Court Opinion

ID: 2757211
Source: CourtListenerOpinion
Date Created: 2014-12-03 19:08:41.922711+00
Date Added: 2024-06-11T11:26:54.153432
License: Public Domain

FILED
                                                           OCT 05 2011
                                                       SUSAN M SPRAUL, CLERK
                                                         U.S. BKCY. APP. PANEL
 1                                                       OF THE NINTH CIRCUIT

 2
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                             ) BAP No. CC-11-1037—PaDKi
                                        )
 6   GARRETTE MARTIN, SR. and REGINA    ) Bk. No. CC-10-57965-PC
     MARTIN,                            )
 7                                      )
                    Debtors.            )
 8   ___________________________________)
                                        )
 9   GARRETTE MARTIN, SR.; REGINA       )
     MARTIN,                            )
10                                      )
                    Appellants,         )
11                                      )
     v.                                 ) M E M O R A N D U M1
12                                      )
     U.S. BANK, N.A., as Trustee, on    )
13   behalf of the Holders of the       )
     Structured Asset Securities        )
14   Corporation Mortgage Pass-Through )
     Certificates, Series 2007-BC3,     )
15                                      )
                    Appellee.           )
16   ___________________________________)
17            Submitted Without Oral Argument on September 23, 2011
18                           Filed - October 5, 2011
19               Appeal from the United States Bankruptcy Court
                     for the Central District of California
20
       Honorable Peter H. Carroll, Chief Bankruptcy Judge, Presiding
21
22   Appearances:     Appellants Garrette Martin, Sr. and Regina Martin,
                      pro se, on brief. Gina L. Albertson, Esq. of
23                    Albertson Law on brief for Appellee.
24
     Before: PAPPAS, DUNN and KIRSCHER, Bankruptcy Judges.
25
26
          1
             This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may have
     (see Fed. R. App. P. 32.1), it has no precedential value. See 9th
28   Cir. BAP Rule 8013-1

                                      -1-
 1        Chapter 72 debtors Garrette Martin, Sr. and Regina Martin
 2   (the “Martins”) appeal the decision of the bankruptcy court
 3   granting relief from the automatic stay to U.S. Bank National
 4   Association, on behalf of the holders of the Structured Asset
 5   Securities Corporation Mortgage Pass-Through Certificates, Series
 6   2007-BC3 (“U.S. Bank”), to enforce an unlawful detainer judgment
 7   against the Martins.   We AFFIRM.
 8      THE MARTINS’ FAILURE TO PROVIDE AN ADEQUATE RECORD ON APPEAL
                 AND U.S. BANK’S REQUEST FOR JUDICIAL NOTICE
 9
10        As the appellants in this appeal, the Martins failed to
11   designate a record on appeal, or to provide a statement of issues
12   on appeal, in contravention of Rule 8006.   The Martins also failed
13   to provide any excerpts of record, in violation of Rule 8009(b),
14   and consequently, their briefs failed to cite to any excerpts of
15   record in support of their arguments, contrary to Rules
16   8010(a)(1)(D) and (E).3   However, insofar as U.S. Bank has
17
          2
18           Unless otherwise indicated, all chapter, section and rule
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
19   to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. The
     Federal Rules of Civil Procedure are referred to as “Civil Rules.”
20
          3
             There were other procedural irregularities attributable to
21   the Martins. First, they submitted their opening brief on April
     6, 2011, one day after the deadline set by the Panel’s Conditional
22   Order of Dismissal for failure to prosecute this appeal. Then, on
     April 22, and without leave of the Panel, they submitted a First
23   Amended Opening Brief, identical to the first, but adding a
     missing certification. The Panel accepted the First Amended Brief
24   as the Martins’ opening brief in this appeal. After U.S. Bank
     submitted their responsive brief on April 26, the Martins
25   submitted a Second Amended Opening Brief on May 18, 2011, which is
     a complete revision of their earlier two briefs, and raises
26   numerous new issues not found in their earlier briefs. Since this
     brief was filed without the permission of the Panel, it violated
27   Rule 8009(a)(3). Finally, the Martins ignored the order of this
     Panel dated June 24, 2011, directing them to file a supplemental
28                                                        (continued...)

