheduled the tower for foreclosure. 914 F.2d 731, 732 (5th Cir. 1990), on
rehearing, 935 F.2d 723 (5th Cir. 1991). The debtor then filed for bankruptcy,
which automatically stayed the foreclosure sale.         Id.     Subsequently, the
bankruptcy court lifted the stay because, among other things, the plan for
reorganization could not be confirmed. Id. The debtor filed a second amended
plan for reorganization and requested an emergency injunction. Id. at 733.
The court granted a temporary injunction but conditioned the relief by
requiring the debtor to meet certain requirements. Id. After the debtor failed
to meet the requirements, the court withdrew the injunction. Id. The debtor
moved for a stay pending appeal, which was denied by both the bankruptcy
court and district court. Id. This court denied the debtor’s request for a writ
of mandamus. Id.

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                                       No. 17-10357
       Thereafter, the bank bought the property at a foreclosure sale. Id. The
bank then moved the district court to dismiss as moot (1) the appeal from the
withdrawal of the injunction and (2) the appeal from the lifting of the
automatic stay. Id. The debtor argued that the appeals were not moot because
all the necessary parties involved in the sale were before the district court. Id.
The district court rejected that argument and dismissed the appeals as moot.
Id. The debtor appealed to this court. Id. We explained that generally, “[i]f
the debtor fails to obtain a stay, and if the property is sold in the interim, the
district court will ordinarily be unable to grant any relief. Accordingly, the
appeal will be moot.” Id. 2         Further, although we expressly recognized the
debtor’s argument that the appeal was not moot because all the parties
(including the bank that purchased the property) were before the court, we
nonetheless held that the appeal was moot.
       Likewise, in the case at bar, Plaintiff-Appellant argues that the appeal
is not moot because there was no third-party purchaser; instead, the
Defendants-Appellants purchased the property, and they are before this court.
However, Matter of Sullivan is published precedent and controls this case.
Thus, applying the holding in Matter of Sullivan, we must reject Plaintiff-
Appellant’s argument that the instant appeal is not moot simply because the
Defendants-Appellants purchased the foreclosed property and are before us on
appeal.
       Plaintiff-Appellant further argues that the instant appeal is not moot
because Texas law provides the remedy of setting aside a foreclosure sale and
cancelling a trustee’s deed. Reply brief at 2 (citing Wells Fargo Bank, N.A. v.

2 Although our opinion in Matter of Sullivan was a bankruptcy proceeding, the mootness
analysis applied with respect to automatic stays in bankruptcy cases “is judicially derived
from a fundamental jurisdictional tenet: federal courts are empowered to hear only live cases
and controversies.” 914 F.2d at 735 (citing U.S. Const. art III, section 2). Thus, the mootness
analysis in Matter of Sullivan is applicable to the instant appeal.
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                                  No. 17-10357
Robinson, 391 S.W.3d 590 (Tex.App. — Dallas 2012, no pet.)). However, this
argument is also foreclosed by our opinion in Matter of Sullivan. In that case,
in support of his argument that the appeal was not moot, the debtor similarly
asserted that “foreclosures may be reversible under Texas state law.” Id. at
734.     This court expressly recognized that wrongful foreclosures may be
reversible in Texas. Id. (citing Henke v. First S. Props., Inc., 586 S.W.2d 617
(Tex.App. — Waco 1979, writ ref’d, n.r.e.)). However, we explained that our
opinion did not imply that the improper lifting of a stay of a foreclosure sale
would constitute grounds for a wrongful foreclosure action. Id. We further
explained that the “details of the foreclosure sale do not form the basis of the
appeal from the lifting of the automatic stay.” Id. at 735. Ultimately, we
concluded the “availability of an action for wrongful foreclosure [was]
inapposite” to the appeal from the lifting of the stay. Id. at 734. Applying the
reasoning in Matter of Sullivan to the case at bar, Plaintiff-Appellant’s reliance
on the availability of a wrongful foreclosure suit is irrelevant to this appeal
from the denial of the preliminary injunction.
        III.   CONCLUSION
        In sum, this court “simply cannot enjoin that which has already taken
place.” Harris v. City of Houston, 151 F.3d 186, 189 (5th Cir. 1998). For the
above reasons, we DISMISS the appeal as MOOT.

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