Court Opinion

ID: 2757101
Source: CourtListenerOpinion
Date Created: 2014-12-03 19:08:30.467412+00
Date Added: 2024-06-11T13:08:59.155461
License: Public Domain

FILED
                                                           MAY 30 2012
 1                                                     SUSAN M SPRAUL, CLERK
                                                         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.   NC-11-1477-JuKiJo
                                   )
 6   BRIAN SCOTT CARPENTER,        )        Bk. No.   11-44904
                                   )
 7                  Debtor.        )
     ______________________________)
 8                                 )
     BRIAN SCOTT CARPENTER,        )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )        M E M O R A N D U M*
11                                 )
     MARTHA G. BRONITSKY;          )
12   UNITED STATES TRUSTEE,        )
     OAKLAND; BAC HOME LOANS       )
13   SERVICING, LP,                )
                                   )
14                  Appellees.     )
     ______________________________)
15
                      Argued and Submitted on May 17, 2012
16                       at San Francisco, California
17                            Filed - May 30, 2012
18             Appeal from the United States Bankruptcy Court
                  for the Northern District of California
19
         Honorable Roger L. Efremsky, Bankruptcy Judge, Presiding
20
21   Appearances:     Jim G. Price, Esq. argued for Appellant Brian
                      Scott Carpenter. No appellee participated in
22                    this appeal.
23
24
25
26        *
            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.
28   See 9th Cir. BAP Rule 8013-1.

                                      -1-
 1   Before:     JURY, KIRSCHER, and JOHNSON** Bankruptcy Judges.
 2
 3            Debtor Brian Scott Carpenter appeals the decisions of the
 4   bankruptcy court denying without hearings his motion to value
 5   real property and motion for reconsideration.     Because the
 6   motions were not supported by evidence and the Local Rules do
 7   not compel a hearing, we AFFIRM.
 8                  I. BACKGROUND FACTS AND PROCEDURAL HISTORY
 9            On May 4, 2011, debtor filed a petition for bankruptcy
10   under chapter 131.     On June 6, 2011, debtor filed a motion to
11   value real property under § 506(a).     The motion was filed
12   pursuant to the bankruptcy court’s Local Rule 9014-1, which
13   provides for a hearing only after a party objects.     Debtor’s
14   motion sought to reclassify as unsecured the claim based on BAC
15   Home Loans Servicing, LP’s (“BAC Home Loans”) second deed of
16   trust (“Second DOT”).     In support of the motion, debtor declared
17   the value of his real property was $275,000 and the balance on
18   his first deed of trust (“First DOT”), also with BAC Home Loans,
19   was $280,000.     Debtor did not support his declaration as to the
20   balance on his First DOT with any documentary evidence.
21            On June 16, 2011, BAC Home Loans filed a proof of claim
22   (“POC”) for the First DOT stating the amount owed was
23
24        **
            The Honorable Wayne E. Johnson, Bankruptcy Judge, Central
     District of California, sitting by designation.
25
          1
26          Unless otherwise indicated, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
27   “Rule” references are to the Federal Rules of Bankruptcy
     Procedure and “Civil Rule” references are to the Federal Rules of
28   Civil Procedure.

                                       -2-
 1   $272,922.96.
 2            On June 28, 2011, debtor filed a request for default on the
 3   grounds that no party opposed the motion to value.      On July 8,
 4   2011, the bankruptcy court denied the request.      The bankruptcy
 5   court, relying on evidence in BAC Homes Loans’ POC, found
 6   debtor’s property held equity above the First DOT in the amount
 7   of $2,077.     Accordingly, the Second DOT remained secured.
 8            On July 15, 2011, debtor filed a motion for
 9   reconsideration.     In the motion, debtor asserted the amount
10   stated in BAC Home Loans’ POC was incorrect because it did not
11   account for costs incurred by publication of a notice of default
12   and a notice of trustee’s sale.     Debtor further alleged BAC Home
13   Loans had informed him that the total principal and arrears was
14   $282,272.27.     Debtor’s motion was supported by a declaration
15   from the debtor but no mortgage statement from BAC Home Loans or
16   any other documentation.     On August 9, 2011, debtor again
17   submitted a request for default.2
18            The bankruptcy court denied the request.   The bankruptcy
19   court rejected debtor’s unsubstantiated assertions regarding the
20   amount owed on the First DOT.     The bankruptcy court again relied
21   on BAC Home Loans’ POC.     The bankruptcy court determined BAC
22   Home Loans’ POC was the best evidence before the court.
23   Finally, the bankruptcy court noted that its denial was without
24   prejudice and invited the debtor to refile the motion with
25
          2
26          The second motion was denominated “Motion for
     Reconsideration”, so the request for default seems procedurally
27   improper. However, as noted below, it really was a renewed
     motion to value and, in that context, the request for default
28   follows.

