FILED
APR 11 2014
1 NO FO PUBL A IO
T R IC T N
2 SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP No. CC-13-1117-DPaKu
)
6 ERIC WINBIGLER, ) Bk. No. 10-37564-SC
)
7 Debtor. )
______________________________)
8 )
ERIC WINBIGLER, )
9 )
Appellant, )
10 )
v. ) M E M O R A N D U M1
11 )
T.D. SERVICE COMPANY; KELLER )
12 WILLIAMS REALTY; LAW OFFICES )
OF FONG & FONG; CITI PROPERTY )
13 HOLDINGS, INC., )
)
14 Appellees. )
______________________________)
15
Submitted Without Oral Argument on March 21, 20142
16
Filed - April 11, 2014
17
Appeal from the United States Bankruptcy Court
18 for the Central District of California
19 Honorable Scott C. Clarkson, Bankruptcy Judge, Presiding
20
Appearances: Appellant Eric Winbigler submitted a brief and
21 excerpts of record.
22
Before: DUNN, PAPPAS and KURTZ, Bankruptcy Judges.
23
24 1
This disposition is not appropriate for publication.
25 Although it may be cited for whatever persuasive value it may
have (see Fed. R. App. P. 32.1), it has no precedential value.
26 See 9th Cir. BAP Rule 8013-1.
27 2
By orders entered on October 16, 2013 and March 7, 2014,
28 this appeal was deemed suitable for submission without oral
argument. See Fed. R. Bankr. P. 8012 and Ninth Circuit BAP
Rule 8012-1.
1 Debtor appellant Eric Winbigler (“Debtor”) appeals the
2 bankruptcy court’s order denying his motion to reopen his
3 chapter 73 bankruptcy case to file and prosecute a motion for
4 contempt against Citi Property Holdings, Inc. (“Citi”), T.D.
5 Service Company, the Law Offices of Fong & Fong, and Keller
6 Williams Realty (collectively, “Appellees”) for alleged
7 violations of the discharge injunction under § 524(a). None of
8 the Appellees has appeared in this appeal. We DISMISS this
9 appeal because without having a transcript of the critical
10 hearing, we do not have an adequate record for meaningful review.
11 FACTUAL BACKGROUND4
12 Debtor filed his chapter 7 bankruptcy petition on August 27,
13 2010. On September 16, 2010, Citi filed a motion for relief from
14 stay (“RFS Motion”) to foreclose on the Debtor’s residence
15 property (“Property”) located in Lucerne Valley, California. In
16 the RFS Motion, Citi alleged that the fair market value of the
17 Property was $40,000 and that the debt secured by the Property
18 totaled $373,729.31, including $106,348.20 of accrued and unpaid
19 interest. Debtor responded to the RFS Motion, arguing that at
20 least some of the loan documents filed by Citi in support of the
21 RFS Motion were invalid and thus, void and that Citi could not
22 establish real party in interest standing to seek relief from
23
24 3
Unless otherwise noted, all chapter and section references
25 are to the federal Bankruptcy Code, 11 U.S.C. §§ 101-1532.
26 4
The background facts have been gleaned from the excerpts
27 of record filed by Debtor, particularly his declaration
(“Declaration”), dated and filed on January 17, 2013, and the
28 exhibits attached thereto.
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1 stay.
2 A hearing on the RFS Motion originally was scheduled for
3 October 14, 2010, but was rescheduled to October 21, 2010.
4 According to Debtor, on October 14, 2010, the bankruptcy court
5 continued the hearing to October 21, 2010 and ordered Citi to
6 file a supplemental declaration in support of the RFS Motion on
7 or before the continued hearing date. Appellant’s Opening Brief,
8 at 5-6. Citi filed the supplemental declaration of Julie Johnson
9 in support of the RFS Motion on October 19, 2010. Thereafter,
10 the hearing on the RFS Motion was further continued to
11 November 4, 2010.
12 Following the hearing on November 4, 2010, the bankruptcy
13 court entered an order denying the RFS Motion without prejudice.
14 Debtor received his discharge by order entered on January 5,
15 2011. His chapter 7 case was closed by order entered on
16 February 2, 2011.
17 On March 18, 2011, Citi recorded, through its trustee,
18 T.D. Service Company, a nonjudicial foreclosure sale notice with
19 respect to the Property. The nonjudicial foreclosure sale took
20 place on April 19, 2011, Citi was the winning bidder by credit
21 bid, and a trustee’s deed was recorded on April 22, 2011.
