FILED
MAR 21 2017
1 NOT FOR PUBLICATION
SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
2 OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP No. CC-16-1185-FCTa
)
6 MARISELA DANGCIL, ) Bk. No. 8:10-bk-15994-TA
)
7 Debtor. )
_____________________________ )
8 )
MARISELA DANGCIL, )
9 )
Appellant, )
10 )
v. ) MEMORANDUM*
11 )
JPMORGAN CHASE BANK, N.A., )
12 )
Appellee. )
13 ______________________________)
14 Submitted Without Argument
on February 23, 2017**
15
Filed – March 21, 2017
16
Appeal from the United States Bankruptcy Court
17 for the Central District of California
18 Honorable Theodor C. Albert, Bankruptcy Judge, Presiding
19
Appearances: Appellant Marisela Dangcil, pro se, on brief; John
20 M. Sorich of PIB Law on brief for Appellee
JPMorgan Chase Bank, N.A.
21
22
23
*
This disposition is not appropriate for publication.
24 Although it may be cited for whatever persuasive value it may
have, see Fed. R. App. P. 32.1, it has no precedential value, see
25 9th Cir. BAP Rule 8024-1.
26 **
By order entered on January 9, 2017, a motions panel
27 determined that this appeal was suitable for submission on the
briefs and record without oral argument pursuant to Federal Rule
28 of Bankruptcy Procedure 8019.
1 Before: FARIS, CLEMENT,*** and TAYLOR, Bankruptcy Judges.
2 INTRODUCTION
3 Debtor Marisela Dangcil appeals from the bankruptcy court’s
4 order granting creditor JPMorgan Chase Bank, N.A.’s (“Chase”)
5 motion for relief from the automatic stay under §§ 362(d)(1), (2)
6 and (4).1 The court correctly determined that Chase lacked
7 adequate protection under § 362(d)(1) and, to that extent, we
8 AFFIRM. But to the extent the court granted the motion under
9 § 362(d)(4), we REVERSE the order.
10 FACTUAL BACKGROUND
11 A. Prepetition events
12 Ms. Dangcil and her then-romantic partner, Victor Chavez,
13 purchased a residential property in Brea, California (“Property”)
14 in March 2006. Ms. Dangcil and Mr. Chavez both executed the deed
15 of trust in favor of Countrywide Home Loans, Inc.
16 (“Countrywide”), but only Mr. Chavez obtained a mortgage loan and
17 executed the promissory note and associated documents. The
18 original principal amount of the loan was $841,790.
19 In April 2006, Mr. Chavez conveyed the Property to
20 Ms. Dangcil in her capacity as trustee for a family trust.
21 At some point thereafter, Chase acquired the promissory note
22
23
***
The Honorable Fredrick E. Clement, United States
24 Bankruptcy Judge for the Eastern District of California, sitting
by designation.
25
1
26 Unless specified otherwise, all chapter and section
references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532,
27 all “Rule” references are to the Federal Rules of Bankruptcy
Procedure, and all “Civil Rule” references are to the Federal
28 Rules of Civil Procedure.
2
1 and deed of trust.2
2 Ms. Dangcil and Mr. Chavez jointly made the mortgage loan
3 payments. Sometime prior to November 2010, Ms. Dangcil or
4 Mr. Chavez3 sought to refinance the mortgage loan on the
5 Property. Ms. Dangcil claimed that she reached an agreement with
6 Chase to refinance the mortgage loan; however, Chase denied that
7 the parties ever entered into a loan modification agreement.
8 There is no signed loan modification agreement in the record.4
9 Ms. Dangcil and Mr. Chavez ended their romantic relationship
10 in December 2010. Mr. Chavez claimed that Ms. Dangcil and her
11 family forced him off the Property in March 2011.
12 B. Ms. Dangcil’s bankruptcy cases
13 Ms. Dangcil filed a chapter 13 petition in May 2010. She
14 listed $968,688.63 in liabilities and $694,000 in assets. She
15 failed to include the Property in her bankruptcy schedules or
16 statement of financial affairs.
17 The inclusion of $1.1 million of debt related to the
18
2
19 On or around May 9, 2013, Countrywide assigned the deed of
trust to Chase. The record does not reflect when Chase acquired
20 the promissory note and associated documents.
