Court Opinion

ID: 818073
Source: CourtListenerOpinion
Date Created: 2013-02-01 22:30:18.525614+00
Date Added: 2024-06-11T15:19:44.527185
License: Public Domain

FILED
                                                            DEC 14 2012
                                                        SUSAN M SPRAUL, CLERK
 1                                                        U.S. BKCY. APP. PANEL
                                                          OF THE NINTH CIRCUIT

 2
 3                   UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                             OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No.     CC-12-1140-KiDH
                                   )
 6   MARYETTA C. MARKS,            )      Bk. No.     10-42867-SK
                                   )
 7                  Debtor.        )
                                   )
 8                                 )
     MARYETTA C. MARKS,            )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      M E M O R A N D U M1
11                                 )
     KATHY A. DOCKERY, Chapter 13 )
12   Trustee; WELLS FARGO BANK,    )
     N.A., Trustee for Option One )
13   Mortgage Loan Trust 2007-6,   )
     Asset-Backed Certificates,    )
14   Series 2007-6,                )
                                   )
15                  Appellees.     )
     ______________________________)
16
                   Argued and Submitted on November 15, 2012,
17                           at Pasadena, California
18                          Filed - December 14, 2012
19                Appeal from the United States Bankruptcy Court
                      for the Central District of California
20
              Honorable Sandra R. Klein, Bankruptcy Judge, Presiding
21
22   Appearances:     Appellant MaryEtta C. Marks argued pro se; Joseph
                      C. Delmotte, Esq. of Pite Duncan, LLP, argued for
23                    Appellee Wells Fargo Bank, N.A., Trustee for Option
                      One Mortgage Loan Trust 2007-6, Asset-Backed
24                    Certificates, Series 2007-6.
25
     Before: KIRSCHER, DUNN, and HOLLOWELL, Bankruptcy Judges.
26
27        1
            This disposition is not appropriate for publication.
     Although it may be cited for whatever persuasive value it may have
28   (see Fed. R. App. P. 32.1), it has no precedential value. See 9th
     Cir. BAP Rule 8013-1.
 1        Appellant, chapter 132 debtor MaryEtta C. Marks ("Marks"),
 2   appeals an order from the bankruptcy court granting a motion for
 3   relief from the automatic stay filed by appellee, Wells Fargo
 4   Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2007-6,
 5   Asset-Backed Certificates, Series 2007-6 ("Wells Fargo").    We
 6   AFFIRM.
 7              I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
 8   A.   The first and second motions for relief from stay.
 9        On February 7, 2007, Marks obtained a loan ("Loan") for
10   $609,987.00 from Option One Mortgage Corporation ("Option One")
11   for a residence located in Los Angeles ("Property").    In exchange
12   for the Loan, Marks executed a promissory note ("Note") secured by
13   a first deed of trust ("DOT") in favor of Option One.
14        Marks eventually defaulted on the Loan, and on February 22,
15   2010, a Notice of Default ("NOD") was recorded against the
16   Property in Los Angeles County.    The NOD identified the DOT and
17   its beneficiary as Option One.    Default Resolution Network was
18   identified as the agent authorized to file the NOD.    American Home
19   Mortgage Servicing, Inc. ("AHMSI") was listed as the contact for
20   payment and any other information regarding the foreclosure.
21        On July 20, 2010, a Notice of Trustee's Sale ("NOS") was
22   recorded against the Property in Los Angeles County.    The NOS
23   identified the DOT beneficiary as Option One, and Power Default
24   Services, Inc. was identified as trustee.   A sale was set for
25   August 9, 2010.
26
          2
            Unless specified otherwise, all chapter, code, and rule
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. The
28   Federal Rules of Civil Procedure are referred to as “Civil Rules."

                                       -2-
 1          To fend off foreclosure, Marks filed a skeletal chapter 7
 2   bankruptcy petition on August 6, 2010, thereby invoking the
 3   protections of the automatic stay under § 362(a).   In her
 4   Schedule A filed on August 20, 2010, Marks listed the Property
 5   with a value of $739,000, subject to a secured claim for
 6   $667,294.00.   In her Schedule D, Marks listed AHMSI as the secured
 7   creditor holding the claim referenced in her Schedule A.     Marks
 8   also listed Option One and Sand Canyon Corporation ("Sand Canyon")
 9   as having a security interest in the Property with secured claims
10   valued at $0.00, noting that each entity "claim[ing] that AHMSI is
11   same created confusion."
12          On September 17, 2010, the beneficial interest in the DOT was
13   assigned to Wells Fargo ("Assignment").   The Assignment describes
14   the DOT and reflects the assignor as Sand Canyon, f/k/a Option
15   One.   It contains both a handwritten and stamped signature by
16   Joseph Kaminski, Assistant Secretary of Sand Canyon.   In the upper
17   left corner, it states that recording was requested by AHMSI,
18   "successor in interest" to Sand Canyon, f/k/a Option One.    The
19   Assignment was recorded in Los Angeles County on October 4, 2010.
20          Meanwhile, on September 29, 2010, Wells Fargo moved for
21   relief from the automatic stay ("First Motion for Relief") under
22   § 362(d)(1) to proceed with foreclosure of the Property.     In
23   support, Wells Fargo offered a declaration from Brenda Harris, an
24   employee of AHMSI, who was the "authorized loan servicing agent
25   for [Wells Fargo]."   Harris stated that Wells Fargo held the Note
26   and that Option One had assigned its beneficial interest in the
27   DOT to Wells Fargo.   Attached to the motion was a copy of the
28   Note, the DOT, and (at that time) the unrecorded Assignment.