22 On May 11, 2011, Keller Williams Realty wrote a letter to
23 Debtor, informing him that eviction proceedings were being
24 initiated with respect to the Property but advising him of an
25 offer of cash if he were willing to vacate the Property “within a
26 short period of time.” Apparently, Debtor did not respond to
27 this offer. On May 23, 2011, Citi caused Debtor to be served
28 with a “THREE (3) DAYS” notice to vacate the Property. On
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1 June 1, 2011, Citi filed an unlawful detainer complaint against
2 Debtor in the San Bernardino County, California Superior Court
3 (“Superior Court”).
4 After extended efforts to serve the unlawful detainer
5 complaint on Debtor, Citi’s counsel, Fong & Fong, served the
6 Debtor by mail and by posting on the Property. Debtor did not
7 respond. On August 22, 2011, counsel for Citi filed a request
8 for entry of default against Debtor in the unlawful detainer
9 action.
10 Thereafter, Debtor, through counsel, filed a motion to
11 reopen his bankruptcy case, which motion was granted by order
12 entered on September 1, 2011. In light of the reopening of
13 Debtor’s bankruptcy case, the Superior Court took no action on
14 Citi’s request for entry of default and continued proceedings in
15 the unlawful detainer action to allow Citi to seek relief from
16 stay in Debtor’s reopened bankruptcy case.
17 On September 29, 2011, Citi filed a motion for relief from
18 stay (“Second RFS Motion”) in Debtor’s reopened bankruptcy case.
19 Following a hearing on October 18, 2011, the bankruptcy court
20 denied the Second RFS Motion because “the automatic stay is not
21 in effect,” by order entered on November 23, 2011. Following the
22 hearing on the Second RFS Motion, Debtor’s bankruptcy case was
23 reclosed.
24 On October 27, 2011, following a further hearing, the
25 Superior Court entered judgment in favor of Citi and against
26 Debtor for possession of the Property, with a waiver by Citi of
27 any claim for damages against the Debtor personally. A writ of
28 possession was issued in favor of Citi on November 16, 2011. A
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1 “Notice to Vacate” the Property was “given” to Debtor on or about
2 December 15, 2011.
3 On December 15, 2011, Debtor was evicted from and locked out
4 of the Property while Debtor was not at home. Appellant’s Brief,
5 at 12. Apparently, the property was listed for sale by Citi with
6 Keller Williams Realty.
7 Debtor filed a motion with the Superior Court to vacate the
8 unlawful detainer judgment in favor of Citi, but that motion was
9 denied at a hearing on December 27, 2011. The Superior Court
10 found that the unlawful detainer judgment was valid.
11 On April 16, 2012, title to the Property was transferred by
12 Grant Deed from Citibank, N.A. to “Tae Sung Roh, an unmarried
13 man.” Mr. Roh apparently further transferred the Property by
14 Grant Deed to “Ho Kyun Kim and Young Sook Kim, husband and wife
15 as joint tenants” on or about April 25, 2012.
16 In the meantime, Debtor had filed a motion to reopen
17 (“Motion to Reopen”) his bankruptcy case a second time, along
18 with a motion to hold the Appellees in contempt for violating the
19 discharge injunction. Following a hearing on February 20, 2013,
20 the bankruptcy court entered an order denying the Motion to
21 Reopen on March 5, 2013. No transcript of that hearing has been
22 provided for our review. Attached to the Debtor’s Notice of
23 Appeal is a copy of the bankruptcy court’s tentative ruling with
24 respect to the matters set for hearing on February 20, 2013. All
25 that the tentative ruling states with respect to the Motion to
26 Reopen is the following: “The January 17, 2013 motion to reopen
27 was filed by the Debtor, in pro per, without a declaration
28 establishing cause, as required by LBR 5010-1. The motion to
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1 reopen was not granted and the case remains closed.” The
2 tentative ruling was not attached to or made a part of the
3 bankruptcy court’s order denying the Motion to Reopen.
4 Debtor filed a timely Notice of Appeal from the order
5 denying his Motion to Reopen.
6 JURISDICTION
7 The bankruptcy court had jurisdiction under 28 U.S.C.
8 §§ 1334 and 157(b)(2)(O). We have jurisdiction under 28 U.S.C.
9 § 158.
10 ISSUE
11 Did the bankruptcy court abuse its discretion when it denied
12 Debtor’s Motion to Reopen?
13 STANDARDS OF REVIEW
14 Denial of a motion to reopen a bankruptcy case is reviewed
15 for abuse of discretion. See Weiner v. Perry, Settles & Lawson,
16 Inc. (In re Weiner), 161 F.3d 1216, 1217 (9th Cir. 1998); Lopez
17 v. Specialty Restaurants, Inc. (In re Lopez), 283 B.R. 22, 26
18 (9th Cir. BAP 2002). We apply a two-part test to determine if
19 the bankruptcy court abused its discretion. First, we review
20 whether the bankruptcy court applied the correct legal standard.
