Dick v. Colorado Housing Enterprises, L.L.C.
2017 U.S. App. LEXIS 19325
| 5th Cir. | 2017Background
- In 2014 Audrey Dick and her husband borrowed $100,000 secured by a deed of trust; Dick defaulted in 2015.
- Dick repeatedly filed bankruptcy in 2016, each proceeding was dismissed; the last dismissal carried a two-year bar.
- A foreclosure sale was scheduled for February 7, 2017; Dick obtained a temporary restraining order from state court and then sued in federal court after defendants removed the case.
- The district court denied Dick’s motion for a temporary restraining order and preliminary injunction to stop an April 4 foreclosure sale; Dick appealed and sought an emergency stay in this Court.
- The trustee accepted a winning bid at the April 4 sale before this Court’s stay; this Court later granted a stay but the sale had already occurred.
- Defendants moved to dismiss the interlocutory appeal as moot because the property was sold at the foreclosure sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Is the interlocutory appeal from denial of a preliminary injunction moot after the property was sold? | The appeal is not moot because the Court can order rescission/cancellation of the foreclosure sale. | The appeal is moot because the sale has occurred and the court cannot undo it. | Dismissed as moot: once the property was sold the court cannot grant effective injunctive relief. |
| 2. Does it matter that defendants themselves were the successful bidders (i.e., no third-party purchaser)? | Because defendants purchased the property and are parties to the appeal, the Court can order relief (reinstatement/rescission). | Sale to purchaser (even defendants) moots the appeal; presence of purchaser on appeal does not save it. | Matter of Sullivan controls; sale to defendants does not prevent mootness. |
| 3. Do available Texas remedies (setting aside sale/cancelling trustee’s deed) prevent mootness? | Texas law allows wrongful-foreclosure suits and rescission, so appeal should not be moot. | State-law post-sale remedies do not prevent federal appeal from being moot. | Availability of wrongful-foreclosure actions is inapposite; mootness still applies. |
| 4. Does Knoles v. Wells Fargo warrant a different result? | Knoles allowed belated relief because purchaser and evicted party were before the court. | Knoles is unpublished and not controlling; published Fifth Circuit precedent governs. | Knoles is not controlling; cannot depart from published Fifth Circuit precedent. |
Key Cases Cited
- Christopher Village, Ltd. P’ship v. Retsinas, 190 F.3d 310 (5th Cir. 1999) (foreclosure sale generally renders injunctive appeals moot because court cannot reverse the transaction)
- NCNB Tex. Nat’l Bank v. Southwold Assocs., 909 F.2d 128 (5th Cir. 1990) (foreclosure that extinguishes lien typically moots injunction challenge)
- Matter of Sullivan Cent. Plaza, I, Ltd., 914 F.2d 731 (5th Cir. 1990) (appeal rendered moot where creditor purchased property at foreclosure; published controlling precedent on mootness)
- Harris v. City of Houston, 151 F.3d 186 (5th Cir. 1998) (federal courts cannot enjoin events that already occurred; mootness principle)