                                      -3-
 1           Marks opposed the First Motion for Relief, contending that an
 2   adequate equity cushion existed on the Property.    In her
 3   declaration, Marks stated that negotiations for a loan
 4   modification had broken down with AHMSI, whom she was told held
 5   the Note, which forced her to file bankruptcy to "prevent the
 6   illegal foreclosure sale of [her] property."    Marks claimed she
 7   never received a copy of the NOD, and that she only found out
 8   about the scheduled trustee sale through her Theft Protection
 9   Shield Plan.
10           Two weeks after Wells Fargo had filed its First Motion for
11   Relief, Marks moved to convert her case to chapter 13.    On
12   November 23, 2010, the bankruptcy court denied the motion to
13   convert for Marks’s failure to properly serve it in accordance
14   with local rule.    Notwithstanding the denial, the case has been
15   mistakenly treated as having (and continues to be administered as
16   if it had) been converted to chapter 13 and was reassigned from
17   the Hon. Ellen Carroll to the Hon. Sandra Klein.    As a result of
18   the conversion, the First Motion for Relief was removed from the
19   court's calendar.
20           Marks’s First Amended Chapter 13 Plan, which provided for
21   direct payments to Wells Fargo on the nearly $76,000 arrearage on
22   the Loan, was confirmed on May 13, 2011.
23           On June 8, 2011, Wells Fargo again moved for relief from stay
24   ("Second Motion for Relief") under § 362(d)(1) because Marks had
25   failed to make sufficient pre- and postpetition payments on the
26   Loan.    In support, Wells Fargo offered a declaration from Carolyn
27   J. Moore, an employee of AHMSI.    Unlike the Harris declaration,
28   Moore did not state that AHMSI was the authorized loan servicing

                                       -4-
 1   agent for Wells Fargo, or that Wells Fargo was the holder of the
 2   Note entitled to payments.   She did, however, state that Option
 3   One had assigned its beneficial interest in the DOT to Wells
 4   Fargo.   Attached was a copy of the Note, the DOT, and the since-
 5   recorded Assignment to Wells Fargo.
 6        Marks filed an untimely opposition to the Second Motion for
 7   Relief on July 6, 2011, in which she contended Wells Fargo had
 8   failed to indicate the connection between AHMSI, whose employee
 9   signed the declaration in support, and Wells Fargo, to whom she
10   claimed she had been making regular payments pursuant to a loan
11   modification agreement and her chapter 13 plan.   Marks asserted
12   that AHMSI was a stranger to the Loan.
13        A hearing on the Second Motion for Relief was held on
14   July 14, 2011, before the Hon. Peter Carroll.   Warren L. Brown,
15   Esq. ("Brown") appeared for Marks.    The bankruptcy court noted
16   that the issue with regard to the connection between AHMSI and
17   Wells Fargo was a similar issue to that raised in Veal v. Am. Home
18   Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 906 (9th Cir.
19   BAP 2011), and, based on the evidence provided, Wells Fargo had
20   not made the connection between it and AHMSI:
21        And, specifically I have to agree with the Debtor that I
          can't make a connection based on the evidence in support
22        of the motion between [AHMSI] and Wells Fargo. Now Wells
          Fargo certainly has standing to bring the motion
23        according to the paperwork that's attached.      But the
          declaration that ties everything together is signed by
24        Carolyn Moor [sic], who is the Assistant Secretary of
          [AHMSI], and it doesn't refer to Wells Fargo or even
25        claim to have a connection with Wells Fargo. It is as if
          [AHMSI] is bringing this motion. It does reference the
26        deed of trust that was assigned to Wells Fargo, but does
          not state anywhere that it is the duly authorized
27        servicing agent for Wells Fargo and has authority to make
          this declaration and to state what funds are owing on the
28        note and to Wells Fargo secured by the deed of trust on

                                     -5-
 1        the property.
 2   Hr’g Tr. (July 14, 2011) 1:21-2:13 (emphasis added).   Counsel for
 3   Wells Fargo requested a continuance to file a supplemental
 4   declaration regarding AHMSI's role as loan servicer for Wells
 5   Fargo, but also noted that a continuance would be appropriate if
 6   Marks was working with AHMSI on a loan modification.   The
 7   bankruptcy court granted the continuance, but Wells Fargo later
 8   withdrew the Second Motion for Relief to give Marks additional
 9   time to pursue a loan modification.
10   B.   The third motion for relief from stay.
11        On January 9, 2012, Wells Fargo filed a third motion for
12   relief from stay ("Third Motion for Relief"), wherein it requested
13   relief under § 362(d)(1) for Marks's failure to tender
14   postpetition payments due and owing under the Note.    In support,
15   Wells Fargo offered a declaration from Demetrius Foster, an
16   employee of AHMSI.   Foster stated that, by contract, AHMSI was the
17   authorized loan servicing agent for Wells Fargo and that Option
18   One had assigned its beneficial interest in the DOT to Wells
19   Fargo.   Attached was a copy of the Note, the DOT, and a copy of
20   the Assignment without the related recording document.   A hearing
21   was scheduled for February 1, 2012.
22        On January 19, 2012, an untimely opposition to the Third
23   Motion for Relief was filed by alleged creditor, Rev. C.R. Tillman
24   ("Tillman").   Tillman contended that Wells Fargo lacked standing
25   and that it should be sanctioned for bringing a "fraudulent motion
26   with deceptive exhibits."   Attached to Tillman's opposition was a
27   copy of an objection he had filed in November 2011 in response to
28   an additional fee request by Brown.   In that opposition, Tillman

                                     -6-
 1   contended Marks owed him $499.00 for title and legal research he
 2   claimed helped "defeat" Wells Fargo's previous motions for relief
 3   from stay.    Tillman further contended his research revealed that
 4   the Assignment to Wells Fargo was void since it violated the stay
 5   in Marks's case, and the Assignment was also unenforceable under
 6   In re Veal because it failed to assign the Note with the DOT.
 7        Eight days after he filed his first objection, Tillman filed
 8   a second untimely objection to the Third Motion for Relief, which
 9   was similar to the first, but this one contained a declaration
10   from Marks.   Marks contended that Wells Fargo had not produced any
11   evidence that it held the Note.    She further argued that Wells
12   Fargo lacked standing to enforce the Note because it had not been
13   properly endorsed.   Marks stated her intent to file complaints
14   against Wells Fargo with the U.S. Trustee's Office, the U.S.
15   Attorney General, the NAACP, the FBI, and the Secret Service
16   Office, due to Wells Fargo's forgery and false document
17   procurement in lending transactions.
18        One day before the scheduled hearing, Marks, now appearing
19   pro se, filed her own untimely opposition to the Third Motion for
20   Relief.   She contended that both AHMSI and Wells Fargo failed to
21   establish "standing" as directed by Judge Carroll at the hearing
22   on the Second Motion for Relief.    In her supporting declaration,
23   Marks contended that AHMSI had not shown how it came into
24   possession of the Note or shown any proof of agency.   Marks also
25   contended that Wells Fargo had failed to show any proof of agency,
26   or how or when it was assigned the DOT.
27        The hearing on the Third Motion for Relief went forward on
28   February 1, 2012, before the Hon. Sandra Klein.   Brown, appearing