                                      -2-
 1   provided a designation of record, statement of issues, and
 2   excerpts to which the Martins have not objected, as allowed under
 3   Rule 8019, we waive the Martins’ Rule violations.
 4        What is missing from the excerpts and the bankruptcy court
 5   docket is information relevant to a possible violation of the
 6   automatic stay as a result of either an earlier, or the current
 7   bankruptcy, and documents relating to the foreclosure.    On April
 8   26, 2011, U.S. Bank submitted a Request for Judicial Notice
 9   (“RJN”) to the Panel dealing with nine documents: five documents
10   from the Official Records of Los Angeles County (“Official
11   Records”) relating to the foreclosure sale of the Martins’
12   property to U.S. Bank, two PACER docket reports for two prior
13   bankruptcies of the Martins, and two documents from the Los
14   Angeles Superior Court relating to proceedings in that court in an
15   action pending between the Martins and U.S. Bank.    The Martins
16   have not objected to the RJN.   The sources of all of these
17   documents are government or judicial agencies, and would appear to
18   be accurate records whose reliability cannot reasonably be
19   questioned.   FED. R. EVID. 201(b); Mack v. Kuckenmeister, 619 F.3d
20   1010, 1014 n.1 (9th Cir. 2010).    We therefore GRANT the RJN as to
21   those documents, and take notice of the existence of the
22   documents, but not for the truth of their contents.
23                                   FACTS
24        In December 2006, the Martins apparently executed a mortgage
25
26
          3
           (...continued)
27   brief discussing the implications of an intervening precedential
     decision of the Panel, Veal v. Am. Home Mortg. Serv., Inc.
28   (In re Veal) 449 B.R. 542 (9th Cir. BAP 2011), in this appeal.

                                       -3-
 1   loan note, secured by a deed of trust, to finance the purchase of
 2   a residential property in Inglewood, California (the “Property”).
 3   The lender was Fieldstone Mortgage Company.   The nominee and
 4   beneficiary under the Deed of Trust was Mortgage Electronic
 5   Registration Systems, Inc. (“MERS”).
 6        On May 12, 2008, the Martins were notified that they were in
 7   default on mortgage loan payments in the amount of $22,405.56.
 8        On July 2, 2008, MERS assigned the Deed of Trust and all
 9   beneficial interest therein to Select Portfolio Servicing, Inc. as
10   servicing agent for U.S. Bank.
11        A Notice of Trustee’s sale of the Property was recorded in
12   the Official Records of Los Angeles County on November 17, 2009,
13   with a sale date set for December 16, 2009.
14        Debtor Garrette Martin, Sr. (“Garrette”) filed a chapter 7
15   petition on February 9, 2010.    The bankruptcy court ordered that
16   case dismissed on March 4, 2010 for his failure to file proper
17   schedules and statements.
18        Garrette filed a second chapter 7 petition on March 9, 2010.
19   The bankruptcy court dismissed the case on April 2, 2010, again
20   for failure to file schedules and statements.
21        On June 1, 2010, a nonjudicial foreclosure sale was conducted
22   on the Property; a trustee’s deed upon sale conveying the Property
23   to U.S. Bank was recorded in the Official Records of Los Angeles
24   County on June 10, 2010.
25        U.S. Bank commenced an unlawful detainer action in Los
26   Angeles Superior Court on June 29, 2010.   Case no. 10L01475.
27   There is no indication in the records submitted that the Martins
28   contested this action.   Judgment was entered in favor of U.S. Bank