21 3
Although the loan modification documents were addressed to
22 Mr. Chavez, he claimed that he did not request or desire a loan
modification for the Property. He said that his signature was
23 forged on certain documents concerning Ms. Dangcil’s attempts to
modify the mortgage loan. Ms. Dangcil says that, as an ex-lover
24 of hers, Mr. Chavez is an unreliable witness.
25 4
A January 2011 unexecuted loan modification agreement
26 provided that the current unpaid principal balance was
$906,369.59. With the addition of interest, escrow, and other
27 fees, the adjusted unpaid principal balance was to be
$1,085,936.12. A November 2010 unexecuted loan modification
28 agreement similarly provided for a new balance of $1,081,622.15.
3
1 Property made her ineligible for chapter 13 relief, so she sought
2 to convert her case to one under chapter 11. The bankruptcy
3 court granted her motion to convert. During the chapter 11
4 proceedings, Ms. Dangcil once again claimed that the Property was
5 owned by a family trust.
6 In August 2011, Ms. Dangcil filed a motion to dismiss her
7 case. The court denied the motion and instead converted her case
8 to one under chapter 7.
9 On May 30, 2014, the chapter 7 trustee filed a notice of his
10 intention to abandon the Property. He said that there was no
11 realizable equity in the Property for the benefit of the estate.
12 The trustee filed his final report on January 27, 2015, which
13 assigned the Property an estimated net value of $0.
14 C. Motion for relief from stay
15 On March 30, 2016, Chase filed its motion for relief from
16 the automatic stay (“Motion”). It sought relief under
17 § 362(d)(1) because its interest in the Property was not
18 adequately protected and the bankruptcy case was filed in bad
19 faith; under § 362(d)(2)(A) because Ms. Dangcil had no equity in
20 the Property and the Property was not necessary to an effective
21 reorganization; and under § 362(d)(4) because the bankruptcy
22 filing was a part of a scheme to delay, hinder, or defraud
23 creditors.
24 Chase represented that its claim totaled $1,286,606.10,
25 which included $906,369.59 in principal, $268,862.61 in interest,
26 and $111,373.90 in advances. It also stated that Ms. Dangcil had
27 not made the past ninety-four payments over eight years for a
28 total arrearage of $488,660.46. It estimated that, based on a
4
1 Zillow.com internet valuation, the fair market value of the
2 Property was $531,018. As such, it asserted that the “equity
3 cushion” in the Property was $0 and that Ms. Dangcil’s equity in
4 the Property was also $0.
5 As to the § 362(d)(4) claim, Chase attached the declaration
6 of Mr. Chavez and stated that he (the borrower) did not apply for
7 a loan modification and did not desire a loan modification.
8 Chase had received a loan modification application on behalf of
9 Mr. Chavez, but Mr. Chavez said that he did not sign or agree to
10 the documents.
11 At the hearing on the Motion, the bankruptcy court stated
12 that “[t]his is not decided on the merits but on burdens of
13 proof.” It said that Chase had failed to carry its burden,
14 because the Zillow.com valuation was not admissible evidence.
15 Ms. Dangcil argued that Chase had agreed to modify the
16 mortgage loan agreement. However, the court said it was not
17 concerned with the purported loan modification but was only
18 focused on whether there was equity in the Property for the
19 estate. The court also asked Ms. Dangcil whether she had
20 segregated any mortgage payments that she had not made over the
21 past eight years; she answered that she had not.
22 Following the hearing, Chase filed supplemental evidence in
23 support of the Motion. It submitted two valuations of the
24 Property: $760,000 (according to a Residential Broker Price
25 Opinion) and $892,000 (according to the Orange County Treasurer-
26 Tax Collector).
27 The bankruptcy court held a second hearing on the Motion.
28 Referencing Chase’s supplemental evidence, the court told
5
1 Ms. Dangcil that the Property was overencumbered and that she had
2 not made mortgage payments in a long time. Ms. Dangcil insisted,
3 “I requested them to refinance the property, to give me a
4 modification and they have not. So I don’t have any defense at
5 all.” The court summarily granted the Motion.
6 In its June 14, 2016 order (“Order”), the court checked the
7 boxes indicating that it granted the Motion under §§ 362(d)(1),
8 (2) and (4). However, it did not check any of the boxes to
9 specify the basis for granting the Motion under § 362(d)(4).