                                       -7-
 1   for Marks, stated that he did not know Tillman, but he had learned
 2   through Marks that Tillman was her minister, who was apparently
 3   giving Marks legal advice when Brown's advice was inadequate.
 4   Marks then informed the court that Brown had disagreed with her
 5   and did not want to file an opposition to the Third Motion for
 6   Relief, so she filed her own opposition.   The court noted that it
 7   had considered Marks’s untimely opposition and asked her if she
 8   wished to present any argument.    Marks questioned the competency
 9   of declarant Foster and argued that Wells Fargo had not produced
10   any documents to support Foster's assertions.   Marks further
11   argued that no evidence existed showing the chain of assignment
12   regarding her Property.   Counsel for Wells Fargo argued that his
13   client had established its standing with the Assignment and the
14   Foster declaration.   Counsel noted that Marks was behind eleven
15   payments on her Loan postpetition.
16        After hearing further argument from the parties, the
17   bankruptcy court found that Wells Fargo had shown a colorable
18   claim for relief and granted the Third Motion for Relief:
19        Okay. After considering the evidence submitted by the
          movant -- I did review, even though it was extremely
20        lately filed, the opposition filed by Ms. Marks -- I do
          find that there is sufficient evidence of the assignment
21        in the record attached to the motion for relief from stay
          that was filed by movant in this case.
22
          I understand there may have been issues in the previous
23        motion that was filed before Judge Peter Carroll, but
          that has been rectified in this motion.
24
          I also do note that in California, the entity foreclosing
25        does not have to produce the note.     That's clear case
          law.   I can certainly provide cites.     The first that
26        comes to mind is the Gomez [sic] cite that was decided by
          the California Court of Appeals in 2011. And there are
27        numerous other cites that also hold the same.
28        So I am going to grant the relief from stay and just

                                       -8-
 1        state further that this is a summary proceeding.   The
          movant only has to show a colorable claim for relief.
 2        And I find that based upon the evidence in the record,
          they have shown that.     So I'm granting the movant's
 3        motion under [§ 362](d)(1).
 4   Hr’g Tr. (Feb. 1, 2012) 7:9-8:4.   The court announced that it did
 5   not consider Tillman's opposition because he was not an attorney
 6   or a party to the case.
 7        Before the bankruptcy court entered an order on the Third
 8   Motion for Relief, Tillman filed a one-page motion for
 9   reconsideration, which consisted of one sentence and lacked any
10   legal reasoning.
11        On February 3, 2012, the bankruptcy court entered an order
12   granting the Third Motion for Relief under § 362(d)(1)("Stay
13   Relief Order").3
14        On February 15, 2012, Marks filed a joinder to Tillman's one-
15   sentence motion for reconsideration under Civil Rule 59(e) and a
16   request for evidentiary hearing.   Marks contended that after the
17   February 1 hearing, she realized she had not received copies of
18   the exhibits attached to Wells Fargo's Third Motion for Relief,
19   i.e., the Note, the DOT, and the Assignment, prior to the hearing.
20   She later received copies from Brown on February 2.   Marks argued
21   that reconsideration of the Stay Relief Order was warranted
22   because the exhibits provided newly discovered evidence with
23   respect to Wells Fargo's standing to bring the Third Motion for
24   Relief and to Wells Fargo's fraud.
25        Specifically, Marks argued that AHMSI's name did not appear
26   in the body of the NOD, but was only referenced in the upper left
27
          3
            For reasons unknown, the court entered a second identical
28   order on February 7, 2012.

                                    -9-
 1   corner of the document.    Marks further argued that the signature
 2   of Joseph Kaminski on the Assignment to Wells Fargo was illegible,
 3   and his stamped signature consisted of what is now commonly
 4   referred to as "robo-signing."   In addition, the notary's
 5   acknowledgment did not establish that Kaminski actually appeared
 6   before her when signing.   Therefore, according to Marks, the
 7   Assignment was fraudulent on its face.   Marks further argued that
 8   although AHMSI was identified in the Assignment as the "successor
 9   in interest" to Sand Canyon, f/k/a Option One, no assignment to
10   AHMSI existed in the public record.
11        Marks filed a second reconsideration motion and request for
12   evidentiary hearing two days later on February 17, 2012.     She
13   refined her arguments raised in the first motion, contending that:
14   (1) the real party in interest was Option One, not AHMSI or Wells
15   Fargo; (2) the Assignment was invalid on its face because it was
16   "robo-signed;" and (3) California law requires assignees to record
17   their assignments before exercising their power of sale, and no
18   assignment to AHMSI from Sand Canyon, f/k/a/ Option One had been
19   recorded.   In her declaration, Marks stated that she conducted a
20   title search on the Property on February 16, 2012, which showed
21   the Assignment had not been recorded.    She identified the "title
22   search" as "Exhibit 8," which consisted of a copy of a 1996
23   quitclaim deed showing a gift transfer of interest in the Property
24   from Willie J. Marks and Marks as joint tenants to Marks as sole
25   owner, and copies of the Note, the DOT, the NOD, the NOS, and a
26   notice of Marks's bankruptcy filing.    In sum, Marks contended
27   Wells Fargo had failed to provide any written document showing a
28   transfer of the interest in the Property from Option One to any

