496 B.R. 253
1st Cir. BAP2013Background
- Melos executed a note secured by a mortgage later assigned to GMAC;
- April 2010 loan modification reduced rate to 2.0% but defaulted in Oct. 2010;
- Melos filed Chapter 7 in Feb. 2011, stay relief obtained and later vacated upon settlement;
- After discharge (Nov. 2011) the Melos dismissed their appeal in exchange for GMAC’s commitment to pursue a HAMP modification;
- Melos filed Chapter 13 and a two-count adversary complaint alleging forbearance breach and bad faith foreclosure;
- GMAC moved for summary judgment asserting no ongoing duty to modify and that HAMP private right of action does not exist; the bankruptcy court granted summary judgment in GMAC’s favor, finding no duty to forebear and that foreclosure was proper;
- Melos’ Chapter 13 case was later dismissed, leaving the adversary proceeding moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mootness after bankruptcy dismissal | Melo dismissal does not render appeal moot | Adversary proceeding was ancillary and moot upon dismissal | Mootness; appeal DISMISSED as MOOT |
Key Cases Cited
- In re Pattullo, 271 F.3d 898 (9th Cir. 2001) (mootness depends on nexus to underlying bankruptcy; direct relation to reorganization ends appeal after dismissal)
- In re Hamilton, 399 B.R. 717 (1st Cir. BAP 2009) (adversary appeal mooted by bankruptcy dismissal if no relief feasible)
- In re Newport Creamery, Inc., 295 B.R. 408 (1st Cir. BAP 2003) (mootness when underlying case is dismissed and relief unavailable)