Bank of New York Mellon v. 732 Hardy Way Trust

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BANK OF NEW YORK MELLON, FKA No. 19-17048
Bank of New York, as Trustee for
the Certificateholders of CWALT, D.C. No.
Inc., Alternative Loan Trust 2005- 2:17-cv-01916-
54CB, Mortgage Pass-Through RFB-EJY
Certificates Series 2005-54CB,
Plaintiff-Appellant,
OPINION
v.

ENCHANTMENT AT SUNSET BAY
CONDOMINIUM ASSOCIATION; 732
HARDY WAY TRUST,
Defendants-Appellees,

and

HAROLD HILL; NEVADA
ASSOCIATION SERVICES, INC.,
Defendants.

Appeal from the United States District Court
for the District of Nevada
Richard F. Boulware II, District Judge, Presiding

Argued and Submitted November 17, 2020
Pasadena, California

Filed June 25, 2021
2 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

Before: Johnnie B. Rawlinson, Danielle J. Forrest, and
Lawrence VanDyke, Circuit Judges.

Opinion by Judge VanDyke;
Concurrence by Judge VanDyke;
Dissent by Judge Forrest

SUMMARY *

Nevada Foreclosure Law / Bankruptcy Automatic Stay

The panel reversed the district court’s summary
judgment that was entered in favor of the 732 Hardy Way
Trust, its denial of summary judgment to the Bank of New
York Mellon (the “Bank”), and its dismissal of the Bank’s
claims against a Homeowners Association (“HOA”) in a
quiet title action brought by the Bank, concerning title to real
property in Nevada that was subject to a HOA nonjudicial
foreclosure sale.

Harold Hill purchased property at 732 Hardy Way,
Mesquite, Nevada. The Bank was a first deed of trust
lienholder. In January 2014, Hill fell behind in his HOA
dues, and the HOA recorded a notice of delinquent
assessment lien in February 2014. In April 2014, Hill filed
for Chapter 13 bankruptcy, and an automatic stay went into
effect. On July 15, 2014, while Hill’s bankruptcy case was
pending, the HOA recorded a notice of foreclosure sale, and
sold the property to the Trust.

*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 3

The panel held that the Bank had prudential standing to
make the argument that the HOA foreclosure sale occurred
in violation of the automatic stay and was thus void.
Because the Bank had standing, its interest as a creditor was
protected under Nevada law. The panel held further that any
HOA foreclosure sale in violation of the automatic
bankruptcy was void, and not merely voidable, under
Nevada law. The panel concluded that the Bank’s interest
was superior to the Trust’s interest where the Bank provided
evidence that: Hill listed the property in his bankruptcy
schedules in March 2014; the automatic bankruptcy stay was
active through 2017; and the property was auctioned off on
September 19, 2014. The panel held that the Bank should
receive quiet title to the property under Nevada Revised
Statute 40.010.

In his concurring opinion, Judge VanDyke wrote
separately to explain further why he thought Judge Forrest’s
dissent was incorrect. He wrote that underlying the dissent’s
analysis was the concept that the factual voidness of the
foreclosure sale here could only be raised in this state-law
action by certain entities, which meant that the sale was only
void as to certain entities if they so choose. This is what was
usually meant when a transaction was said to be “voidable,
not void.” The dissent’s reliance on a “voidable, not void”
rationale was directly at odds with this court’s clear authority
recognizing that violations of a bankruptcy stay are in fact
“void,” not voidable. The dissent’s assertion that the
automatic stay did not protect individual creditors when
pursuing claims that were adverse or unrelated to the
debtor’s estate was not an accurate reflection of this circuit’s,
or the Supreme Court’s, precedent generally.

Dissenting, Judge Forrest would hold that the Bank was
not entitled to enforce the automatic stay or seek relief based
4 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

on a violation of the bankruptcy stay because in seeking
relief, the Bank was not acting as a “creditor” within the
meaning of the Bankruptcy Code. Specifically, Judge
Forrest wrote that the automatic stay did not protect litigants
pursuing claims that were adverse or unrelated to the
distribution of the debtor’s estate. The Bank wanted the
foreclosure sale declared void to preserve its lien interest in
the subject property, but voiding the foreclosure sale did not
advance or preserve the bankruptcy estate, and it had nothing
to with the Bank’s claim against the debtor or against the
estate. Accordingly, the automatic stay did not confer any
rights upon the Bank in the context of this case. Judge
Forrest disagreed with the majority’s conclusion that state
law, not federal law, resolved this case. She would hold that
the Bank was not within the class of persons entitled to
enforce the automatic stay, and therefore, the Bank’s quiet
title claim was without merit and must be dismissed. Finally,
Judge Forrest disagreed with the concurrence’s discussion of
the void-not-voidable rule.
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 5

COUNSEL

Ariel E. Stern (argued), Natalie L. Winslow, and Rex D.
Gardner, Akerman LLP, Las Vegas, Nevada, for Plaintiff-
Appellant.

Michael F. Bohn (argued), Law Offices of Michael F. Bohn,
Henderson, Nevada, for Defendant-Appellee 732 Hardy
Way Trust.

Ryan D. Hastings (argued) and Sean L. Anderson, Leach
Kern Gruchow Anderson Song, Las Vegas, Nevada, for
Defendant-Appellee Enchantment at Sunset Bay
Condominium Association.

OPINION

VANDYKE, Circuit Judge:

In this case, we are again presented with the effect of a
foreclosure of a superpriority lien granted to a homeowners’
association (HOA) under Nevada Revised Statute
116.3116. 1 As a consequence of the late-2000’s financial
crisis and its effect on Nevada homeowners, our court has
seen many cases involving Nevada’s HOA superpriority lien
statute. But this case involves a unique wrinkle that we have
not yet addressed. We must decide whether the Bank of New
York Mellon (Bank), as the first deed of trust lienholder,
may set aside a completed superpriority lien foreclosure sale
on the grounds that the sale occurred in violation of the

1
We refer here only to the version of the Nevada homeowners’
association foreclosure statute in effect from 2013 to 2015, prior to the
2015 amendment. See 2015 Nev. Stat. 1332–49.
6 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

automatic stay in bankruptcy proceedings. See 11 U.S.C.
§ 362(a). Because the Bank has standing under Nevada’s
quiet title statute, Nevada Revised Statute 40.010, and
established case authority confirms that any HOA
foreclosure sale made in violation of the bankruptcy stay—
like the foreclosure sale here—is void, not merely voidable,
Schwartz v. United States (In re Schwartz), 954 F.2d 569,
571–72 (9th Cir. 1992), we conclude that the Bank may raise
the HOA’s violation of the automatic stay provision, and that
the Bank has superior title. 2