                                      -10-
 1   other entity, be it AHMSI, Sand Canyon, or Wells Fargo.
 2        A hearing on the reconsideration motions was held on
 3   February 29, 2012.   The bankruptcy court denied the motions,
 4   rejecting Marks's argument of not having received Wells Fargo’s
 5   exhibits prior to the hearing as a basis for newly discovered
 6   evidence; the court had received the exhibits and considered them,
 7   so no newly discovered evidence existed.
 8        After the bankruptcy court had ruled and went off the record,
 9   Tillman appeared and presented argument on his one-sentence motion
10   for reconsideration.   In short, he argued that the Assignment was
11   invalid because it was done postpetition in violation of the stay.
12   The court informed Tillman that assignments are not impacted by
13   the stay, and that a creditor is free to assign its interest to
14   whomever it wants.   After hearing further argument from Tillman,
15   the court again denied the motions for reconsideration, and,
16   specifically, denied Tillman's motion because it failed to provide
17   any supporting facts or argument.   The court entered an order
18   denying both motions for reconsideration on March 22, 2012 (the
19   "Reconsideration Order").
20        Marks timely filed an amended Notice of Appeal on March 26,
21   2012.4
22                             II. JURISDICTION
23        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
24   and 157(b)(2)(G).    We have jurisdiction under 28 U.S.C. § 158.
25
26
27        4
            On March 28, 2012, Marks filed a motion for stay pending
     appeal, which Wells Fargo opposed. The bankruptcy court denied
28   that motion on May 2, 2012.

                                      -11-
 1                                III. ISSUES
 2   1.   Did the bankruptcy court abuse its discretion when it granted
 3   Wells Fargo's Third Motion for Relief?
 4   2.   Did the bankruptcy court abuse its discretion in denying the
 5   motions to reconsider the Stay Relief Order?
 6                         IV. STANDARDS OF REVIEW
 7        We review a bankruptcy court's order granting relief from the
 8   automatic stay for an abuse of discretion.   Gruntz v. Cnty. of
 9   L.A. (In re Gruntz), 202 F.3d 1074, 1084 n.9 (9th Cir. 2000)(en
10   banc); Edwards v. Wells Fargo Bank, N.A. (In re Edwards), 454 B.R.
11   100, 104 (9th Cir. BAP 2011).   Likewise, the bankruptcy court’s
12   denial of a motion for reconsideration is reviewed for an abuse of
13   discretion.   OneCast Media, Inc. v. James (In re OneCast Media,
14   Inc.), 439 F.3d 558, 561 (9th Cir. 2006).    A bankruptcy court
15   abuses its discretion if it applied the wrong legal standard or
16   its findings were illogical, implausible, or without support in
17   the record.   TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d
18   820, 832 (9th Cir. 2011).
19        We review de novo whether a party has standing.   Mayfield v.
20   United States, 599 F.3d 964, 970 (9th Cir. 2010); In re Veal,
21   450 B.R. at 906.   De novo means review is independent, with no
22   deference given to the trial court's conclusion.   Mwangi v. Wells
23   Fargo Bank, N.A. (In re Mwangi), 432 B.R. 812, 818 (9th Cir. BAP
24   2010).
25                               V. DISCUSSION
26   A.   The bankruptcy court did not err in determining that Wells
          Fargo had standing to prosecute the Third Motion for Relief.
27
28        Marks contends on appeal that the Assignment to Wells Fargo

                                     -12-
 1   is void, or fraudulent, or otherwise ineffective.     On this basis,
 2   she asserts that Wells Fargo lacked standing to prosecute the
 3   Third Motion for Relief.
 4        1.       Standing
 5        Standing is a threshold matter of jurisdiction.     In re
 6   Edwards, 454 B.R. at 104.    The issue of standing involves both
 7   “constitutional limitations on federal court jurisdiction and
 8   prudential limitations on its exercise.”     Warth v. Seldin,
 9   422 U.S. 490, 498 (1975); In re Veal, 450 B.R. at 906.     Only
10   prudential standing is at issue in this appeal.5     Prudential
11   standing requires the plaintiff to assert its own legal rights
12   rather than the legal rights of others.     Dunmore v. United States,
13   358 F.3d 1107, 1112 (9th Cir. 2004).
14        Motions for relief from stay are contested matters under
15   Rule 9014.    Rule 9014(c) provides that Rule 7017, which in turn
16   incorporates Civil Rule 17(a), is applicable to contested matters.
17   Civil Rule 17(a)(1) provides that “[a]n action must be prosecuted
18   in the name of the real party in interest . . . .”     Thus, to
19   satisfy the requirements of prudential standing and Civil
20   Rule 17(a)(1), “the action must be brought by the person who,
21   according to the governing substantive law, is entitled to enforce
22   the right.”    6A Wright, Miller, Kane & Marcus, FED. PRAC. & PROC.,
23   CIV. ¶ 1543 (3d ed. 2011); In re Veal, 450 B.R. at 908.     Simply
24   put, the party moving for relief from the automatic stay must be
25
          5
            Constitutional standing is satisfied because Wells Fargo
26   established the minimum requirements of injury in fact, causation,
     and redressability. The automatic stay’s prohibition on
27   Wells Fargo's right to exercise its alleged nonbankruptcy rights
     could be redressed by obtaining relief from stay. See In re Veal,
28   450 B.R. at 906.

