Court Opinion

ID: 4253786
Source: CourtListenerOpinion
Date Created: 2018-03-12 20:00:34.27313+00
Date Added: 2024-06-11T09:23:15.178431
License: Public Domain

NOT FOR PUBLICATION                         FILED
                    UNITED STATES COURT OF APPEALS                       MAR 12 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

In re: DENNIS DELMAR DRAUDT,                    No.    16-56198

             Debtor.                            D.C. No. 2:16-cv-00616-MWF
______________________________

DENNIS DELMAR DRAUDT,                           MEMORANDUM*

                Appellant,

 v.

CHARLES HOLMES; et al.,

                Appellees.

                  Appeal from the United States District Court
                      for the Central District of California
                 Michael W. Fitzgerald, District Judge, Presiding

                             Submitted March 7, 2018**
                               Pasadena, California

Before: GRABER, W. FLETCHER, and OWENS, Circuit Judges.

      Chapter 13 debtor Dennis Delmar Draudt appeals from the district court’s

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
affirmance of the bankruptcy court’s Federal Rule of Civil Procedure 12(b)(6)

dismissal of his adversary case alleging wrongful foreclosure. We review de novo

the district court’s decision on appeal from the bankruptcy court. See Cloobeck v.

Cory (In re Cloobeck), 788 F.3d 1243, 1245 (9th Cir. 2015). We review de novo

the bankruptcy court’s decision to dismiss for failure to state a claim, and review

for an abuse of discretion its decision to deny leave to amend. See Turner v. Wells

Fargo Bank NA (In re Turner), 859 F.3d 1145, 1148 (9th Cir. 2017). As the

parties are familiar with the facts, we do not recount them here. We affirm.

      The bankruptcy court properly dismissed Draudt’s wrongful foreclosure

action for failure to state a claim. The bankruptcy court’s January 7, 2015 order –

which granted Charles Holmes relief from the automatic stay, but extended until

February 17, 2015, the prohibition against conducting a foreclosure sale of the

property – was no longer effective by operation of law after Draudt voluntarily

dismissed his Chapter 13 case on January 20, 2015. See 11 U.S.C. §§ 349(b)(3)

(“Unless the court, for cause, orders otherwise, a dismissal of a case . . . revests the

property of the estate in the entity in which such property was vested immediately

before the commencement of the case under this title.”), 362(c)(1) (“[T]he

[automatic] stay of an act against property of the estate . . . continues until such

property is no longer property of the estate[.]”). Draudt’s argument that the

bankruptcy court exercised its discretion under § 349(b)(3) for the January 7 order

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to survive dismissal of his Chapter 13 case is unpersuasive because the bankruptcy

court indicated that was not the intent of its January 7 order, and Draudt cannot

identify anything in the record that suggests a different conclusion.

      The bankruptcy court did not abuse its discretion by denying Draudt leave to

amend. Amendment would be futile because Draudt could not cure the defect that

his claims rested on the flawed legal premise that the automatic stay, including the

February 17 foreclosure extension, remained effective after the bankruptcy court

dismissed his Chapter 13 case. See Cervantes v. Countrywide Home Loans, Inc.,

656 F.3d 1034, 1041 (9th Cir. 2011). And, the record contradicts the assertion that

Draudt could amend to plausibly allege that Holmes’ attorney orally promised at a

hearing not to foreclose before February 17. See id. at 1040.

      AFFIRMED.

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