In re: Roberto Lara Ramirez
EC-16-1015-KuMaJu
| 9th Cir. BAP | Dec 2, 2016Background
- Debtor Roberto Lara Ramirez filed a Chapter 13 petition on August 25, 2015, his fifth bankruptcy filing in a few years; prior filings included both Chapter 7 and 13 cases and at least one prior relief-from-stay granted to Nationstar.
- Nationstar held a nonjudicial foreclosure sale of Ramirez’s residence on August 26, 2015 — one day after Ramirez’s petition — and later moved to annul the stay (retroactive relief) to validate that sale and for prospective in rem relief under 11 U.S.C. § 362(d)(4).
- Nationstar produced evidence it was unaware of the August 25 filing before conducting the sale and documented repeated prior foreclosure notices and prior bankruptcy filings that previously impeded sales.
- Ramirez opposed, asserting he gave notice of the filing to Nationstar on August 25 and arguing serial filings alone cannot establish a scheme under § 362(d)(4); he requested an evidentiary hearing on notice but did not comply with local rule requirements or submit supporting evidence with his opposition.
- The bankruptcy court granted both annulment of the stay (validating the August 26 sale) and § 362(d)(4) in rem relief, finding a scheme to delay and referencing both Ramirez’s serial filings and alleged transfers of the property to beneficiaries — but there was no record evidence of any transfers.
- The Panel vacated the bankruptcy court’s order and remanded because the transfer-related factual finding was clearly erroneous and may have been critical to both the § 362(d)(4) and annulment conclusions; the Panel directed the bankruptcy court to reconsider and clarify its handling of Ramirez’s request to present evidence on notice.
Issues
| Issue | Plaintiff's Argument (Ramirez) | Defendant's Argument (Nationstar) | Held |
|---|---|---|---|
| Whether § 362(d)(4) in rem relief was appropriate | Serial filings alone don’t prove a scheme; insufficient evidence | Ramirez’s repeated filings and conduct show a scheme to delay foreclosure | Panel: Vacate and remand — bankruptcy court findings largely supported but transfer-related findings (no evidence) were clearly erroneous and require reconsideration |
| Whether the stay should be annulled retroactively (validate August 26 sale) | Ramirez gave notice to Nationstar before sale; annulment improper | Nationstar lacked notice and relied on longtime foreclosure efforts; annulment justified to protect purchaser/creditor | Panel: Vacate and remand — annulment relied in part on the erroneous transfer finding and must be reexamined |
| Whether Ramirez should have been allowed to present evidence at the relief hearing | Requested evidentiary hearing to prove notice to Nationstar | Opposed; emphasized Ramirez failed to comply with local rules and produce evidence in opposition | Panel: Ramirez failed to meet local rule requirements; court should on remand clarify basis for denying hearing or may reopen record at its discretion |
| Whether clearly erroneous factual findings require vacatur | N/A | N/A | Panel: A factual finding (unauthorized transfers) with no record support is clearly erroneous and may have been material; vacatur and remand required |
Key Cases Cited
- Nat'l Envtl. Waste Corp. v. City of Riverside, 129 F.3d 1052 (9th Cir. 1997) (annulment of the automatic stay requires balancing equities and examining creditor knowledge)
- Fjeldsted v. Lien (In re Fjeldsted), 293 B.R. 12 (9th Cir. B.A.P. 2003) (factors for evaluating stay annulment and totality-of-circumstances test)
- First Yorkshire Holdings, Inc. v. Pacifica L 22, LLC (In re First Yorkshire Holdings, Inc.), 470 B.R. 864 (9th Cir. B.A.P. 2012) (standards for granting § 362(d)(4) in rem relief)
- Alakozai v. Citizens Equity First Credit Union (In re Alakozai), 499 B.R. 698 (9th Cir. B.A.P. 2013) (rationale for § 362(d)(4) relief to deter serial-filing schemes)
- Schwartz v. United States (In re Schwartz), 954 F.2d 569 (9th Cir. 1992) (annulment can retroactively validate actions that would otherwise violate the stay)
- United States v. Hinkson, 585 F.3d 1247 (9th Cir. 2009) (standard for abuse of discretion review; factual findings are clearly erroneous if illogical or unsupported)
- Benedor Corp. v. Conejo Enters., Inc. (In re Conejo Enters., Inc.), 96 F.3d 346 (9th Cir. 1996) (orders granting or denying stay relief are final and appealable)