I. BACKGROUND

This dispute involves the property at 732 Hardy Way in
Mesquite, Nevada (Property), located in the Enchantment at
Sunset Bay Condominium Association (HOA), and subject
to the HOA’s Declaration of Covenants, Conditions, and
Restrictions, recorded in 2003. In 2005, Harold Hill
purchased the Property with a $185,400 loan that was
assigned to the Bank in 2013. In January 2014, Hill fell
behind in his HOA dues, and the HOA recorded a Notice of
Delinquent Assessment Lien. The next month, the HOA
recorded a Notice of Default and Election to Sell and
informed Hill that he needed to pay $3,130.56 or his home
would be sold. By April 2014, Hill had filed for Chapter 13
bankruptcy and stated in his bankruptcy plan that he was
surrendering the Property to the Bank and the HOA. An
automatic bankruptcy stay went into effect, staying “any act
to . . . enforce any lien against property of the estate.”
11 U.S.C. § 362(a)(4).

2
We thus do not reach the issue of whether the sale should be set
aside as a matter of equity or based on the Bank’s due process claims.
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 7

While Hill’s bankruptcy case was still pending, the HOA
recorded a Notice of Foreclosure Sale on July 15, 2014, and
several weeks later sold the Property to 732 Hardy Way
Trust (Trust) for $6,072.29 at a nonjudicial foreclosure sale. 3
The Bank subsequently initiated this litigation, in which it
(1) sued the HOA and the Trust to quiet title and for
declaratory relief on the basis that the foreclosure sale was
void and therefore did not extinguish the Bank’s first deed
of trust; (2) sought a preliminary injunction to prevent the
Trust from selling or transferring the Property; and
(3) requested an order declaring that the Bank could
foreclose on its deed of trust. The Bank also sued the HOA
for breach of Nevada Revised Statute 116.1113 and
wrongful foreclosure. 4

The Bank and the Trust each moved for summary
judgment. The Trust argued it had superior title because the
HOA foreclosure sale extinguished the Bank’s deed of trust.
Conversely, the Bank argued that the HOA foreclosure sale
did not extinguish its lien because, inter alia, the sale violated
the automatic bankruptcy stay and was thus void under
Nevada and Ninth Circuit precedent, or alternatively,
Nevada’s HOA foreclosure statute violated due process.
The district court granted summary judgment in favor of the
Trust and dismissed the remaining claims against the HOA,
holding simply “that the foreclosure sale extinguished the
[Bank’s] deed of trust on the [P]roperty and that [the Trust]

3
The Trust does not dispute the Bank’s assertion that the HOA
foreclosure sale violated the bankruptcy stay when it recorded its notice
of sale. See 11 U.S.C. § 362(a)(4), (5) (preventing “any act to create,
perfect, or enforce” a lien against either the property of the estate or the
property of the debtor).
4
The Bank also pursued claims against Hill and the HOA’s
collection agent, which it does not raise on appeal.
8 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

purchased the property free and clear of the deed of trust.”
The Bank timely appealed, and we have jurisdiction
pursuant to 28 U.S.C. § 1291.

II. DISCUSSION

“We review de novo ‘the district court’s decision on
cross-motions for summary judgment.’” BNSF Ry. Co. v.
Or. Dep’t of Revenue, 965 F.3d 681, 685 (9th Cir. 2020)
(citation omitted). “Here, . . . no material facts are disputed,
so we ‘ask only whether the district court correctly applied
the relevant substantive law.’” Id. (citation omitted).

A. The Bank Has Standing to Raise the Violation of the
Automatic Bankruptcy Stay.

The district court concluded that under Tilley v.
Vucurevich (In re Pecan Groves), 951 F.2d 242, 245 (9th
Cir. 1991), the Bank lacked standing to challenge any
violation of the automatic stay because it “was neither a
party, a debtor, or a trustee in [the underlying] bankruptcy
matter.” The Bank argues that the district court misapplied
In re Pecan Groves and incorrectly used that bankruptcy
case to prevent the Bank from raising the voidness of the
foreclosure sale in this diversity action in federal court. We
agree that the district court indeed erred because the Bank
had standing to make the argument that the HOA foreclosure
sale occurred in violation of the bankruptcy stay and was
thus void.

The parties do not dispute that the Bank has Article III
standing, as the alleged extinguishment of the Bank’s first
deed of trust can be fairly traced to the HOA’s violation of
the bankruptcy stay. See Spokeo, Inc. v. Robins, 136 S. Ct.
1540, 1547 (2016). Instead, the Trust argues that the Bank
does not have prudential standing such that the Bank’s
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 9

grievance “fall[s] within the zone of interests protected or
regulated by the statutory provision . . . invoked in the suit.”
Bennett v. Spear, 520 U.S. 154, 162 (1997). 5

We disagree. The Bank here brought its quiet title claim
under Nevada Revised Statute 40.010, which allows suit “by
any person against another who claims an estate or interest
in real property, adverse to the person bringing the action,
for the purpose of determining such adverse claim.” Such a
broad statement clearly “grants the [Bank] the cause of
action that [it] asserts”—a declaration of its interest in the
subject Property vis-à-vis the Trust’s interest—such that the
Bank satisfies the zone-of-interests test for prudential
standing purposes. Bank of Am. Corp. v. City of Miami,
137 S. Ct. 1296, 1302 (2017).

Although we held in In re Pecan Groves that “a creditor
has no independent standing to appeal an adverse decision
regarding a violation of the automatic stay,” the Bank’s quiet
title action does not implicate this ruling. In re Pecan
Groves, 951 F.2d at 245. In that case, we addressed whether
a creditor had standing to appeal a bankruptcy order and
reasoned that as “the trustee ha[d] not appealed the adverse

5
As the Supreme Court observed in the Lexmark case, portraying
this question as one of “‘prudential standing’ is [technically] a
misnomer.” Lexmark Int’l, Inc. v. Static Control Components, Inc.,
572 U.S. 118, 127 (2014) (citation omitted). The Supreme Court “in
Lexmark . . . rejected the ‘prudential standing’ label and made clear that
whether a plaintiff’s claims are within a statute’s zone of interests is not
a jurisdictional question.” Pit River Tribe v. Bureau of Land Mgmt.,
793 F.3d 1147, 1156 (9th Cir. 2015) (emphasis added) (citing Lexmark
Int’l, 572 U.S. at 126–28). Indeed, “[w]hether a plaintiff comes within
‘the “zone of interests”’ is an issue that requires us to determine, using
traditional tools of statutory interpretation, whether a legislatively
conferred cause of action encompasses a particular plaintiff’s claim.”
Lexmark Int’l, 572 U.S. at 127 (emphasis added) (citation omitted).
10 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

ruling . . . [n]o other party [could] challenge this ruling.” Id.
We did not consider whether a creditor was precluded from
advancing a quiet title action premised on violation of the
automatic stay, particularly in a diversity case where state
law recognizes such a claim as a basis for voiding a
foreclosure sale.