                                      -13-
 1   the "real party in interest."
 2           The stay under § 362(a) is extremely broad in scope and
 3   prohibits almost any type of formal or informal collection or
 4   legal action against a debtor or the property of the estate.
 5   Midlantic Nat'l Bank v. N.J. Dep't of Envtl. Prot., 474 U.S. 495,
 6   503 (1986).    The automatic stay prevents continuation of a
 7   foreclosure proceeding concerning a debtor's property, or property
 8   of a bankruptcy estate, during the pendency of the bankruptcy
 9   case.    Countrywide Home Loans, Inc. v. Hoopai (In re Hoopai),
10   581 F.3d 1090, 1093 (9th Cir. 2010).
11           Under § 362(d), a "party in interest" can request relief from
12   the automatic stay.    Section 362(d)(1) authorizes relief from stay
13   "for cause, including the lack of adequate protection of an
14   interest in property of such party in interest."    The Code does
15   not define the term "party in interest."    Thus, whether a moving
16   party is a "party in interest" under § 362(d) is determined on a
17   case-by-case basis, taking into account both the claimed interest
18   and how that interest is affected by the automatic stay.    In re
19   Veal, 450 B.R. at 913; Kronemyer v. Am. Contractors Indem. Co.
20   (In re Kronemyer), 405 B.R. 915, 919 (9th Cir. BAP 2009).      A
21   "party in interest" can include any party that has a pecuniary
22   interest in the matter, that has a practical stake in the
23   resolution of the matter, or that is impacted by the automatic
24   stay.    Brown v. Sobczak (In re Sobczak), 369 B.R. 512, 517-18 (9th
25   Cir. BAP 2007).
26           Proceedings to decide motions for relief from the automatic
27   stay are very limited in scope.    Such proceedings "should not
28   involve an adjudication on the merits of claims, defenses, or

                                       -14-
 1   counterclaims, but simply determine whether the creditor has a
 2   colorable claim to the property of the estate."     Biggs v. Stovin
 3   (In re Lux Int'l, Ltd.), 219 B.R. 837, 842 (9th Cir. BAP 1998)
 4   (emphasis added).   See In re Veal, 450 B.R. at 913 (holding same
 5   and citing First Fed. Bank of Cal. v. Robbins (In re Robbins),
 6   310 B.R. 626, 631 (9th Cir. BAP 2004)).     Veal recognized that a
 7   movant has a colorable claim under § 362 if it either: (1) owns or
 8   has another form of property interest in a note secured by the
 9   debtor's (or the estate's) property; or (2) is a "person entitled
10   to enforce such a note under applicable state law."     450 B.R. at
11   910.   We note, however, that Veal is distinguishable from the
12   instant case because Veal was applying Illinois law, which follows
13   the common law rule under the Uniform Commercial Code (“UCC”) that
14   a mortgagee must hold the note to foreclose.     Id. at 916.
15   Likewise, under the common law rule, an assignment of a mortgage
16   without the note is a nullity.    Id.    In Veal, the Panel determined
17   that the mortgagee failed to establish its standing to obtain
18   relief from the automatic stay because it could not show that it
19   possessed the note, or that it had an interest in the note.     Id.
20   at 918.   In this case, California law applies,6 which has altered
21   the common law rule by statute.
22          Veal recognized that states within the Ninth Circuit,
23   including California, have enacted nonjudicial foreclosure
24
          6
            The DOT, the security instrument at issue, contains a
25   choice of law provision, which states that it shall be governed by
     federal law "and the law of the jurisdiction in which the Property
26   is located." Here, that would be California. As the Panel held
     in Veal, the forum state's choice of law rules determine which
27   state's substantive law applies. 450 B.R. at 916 n.32. As for
     the Property at issue here, California uses deeds of trust as
28   opposed to mortgages as the security instrument for the note.

                                       -15-
 1   statutes that may have changed the common law rule.    Id. at 916-17
 2   & n.34.   Veal further recognized that "the minimum requirements
 3   for the initiation of foreclosures under applicable nonbankruptcy
 4   law will shape the boundaries of real party interest status under
 5   Civil Rule 17 with respect to relief from stay matters.    As a
 6   consequence, the result in a given case may often depend upon the
 7   situs of the real property in question."    450 B.R. at 917 n.34.
 8        California's nonjudicial foreclosure statutes are governed by
 9   CAL. CIV. CODE ("CCC") §§ 2924 through 2924k, which do not require
10   that the note be in the possession of the party initiating
11   foreclosure.   Debrunner v. Deutsche Bank Nat'l Trust Co., 138 Cal.
12   Rptr. 3d 830, 835 (Cal. Ct. App. 2012)(string citations omitted);
13   Lane v. Vitek Real Estate Indus. Grp., 713 F.Supp.2d 1092, 1099
14   (E.D. Cal. 2010)(“There is no stated requirement in California's
15   non-judicial foreclosure scheme that requires a beneficial
16   interest in the Note to foreclose.     Rather, [CCC § 2924(a)(1)]
17   broadly allows a trustee, mortgagee, beneficiary, or any of their
18   agents to initiate non-judicial foreclosure.    Accordingly, the
19   statute does not require a beneficial interest in both the Note
20   and the Deed of Trust to commence a non-judicial foreclosure
21   sale.”); Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F.Supp.2d
22   1039, 1043 (N.D. Cal. 2009)(same); Hague v. Wells Fargo Bank, NA,
23   2011 WL 3360026, at *3 (N.D. Cal. Aug. 2, 2011)("The original note
24   need not be produced in order to initiate nonjudicial
25   foreclosure.").   The comprehensive statutory framework established
26   to govern nonjudicial foreclosure sales in CCC § 2924 et seq. is
27   intended to be exhaustive.   Moeller v. Lien, 30 Cal. Rptr. 2d 777,
28   785 (Cal. Ct. App. 1994)(citing Homestead Sav. v. Darmiento,