                                      -4-
 1   and against the Martins on September 29, 2010, awarding U.S. Bank
 2   possession of the Property; a Writ of Possession was issued on
 3   October 15, 2010.
 4        On November 8, 2010, the Martins filed a joint petition under
 5   chapter 7.    On their Schedule A, they claimed ownership of the
 6   Property.
 7        Thirty days later, on December 8, 2010, U.S. Bank filed a
 8   motion for relief from stay to allow it to enforce the unlawful
 9   detainer judgment.   U.S. Bank argued that the Martins and their
10   bankruptcy estate held no interest in the Property and no right to
11   continued possession, because U.S. Bank had acquired title at the
12   trustee’s foreclosure sale, the unlawful detainer judgment had
13   been entered in favor of U.S. Bank and against the Martins, and a
14   Writ of Possession had been issued.    To support the motion, U.S.
15   Bank submitted the following documents: (a) a declaration
16   detailing the foreclosure and unlawful detainer proceedings; (b) a
17   copy of the trustee’s deed upon sale to U.S. Bank; (c) a copy of a
18   “notice for possession” served on the Martins in the unlawful
19   detainer action; (d) a copy of the unlawful detainer complaint;
20   (e) a copy of the clerk’s entry of judgment in the unlawful
21   detainer action; and (f) a copy of the state court Writ of
22   Possession.   A hearing on the stay relief motion was set for
23   January 6, 2011.
24        In apparent violation of Bankr. C.D. Cal. Local R. 9013-1(f),
25   requiring that any opposition to a contested motion be filed no
26   later than 14 days before the date set for hearing on the motion,
27   the Martins filed their opposition nine days before the hearing
28   date, on December 28, 2010.   Like most of their papers in this

                                      -5-
 1   appeal, the Martins’ arguments are difficult to follow.    It would
 2   appear, however, that they raised the following points: (a) that
 3   MERS did not have legal authority to transfer beneficial ownership
 4   of the deed of trust to U.S. Bank; (b) that U.S. Bank lacked
 5   standing; (c) that U.S. Bank has unclean hands as the result of
 6   various unspecified fraudulent transfers, assignments and
 7   substitutions after the fact of a foreclosure; and (d) that the
 8   Martins retain an equitable interest in the Property as a result
 9   of a UCC financing statement indicating over $300,000 in
10   investments in the Property.
11        The bankruptcy court took the U.S. Bank stay relief motion
12   off calendar on January 6, 2011, granting the motion for relief
13   from stay.   Although the court did not directly refer to the
14   opposition of the Martins, the court stated that “the failure of
15   the debtor, the trustee, and all other parties in interest to file
16   written opposition at least 14 days prior to the hearing as
17   required by LBR 9013-1(f) is considered as consent to the granting
18   of the motion.   LBR 9013-1(h).”    Finding that the submissions of
19   U.S. Bank established a prima facie case for relief from stay, and
20   that the motion was not timely challenged, the bankruptcy court
21   granted the motion.   The court also observed that “Debtor filed
22   the bankruptcy petition on November 8, 2010 in an apparent effort
23   to stay enforcement of the unlawful detainer judgment.”
24        The bankruptcy court entered its order granting relief from
25   stay on January 11, 2011.   The Martins filed a timely appeal on
26   January 19, 2011.
27                               JURISDICTION
28        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334

                                        -6-
 1   and 157(b)(2)(G).       We have jurisdiction under 28 U.S.C. § 158.
 2                                       ISSUE
 3           Whether the bankruptcy court abused its discretion in
 4   granting relief from stay to U.S. Bank to enforce the unlawful
 5   detainer judgment.
 6                                 STANDARD OF REVIEW
 7           We review orders granting relief from the automatic stay for
 8   abuse of discretion.       Kronemyer v. Am. Contractors Indem. Co.
 9   (In re Kronemyer), 405 B.R. 915, 919 (9th Cir. BAP 2009). In
10   applying an abuse of discretion test, we first "determine de novo
11   whether the [bankruptcy] court identified the correct legal rule
12   to apply to the relief requested."          United States v. Hinkson,
13   585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).         If the bankruptcy
14   court identified the correct legal rule, we then determine whether
15   its "application of the correct legal standard [to the facts] was
16   (1) illogical, (2)implausible, or (3) without support in
17   inferences that may be drawn from the facts in the record."         Id.
18   (internal quotation marks omitted).         If the bankruptcy court did
19   not identify the correct legal rule, or if its application of the
20   correct legal standard to the facts was illogical, implausible, or
21   without support in inferences that may be drawn from the facts in
22   the record, then the bankruptcy court has abused its discretion.
23   Id.
24                                     DISCUSSION
25                The bankruptcy court did not abuse its discretion in
                    granting relief from stay to U.S. Bank to enforce
26                           the unlawful detainer judgment.
27           A.    There is no showing that U.S. Bank violated the automatic
28   stay.