In contrast to the facts and procedural posture of In re
Pecan Groves, the Bank brought this quiet title diversity
action pursuant to Nevada precedent invalidating HOA
foreclosure sales when the HOA has violated the automatic
stay. LN Mgmt. LLC Series 5105 Portraits Place v. Green
Tree Loan Servicing, LLC (Portraits Place), 399 P.3d 359,
360–61 (Nev. 2017) (recognizing that “the HOA foreclosure
sale was an act in violation of the automatic stay, despite the
lack of notice of the homeowners’ bankruptcy,” and that the
sale was “invalidated”). When adjudicating various types of
state law disputes, Nevada courts consistently consider the
voidness of actions taken in violation of a federal bankruptcy
stay. See SFR Investments Pool 1, LLC v. U.S. Bank, N.A.,
449 P.3d 461, 465 (Nev. 2019) (en banc) (holding that “it
was proper of the district court to consider the stay in
balancing the equities, as the court must consider all of the
circumstances surrounding the sale” because “[t]he fact that
the sale was in violation of a bankruptcy stay at the time the
sale was held may be relevant to U.S. Bank’s failure to act
and the sale price,” and “it would be reasonable for a lender
not to attend a foreclosure sale if it believe[d] that the sale
[was] being conducted in violation of a bankruptcy stay”);
Gundala v. BAC Home Loans Servicing, LP, 483 P.3d 1121,
2021 WL 1531154, at *1 (Nev. 2021) (unpublished)
(concluding that “the HOA recorded a Notice of Delinquent
Assessment in March 2011 and a Notice of Default in June
2011, both of which were recorded while the automatic stay
was in effect,” and “[b]ecause the abovementioned notices
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 11

were both recorded while the automatic stay was in effect,
the district court correctly determined that they were void
and that the ensuing HOA foreclosure sale was also void”);
NV Eagles, LLC v. Nationstar Mortg., LLC, 462 P.3d 1230,
2020 WL 2527389, at *1 (Nev. 2020) (unpublished)
(opining that “[a]lthough appellant contends that the sale did
not violate the automatic stay because the debtor had been
personally discharged before the sale, the subject property
was still part of the bankruptcy estate at the time of the sale
and therefore was still subject to the automatic stay,” and
that “the [state] district court correctly determined that the
HOA’s foreclosure sale was invalid because it violated the
automatic bankruptcy stay”); CitiMortgage, Inc. v. Corte
Madera Homeowners Ass’n, 962 F.3d 1103, 1110 (9th Cir.
2020) (recognizing in a quiet title action that “generally, the
filing of bankruptcy will stay all proceedings relating to a
foreclosure sale,” and that, under Nevada law, the filing of
notices related to foreclosure may violate the automatic stay)
(citation and alteration omitted).

B. Any HOA Foreclosure Sale in Violation of the
Automatic Bankruptcy Stay is Void under Nevada
Law.

To prevail on its claim, the Bank must prove that its
interest in the Property is superior to the Trust’s interest.
Chapman v. Deutsche Bank Nat’l Tr. Co., 302 P.3d 1103,
1106 (Nev. 2013) (en banc). In this case, the Bank’s interest
is superior to the Trust’s interest because under Nevada
precedent, an HOA foreclosure “sale conducted during an
automatic stay in bankruptcy proceedings is invalid.”
Portraits Place, 399 P.3d at 359–60.

Here, the Bank provided evidence showing that: (1) Hill
listed the Property in his bankruptcy schedules in March
2014; (2) the automatic bankruptcy stay was active through
12 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

2017; and (3) the Property was auctioned off on
September 19, 2014. 6 As the Nevada Supreme Court
concluded in Portraits Place, where the property is “listed
. . . in the[] relevant bankruptcy schedule” and sold “[d]uring
the bankruptcy proceedings . . . without seeking relief from
the automatic stay,” such a “sale was void.” Id. The
“purchase of the property at the [foreclosure] sale was
without effect.” 40235 Wash. St. Corp. v. Lusardi, 329 F.3d
1076, 1080 (9th Cir. 2003). 7 Therefore, the Bank should
receive quiet title to the Property under Nevada Revised
Statute 40.010.

The dissent’s assertion that our decision relies on federal
bankruptcy code as the substantive rule of decision in this
case misconstrues our rationale. A violation of federal law
can have independent consequences under state law. And
when that happens, it is not entirely accurate to characterize
those consequences as “sole[ly]” a matter of federal, not
state, substantive law. Instead, the substantive rule of
decision depends on how state law treats the federal
violation. A helpful analogy might be driving in Nevada
with an expired Oregon driver’s license. Whether the license
is expired or not will be controlled by Oregon law. But the
consequences of driving on that expired license in Nevada
will be controlled by Nevada law. Similarly, here, the

6
The Trust in its answering brief does not contest this case authority
or these facts, focusing its argument solely on contesting the Bank’s
standing.
7
The Trust’s argument that it was a bona fide purchaser (BFP), is
not a defense in this situation under Nevada law because “[a] party’s
status as a BFP is irrelevant when a defect in the foreclosure proceeding
renders the sale void.” Bank of Am., N.A. v. SFR Investments Pool 1,
LLC, 427 P.3d 113, 121 (Nev. 2018) (en banc), as amended on denial of
reh’g (Nov. 13, 2018).
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 13

factual voidness of the Property’s transfer is a result of
federal bankruptcy law. But the consequences of such a void
transaction for purposes of a Nevada quiet title action are
controlled by Nevada’s property laws. 8 Nevada courts may
determine that violations of federal bankruptcy laws—
particularly violations that result in “void” transactions—
have state law consequences for Nevada property, which
was exactly what the Nevada Supreme Court did in Portraits
Place. 399 P.3d at 360 (concluding in a Nevada quiet title
action that because “the HOA foreclosure sale was an act in
violation of the automatic stay . . . the violation of the
automatic stay invalidated the HOA foreclosure sale”).

