Alakozai v. Citizens Equity First Credit Union (In Re Alakozai)
499 B.R. 698
9th Cir. BAP2013Background
- Mohamed Alakozai executed a deed of trust on Dublin, CA property in 2005; Debra Alakozai (his wife) made payments from community funds and thus acquired a community property interest though she was not on the deed.
- CEFCU (successor to Valley Credit Union) sought foreclosure after default; Mohamed filed multiple bankruptcies, including a Fourth Case (filed Nov. 15, 2010).
- In the Fourth Case the bankruptcy court granted CEFCU in rem relief under 11 U.S.C. § 362(d)(4) (order entered Jan. 27, 2011), the order was recorded in Alameda County and was not appealed.
- Debra filed a separate chapter 13 (the Fifth Case) on July 20, 2011; later that same day a trustee’s sale occurred and CEFCU purchased the Property.
- Debra filed another chapter 13 in 2012 (Sixth Case); CEFCU moved for stay relief to continue an existing state unlawful detainer action. The bankruptcy court granted stay relief and Debra appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy court abused discretion by granting CEFCU stay relief to continue unlawful detainer | Alakozai: Foreclosure during her 2011 filing (Fifth Case) violated the automatic stay and was void because the Fourth Case in‑rem order lacked adequate factual findings | CEFCU: A valid, final § 362(d)(4) in rem order was entered in the Fourth Case, recorded, and binding on any later filer for two years under § 362(d)(4) and § 362(b)(20) | Affirmed — the recorded in rem order rendered the automatic stay in the Fifth Case inapplicable; foreclosure and subsequent UD prosecution were proper |
Key Cases Cited
- Gruntz v. County of Los Angeles, 202 F.3d 1074 (9th Cir. 2000) (scope of the automatic stay under § 362)
- Griffin v. Wardrobe (In re Wardrobe), 559 F.3d 932 (9th Cir. 2009) (acts taken in violation of the automatic stay are void)
- First Yorkshire Holdings, Inc. v. Pacifica L 22, LLC (In re First Yorkshire Holdings, Inc.), 470 B.R. 864 (9th Cir. BAP 2012) (in rem § 362(d)(4) orders bind non-debtors and subsequent filers if properly recorded)
- Samson v. W. Capital Partners, LLC (In re Blixseth), 684 F.3d 865 (9th Cir. 2012) (grant or denial of stay relief is a final order)