10 Ms. Dangcil timely appealed the Order.
11 JURISDICTION
12 The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
13 §§ 1334 and 157(b)(2)(G). We have jurisdiction under 28 U.S.C.
14 § 158.
15 ISSUES
16 (1) Whether the bankruptcy court denied Ms. Dangcil due
17 process.
18 (2) Whether the bankruptcy court erred in granting Chase
19 relief from the automatic stay.
20 STANDARDS OF REVIEW
21 “Whether an appellant’s due process rights were violated is
22 a question of law we review de novo.” DeLuca v. Seare
23 (In re Seare), 515 B.R. 599, 615 (9th Cir. BAP 2014) (citation
24 omitted); see HSBC Bank USA, Nat’l Ass’n v. Blendheim
25 (In re Blendheim), 803 F.3d 477, 497 (9th Cir. 2015) (“Whether
26 adequate notice has been given for the purposes of due process is
27 a mixed question of law and fact that we review de novo.”).
28 We review for an abuse of discretion the bankruptcy court’s
6
1 decision to grant relief from the automatic stay under § 362(d).
2 Kronemyer v. Am. Contractors Indem. Co. (In re Kronemyer),
3 405 B.R. 915, 919 (9th Cir. BAP 2009) (citation omitted).
4 Additionally, “[w]e review de novo contentions that present an
5 issue of law regarding stay relief.” Id.
6 “De novo review requires that we consider a matter anew, as
7 if no decision had been made previously.” Francis v. Wallace
8 (In re Francis), 505 B.R. 914, 917 (9th Cir. BAP 2014) (citations
9 omitted).
10 We apply a two-part test to determine whether the bankruptcy
11 court abused its discretion. United States v. Hinkson, 585 F.3d
12 1247, 1261–62 (9th Cir. 2009) (en banc). First, we consider de
13 novo whether the bankruptcy court applied the correct legal
14 standard to the relief requested. Id. Then, we review the
15 bankruptcy court’s factual findings for clear error. Id. at
16 1262. We must affirm the bankruptcy court’s factual findings
17 unless we conclude that they are illogical, implausible, or
18 without support in inferences that may be drawn from the facts in
19 the record. Id.
20 DISCUSSION
21 A. We will consider Ms. Dangcil’s appeal despite her deficient
briefs and excerpts of record.
22
23 Chase requests that we strike Ms. Dangcil’s opening brief
24 and dismiss this appeal because her excerpts of record and brief
25 do not comply with the applicable rules.
26 Chase’s points are well taken. Ms. Dangcil’s excerpts of
27 record include only six documents, at least two of which do not
28 appear to have been presented to the bankruptcy court. She fails
7
1 to provide a complete record on appeal and did not include the
2 transcripts of the hearings until the BAP clerk’s office told her
3 to do so. Moreover, she does not provide citations to the record
4 supporting many of her arguments; additionally, she does not cite
5 any legal authority for her arguments regarding § 362(d).
6 Nevertheless, while many aspects of Ms. Dangcil’s appellate
7 briefs and record are deficient, Ms. Dangcil is proceeding pro se
8 in this appeal, so we will construe her arguments liberally. See
9 Kashani v. Fulton (In re Kashani), 190 B.R. 875, 883 (9th Cir.
10 BAP 1995). We will also review the excerpts of record provided
11 by Chase and will exercise our discretion to review the
12 bankruptcy court’s docket. See Woods & Erickson, LLP v. Leonard
13 (In re AVI, Inc.), 389 B.R. 721, 725 n.2 (9th Cir. BAP 2008).
14 However, we will not consider evidence and argument not
15 first presented to the bankruptcy court, including Ms. Dangcil’s
16 Exhibits D and E. See Oyama v. Sheehan (In re Sheehan), 253 F.3d
17 507, 512 n.5 (9th Cir. 2001) (“Evidence that was not before the
18 lower court will not generally be considered on appeal”);
19 Kirschner v. Uniden Corp. of Am., 842 F.2d 1074, 1077–78 (9th
20 Cir. 1988) (papers not filed or admitted into evidence by trial
21 court prior to judgment on appeal were not part of the record on
22 appeal and thus stricken).
23 B. Despite Chase’s failure to serve Ms. Dangcil properly, the
bankruptcy court did not deny Ms. Dangcil due process.
