Fadel v. DCB United LLC (In Re Fadel)
492 B.R. 1
| 9th Cir. BAP | 2013Background
- Fanda Fadel filed a Chapter 13 petition for a La Quinta residence two days before a foreclosure sale.
- DCB United LLC, as trustee, purchased the Property at foreclosure on July 22, 2011.
- Grant deeds and an Interspousal Deed showed Mr. Fadel as sole owner; Fadel argued she retained a community interest.
- Bankruptcy court assumed some interest in Fadel but ultimately held title in Mr. Fadel; sale did not violate stay.
- DCB sought relief from stay to proceed with unlawful detainer; plan did not include the Property debt.
- Fadel challenged the decision, raising theories about community property, undue influence, and codebtor stay; court denied reconsideration and affirmed stay relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DCB is bound by the confirmed plan | Fadel argues DCB was bound as a party in interest to the plan. | DCB was not a creditor and thus not bound by the plan's confirmation. | DCB not bound by confirmation order |
| Whether the Stay Relief Order was an abuse of discretion | Fadel contends the automatic stay protected the Property due to her potential interest. | DCB showed lack of Fadel's estate interest and proper cause to grant stay relief. | Stay relief properly granted |
| Whether the Reconsideration Motion was a proper Civil Rule 59(e) motion | Fadel sought reconsideration on Chesnut-like theories and new factual arguments. | Motion re-raised previously available arguments; no new basis to alter judgment. | Reconsideration denied |
| Whether California form-of-title presumption defeats community-property presumptions here | Fadel argues community rights/pro tanto interest rebut the title presumption. | Form-of-title presumption prevails; Interspousal Deed shows sole ownership by Mr. Fadel. | Form-of-title presumption controls; Fadel lacks interest |
| Whether the codebtor stay under § 1301 applies | California Code § 914/910 could make Fadel liable and trigger codebtor stay. | Fadel was not an obligor on the deed of trust; codebtor stay not applicable. | Codebtor stay not applicable |
Key Cases Cited
- In re Brooks, 169 Cal.App.4th 176 (Cal. Ct. App. 2008) (form of title presumption controls absent undue influence)
- In re Haines, 33 Cal.App.4th 292 (Cal. Ct. App. 1995) (undue influence trumping title presumption when present)
- In re Marsden, 130 Cal.App.3d 426 (Cal. Ct. App. 1982) (Moore/Marsden rule; reimbursement rights separate from title)
- In re Moore, 28 Cal.3d 366 (Cal. 1970) (Moore/Marsden framework for community contributions)
- In re Boyd, 410 B.R. 95 (Bankr. N.D. Cal. 2009) (distinguishable from Brooks/Marsden approach; pro tanto interest debated)
- Chesnut v. Brown, 422 F.3d 298 (5th Cir. 2005) (arguable property held by debtor; Ninth Circuit declined to adopt)
- In re Pettit, 217 F.3d 1072 (9th Cir. 2000) (burden in estate disputes; stay issues not expanded here)
- In re Blue, 247 B.R. 748 (Bankr. N.D. Ill. 2000) (creditor not bound by debtor's plan if not creditor)
- Butner v. United States, 440 U.S. 48 (1979) (property rights determined by state law)
- In re Mantle, 153 F.3d 1082 (9th Cir. 1998) (estate questions require state property law)