In re: Kathleen Lynne Ray
NV-15-1137-LDoKi
| 9th Cir. BAP | Nov 14, 2016Background
- Kathleen Ray defaulted on a 2005 mortgage; Deutsche Bank acquired the property via a Trustee’s Deed Upon Sale (2010) and later obtained writs of restitution in state unlawful detainer proceedings.
- Ray filed multiple bankruptcy petitions (Ch.7 in 2009; Ch.13/converted to Ch.7 in 2011; Ch.13 in 2014) and repeatedly litigated against Deutsche Bank in state and federal courts; prior suits and appeals were dismissed or affirmed.
- In September 2014 Deutsche Bank obtained a temporary writ of restitution; Ray filed the 2014 chapter 13 petition less than two weeks later and listed the property but not a secured mortgage claim.
- Deutsche Bank moved for relief from the automatic stay (to proceed with eviction) in Feb. 2015; Ray sought an extension to oppose but offered no admissible evidence and relied on claims of mortgage fraud, counsel conflict, and ongoing negotiations.
- The bankruptcy court denied Ray’s extension request, granted relief from stay (finding the property was not property of the estate), denied in rem relief under § 362(d)(4), and denied Ray’s motion for reconsideration. Ray appealed.
Issues
| Issue | Ray’s Argument | Deutsche Bank’s Argument | Held |
|---|---|---|---|
| Whether denial of Ray’s request for additional time to oppose the stay motion was an abuse of discretion | Ray: needed short continuance to complete due diligence, negotiations were ongoing, counsel conflict; inability to attend hearing | DB: Ray had long litigatory history, no estate interest in the property, the requested grounds were irrelevant to stay disposition | Court: No abuse of discretion — denial proper because Ray had no interest and continuance would not change outcome |
| Whether relief from automatic stay should be granted to permit eviction | Ray: alleged mortgage fraud, challenged DB’s title/standing | DB: holds Trustee’s Deed Upon Sale and writ of restitution; has colorable claim to title and possession | Court: Grant relief — DB had colorable ownership/possession and cause under § 362(d) because property not estate property |
| Whether in rem relief under § 362(d)(4) was warranted | Ray: sought protections; alleged procedural irregularities | DB: argued in rem relief may be appropriate but did not cross-appeal denial | Court: Affirmed denial — DB, as owner, was not a secured creditor under § 362(d)(4) so in rem relief not applicable |
| Whether denial of motion for reconsideration was an abuse of discretion | Ray: asserted same points as before (extension denial, service/HOA notice, counsel conflict); motion was unopposed | DB: argued no new evidence or law; issues previously decided | Court: No abuse — Ray presented no newly discovered evidence, clear error, or intervening law; denial without prejudice to re-calendar was appropriate |
Key Cases Cited
- Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253 (9th Cir. 2010) (abuse-of-discretion review standard for certain bankruptcy rulings)
- TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820 (9th Cir. 2011) (abuse-of-discretion definition: wrong standard or findings illogical/unsupported)
- Edwards v. Wells Fargo Bank (In re Edwards), 454 B.R. 100 (9th Cir. BAP 2011) (trustee’s deed plus writ of possession establishes colorable ownership for stay relief)
- Veal v. American Home Mortgage Serv., Inc. (In re Veal), 450 B.R. 897 (9th Cir. BAP 2011) (relief-from-stay proceedings are summary and procedural; creditor need only show colorable claim)
- Perl v. Eden Place, LLC (In re Perl), 811 F.3d 1120 (9th Cir. 2016) (unlawful detainer judgment can confer legal right of possession)
- Johnson v. Righetti (In re Johnson), 756 F.2d 738 (9th Cir. 1985) (procedural nature of relief-from-stay determinations)
- Ellis v. Yu (In re Ellis), 523 B.R. 673 (9th Cir. BAP 2014) (limitations on application of § 362(d)(4) when creditor is owner)