                                     -16-
 1   281 Cal. Rptr. 2d. 367 (Cal. Ct. App. 1991)).
 2        2.      Analysis
 3        Therefore, in California, a party with a nonbankruptcy right
 4   to commence foreclosure proceedings may have prudential standing -
 5   i.e, a colorable claim to the property - to prosecute a motion for
 6   relief from stay.       Hence, to the extent Marks contends Wells Fargo
 7   had to show that it held the Note, or an interest in the Note, or
 8   produce the actual Note to establish its standing to prosecute the
 9   Third Motion for Relief, she is incorrect.      Given that Wells Fargo
10   could commence foreclosure of the Property without the Note, it
11   certainly would not need to possess or show any interest in the
12   Note in the lesser action of establishing a colorable claim
13   entitling it to relief from stay.
14        We conclude, on this record, Wells Fargo demonstrated that it
15   had a colorable claim to the Property.      In other words, Wells
16   Fargo made the connection Judge Carroll said was lacking between
17   AHMSI and Wells Fargo with respect to the Second Motion for
18   Relief.   His concern in that motion was that AHMSI had failed to
19   establish its role in the scheme of things, not that Wells Fargo
20   lacked standing.    In fact, Judge Carroll expressly found that
21   Wells Fargo had established standing based on the documents
22   submitted.    In support of the Third Motion for Relief, Wells Fargo
23   offered the Foster declaration.      Foster stated that Option One had
24   assigned its beneficial interest in the DOT to Wells Fargo and
25   that AHMSI was the authorized loan servicing agent for Wells
26   Fargo.    Attached was a copy of the Note, the DOT, and the
27   Assignment.    The Assignment is executed by Sand Canyon, f/k/a
28   Option One, the original beneficiary under the DOT, and indicates

                                         -17-
 1   that all beneficial interest under the DOT was assigned to Wells
 2   Fargo on September 17, 2010.   Although Wells Fargo did not include
 3   proof that the Assignment had been recorded (which it had been on
 4   October 4, 2010), the document establishing this fact was
 5   submitted with its Second Motion for Relief and was part of the
 6   record.   Furthermore, this fact is a matter of public record of
 7   which the bankruptcy court was free to take judicial notice.
 8   FED. R. EVID. 201.
 9        As the beneficiary under the DOT, Wells Fargo may commence
10   the foreclosure process against the Property.
11   See CCC § 2924(a)(1); Debrunner, 138 Cal. Rptr. 3d at 835.
12   Accordingly, these foreclosure rights give Wells Fargo a colorable
13   claim in the Property, and therefore it had standing to prosecute
14   the Third Motion for Relief.   We reject all of Marks's arguments
15   to the contrary, most of which are an attempt to circumvent
16   California's lack of a cause of action to determine whether or not
17   a party has authority to institute foreclosure proceedings.    See
18   Gomes v. Countrywide Home Loans, 121 Cal. Rptr. 3d 819, 824-25
19   (2011).
20        Marks first contends that Wells Fargo lacks standing because
21   the NOD lists Option One as the beneficiary as opposed to Wells
22   Fargo.    First, this argument exceeds the scope of what the
23   bankruptcy court had to determine in the Third Motion for Relief,
24   which was whether Wells Fargo established its foreclosure rights
25   under the DOT.   Any technical defects in the NOD should be raised
26   in state court, if anywhere.   Second, regardless of which entity
27   was listed as beneficiary in the NOD, which at the time was Option
28   One, the NOD complies in all respects with CCC § 2924(a)(1)(A)-

                                      -18-
 1   (D).7       Further, Marks has not established how she is prejudiced by
 2   the fact that Option One was the named beneficiary in the NOD.
 3   See Debrunner, 138 Cal. Rptr. 3d at 837-38.
 4           Next, Marks challenges the validity of the Assignment.       She
 5   first contends the Assignment is void on its face because it was
 6   not recorded in a timely manner, citing "CCC § 2924(h)(c)."          No
 7   such statute exists.       If she means CCC § 2924h(c), this statute
 8   governs bidders at trustee sales and has no relevance to recording
 9   assignments of deeds of trust.       To the extent she contends
10   CCC § 2932.58 applies, that statute governs an assignee's ability
11   to exercise its power of sale once the assignment is duly
12   acknowledged and recorded.       However, the majority of California
13   courts have held that the recording requirements in CCC § 2932.5
14   apply only to mortgages and not deeds of trust.9       Regardless,
15
             7
16          That statute requires a notice of default to identify the
     deed of trust, contain a statement that a breach of the
17   obligations under the note has occurred, contain a statement
     setting forth the nature of each breach actually known to the
18   beneficiary and of its election to sell or cause to be sold the
     property to satisfy that obligation and any other obligation
19   secured by the deed of trust that is in default, and, if
     applicable, provide the notice statement specified in
20   CCC § 2924c(b)(1). The NOD provides all of these things.
             8
21               CCC § 2932.5 provides:
22           Where a power to sell real property is given to a mortgagee,
             or other encumbrancer, in an instrument intended to secure
23           the payment of money, the power is part of the security and
             vests in any person who by assignment becomes entitled to
24           payment of the money secured by the instrument. The power of
             sale may be exercised by the assignee if the assignment is
25           duly acknowledged and recorded.
             9
26          See Calvo v. HSBC Bank USA, N.A., 130 Cal. Rptr. 3d 815,
     819 (Cal. Ct. App. 2011), rev. denied (Cal. Jan. 4, 2012)(“The
27   rule that section 2932.5 does not apply to deeds of trust is part
     of the law of real property in California.”); Caballero v. Bank of
28                                                        (continued...)