24
25 Ms. Dangcil contends that the court denied her due process
26 because Chase failed to serve her with its Motion and
27 supplemental valuation, and, as a result, she was not able to
28 adequately respond to Chase’s arguments. Although we agree that
8
1 Chase repeatedly ignored the applicable service rules, we
2 disagree that the court denied her due process.
3 Generally speaking, a party must receive sufficient notice
4 of any adverse action and the opportunity to be heard. See
5 Tennant v. Rojas (In re Tennant), 318 B.R. 860, 870 (9th Cir. BAP
6 2004). According to the United States Supreme Court:
7 An elementary and fundamental requirement of due
process in any proceeding which is to be accorded
8 finality is notice reasonably calculated, under all the
circumstances, to apprise interested parties of the
9 pendency of the action and to afford them an
opportunity to present their objections. The notice
10 must be of such nature as reasonably to convey the
required information . . . and it must afford a
11 reasonable time for those interested to make their
appearance.
12
13 Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)
14 (citations omitted).
15 Section 362(d) provides that, “[o]n request of a party in
16 interest and after notice and a hearing, the court shall grant
17 relief from the stay” in certain circumstances. Section 102(1)
18 defines the phrase “after notice and a hearing”:
19 (1) “after notice and a hearing”, or a similar phrase -
20 (A) means after such notice as is appropriate in
the particular circumstances, and such opportunity
21 for a hearing as is appropriate in the particular
circumstances; but
22
(B) authorizes an act without an actual hearing if
23 such notice is given properly and if -
24 (i) such a hearing is not requested timely by
a party in interest; or
25
(ii) there is insufficient time for a hearing
26 to be commenced before such act must be done,
and the court authorizes such act[.]
27
28 “[T]he concept of notice and a hearing is flexible and
9
1 depends on what is appropriate in the particular circumstance.”
2 In re Tennant, 318 B.R. at 870 (citing Great Pac. Money Markets,
3 Inc. v. Krueger (In re Krueger), 88 B.R. 238, 241 (9th Cir. BAP
4 1988)).
5 Ms. Dangcil argues that because Chase did not serve her with
6 the Motion or supplemental valuation, the Order was a “default”
7 in Chase’s favor. She argues that, had Chase done its duty to
8 perform title history searches,5 it would have known that she was
9 on title to the Property and should have been served with the
10 Motion under Civil Rule 4(e)(2)(A).6
11 We agree that Chase did not properly serve the Motion on
12 Ms. Dangcil.
13 Local Bankruptcy Rule 4001-1(c)(1)(C)(i) requires service of
14 a motion for relief from stay on both the debtor and her
15 attorney. Chase does not deny that it failed to serve
16 Ms. Dangcil with the Motion, reply, and supplemental valuation.
17 The various proofs of service confirm that Ms. Dangcil, who at
18 the time was proceeding pro se, did not directly receive copies
19 of those documents. Rather, it appears that Chase sent those
20 documents only to attorneys who had previously represented
21
22 5
She claims that a title insurer may be held liable for the
23 damages it causes by breaching its duty to examine title history
records. There is no indication in the record that Chase is a
24 title insurer.
25 6
Ms. Dangcil selectively references service under Civil
26 Rule 4(e)(2)(A), which provides that service may be accomplished
by “delivering a copy of the summons and of the complaint to the
27 individual personally[.]” But in a bankruptcy case, Rule 7004(b)
provides that service may be made by first class mail postage
28 prepaid to an individual’s home or business.
10
1 Ms. Dangcil or who represented her only for a limited purpose.
2 Chase’s task was not unreasonably difficult: it did not need to
3 serve her personally. But it utterly failed to even mail her a
4 copy of its filings. Particularly when dealing with a pro se
5 litigant, a party should ensure that the pro se litigant has
6 notice of its legal actions. Chase failed in this respect.