III. CONCLUSION

The district court erred in holding that the Bank lacked
standing to pursue its quiet title claim in federal court.
Because the Bank has standing, its interest as a creditor is
protected under Nevada law, and the HOA foreclosure sale
in violation of the bankruptcy stay was void, applicable
precedent compels us to conclude that the Bank has superior
title. For these reasons, we reverse the district court’s grant
of summary judgment in favor of the Trust, its denial of
summary judgment to the Bank, and its dismissal of the
Bank’s claims against the HOA, and remand for proceedings
consistent with this opinion.

REVERSED AND REMANDED.

8
State law here merely recognizes and applies a fact (voidness)
created by operation of federal law. A state’s attempt to nullify the result
of federal law might present questions not at issue in this case.
14 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

VANDYKE, Circuit Judge, concurring:

I write separately to explain further why I think Judge
Forrest’s thoughtful analysis in her dissent is nonetheless
incorrect. Stepping back from our doctrinal differences for
a moment, there is something peculiar about the dissent’s
conclusion that, yes, the HOA foreclosure sale at issue in this
case was void as a matter of federal bankruptcy law, but
Nevada property law must turn a blind eye to that fact. That
approach would force Nevada to ignore a reality that our
own court has recognized again and again: that violations of
a bankruptcy stay are void, not merely voidable. 1

I think the dissent’s counterintuitive conclusion is a
result of trying to reconcile the irreconcilable. Underlying
the dissent’s analysis is the concept that the factual voidness
of the foreclosure sale here may only be raised in this state-
law action by certain entities—meaning, the sale is only void
as to certain entities if they so choose. But that is what is
usually meant when we say a transaction is “voidable, not
void.” If only the “debtor [may] affirmatively challenge
creditor violations of the stay,” for example, then such
violations “are merely voidable,” not void. Schwartz v.
United States (In re Schwartz), 954 F.2d 569, 571 (9th Cir.
1992). Ultimately, the dissent cannot escape its reliance on
a “voidable, not void” rationale—one that is directly at odds
with our circuit’s clear authority recognizing that violations

1
On the other hand, unlike the dissent I don’t find it particularly
peculiar that a party could assert a claim in a state-law quiet title action
that it was procedurally prevented from raising in a bankruptcy
proceeding. Procedural rules regularly prevent parties from asserting
claims in one type of proceeding but not another. Diverse parties
litigating a state-law tort claim under $75,000 could litigate their dispute
in state court, for example, but would be procedurally barred from
litigating in federal court.
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 15

of a bankruptcy stay are, in fact, “void,” not voidable. Id.
at 575.

This fundamental contradiction is not by accident. It is
a necessary consequence of the dissent’s commendable but
nevertheless doomed attempt to apply our circuit’s caselaw
about prudential standing in bankruptcy proceedings to this
non-bankruptcy case applying Nevada property law in a
diversity action. The first problem with this attempt is
addressed by the majority opinion—that prudential standing
in bankruptcy proceedings and Nevada property law are just
two different things, and the dissent is improperly trying to
mix apples and oranges. But this problem is exacerbated by
something else—the fact that our circuit’s caselaw about
prudential standing in bankruptcy proceedings historically
grew out of a “voidable, not void” rationale, which our
circuit has since repeatedly rejected. It should come as no
surprise, then, that when the dissent (improperly) attempts to
transpose our bankruptcy prudential standing jurisprudence
onto this case, it ends up right back where that jurisprudence
started—with a voidable, not void, rationale. And as a
corollary to that error, the dissent is forced to mistakenly
argue that a creditor such as the Bank “falls outside the zone
of interests protected by the automatic stay,” when both the
Supreme Court and our court have said otherwise.

1. Towards the end of the dissent, it acknowledges that
in our circuit’s caselaw a foreclosure sale in violation of the
bankruptcy stay is void, and not merely voidable. But the
dissent interprets void to mean void only as to certain
entities—those related to the debtor’s estate—meaning that
in the absence of an active debtor, creditors may not
challenge “void” transactions. This is just redefining “void,
not voidable” as “voidable, not void.” It also ignores the fact
that we have consistently reapplied In re Schwartz to affirm
16 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

that any violations of the automatic stay provision are indeed
void—full stop. See Burton v. Infinity Capital Mgmt.,
862 F.3d 740, 747 (9th Cir. 2017) (judicial interference); In
re Dyer, 322 F.3d 1178, 1188 (9th Cir. 2003) (attempt to
record deed of trust); 40235 Wash. St. Corp. v. Lusardi,
329 F.3d 1076, 1080 (9th Cir. 2003) (tax sale). Nor are we
the only court to hold this view. See In re Myers, 491 F.3d
120, 127 (3d Cir. 2007) (“We have indeed held that actions
taken in violation of the stay are void.”); United States v.
White, 466 F.3d 1241, 1244 (11th Cir. 2006) (“It is the law
of this Circuit that ‘[a]ctions taken in violation of the
automatic stay are void and without effect.’” (citation
omitted)); Mann v. Chase Manhattan Mortg. Corp.,
316 F.3d 1, 3 (1st Cir. 2003) (“acts undertaken in violation
of the automatic stay are . . . void”); In re Colonial Realty
Co., 980 F.2d 125, 137 (2d Cir. 1992) (“[S]o central is the
§ 362 stay to an orderly bankruptcy process that actions
taken in violation of the stay are void and without effect.”
(quotation marks and citation omitted)); Ellis v. Consol.
Diesel Elec. Corp., 894 F.2d 371, 372 (10th Cir. 1990) (“It
is well established that any action taken in violation of the
stay is void and without effect.”). 2

If a transaction is void, it is null—it is as if it never
existed. 3 On the other hand, if a transaction is voidable, it

2
There is, as the dissent notes, a circuit split on the “void-versus-
voidable distinction.” As demonstrated by the cases cited above, our
circuit is firmly on the “void, not voidable” side of that split.
3
Void, BLACK’S LAW DICTIONARY (6th ed. 1990) (citing, inter alia,
In re Oliver, 38 B.R. 245, 248 (Bankr. D. Minn. 1984)) (“Null;
ineffectual; nugatory; having no legal force or binding effect; unable, in
law, to support the purpose for which it was intended. An instrument or
transaction which is wholly ineffective, inoperative, and incapability of
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 17

may still be enforced by some entities, but not others. The
dissent essentially redefines “void” to mean “void from the
perspective of certain entities, but not others.” But that is
what everyone else means when they say a transaction is
merely voidable. 4