                                          -19-
 1   Marks is still incorrect because the record reflects that the NOD
 2   was recorded in Los Angeles County on October 4, 2010, which was
 3   only eighteen days after it was executed.   Thus, it was recorded
 4   and in a timely manner.
 5        Marks also contends that the Assignment is void because it
 6   was signed by "robo-signer" Joseph Kaminski.   Although Marks does
 7   not explain what a "robo-signer" is, it appears to be someone,
 8   generally a bank employee, “who signs thousands of foreclosure
 9   documents regularly, swearing to the veracity of the information
10   contained in them, but in reality does not have personal knowledge
11   of the case.”   See S.T.O.P. Stop Taking Our Property,
12
13
          9
           (...continued)
14   Am., 2012 WL 475766, at *1 (9th Cir. Feb. 15, 2012)(“For the
     reasons stated in Calvo and the many district court decisions that
15   have reached the same conclusion . . . we find no ‘convincing
     evidence’ that the California Supreme Court would hold that
16   California Civil Code section 2932.5 applies to deeds of trust.”);
     In re Salazar, 470 B.R. 557, 560 (S.D. Cal. 2012)(“the Court finds
17   that § 2932.5 does not apply to deeds of trust.”); Lindsay v.
     America's Wholesale Lender, 2012 WL 83475, at *2 (C.D. Cal. Jan.
18   10, 2012)(“Section 2932.5 ‘does not require the recordation of an
     assignment of beneficial interest for a deed of trust, as opposed
19   to a mortgage.’”)(quoting Caballero v. Bank of Am., 2010 WL
     4604031, at *3 (N.D. Cal. 2010)(emphasis in original)); Yau v.
20   Deutsche Bank Nat'l Trust Co. Americas, 2011 WL 5402393, at *9
     (C.D. Cal. Nov. 8, 2011)(“[Section 2932.5] does not apply where
21   the power of sale is set forth in a deed of trust. Section 2932.5
     applies only to mortgages that give a power of sale to the
22   creditor, not to deeds of trust which grant a power of sale to the
     trustee.”)(citation omitted); Herrera v. Fed. Nat'l Mortg. Ass'n,
23   141 Cal. Rptr. 3d 326, 337 (Cal. Ct. App. 2012)(“It is well
     established that section 2932.5 does not apply to trust deeds in
24   which the power of sale is granted to a third party, the trustee.
     Section 2932.5 applies to mortgages, in which the mortgagor or
25   borrower has granted a power of sale to the mortgagee or
     lender.”); Haynes v. EMC Mortg. Corp., 140 Cal. Rptr. 3d 32, 34
26   (Cal. Ct. App. 2012)(“That section 2932.5 applies only to
     mortgages is well settled.”). But see In re Cruz, 457 B.R. 806,
27   814 (Bankr. S.D. Cal. 2011)(Section 2932.5 applies to deeds of
     trust and the beneficiaries' interest in the deed of trust must be
28   recorded prior to the foreclosure sale).

                                     -20-
 1   http://takeyourhomeback.com/?p=1141 (last visited on Nov. 26,
 2   2012).   Marks fails to prove that Kaminski is a robo-signer or,
 3   more importantly, to cite any authority supporting her contention
 4   that an assignment signed by an alleged robo-signer renders it
 5   fraudulent or void.   Disparaging terms and unsupported allegations
 6   about what might have occurred with respect to the Assignment fail
 7   to establish any claim that it is void or that fraud has been
 8   perpetrated against Marks.
 9        Marks further contends that AHMSI was required to record its
10   assignment in the DOT from Option One or Sand Canyon, and nothing
11   in the record of title shows a transfer of interest in the
12   Property from Option One or Sand Canyon to AHMSI.    Thus, argues
13   Marks, because AHMSI had nothing to assign to Wells Fargo, the
14   Assignment to Wells Fargo is void.     In other words, the broken
15   "chain of assignment" invalidates the Assignment from AHMSI to
16   Wells Fargo.   Without addressing what is or is not in the record
17   of title, AHMSI has never claimed to be beneficiary of the DOT.
18   Option One was the original beneficiary of the DOT.    The
19   Assignment of the DOT was executed by Sand Canyon, f/k/a Option
20   One to Wells Fargo.   AHMSI established that it is the authorized
21   loan servicing agent for Wells Fargo.
22        Next, Marks's contention that California law requires all
23   assignments transferring an interest in real property be
24   publically noticed and recorded misstates the law.    California
25   does not require that assignments of a beneficial interest under a
26   deed of trust be recorded.   CCC § 2934 provides only that such
27   assignments may be recorded, and a recorded assignment operates as
28

                                     -21-
 1   constructive notice to the public of the assignee's interest.10
 2   Further, Marks's evidence (Exhibit 8) showing the “absence” of a
 3   recorded assignment of the DOT to AHMSI, does not conclusively
 4   establish what is or is not in the record of title.   A title
 5   report is a more suitable document to establish what Marks
 6   contends, presuming that AHMSI, if it ever had a beneficiary
 7   interest in the DOT, actually had to record its assignment, which
 8   is contrary to California law.11
 9        Lastly, Marks argues that Wells Fargo lacked standing due to
10   a violation of the trust agreement that was executed in connection
11   with the securitization of the Loan.    In short, Marks contends
12   that the Assignment to Wells Fargo occurred three years after the
13   closing of Trust 2007-6 pursuant to the pooling and servicing
14   agreement, or PSA, so it is therefore void.   Despite Marks's
15   contention that she raised this issue before the bankruptcy court
16
17        10
               CCC § 2934 provides:
18        Any assignment of a mortgage and any assignment of the
          beneficial interest under a deed of trust may be recorded,
19        and from the time the same is filed for record operates as
          constructive notice of the contents thereof to all persons;
20        and any instrument by which any mortgage or deed of trust of,
          lien upon or interest in real property, (or by which any
21        mortgage of, lien upon or interest in personal property a
          document evidencing or creating which is required or
22        permitted by law to be recorded), is subordinated or waived
          as to priority may be recorded, and from the time the same is
23        filed for record operates as constructive notice of the
          contents thereof, to all persons.
24
          11
             It is not clear why the Assignment in the upper left corner
25   refers to AHMSI as the "successor in interest" to Sand Canyon,
     f/k/a Option One. Perhaps it is a scrivener's error. Perhaps
26   AHMSI had been assigned a beneficial interest in the DOT at some
     point. Regardless, as explained above, California law did not
27   require AHMSI to record its purported assignment of the DOT, so
     any alleged break in the chain of title does not defeat what
28   clearly is Wells Fargo's interest in the DOT.