7 Nevertheless, we find no reversible error.
8 First, Ms. Dangcil did not raise the due process issue
9 before the bankruptcy court or otherwise object to the notice or
10 hearing afforded by the court. As such, she has waived this
11 issue. See Yamada v. Nobel Biocare Holding AG, 825 F.3d 536, 543
12 (9th Cir. 2016) (“[g]enerally, an appellate court will not hear
13 an issue raised for the first time on appeal”); Ezra v. Seror
14 (In re Ezra), 537 B.R. 924, 932 (9th Cir. BAP 2015) (“Ordinarily,
15 federal appellate courts will not consider issues not properly
16 raised in the trial courts.”). A debtor’s failure to raise due
17 process challenges before the bankruptcy court waives such claims
18 on appeal. See Zamos v. Zamos (In re Zamos), 300 F. App’x 451,
19 452 (9th Cir. 2008) (“Jerome has waived his contention that his
20 due process rights were violated by Patricia’s delay in bringing
21 suit to collect delinquent support payments, as he did not raise
22 it below.”).
23 Ms. Dangcil says that she raised this argument in her
24 opposition to the Motion. She admits that she did not “check the
25 box for lack of service[,]” but claims that she “was representing
26 herself and may not have understood she needed to make the
27 argument. Or, perhaps, it was simply a clerical error and [she]
28 just missed checking the appropriate form box.” In addition to
11
1 this equivocal argument, she argues that she raised this issue
2 before the bankruptcy court because Chase argued in its reply
3 that her opposition was untimely. But she admitted that she
4 actually received the Motion and never told the court that she
5 was not afforded notice or the opportunity to be heard. In other
6 words, she failed to present the due process argument to the
7 bankruptcy court, and we will not consider it for the first time
8 on appeal.
9 Second, despite Chase’s failure to serve Ms. Dangcil, she
10 had actual notice of the Motion, responded to the Motion in
11 detail, and appeared and argued at both hearings. Ms. Dangcil
12 claimed that she received the Motion five days after it was
13 filed, which was twenty-two days before the hearing. Despite the
14 delay, she had adequate notice. She also had ample opportunity
15 to present her arguments and be heard, and she availed herself of
16 that opportunity. Thus, Ms. Dangcil was not deprived of either
17 notice or an opportunity to be heard.
18 Third, even in cases where a bankruptcy court errs by
19 failing to provide adequate notice and hearing, the debtor must
20 show prejudice from the procedural deficiencies. See Rosson v.
21 Fitzgerald (In re Rosson), 545 F.3d 764, 776-77 (9th Cir. 2008)
22 (“Because there is no reason to think that, given appropriate
23 notice and a hearing, Rosson would have said anything that could
24 have made a difference, Rosson was not prejudiced by any
25 procedural deficiency.”). In Rosson, the Ninth Circuit held that
26 the debtor was deprived of a meaningful opportunity to be heard;
27 nevertheless, because he could “show no prejudice arising from
28 the defective process afforded him[,]” the bankruptcy court
12
1 properly converted the case to chapter 7. Id. (citations
2 omitted); see City Equities Anaheim, Ltd. v. Lincoln Plaza Dev.
3 Co. (In re City Equities Anaheim, Ltd.), 22 F.3d 954, 959 (9th
4 Cir. 1994) (rejecting a due process claim for lack of prejudice
5 where debtor could not show that different or additional
6 arguments would have been presented if the bankruptcy court had
7 timely approved petition for new counsel).
8 Ms. Dangcil fails to explain what more she would have said
9 if she had received timely service of the Motion and supplemental
10 appraisal. Her inability to give us any persuasive, substantive
11 argument against the Order on appeal proves that she could not
12 have made any such argument before the bankruptcy court even if
13 she had been given more notice. We fail to see how Ms. Dangcil
14 “would have said anything that could have made a difference.”
15 See In re Rosson, 545 F.3d at 777.
16 Therefore, although Chase neglected to serve Ms. Dangcil
17 with any of the relevant filings, the bankruptcy court did not
18 deprive Ms. Dangcil of due process.
19 C. The bankruptcy court did not abuse its discretion in
granting Chase relief from the automatic stay.
20
21 1. The court correctly granted stay relief “for cause.”
22 Ms. Dangcil argues that she had ample equity in the Property
23 and that Chase was adequately protected. She also argues that
24 the Property would have had an ample equity cushion if Chase had
25 not dishonored a loan modification agreement. We disagree on
26 both counts.