                                          -7-
 1        As an apparent defense to enforcement of an unlawful detainer
 2   judgment, the Martins argue in all three of their briefs that U.S.
 3   Bank violated the automatic stay by conducting an improper
 4   foreclosure.   Indeed, this was the only argument made in the
 5   Martins’ first two briefs.   The precise words used in their
 6   original and First Amended Briefs4 are as follows:
 7        1. On November 18, 2010, at approx. 2:36 P.M., the
          Appellant filed a Petition for Bankruptcy Chapter 7
 8        protection, by filing with the Los Angeles Central
          District bankruptcy clerk, the petition and filings
 9        fees.
10        2. The Deed of Trust was scheduled to be sold at 3:30
          P.M, by the Creditor and Creditor’s Trustee. As such,
11        Noticed properly served the same day, giving Notice a
          Bankruptcy Petition naming the Creditor and Trustee as
12        such at 2:58 P.M., whereas the Trustee completed the
          sale in violation of the Automatic Stay of Protection,
13        at 3:30 P.M.
14   Martin’s Original Op. Br. at 3, First Amended Op. Br. at 3.
15        Obviously, there are two factually incorrect statements in
16   the Martins’ allegations.    First, the Martins’ bankruptcy petition
17   was filed on November 8, 2010, not November 18, 2010.    Second, the
18   deed of trust foreclosure sale did not occur on either November 8
19   or 18, 2010, but over six months earlier, on June 1, 2010, when
20   there was no pending bankruptcy case or automatic stay in effect.
21        Under § 362(a), an automatic stay arises upon the
22   commencement of a bankruptcy case which,
23        operates as a stay, applicable to all entities, of —
          (1) the commencement or continuation, including the
24        issuance or employment of process, of a judicial,
          administrative, or other action or proceeding against
25        the debtor that was or could have been commenced before
          the commencement of the case under this title, or to
26
27        4
             The Martins’ Second Amended Opening Brief continued the
     allegation that U.S. Bank had violated the automatic stay, but
28   without further detail.

                                      -8-
 1           recover a claim against the debtor that arose before the
             commencement of the case under this title; (2) the
 2           enforcement, against the debtor or against property of
             the estate, of a judgment obtained before the
 3           commencement of the case under this title[.]
 4           The stay under § 362 is extremely broad in scope, and
 5   prohibits almost any type of formal or informal collection or
 6   legal action against a debtor or the property of the estate.
 7   Midlantic Nat’l Bank v. N.J. Dep’t of Envtl. Prot., 474 U.S. 495,
 8   503 (1986).    The automatic stay prevents continuation of a
 9   foreclosure proceeding concerning a debtor’s property, or property
10   of a bankruptcy estate, during the pendency of the bankruptcy
11   case.    Countrywide Home Loans, Inc. v. Hoopai (In re Hoopai),
12   581 F.3d 1090, 1093 (9th Cir. 2010).    Additionally, the automatic
13   stay bars enforcement of an unlawful detainer judgment or writ of
14   possession while the debtor is in bankruptcy.    Edwards v. Wells
15   Fargo Bank, N.A. (In re Edwards), 454 B.R. 100, 2011 WL 3211357
16   * 12 (9th Cir. BAP 2011).
17           An essential element in all this case law, however, is that
18   there must be a pending bankruptcy case for the automatic stay to
19   apply.    See § 362(c)(1) and (2) (providing that the automatic stay
20   continues until the bankruptcy case is dismissed); Ung v. Boni
21   (In re Boni), 240 B.R. 381, 384 (9th Cir. BAP 1999).
22           Garrette’s first bankruptcy case was pending from February 9,
23   2010 to March 4, 2010.    His second bankruptcy case was open from
24   March 9, 2010 to April 4, 2010.    The Martins’ latest bankruptcy
25   case was filed on November 8, 2010, and remains pending.    In other
26   words, none of the bankruptcy cases were pending on June 1, 2010,
27   the date of the foreclosure sale; on June 10, 2010, the date of
28   the recording of U.S. Bank’s trustee deed of sale in the Official