                                      -22-
 1   but the court "overlooked" it, this issue was never raised in
 2   connection with any of her oppositions to Wells Fargo's motions
 3   for relief.   Marks raised this argument for the first time in her
 4   motion for stay pending appeal.    The order denying that motion is
 5   not before us, and we generally will not consider issues raised
 6   for the first time on appeal.   See United Student Funds, Inc. v.
 7   Wylie (In re Wylie), 349 B.R. 204, 213 (9th Cir. BAP 2006).       Even
 8   if we did consider it, we fail to see how Marks has standing to
 9   assert breaches of a trust agreement to which she was not a party
10   or even a third-party beneficiary.       Marks has no interest in a
11   trust agreement involving groups of investors in pools of loans.
12   The First Circuit Bankruptcy Appellant Panel rejected this same
13   argument raised by the debtors in Correia v. Deutsche Bank Nat'l
14   Trust Co. (In re Correia), 452 B.R. 319, 324 (1st Cir. BAP 2011).
15   See Washington v. Saxon Mortg. Servs. (In re Washington), 469 B.R.
16   587, 531 (Bankr. W.D. Pa. 2012)(rejecting same argument); In re
17   Almeida, 417 B.R. 140, 149 n.4 (Bankr. D. Mass. 2009)(holding that
18   because party was not a third-party beneficiary of the PSA he
19   lacked standing to object to any breaches of its terms; investors
20   who bought securities based upon the pooled mortgages were parties
21   with standing to object to defects in those mortgages resulting
22   from failures to abide by the PSA).
23        Accordingly, we conclude the bankruptcy court did not err
24   when it determined that Wells Fargo had standing to prosecute the
25   Third Motion for Relief.
26   B.   The bankruptcy court not abuse its discretion in granting
          Wells Fargo's Third Motion for Relief.
27
28        Marks's arguments on appeal do not extend beyond challenging

                                       -23-
 1   Wells Fargo's standing to prosecute the Third Motion for Relief.
 2   Nonetheless, we note that the bankruptcy court granted relief "for
 3   cause" under § 362(d)(1).   What constitutes "cause" is determined
 4   on a case-by-case basis.    In re Kronemyer, 405 B.R. at 921.    Once
 5   a party seeking relief establishes a prima facie case that cause
 6   exists for relief under § 362(d)(1), the burden shifts to the
 7   debtor to show that relief from the stay is not warranted.      USA v.
 8   Gould (In re Gould), 401 B.R. 415, 426 (9th Cir. BAP 2009).
 9        We conclude the record supports the bankruptcy court's
10   finding that "cause" existed to terminate the automatic stay and
11   allow Wells Fargo to exercise its foreclosure remedies against the
12   Property.   Wells Fargo established its standing and a colorable
13   claim to the Property.   Further, at the time Wells Fargo filed the
14   Third Motion for Relief, Marks had failed to tender eleven
15   postpetition payments owing under the Note, a fact she does not
16   apparently dispute.   A debtor's failure to make postpetition
17   mortgage payments as they become due in a chapter 13 case
18   constitutes "cause" for relief from the automatic stay under
19   § 362(d)(1).   Ellis v. Parr (In re Ellis), 60 B.R. 432, 435 (9th
20   Cir. BAP 1985); Lomas Mortg. USA, Inc. v. Elmore (In re Elmore),
21   94 B.R. 670, 678 (Bankr. C.D. Cal. 1988).   For these reasons,
22   Marks did not meet her burden to show that relief from stay was
23   not warranted.
24        Accordingly, the bankruptcy court did not abuse its
25   discretion when it granted Wells Fargo's Third Motion for Relief
26   and terminated the automatic stay.
27
28

                                      -24-
 1   C.     The bankruptcy court did not abuse its discretion when it
            denied the motions for reconsideration.
 2
 3          A motion under Civil Rule 59(e), incorporated by Rule 9023,
 4   should not be granted, absent highly unusual circumstances, unless
 5   the court is presented with newly discovered evidence, committed
 6   clear error, or if there is an intervening change of controlling
 7   law.   389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th
 8   Cir. 1999).   A motion for reconsideration is not for rehashing the
 9   same arguments made the first time, or to assert new legal
10   theories or new facts that could have been raised at the initial
11   hearing.   In re Greco, 113 B.R. 658, 664 (D. Haw. 1990), aff'd and
12   remanded, Greco v. Troy Corp., 952 F.2d 406 (9th Cir. 1991).
13          Marks offers no argument as to why (or even if) the
14   bankruptcy court abused its discretion when it denied the motions
15   to reconsider the Stay Relief Order.    Generally, arguments not
16   raised in a party's opening brief are deemed waived.   Smith v.
17   Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999).    In any event, Marks
18   argued in her motions that reconsideration was warranted because
19   Wells Fargo's exhibits submitted with its Third Motion for Relief,
20   which she did not receive until after the hearing, provided newly
21   discovered evidence to show its lack of standing and its fraud.
22   Specifically, Marks argued that the copy of the Assignment proved
23   that it was fraudulent on its face.
24          Under Civil Rule 59(e), "[t]o justify an amendment based on
25   newly discovered evidence, a party 'must show that the evidence
26   was discovered after the judgment, that the evidence could not be
27   discovered earlier through due diligence, and that the newly
28   discovered evidence is of such a magnitude that had the court

                                      -25-
 1   known of it earlier, the outcome would likely have been
 2   different.'"    Broncel v. H & R Transp., Ltd., 2010 WL 3582492, at
 3   *1 (E.D. Cal. 2010)(quoting Dixon v. Wallowa Cnty., 336 F.3d 1013,
 4   1022 (9th Cir. 2003)).   The bankruptcy court determined that even
 5   if Marks had not received Wells Fargo's exhibits until after the
 6   hearing as she claimed, the court had received them prior to the
 7   hearing and considered them.   As such, no newly discovered
 8   evidence existed.   We also find no merit in Marks’s argument
 9   because at the time of the hearing she was represented by Brown,
10   who did receive a copy of Wells Fargo’s exhibits prior to the
11   hearing.   Thus, we see no abuse by the bankruptcy court.   In any
12   event, it is undisputed that Wells Fargo included a copy of the
13   Assignment with both its First and Second Motions for Relief.
14   Furthermore, Wells Fargo's exhibits established that the
15   Assignment has been a matter of public record since October 2010.
16        Accordingly, we conclude the bankruptcy court did not abuse
17   its discretion in denying the motions to reconsider the Stay
18   Relief Order.
19                               VI. CONCLUSION
20        Based on the foregoing reasons, we AFFIRM.
21
22
23
24
25
26
27
28

                                      -26-