21 See United States v. Hinkson, 585 F.3d 1247, 1261-63 (9th Cir.
22 2009) (en banc). Then, if the correct legal standard was
23 applied, we determine whether the bankruptcy court’s supporting
24 fact findings were illogical, implausible or without support in
25 the record. Id. at 1262.
26 DISCUSSION
27 In this appeal, Debtor argues that the bankruptcy court
28 abused its discretion in denying his Motion to Reopen so that he
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1 could pursue contempt remedies against the Appellees for their
2 alleged violations of the discharge injunction of § 524 in
3 proceeding with foreclosure and sale of the Property.
4 Unfortunately, the focus of Debtor’s arguments reflects a
5 fundamental misunderstanding of the bankruptcy court’s order
6 denying Citi’s first RFS Motion.
7 Motions for relief from the automatic stay are very limited
8 proceedings. Deciding a motion for relief from stay involves
9 consideration of standing issues with respect to the moving party
10 (if such issues are raised) and the specific grounds for granting
11 relief from stay set forth in § 362(d), i.e., generally whether
12 “cause” has been established; whether the debtor has any equity
13 in the subject property; and (in a reorganization case) whether
14 the subject property is necessary to an effective reorganization
15 of the debtor’s affairs.
16 Hearings on relief from the automatic stay are . . .
handled in a summary fashion. [citation omitted] The
17 validity of the claim or contract underlying the claim
is not litigated during the hearing.
18
19 Johnson v. Righetti (In re Johnson), 756 F.2d 738, 740-41 (9th
20 Cir. 1985).
21 Given the limited grounds for obtaining . . . relief
from stay, read in conjunction with the expedited
22 schedule for a hearing on the motion, most courts hold
that motion for relief from stay hearings should not
23 involve an adjudication on the merits of claims,
defenses, or counterclaims, but simply determine
24 whether the creditor has a colorable claim to the
property of the estate.
25
26 Biggs v. Stovin (In re Luz Int’l, Ltd.), 219 B.R. 837, 842 (9th
27 Cir. BAP 1998).
28 Since we do not have a transcript of the hearing at which
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1 the bankruptcy court heard argument and decided to deny the RFS
2 Motion, we don’t know what rationale the bankruptcy court used
3 for denying the motion. However, we do know that in the order
4 denying the RFS Motion, the bankruptcy court denied it “without
5 prejudice.”
6 The primary meaning of “dismissal without prejudice,”
we think, is dismissal without barring the plaintiff
7 from returning later, to the same court, with the same
underlying claim. That will also ordinarily (though
8 not always) have the consequence of not barring the
claim from other courts, . . . Thus, Black’s Law
9 Dictionary (7th ed. 1999) defines “dismissed without
prejudice” as “removed from the court’s docket in such
10 a way that the plaintiff may refile the same suit on
the same claim,” . . . and defines “dismissal without
11 prejudice” as “[a] dismissal that does not bar the
plaintiff from refiling the lawsuit within the
12 applicable limitations period,” . . . .
13 Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505-06
14 (2001). In other words, while denying the RFS Motion, the
15 bankruptcy court did not preclude Citi from filing and
16 prosecuting a later motion for relief in the Debtor’s bankruptcy
17 case with different or better support. The bankruptcy court’s
18 order denying the RFS Motion had no substantive effect on the
19 lien claimed by Citi with respect to the Property. It certainly
20 did not avoid that lien as asserted by Debtor in his brief. See
21 Appellant’s Opening Brief, at 15-16.
22 As it turned out, Citi did not need to file such a motion.
23 When Debtor received his discharge and his chapter 7 case was
24 closed, the automatic stay terminated both as to him and as to
25 his bankruptcy estate as a matter of law. See § 362(c)(1) and
26
27
28
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1 (2)(A) and (C).5
2 When the automatic stay terminated, if Debtor had defenses
3 to Citi proceeding to foreclose on the Property, he needed to
4 raise them in state court. He did not appear at the Superior
5 Court until after the foreclosure sale had occurred, the
6 trustee’s deed had been recorded and Citi was seeking a default
7 judgment in its unlawful detainer action. At that point, Debtor
8 filed a motion to reopen his chapter 7 case that was granted, and
9 Citi filed the Second RFS Motion. The bankruptcy court
10 appropriately denied the Second RFS Motion because “the automatic
11 stay [was] not in effect.” Thereafter, Citi obtained an unlawful
12 detainer judgment over the Debtor’s objection (waiving any claim
13 for damages, consistent with the Debtor’s discharge), evicted
14 Debtor from the Property and sold the Property to an unrelated
15 third party.