                                       -9-
 1   Records; on June 29, 2010, when U.S. Bank commenced its unlawful
 2   detainer action; on September 29, 2010, when the state court
 3   granted judgment in the unlawful detainer action in favor of
 4   U.S. Bank; or on October 15, 2010, when the state court issued the
 5   Writ of Possession.   Simply put, none of the critical actions
 6   taken by U.S. Bank against the Martins or the Property violated
 7   any automatic stay.
 8        B.   The bankruptcy court did not abuse its discretion in
 9   relying on the local bankruptcy rules.
10        The bankruptcy court based its decision to grant relief from
11   stay in favor of U.S. Bank, at least in part, on the failure of
12   any party in interest to object to the motion.   In doing so, the
13   court relied on two provisions of the local bankruptcy rules,
14   LBR 9013-1 (f) and (h):
15        LBR 9013-1. MOTION PRACTICE AND CONTESTED MATTERS
16        . . . .
17        (f) Opposition, Joinders, and Responses to Motions.
          Except as set forth in [provisions not relevant here]
18        each interested party opposing, joining, or responding
          to the motion must file and serve on the moving party
19        and the United States trustee not later than 14 days
          before the date designated for hearing either:
20
          (1) A complete written statement of all reasons in
21        opposition thereto or in support or joinder thereof,
          declarations and copies of all photographs and
22        documentary evidence on which the responding party
          intends to rely, and any responding memorandum of points
23        and authorities. The opposing papers must advise the
          adverse party that any reply to the opposition must be
24        filed with the court and served on the opposing party
          not later than 7 days prior to the hearing on the
25        motion; or
26        (2) A written statement that the motion will not be
          opposed.
27        . . .
28        (h) Failure to File Required Papers. Papers not timely

                                     -10-
 1        filed and served may be deemed by the court to be
          consent to the granting or denial of the motion, as the
 2        case may be.
 3   We “afford a high level of deference to local rules.”   Guam Sasaki
 4   Corp. v. Diana’s, Inc., 881 F.2d 713, 715 (9th Cir. 1989); Moncur
 5   v. Apricredit Accept. Co. (In re Moncur), 328 B.R. 183, 191 (9th
 6   Cir. BAP 2005) (“[W]e defer to the bankruptcy court's construction
 7   and interpretation of its own orders and local rules[.]”).   The
 8   Ninth Circuit has held that failure to comply with a local rule
 9   requiring timely opposition to a motion is proper grounds for
10   granting that motion.   Ghazil v. Moran, 46 F.3d 52, 53 (9th Cir.
11   1995) (upholding a similar local rule in Nevada that provided “the
12   failure of the opposing party to file a memorandum of points and
13   authorities in opposition to any motion shall constitute a consent
14   to the granting of the motion.").5
15        Of course, the bankruptcy court did not rely solely on the
16   local bankruptcy rules in granting relief from stay.    U.S. Bank
17   presented ample evidence to show that it had properly completed a
18   nonjudicial foreclosure sale on the Property prepetition, that it
19
          5
             In a recent opinion, the Ninth Circuit commented on the
20   rule applicable in the District Court of the Central District of
     California that apparently is the model for the bankruptcy court’s
21   LBR 9013-1. Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253,
     1259 n.6 (9th Cir. 2010). Like the bankruptcy rule, C.D. Cal.
22   Local R. 6-1 provides that any opposition papers must be filed no
     later than fourteen days before the hearing. The court of appeals
23   found this rule “unusual” because it would allow a movant to file
     a motion twenty-one days before a scheduled hearing, leaving the
24   opposing party only seven days to file the opposition. Id. The
     Ninth Circuit noted that all other districts of the Ninth Circuit
25   allowed the opposing party a minimum of fourteen days to file an
     opposition. While Ahanchian could reflect the Ninth Circuit’s
26   potential concern regarding the bankruptcy court’s LBR 9013-1,
     there is no cause for alarm under the facts of this case, since
27   the Martins were given at least fourteen days notice of the U.S.
     Bank motion and to file a timely opposition. They failed to do
28   so.

