Miller v. Deutsche Bank National Trust Co.
666 F.3d 1255
| 10th Cir. | 2012Background
- Deutsche Bank foreclosed on the Miller home in Colorado state court and obtained an order for sale (OAS).
- Millers filed Chapter 13 bankruptcy, triggering an automatic stay of foreclosure under 11 U.S.C. § 362(a).
- Bank sought relief from stay; bankruptcy court granted relief, concluding Deutsche Bank was a party in interest with standing.
- BAP affirmed; Millers appealed, arguing Deutsche Bank lacked standing and possession of the original Note.
- Bank presented a copy of the Note indorsed in blank; the original Note was not produced at the bankruptcy hearing.
- Court held Deutsche Bank did not prove it was a creditor/holder with possession of the Note under Colorado law; relief from stay reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Deutsche Bank is a party in interest with standing. | Millers contend Deutsche Bank lacks standing as holder of the Note. | Deutsche Bank asserts it is the creditor/holder entitled to relief from stay. | Deutsche Bank failed to prove status as creditor; standing not established. |
| Whether Rooker-Feldman/issue preclusion foreclose review. | BAP relied on Rooker-Feldman to preclude relitigation of state-court standing. | Preclusion doctrines apply; state finding precludes federal review. | Rooker-Feldman and issue preclusion do not apply to foreclose review; remand for merits. |
| What is the controlling standard for 'party in interest' standing under § 362(d)? | Deutsche Bank is a party in interest as holder or possessor of the Note. | Standing requires possession and enforceability under Colorado UCC; mere indorsement in blank is insufficient. | Bankruptcy court abused its discretion; no show of possession/qualified holder under UCC. |
| Does Colorado law require possession of the original Note to enforce or to foreclose? | Indorsement in blank allows transfer; original note not strictly required in some contexts. | Possession of the original Note is required to establish holder and enforceability. | Possession required; Deutsche Bank failed to prove possession of the original Note. |
| Can a 'holder of an evidence of debt' foreclose without presenting the original note under Colo. Rev. Stat. § 38-38-101(1)? | Holder may foreclose without the original note in certain circumstances. | DB must qualify as holder of an evidence of debt with possession; otherwise not valid. | DB fails to show it is a holder with possession; statutory foreclosure not established. |
Key Cases Cited
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (U.S. 2005) (Rooker-Feldman framework discussed)
- Lance v. Dennis, 546 U.S. 459 (U.S. 2006) (full faith and credit/preclusion concerns in preclusion doctrine)
- In re Comcoach Corp., 698 F.2d 571 (2d Cir. 1983) (definition of 'party in interest' in bankruptcy context)
- In re Dittmar, 618 F.3d 1199 (10th Cir. 2010) (standard of review for BAP decisions; deference considerations)
- C.W. Mining Co., 641 F.3d 1235 (10th Cir. 2011) (standard of review and scope of appellate review in bankruptcy)