27 Sections 362(d) provides, in relevant part:
28 (d) On request of a party in interest and after notice
13
1 and a hearing, the court shall grant relief from the
stay provided under subsection (a) of this section,
2 such as by terminating, annulling, modifying, or
conditioning such stay -
3
(1) for cause, including the lack of adequate
4 protection of an interest in property of such
party in interest;
5
(2) with respect to a stay of an act against
6 property under subsection (a) of this section,
if -
7
(A) the debtor does not have an equity in
8 such property; and
9 (B) such property is not necessary to an
effective reorganization[.]
10
11 §§ 362(d)(1), (2).
12 Section 362(d)(1) allows the bankruptcy court to grant a
13 creditor relief from the automatic stay “for cause.” “Because
14 there is no clear definition of what constitutes ‘cause,’
15 discretionary relief from the stay must be determined on a case
16 by case basis.” MacDonald v. MacDonald (In re MacDonald),
17 755 F.2d 715, 717 (9th Cir. 1985). The lack of adequate
18 protection is one of many types of “cause” warranting relief
19 under § 362(d)(1). Ellis v. Parr (In re Ellis), 60 B.R. 432, 435
20 (9th Cir. BAP 1985).
21 “[T]he party seeking relief must first establish a prima
22 facie case that ‘cause’ exists for relief under § 362(d)(1).
23 Once a prima facie case has been established, the burden shifts
24 to the debtor to show that relief from the stay is unwarranted.
25 If the movant fails to meet its initial burden to demonstrate
26 cause, relief from the automatic stay should be denied.”
27 Lapierre v. Advanced Med. Spa Inc. (In re Advanced Med. Spa
28 Inc.), No. BAP EC-16-1087, 2016 WL 6958130, at *4 (9th Cir. BAP
14
1 Nov. 28, 2016); see § 362(g) (the party requesting relief has the
2 burden of proof regarding equity in the property, but the party
3 opposing relief has the burden of proof on all other issues).
4 In the present case, the bankruptcy court held that, due to
5 lack of equity in the Property, Chase was not adequately
6 protected. Ms. Dangcil argues on appeal that there was
7 sufficient equity in the Property to protect Chase. She
8 calculated the amount of equity by subtracting the original
9 principal loan amount of $841,790 from Chase’s valuation. She
10 claims that she had as much as $50,000 in equity, which is at
11 least 5.6 percent of the value of the Property.
12 Ms. Dangcil did not tell the bankruptcy court that she had
13 equity in the Property or that Chase was adequately protected.7
14 Rather, she only argued that Chase did not meet its burden
15 regarding the valuation and that Chase had agreed to a loan
16 modification. We will not consider arguments that she did not
17 raise below. See Yamada, 825 F.3d at 543; Ezra, 537 B.R. at 932.
18 Nevertheless, even if we address the substance of her argument,
19 she is simply wrong.
20 Ms. Dangcil’s argument rests on the assertion that Chase’s
21
22 7
Ms. Dangcil concedes that she did not raise these
23 arguments below but instead argues that she could not have made
these arguments to the bankruptcy court because Chase did not
24 provide the valuation until after the initial hearing and “she
did not have a real chance to respond in writing or object to
25 Appellee’s valuation argument in the trial court.” Although
26 Chase does not deny that it failed to serve Ms. Dangcil with the
supplemental valuation, she had an opportunity to challenge the
27 valuation and argue that she had equity in the Property at the
second hearing but failed to do so. She also could have sought
28 reconsideration by the bankruptcy court but neglected to do so.
15
1 loan balance was $841,790. This is the original principal amount
2 of the loan. Ms. Dangcil’s argument ignores the undisputed fact
3 that, because she had not made any payments on the loan for about
4 eight years, the loan balance had grown to $1,286,606.10 due to
5 the accrual of interest and other charges. Using the undisputed
6 current loan balance proves that there was no “equity cushion” to
7 provide adequate protection to Chase.
8 Additionally, we have previously held that “a debtor’s
9 persistent failure to make payments, standing alone, may
10 constitute adequate cause for relief from the stay.” Aguilar v.
11 Ocwen Loan Servicing, LLC (In re Aguilar), BAP No.
12 CC–14–1071–PaTaKu, 2014 WL 6981285, at *4 (9th Cir. BAP Dec. 10,
13 2014), aff’d, --- F. App’x ----, 2017 WL 393763 (9th Cir.