                                     -11-
 1   was the holder of recorded title to the Property, and that it
 2   sought and obtained an unlawful detainer judgment and Writ of
 3   Possession against the Martins from the state court before the
 4   Martins filed their bankruptcy petition.   The bankruptcy court
 5   therefore had an adequate basis to conclude that U.S. Bank had
 6   presented a prima facie case for relief from stay.
 7        A creditor meets its burden of presenting a prima facie case
 8   for stay relief when it shows that it is the title holder on a
 9   property under a recorded trustee’s deed of sale.    In re Edwards,
10   2011 WL 3211357 * 9.    The bankruptcy court correctly determined
11   that a lawful foreclosure sale had extinguished the Martins’
12   rights of ownership and possession of the Property.    Moeller v.
13   Lien, 25 Cal. App.4th 822, 831 (Cal. Ct. App. 1994).    The court
14   found that the unlawful detainer judgment had been entered
15   prepetition, and that “Debtor[s] filed the bankruptcy petition on
16   November 8, 2010 in an apparent effort to stay enforcement of the
17   unlawful detainer judgment.”
18        Based on this record, the bankruptcy court did not abuse its
19   discretion in granting relief from the stay.
20        C.   The Martins’ other arguments in the bankruptcy court and
21   on appeal lack merit.
22        As noted above, the Martins submitted a late opposition to
23   the motion for relief from stay in the bankruptcy court that was
24   not considered by the court.   Then, in this appeal, they have
25   submitted three “opening” briefs, the third of which was submitted
26   without permission of the Panel, and reiterated arguments that
27   they made in the late opposition in the bankruptcy court.    As
28   discussed above, we affirm the bankruptcy court’s decision to

                                      -12-
 1   consider only timely motion oppositions.   Out of respect for that
 2   decision, we could strike the Second Amended Brief and its
 3   arguments as submitted in violation of Rule 8009(a)(3).   However,
 4   even were we to consider the arguments the Martins made in the
 5   late opposition filed in the bankruptcy court, or in the late and
 6   improperly filed Second Amended Opening Brief, those arguments are
 7   without merit.
 8        The thrust of the Martins’ arguments is that the foreclosure
 9   sale was improper, because neither MERS nor U.S. Bank had
10   authority to conduct it, and that U.S. Bank was not a holder in
11   due course of the note or deed of trust and lacked standing to
12   seek relief from stay in the bankruptcy court.
13        A recent Opinion of the Panel touches on the Martins’
14   arguments, In re Edwards.   Despite the Martins’ arguments, the
15   issue in this appeal is not whether U.S. Bank was the holder of
16   the note at the time of the foreclosure sale, but rather whether
17   U.S. Bank has some cognizable property interest under state law
18   that would allow it to prosecute a motion for relief from stay to
19   enforce an unlawful detainer judgment.   Or more specifically, in
20   light of In re Edwards, the issue here is whether, when taken
21   together, U.S. Bank’s recorded trustee’s deed of sale and the
22   unlawful detainer judgment demonstrate that U.S. Bank held a
23   colorable interest in the Property.    In re Edwards, 2011 WL
24   3211357 * 9.
25        Analyzing California law in In re Edwards, the Panel
26   concluded that the specific combination of a recorded deed of sale
27   with a subsequent unlawful detainer judgment satisfied the
28   colorable interest requirement for standing to seek relief from

                                     -13-
 1   the automatic stay to enforce an unlawful detainer judgment and
 2   Writ of Possession.   In re Edwards, 2011 WL 3211357 * 11.    In
 3   other words, the Panel has already determined that, under facts
 4   similar to those in this appeal, U.S. Bank indeed had standing to
 5   ask the bankruptcy court for stay relief to recover possession of
 6   the Property.6
 7                                CONCLUSION
 8        The bankruptcy court did not abuse its discretion in granting
 9   U.S. Bank relief from stay to enforce the unlawful detainer
10   judgment.   We AFFIRM the order of the bankruptcy court.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25        6
             The Martins’ other arguments are equally unpersuasive.
     That the Martins made substantial improvements to the Property is
26   simply not probative that they retained an equity interest in the
     Property post-foreclosure. And their various allegations that, in
27   other cases, MERS has improperly transferred interests in trust
     deeds or property, even if true, do not prove that MERS may have
28   acted improperly in this case.

                                     -14-