16 So far, the Discussion has focused on the Debtor’s
17 arguments, as set forth in his Opening Brief, but the disposition
18 of this appeal needs to address some additional, different
19 points. In prior decisions, this Panel has held “that the
20
21 5
Section 362(c)(1) and (2)(A) and (C) provide in relevant
22 part:
(1) the stay of an act against property of the estate
23 . . . continues until such property is no longer property of the
estate:
24
(2) the stay of any other act . . . continues until the
25 earliest of –
(A) the time the case is closed;
26 . . .
27 (C) if the case is a case under chapter 7 of this title
concerning an individual . . . , the time a discharge
28 is granted or denied; . . . .
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1 reopening of a closed bankruptcy case is a ministerial act that
2 functions primarily to enable the file to be managed by the clerk
3 as an active matter and that, by itself, lacks independent legal
4 significance and determines nothing with respect to the merits of
5 the case.” Menk v. Lapaglia (In re Menk), 241 B.R. 896, 913 (9th
6 Cir. BAP 1999) (citations omitted and emphasis added). A motion
7 to reopen really only implicates a narrow range of administrative
8 issues, such as, for example, whether further estate
9 administration is necessary, whether a trustee should be
10 appointed, and whether another filing fee is required. Id. at
11 916-17. Generally, it is not appropriate in proceedings on a
12 motion to reopen to make substantive determinations on claims for
13 relief. Id.
14 In this appeal, the Debtor does not argue that the
15 bankruptcy court erred in denying his Motion to Reopen on the
16 procedural ground that extraneous issues intruded in the court’s
17 decision to deny the motion. Generally, issues not “specifically
18 and distinctly argued” in a party’s opening brief are deemed
19 waived. See, e.g., Arpin v. Santa Clara Valley Transp. Agency,
20 261 F.3d 912, 919 (9th Cir. 2001). However, even if we consider
21 that question in this appeal, we are hampered by an inadequate
22 record.
23 Debtor has not provided us with a transcript of the hearing
24 at which the bankruptcy court denied his Motion to Reopen.
25 Accordingly, we do not know what the bankruptcy court stated as
26 the rationale for denying the Motion to Reopen.
27 As recognized by Debtor, the applicable standard of review
28 is abuse of discretion. Without a transcript of the hearing on
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1 the Motion to Reopen, we do not, and cannot know what legal
2 standard the bankruptcy court applied in denying the motion. Nor
3 do we know what fact findings, if any, supported its decision.
4 In its tentative ruling, the bankruptcy court noted that the
5 Debtor filed the Motion to Reopen without a supporting
6 declaration establishing cause, as required by its local rules.
7 However, we do not know whether the bankruptcy court adopted its
8 tentative ruling at the hearing. The bankruptcy court’s order
9 denying the Motion to Reopen states only that the motion was
10 denied “[f]or the reasons set forth on the record.” If the
11 record presented to us is inadequate to allow us an opportunity
12 to review the appealed decision meaningfully, we may have no
13 alternative but to summarily affirm the bankruptcy court’s
14 decision or dismiss the appeal. See Community Commerce Bank v.
15 O’Brien (In re O’Brien), 312 F.3d 1135, 1137 (9th Cir. 2002).
16 We suspect, based on the record before us, that reopening
17 Debtor’s bankruptcy case for a second time would have been a
18 useless act: Debtor apparently wanted to reopen his bankruptcy
19 case to prosecute a motion for contempt remedies against the
20 Appellees, that was based on the faulty premise that Appellees
21 violated the discharge injunction of § 524 by pursuing
22 foreclosure of a lien on the Property that had not been avoided
23 during Debtor’s bankruptcy.
24 Section 524(a) operates as an injunction against the
25 commencement or continuation of any action or the employment of
26 any process to collect or recover a debt as a personal liability
27 of a chapter 7 debtor. 4 Collier on Bankruptcy ¶ 524.02 (Alan N.
28 Resnick & Henry J. Sommer eds., 16th ed. 2013). However, the
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1 discharge injunction provisions of § 524 apply only to the
2 personal liability of the debtor, so they have no effect on an
3 otherwise valid, unavoided prepetition lien under applicable
4 state law. Id. “[W]e are not convinced that Congress intended
5 to depart from the pre-[Bankruptcy] Code rule that liens pass
6 through bankruptcy unaffected.” Dewsnup v. Timm, 502 U.S. 410,
7 417 (1992).
8 Ultimately, those points are not dispositive here. To
9 conclude that the bankruptcy court abused its discretion, we
10 would have to determine that the bankruptcy court applied an
11 incorrect legal standard; applied the correct legal standard
12 erroneously based on the facts before it; or clearly erred in its
13 fact findings. Without a transcript of the relevant hearing, we
14 simply are in no position to make those determinations.
15 Accordingly, in the circumstances of this appeal, we cannot
16 find that the bankruptcy court abused its discretion in denying
17 the Motion to Reopen.
18 CONCLUSION
19 For the foregoing reasons, we DISMISS Debtor’s appeal.
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