2. The dissent’s conclusions that transactions in
violation of the bankruptcy stay are only void as to certain
debtors and creditors is understandable given the cases on
which the dissent relies—not because “void” has ever been
understood to mean “only void for some entities,” but
because the older bankruptcy standing cases the dissent cites
were either directly or indirectly based on the now-rejected
rationale that such transactions were merely voidable, not
void. For example, the dissent applies Magnoni v. Globe
Inv. & Loan Co., Inc. (In re Globe), 867 F.2d 556, 560 (9th
Cir. 1989), which reached its conclusion that Bankruptcy
Code “section 362 . . . does not confer any rights to outside
parties” by citing to In re Brooks, 79 B.R. 479 (B.A.P. 9th
Cir. 1987). The dissent also cites to Tilley v. Vucurevich (In
re Pecan Groves), which similarly relied on In re Brooks to
conclude that only “the trustee . . . [may] seek to enforce the
protections of the automatic stay.” 951 F.2d 242, 245 (9th
Cir. 1991). The In re Brooks decision, in turn, rested on two
key assertions, that (1) “a transfer made in violation of the
stay may be voidable at the trustee’s discretion,” rather than
simply void, id. at 480 (emphasis added), and (2) the
automatic bankruptcy stay benefits only the debtor, and

ratification and which thus has no force or effect so that nothing can cure
it.”).
4
Voidable, BLACK’S LAW DICTIONARY (6th ed. 1990) (“That which
may be avoided or declared void; not absolutely void, or void in itself.”).
18 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

“[o]ther parties affected . . . [have] no substantive or
procedural rights,” id. at 481. 5

Both of these determinations are inconsistent with our
more recent bankruptcy jurisprudence. 6 In re Schwartz
clarified that such transfers are actually void, not merely
voidable. 954 F.2d at 571–72. And the Supreme Court has
explicitly stated that, irrespective of whether claims are
made against the debtor’s estate, “[t]he automatic stay . . .
benefits creditors as a group by preventing individual
creditors from pursuing their own interests to the detriment
of the others.” City of Chicago v. Fulton, 141 S. Ct. 585,
589 (2021) (emphasis added). Our court has said the same
thing in the years since In re Globe. See In re Mwangi,
764 F.3d 1168, 1173 (9th Cir. 2014) (“The stay [thus]
protects the debtor . . . and also protects creditors as a class
from the possibility that one creditor will obtain payment on
its claims to the detriment of all others.” (citation omitted));

5
The dissent relies on In re Globe and In re Pecan Groves as support
for its position that “void” really means just void as to certain parties.
That would only work if those opinions purported to be reaching their
conclusions in a “void, not voidable” framework. But quite the contrary,
as explained, those opinions are squarely rooted in In re Brooks’s
“voidable, not void” rationale, so the dissent’s attempt to rely on them as
demonstrating how to “apply the void-not-voidable rule” makes no
sense.
6
The dissent states I am “suggesting that In re Globe and In re Pecan
Groves are no longer good law.” Well, that depends on what the dissent
means. If it means to suggest that I am suggesting those decisions are
no longer binding precedent about prudential standing in bankruptcy
proceedings, that’s not true. Right or wrong, their holdings remain
binding precedent in that context until changed by our court. If the
dissent means that I don’t think they are good law in the sense of being
correct law, then I might be guilty as charged. The cases are expressly
based on a premise (violations of the bankruptcy stay are voidable, not
void) that we have since rejected in our bankruptcy law.
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 19

In re Sherman, 491 F.3d 948, 971 (9th Cir. 2007) (citing
H.R. Rep. No. 95–595, at 340 (1977) to “observ[e] that
another purpose of the automatic stay is to protect creditors
by providing ‘an orderly liquidation procedure under which
all creditors are treated equally’”); In re Dawson, 390 F.3d
1139, 1147 (9th Cir. 2004), abrogated on other grounds by
In re Gugliuzza, 852 F.3d 884 (9th Cir. 2017) (citing H.R.
Rep. No. 95–595, at 340 (1977) to note “[t]he automatic stay
also provides creditor protection. Without it, certain
creditors would be able to pursue their own remedies against
the debtor’s property”); United States v. Dos Cabezas Corp.,
995 F.2d 1486, 1491 (9th Cir. 1993) (“The purpose of the
automatic stay provision is two-fold. By halting all
collection efforts, ‘[i]t gives the debtor “a breathing spell”’
. . . . By preventing creditors from pursuing to the detriment
of others, their own remedies against the debtors’ property
the stay protects creditors.” (emphasis added) (citation
omitted)); cf. Matter of Ring, 178 B.R. 570, 577–81 (Bankr.
S.D. Ga. 1995) (observing that “[c]learly, creditors do
benefit from the automatic stay” such that “it creates a
facially anomalous result [if] . . . a creditor who is adversely
affected by [a stay violation] nevertheless is without
standing” in bankruptcy proceedings and concluding that,
contrary to Ninth Circuit precedent arising from In re
Brooks, “a holder of a lien in property . . . has standing to
seek a declaratory judgment that such transfer is void ab
initio” before the bankruptcy court).

Given this precedent, the dissent’s assertion that “the
automatic stay does not protect individual creditors when
pursuing claims that are adverse or unrelated to the debtor’s
estate” is not an accurate reflection of our circuit’s (or the
Supreme Court’s) precedent generally. It is admittedly
accurate (albeit wrong) only within the narrow context of our
caselaw governing prudential standing in a bankruptcy
20 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

proceeding. It is not accurate more broadly. Because the
principles underlying In re Globe’s and In re Pecan
Groves’s conclusions in the bankruptcy proceeding context
are clearly outdated and inconsistent with our more recent
precedent, I would not extend their prudential standing
rationale to control what types of arguments can be raised
with respect to a Nevada state-law property claim (e.g.,
factual voidness). Our bankruptcy proceeding jurisprudence
is internally inconsistent. I see no reason to extend the
outdated side of that inconsistency to effectively censor a
party from presenting a factually-true argument in the
context of its state-law claim outside of a bankruptcy
proceeding.