                                       -3-
 1   additional evidence.    On August 23, 2011, debtor filed a notice
 2   of appeal.
 3                              II. JURISDICTION
 4           The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
 5   §§ 1334 and 157(b)(1).    This Panel has jurisdiction under
 6   28 U.S.C. § 158.
 7                                 III. ISSUE
 8           Whether the bankruptcy court abused its discretion by
 9   denying debtor a hearing on his motion to value and motion for
10   reconsideration.3
11                           IV. STANDARD OF REVIEW
12           We review a bankruptcy court’s compliance with non-
13   jurisdictional bankruptcy rules for an abuse of discretion.
14   Fitzsimmons v. Nolden (In re Fitzsimmons), 920 F.2d 1468, 1471
15   (9th Cir. 1990).    We apply a two-part test to determine whether
16   the bankruptcy court abused its discretion: (1) we review de
17   novo whether the bankruptcy court “identified the correct legal
18   rule to apply to the relief requested” and (2) if it did,
19   whether the bankruptcy court’s application of the legal standard
20   was illogical, implausible or “without support in inferences
21   that may be drawn from the facts in the record.”    United States
22   v. Hinkson, 585 F.3d 1247, 1261–63 (9th Cir. 2009).
23
24
25       3
            Debtor’s statement of issues on appeal challenged the
26   bankruptcy court’s reliance on BAC Home Loans’ POC. However,
     debtor did not argue the issue in his brief. Therefore, debtor
27   has waived the issue for purposes of this appeal. See Wake v.
     Sedona Inst. (In re Sedona Inst.), 220 B.R. 74, 76 (9th Cir.
28   1998) (an issue not briefed is deemed waived).

                                      -4-
 1                             V. DISCUSSION
 2        Debtor focuses his appeal on the failure of the bankruptcy
 3   court to set a hearing before denying the motions.    This focus
 4   is misguided.
 5        Debtor’s motion to value asserted the balance on his First
 6   DOT with BAC Home Loans was $280,000 and the value of his real
 7   property was $275,000.   BAC Home Loans filed a POC with
 8   supporting documentation that contradicted Debtor’s declaration.
 9   The bankruptcy court denied the motion stating:
10        The evidence in support of Debtor’s Motion shows that
          there is equity for the benefit of BAC Home Loans
11        Servicing, LP. Specifically, the appraisal submitted
          by Debtor values the property at $275,000. Further,
12        the Proof of Claim filed by the 1st lienholder values
          its claim at $272,922.96, leaving $2,077 in equity for
13        the benefit of BAC Home Loans Servicing, LP.
14        In response, debtor filed a motion for reconsideration.
15   We note that the motion for reconsideration did not state any
16   grounds for reconsideration under Rule 9024.   For this reason,
17   we do not analyze the motion under Rule 9024, but instead
18   consider the motion as a resubmission of the motion to value.
19        Debtor’s motion for reconsideration contested the
20   bankruptcy court’s reliance on BAC Home Loans’ POC.   Debtor
21   argued that BAC Home Loans’ POC was inaccurate because it did
22   not account for costs accrued by BAC Home Loans relating to
23   recording and publishing a notice of default and notice of
24   trustee sale.
25        In denying the motion for reconsideration, the bankruptcy
26   court reaffirmed its prior decision, stating, “the Motion did
27   not attach the proof of claim, the note and deed of trust, or a
28   statement setting forth the outstanding balance at or about the

                                    -5-
 1   time the petition was filed for either the senior or the junior
 2   lienholder.”   Notably, the bankruptcy court denied the motion
 3   for reconsideration without prejudice and invited debtor to
 4   refile the motion with supporting documentation.
 5        The procedural framework for valuing collateral pursuant to
 6   § 506(a) is set forth in Rule 3012, which states as follows:
 7       The court may determine the value of a    claim secured by
         a lien on property in which the estate    has an interest
 8       on motion of any party in interest and    after a hearing
         on notice to the holder of the secured    claim and any
 9       other entity as the court may direct.
10   Section 102(1)(A) defines “after notice and a hearing” and
11   similar phrases to mean “after such notice as is appropriate in
12   the particular circumstances, and such opportunity for hearing
13   as is appropriate in the particular circumstances[.]”    See
14   United States v. Yochum (In re Yochum), 89 F.3d 661, 672 (9th
15   Cir. 1996).    Section 102(1)(B) authorizes an act without an
16   actual hearing if notice is proper and a hearing is not
17   requested by a party in interest.
18        The Northern District of California has adopted guidelines
19   for notice and hearing on motions to value.    Pursuant to those
20   guidelines, the moving party is not required to schedule a
21   hearing but, if there is an objection, a hearing shall be set.
22   The guidelines do not set forth a procedure if the bankruptcy
23   court raises an issue of fact.
24        Debtor’s motion for reconsideration, and brief in this
25   appeal, assert the bankruptcy court was required to set the
26   motion to value debtor’s real property for hearing.    Debtor is
27   incorrect; nothing in the Northern District of California
28   guidelines or Local Rules require a bankruptcy court to set a

                                      -6-
 1   motion to value for hearing, nor would such a requirement make
 2   sense when, as here, the only relevant evidence is
 3   documentation.
 4            At oral argument, debtor’s counsel argued that a hearing
 5   was necessary to obtain documentation through discovery.       While
 6   we agree that discovery may be necessary, a hearing is not.
 7   This Panel notes three methods by which debtor’s counsel may
 8   conduct discovery without a hearing.     First, because a motion to
 9   value is a contested matter under Rule 9014, debtor’s counsel
10   may request production of documents from BAC Home Loans pursuant
11   to Rule 7034.4     Second, debtor’s counsel may seek production of
12   documents by motion and subpoena pursuant to Rule 2004(c).
13   Finally, debtor’s counsel may object to BAC Home Loans’ POC,
14   creating again the discovery rights which arise in a contested
15   matter.
16            Accordingly, the bankruptcy court did not abuse its
17   discretion by denying debtor a hearing.
18                                VI. CONCLUSION
19            Having determined the bankruptcy court did not abuse its
20   discretion when denying debtor’s motion to value and motion for
21   reconsideration, we AFFIRM.
22
23
24
25
26
27
          4
            The Panel acknowledges that a court may under Rule 9014(c)
28   direct that not all Part VII Rules apply to contested matters.

                                       -7-