14 Jan. 30, 2017) (citing In re Ellis, 60 B.R. at 435; Price v. Del.
15 State Police Fed. Credit Union (In re Price), 370 F.3d 362, 373
16 (3d Cir. 2004) (“A persistent failure to make monthly payments
17 under loan documents can constitute cause for granting relief
18 from the automatic stay.”)). The bankruptcy court noted that
19 Ms. Dangcil had not made any mortgage loan payments for eight
20 years, which totaled ninety-four missed payments and a deficiency
21 of $488,660.46. Ms. Dangcil’s admitted failure to make any
22 mortgage loan payments (or segregate mortgage payments) in eight
23 years further established cause to grant relief from stay under
24 § 362(b)(1).
25 Accordingly, the court did not abuse its discretion in
26 granting relief from the automatic stay pursuant to § 362(d)(1).
27 Given our discussion above, we need not consider the court’s
28 other bases for granting the Motion.
16
1 2. The purported loan modification is irrelevant and does
not preclude stay relief.
2
3 Ms. Dangcil focuses largely on her efforts to obtain a loan
4 modification, insisting that the “loan modification is valid, and
5 Appellee has dishonored it to date.” She contends that she was
6 “entitled to” the modification, and, had Chase honored the loan
7 modification, she would have equity in the Property. She also
8 claims that Chase acted in bad faith when it refused her offers
9 of payment under the loan modification agreement. We reject
10 these arguments.
11 There is no evidence in the record that Chase agreed to any
12 loan modification. Under California law, “[i]n order for a
13 contract to form, there must be a meeting of the minds with an
14 intent to be bound by a legally enforceable agreement.” Chaganti
15 v. I2 Phone Int’l, Inc., 635 F. Supp. 2d 1065, 1071 (N.D. Cal.
16 2007), aff’d, 313 F. App’x 54 (9th Cir. 2009) (citation omitted).
17 “An offer must clearly articulate the terms of the agreement and
18 the acceptance must be absolute, unqualified and a mirror image
19 of the offer.” Id. (citations omitted)
20 Ms. Dangcil failed to present either the bankruptcy court or
21 this Panel with an executed loan modification agreement or proof
22 of Chase’s assent to an agreement. Rather, she only provides us
23 with e-mails (not presented to the bankruptcy court) that show
24 that a representative for Chase or Countrywide forwarded a draft
25 of a loan modification agreement. She claims that the superior
26 court assumed that the parties were going to enter into a loan
27 modification agreement, but this is not supported by competent
28 evidence, nor does it prove that there was an enforceable
17
1 agreement.
2 Further, even if the agreement were binding on Chase,
3 Ms. Dangcil still would not have any equity in the Property.
4 According to the unexecuted loan modification agreements, the
5 loan modification would not have reduced the loan balance;
6 rather, it would have added the delinquent interest to the
7 principal sum of the loan. Thus, the principal amount owed would
8 have increased from the original principal amount of $841,970 to
9 $1,085,936.12 (based on the January 2011 unexecuted agreement),
10 or $1,081,622.15 (based on the November 2010 unexecuted
11 agreement). She is patently wrong that the loan modification
12 would result in a $50,000 equity cushion in the Property.
13 3. The record does not support stay relief under
§ 362(d)(4).
14
15 Ms. Dangcil contends that the court erred in granting the
16 Motion based on § 362(d)(4). The Order identified § 362(d)(4) as
17 a basis for the court’s ruling but the court’s oral ruling made
18 clear that it was solely focused on the issue of equity in the
19 Property under §§ 362(d)(1) and (2).
20 We agree that the inclusion of § 362(d)(4) in the Order is
21 probably an oversight by the court, based on its comments at the
22 hearings and its failure to identify the basis for granting
23 relief under § 362(d)(4). Accordingly, we reverse the Order only
24 to the extent it includes § 362(d)(4) as a basis for granting the
25 Motion.
26 CONCLUSION
27 For the reasons set forth above, the bankruptcy court did
28 not deny Ms. Dangcil due process, despite Chase’s failure to
18
1 serve her. The court also did not abuse its discretion in
2 granting Chase relief from the automatic stay. Therefore, we
3 AFFIRM IN PART the bankruptcy court’s decision to grant relief
4 from stay under § 362(d)(1) and REVERSE IN PART the Order as to
5 stay relief under § 362(d)(4) only.
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