The majority’s decision awarding quiet title to the Bank
because the foreclosure sale in violation of the bankruptcy
stay was void does not, contrary to the dissent, undermine
the protections of the bankruptcy stay or the trustee’s role in
protecting the estate. Quite the opposite, it achieves one of
the objectives of the stay noted even by the dissent: by
allowing other creditors to point out that a creditor’s sale
violated the stay and is therefore void, it reduces the
incentive for creditors to “rac[e] to various courthouses to
pursue independent remedies to drain the debtor’s assets.”
Dean v. Trans World Airlines, Inc., 72 F.3d 754, 755–56 (9th
Cir. 1995). Contrary to the dissent, recognizing the voidness
of this transaction in a Nevada quiet title action in no way
“seeks to use the stay in a manner contrary to its purposes.” 7

7
The dissent characterizes my argument as claiming “that the
automatic stay protects the Bank because it was a ‘creditor’ of the debtor
in the underlying bankruptcy proceedings.” That misunderstands my
argument. The Bank prevails in this case because the HOA foreclosure
sale was void, and can be recognized as such in a Nevada quiet title
action, regardless of who would be “protected”—that is, who would have
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 21

Boiled down to their essentials, the difference between
the majority and the dissent in this case reduces to whether a
transaction in violation of a bankruptcy stay is void, or
merely voidable. Our precedent clearly says it is void—like
it never happened. Our outdated bankruptcy standing
jurisprudence may, until it is corrected, improperly require
us to ignore that glaring fact in some circumstances in
federal bankruptcy proceedings. But there is no reason
Nevada property law must duplicate that error.

FORREST, Circuit Judge, dissenting:

The majority holds that a first deed of trust lienholder—
here, Bank of New York Mellon (Bank)—can set aside a
completed foreclosure sale through a state-law quiet-title
action on the grounds that the foreclosure violated the
automatic bankruptcy stay provided for under the
Bankruptcy Code. I respectfully dissent because, in seeking
this relief, the Bank is not acting as a “creditor” within the
meaning of the Bankruptcy Code and, therefore, is not
entitled to enforce the automatic stay or seek relief based on
a violation of the stay.

I. Standing

As a threshold matter, I agree with the majority that the
district court erred in holding that the Bank lacked standing

prudential standing to assert such voidness—in a bankruptcy
proceeding. Whether or not the Bank was a creditor in the underlying
bankruptcy proceedings is irrelevant to my analysis. I only discuss
bankruptcy creditors in response to the dissent’s claim that recognizing
the voidness of that transaction in this state-law case somehow
undermines federal bankruptcy law.
22 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

to bring its quiet-title claim. Standing doctrine (both
constitutional and prudential) presents a threshold question
of justiciability—i.e., is the plaintiff “entitled to have the
court decide the merits of the dispute[?]” Warth v. Seldin,
422 U.S. 490, 498 (1975). Constitutional standing considers
whether a federal court has the power to adjudicate a case,
Lexmark Int’l, Inc. v. Static Control Components, Inc.,
572 U.S. 118, 128 n.4 (2014), and prudential standing
concerns “judicially self-imposed limits on the exercise of
federal jurisdiction,” Bennett v. Spear, 520 U.S. 154, 162
(1997) (citation omitted). The parties here dispute only
whether the Bank has prudential standing to challenge the
foreclosure sale. 1

There is no reason to impose prudential limitations on
our jurisdiction in the instant case. The Bank brings its quiet-
title claim under Nevada Revised Statute 40.010, which
allows suit “by any person against another who claims an
estate or interest in real property, adverse to the person
bringing the action, for the purpose of determining such
adverse claim.” 2 Thus, Nevada’s quiet-title statute “grants

1
The Supreme Court has historically discussed the zone-of-interests
test as a category of prudential standing. See, e.g., Bennett, 520 U.S.
at 162. Although one Supreme Court case directed that courts should not
limit standing “merely because prudence dictates,” Lexmark, 572 U.S.
at 125–28 n.4, its most recent case addressing this issue once again
blended prudential concerns with standing doctrine, Bank of America
Corp. v. City of Miami, 137 S. Ct. 1296, 1302–03 (2017) (holding that
the plaintiffs had satisfied “the ‘cause-of-action’ (or ‘prudential
standing’) requirement”); see also Wright & Miller, 13A Fed. Prac. &
Proc. Juris. § 3531.7 (3d ed. 202) (discussing enduring uncertainty about
the prudential zone-of-interests test).
2
As the majority noted, Nevada’s HOA foreclosure statute was
amended in 2015. 2015 Nev. Stat. 1332–49. I also refer only to the
version in effect from 2013–2015.
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 23

the [Bank] the cause of action that [it] asserts,” Bank of Am.
Corp. v. City of Miami, 137 S. Ct. 1296, 1302 (2017), and
the Bank may pursue its claim in a federal court sitting in
diversity. That is not the end of the story, however.

II. Automatic Bankruptcy Stay

To prevail on its quiet-title claim, the Bank must prove
that its interest in the subject property is superior to the
interests of the foreclosure purchaser, 732 Hardy Way Trust
(Trust). Chapman v. Deutsche Bank Nat’l Tr. Co., 302 P.3d
1103, 1106 (Nev. 2013) (en banc). The rule of decision for
determining where superior title lies does not arise from
Nevada’s quiet-title statute; the quiet-title statute merely
provides a procedural mechanism for resolving competing
title claims and does not confer any substantive rights to real
property. See Nev. Rev. Stat. 40.010; Chapman, 302 P.3d
at 318 (“A plea to quiet title does not require any particular
elements, but each party must plead and prove his or her own
claim to the property in question . . . .”) (internal quotation
marks and citation omitted). The substantive rules of
decision for a quiet-title claim must arise from another
source.

Here, the sole substantive rule on which the Bank relies
is Section 362(a) of the Bankruptcy Code—the automatic
bankruptcy stay. But this claim is viable only if the Bank
falls within the “particular class of persons [who] has a right
to sue under this substantive statute.” Lexmark, 572 U.S.
at 127 (alteration and citation omitted). To determine if the
Bank can seek relief based on the automatic bankruptcy stay,
we must look to the Bankruptcy Code. See 40235 Wash. St.
Corp. v. Lusardi, 329 F.3d 1076, 1079–80 (9th Cir. 2003).

The commencement of a bankruptcy case creates a
bankruptcy estate comprised of the debtor’s property
24 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

interests. 11 U.S.C. § 541(a). That property is used to pay
creditors’ allowed claims in a process facilitated by a
bankruptcy trustee who represents the estate and “acts as a
fiduciary for the debtor’s creditors.” Hillis Motors, Inc. v.
Haw. Auto. Dealers’ Ass’n, 997 F.2d 581, 585 (9th Cir.
1993) (citing 11 U.S.C. § 323(a)). Bankruptcy is, at bottom,
“a distribution system; it distributes property from the debtor
to creditors so that creditors can apply such payments to the
debtor’s debts.” 1 Collier on Bankruptcy ¶ 1.03 (16th ed.
2021). Creditors play a distinct and limited role in this
system: they assert claims for distribution from the debtor’s
estate. See 11 U.S.C. § 101(10)(A), (B) (defining “creditor”
as an “entity that has a [right to payment] against the debtor”
or “against the estate”); id. § 101(5) (defining “claim”).

It is well-established that Section 362(a)’s automatic stay
provision protects debtors by providing “breathing space”
from creditor harassment, Burton v. Infinity Cap. Mgmt.,
862 F.3d 740, 746 (9th Cir. 2017), and an opportunity for a
fresh start at the conclusion of a successful bankruptcy
process, Schwartz v. United States (In re Schwartz), 954 F.2d
569, 571 (9th Cir. 1992); see also Burkart v. Coleman (In re
Tippett), 542 F.3d 684, 691 (9th Cir. 2008). But that is not
its only purpose. The stay also protects creditors’ interests in
the debtor’s estate. See, e.g., Treasurer of Snohomish Cnty.
v. Seattle-First Nat’l Bank (In re Glasply Marine Indus.,
Inc.), 971 F.2d 391, 394 (9th Cir. 1992) (“Congress designed
the automatic stay to protect the relative position of all
creditors.”). That is, the automatic stay protects a creditor’s
ability to collect a fair return on its debt relative to the claims
of other creditors by preserving the debtor’s estate. This
makes sense because without the automatic stay, creditors
could “rac[e] to various courthouses to pursue independent
remedies to drain the debtor’s assets.” Dean v. Trans World
Airlines, Inc., 72 F.3d 754, 755–56 (9th Cir. 1995). By
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 25

prohibiting such disorderly depletion, the automatic stay
protects “creditors as a class from the possibility that one
creditor will obtain payment on its claims to the detriment of
all others.” Hillis, 997 F.2d at 585; see also City of Chicago
v. Fulton, 141 S. Ct. 585, 589 (2021) (explaining the
automatic stay protects creditors “as a group by preventing
individual creditors from pursuing their own interests to the
detriment of the others”) (emphases added).

But, important for this case, the automatic stay does not
protect litigants pursuing claims that are adverse or unrelated
to the distribution of the debtor’s estate. This is clear from
our decision in Magnoni v. Globe Investment & Loan Co.,
Inc. (In re Globe), 867 F.2d 556, 558–60 (9th Cir. 1989),
where several parties who co-owned real property with the
debtor sought to set aside the foreclosure of the debtor’s
interest in the co-owned property as violative of the
automatic stay. The co-owners were “creditors” of the debtor
because they had filed proofs of claim in the debtor’s
bankruptcy case. Id. at 558 & n.4. Nonetheless, we held that
they could not invoke protection from the automatic stay
because they had “not pursued [their] action as [the debtor’s]
creditors, but rather as owners of the . . . property.” Id.
at 559. Setting aside the sale would not have benefitted the
debtor’s estate because the estate had received a cash
payment for the value of the debtor’s interest in the subject
property. Id. at 558. In such circumstances, the co-owners
were acting not as “creditors” seeking to recover from the
bankruptcy estate but instead as “aggrieved property owners
with interests adverse to the estate.” Id. at 560. And we held
that the automatic stay “does not confer any rights” on
parties in this position. Id. As we explained, “[the automatic
stay] is intended to protect the debtor and to assure equal
distribution among creditors.” Id. Thus, the co-owners’
claim based on violation of the stay was “wholly without
26 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

merit” because it was “antagonistic to the express purpose
behind [the automatic stay].” Id.

This case is analogous. The Bank wants the foreclosure
sale declared void to preserve its lien interest in the subject
property. 3 See Chapman, 302 P.3d at 1106. But this outcome
protects the Bank’s interests as an “aggrieved property
owner[].” In re Globe, 867 F.2d at 560. Voiding the
foreclosure sale does not advance or preserve the bankruptcy
estate, and it has nothing to do with the Bank’s “claim
against the debtor” or “against the estate.” 11 U.S.C.
§ 101(10)(A), (B) (emphases added). The Bank’s failure to
object to the debtor’s pre-foreclosure surrender of the subject
property as part of the debtor’s bankruptcy plan only
reinforces this conclusion. Whereas the Bank’s quiet-title
claim is unrelated to its role as a “creditor” and the purposes
for which the automatic stay was enacted, I would reject the
Bank’s “disingenuous attempt to use the Bankruptcy Code
[for its own] advantage.” In re Globe, 867 F.2d at 560. The
automatic stay “does not confer any rights” upon the Bank
in the context of this case. Id. 4

3
As the majority notes, it is undisputed that the automatic stay was
in effect when the foreclosure proceeding was first initiated. However,
the bankruptcy court record establishes that the automatic stay had been
lifted as to the subject property by the time the foreclosure sale itself
occurred.
4
The concurrence argues that the automatic stay protects the Bank
because it was a “creditor” of the debtor in the underlying bankruptcy
proceedings. But it fails to acknowledge that the Bank is not presently
pursuing relief as a “creditor” as that term is defined for purposes of
bankruptcy—i.e., an entity that has a [right to payment] against the
debtor” or “against the estate.” 11 U.S.C. § 101(10)(A), (B); id. § 101(5).
Instead, the Bank is acting as a “creditor” in the general sense of that
term—i.e., one “to whom a debt is owed.” Black’s Law Dictionary (11th
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 27

Tilley v. Vucurevich (In re Pecan Groves), 951 F.2d 242
(9th Cir. 1991), further supports this conclusion. There we
held that creditors (and certainly aggrieved property owners)
lack standing in bankruptcy proceedings to challenge a
bankruptcy court’s adverse decision regarding a claimed
stay violation. Id. at 244–46. This holding respects the
principle that it is the bankruptcy trustee who “is charged
with the administration of the estate for the . . . creditor’s
benefit.” Id. at 245; see also Hillis Motors, 997 F.2d at 585
(explaining that the trustee represents the estate and “acts as
a fiduciary for the debtor’s creditors”). Creditors cannot
“subvert the trustee’s powers” by “pursu[ing] claims the
trustee abandon[ed].” In re Pecan Groves, 951 F.2d at 245.
In this case, allowing the Bank to enforce the stay outside
the bankruptcy proceedings—relief that would not benefit
the debtor’s bankruptcy estate and that was forgone by the
trustee in the bankruptcy case—would undermine the
trustee’s administrative role and contradict the principle
expounded by In re Pecan Groves. 5

The majority contends that none of the foregoing
analysis matters because state law, not federal law, resolves
this case. It hangs its hat on LN Management LLC Series
5105 Portraits Place v. Green Tree Servicing LLC (Portraits
Place), 399 P.3d 359, 360–61 (Nev. 2017), which upheld a
creditor’s challenge to an HOA foreclosure sale because it

ed. 2019). Nor does the concurrence explain why the automatic stay
should protect a creditor pursuing a claim that is wholly unrelated to the
distribution of the debtor’s estate.
5
I agree with the majority that In re Pecan Groves’s holding
regarding standing in bankruptcy proceedings is inapplicable to this case.
28 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

violated the automatic stay and was therefore void. 6 This
reasoning would make sense if the Bank were relying on
state law for its quiet-title claim. But it’s not. Thus, the
question before us turns not on state law, but on federal
bankruptcy law—i.e., whether the party seeking to enforce
the automatic stay “fall[s] within the zone of interests
protected by [11 U.S.C. § 362(a)].” See Lexmark, 572 U.S.
at 129 (citation omitted). And although the majority relies on
Portraits Place to answer this question, the Nevada Supreme
Court’s view of federal bankruptcy law and application of
the automatic stay is not binding on us. See Budinich v.
Becton Dickinson & Co., 486 U.S. 196, 198 (1988)
(“Although state law generally supplies the rules of decision
in federal diversity cases, it does not control the resolution
of issues governed by federal statute.”) (internal citations

6
The majority relies on four other cases to conclude that Nevada
law controls this case. Maj. Op. 10–11. Two are unpublished Nevada
Supreme Court decisions that do no more than apply Portraits Place. See
Gundala v. BAC Home Loans Servicing, LP, 483 P.3d 1121, 2021 WL
1531154, at *1 (Nev. 2021) (unpublished); NV Eagles, LLC v. Nationstar
Mortg., LLC, 462 P.3d 1230, 2020 WL 2527389, at *1 (Nev. 2020)
(unpublished). The other two cases do not support the majority’s
conclusion. In SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 449 P.3d
461, 465 (Nev. 2019), the Nevada Supreme Court considered whether a
foreclosure sale should be set aside on equitable grounds and held that a
violation of the bankruptcy stay might indicate unfairness in the
foreclosure proceedings. But here, the majority does not grant equitable
relief due to evidence of “fraud, oppression, or unfairness.” See id.
Rather, it holds that the foreclosure sale is void because it violated the
automatic bankruptcy stay. Finally, in CitiMortgage, Inc. v. Corte
Madera Homeowners Association, 962 F.3d 1103, 1110–11 (9th Cir.
2020), our court said nothing about whether a creditor pursuing a claim
unrelated to the debtor’s estate may seek protection under the
Bankruptcy Code; instead, we remanded for the district court to consider
in the first instance whether the property was property of the debtor or
the estate and whether the foreclosure notices at issue violated the
bankruptcy stay.
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 29

omitted). Indeed, the Nevada Supreme Court seemingly
understood this foundational principle of federalism when it
applied federal law, including our decision in In re Schwartz
in deciding whether a foreclosure sale conducted in violation
of the automatic bankruptcy stay is void or voidable.
Portraits Place, 399 P.3d at 360–61 (citing In re Schwartz,
954 F.2d at 571). In this context, the majority’s assertion that
state law dictates the outcome here makes no sense.

Finally, I recognize that we have held that “violations of
the automatic stay are void, not voidable.” In re Schwartz,
954 F.2d at 571. 7 But that does not necessarily mean that
anyone dissatisfied with conduct it believes violated the
automatic stay may claim protection under Section 362 of
the Bankruptcy Code. In In re Schwartz, there was no
question that the party seeking to enforce the automatic
stay—the debtor—fell within the zone of interests protected
by the automatic stay. Id. at 570. The Internal Revenue
Service (IRS) had assessed taxes and penalties against the
debtor while the automatic stay was in effect, and the debtor
argued that the IRS’s claim asserted in a later bankruptcy
proceeding based on the IRS’s prior violative assessment
was void. Id. We agreed, noting that the automatic stay “is
designed to protect debtors from all collection efforts while
they attempt to regain their financial footing.” Id. at 571. We
had no occasion in In re Schwartz to address the question

7
There is a longstanding circuit split over the void-versus-voidable
distinction. See, e.g., Chapman v. Bituminous Ins. Co., 345 F.3d 338, 344
(5th Cir. 2003) (In re Coho Res. Inc.); Bronson v. United States, 46 F.3d
1573, 1578 (Fed. Cir. 1995); Easley v. Pettibone Mich. Corp., 990 F.2d
905, 909–12 (6th Cir. 1993); see also In re Myers, 491 F.3d 120, 127 (3d
Cir. 2007) (holding that the void-not-voidable rule is not absolute
because Section 362(d) of the Bankruptcy Code allows bankruptcy
courts to retroactively annul the stay); Soares v. Brockton Credit Union
(In re Soares), 107 F.3d 969, 976 (1st Cir. 1997) (same).
30 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST

presented here—whether a party that falls outside the zone
of interests protected by the automatic stay or that seeks to
use the stay in a manner contrary to its purposes is
nonetheless entitled to enforce the stay. Thus, the majority’s
reliance on In re Schwartz (and Portraits Place’s application
of In re Schwartz) puts the cart before the horse. If the Bank
fell within the “particular class of persons [who] has a right
to sue under [the automatic bankruptcy stay],” Lexmark,
572 U.S. at 127 (alteration and citation omitted), as the
debtor did in In re Schwartz, then the void-not-voidable rule
applies. But the Bank is not within such class of persons. The
analysis ends there. With no right to assert Section 362(a) of
the Bankruptcy Code as a basis for relief, the Bank’s quiet-
title claim is “wholly without merit” and must be dismissed.
In re Globe, 867 F.2d at 560.

The concurrence argues that this reasoning upends the
void-not-voidable rule. Maybe if “void” were viewed in
absolute terms. But our caselaw, taken as a whole, does not
apply the void-not-voidable rule in this way. If conduct
violating the automatic stay were truly void ab initio,
prudential standing would be immaterial—the conduct
would have no legal effect as to anyone, period. More than
once, however, we have applied prudential standing
principles to violations of the automatic stay. In re Globe,
867 F.2d at 556; In re Pecan Groves, 951 F.2d at 242. And
the majority and the concurrence fail to cite any cases where
we allowed a litigant with interests unrelated to the
distribution of the debtor’s estate to enforce the automatic
stay. Cf. Burton, 862 F.3d at 743–44 (claim filed to protect
debtor’s estate); Dyer v. Lindblade (In re Dyer), 322 F.3d
1178, 1184 (9th Cir. 2003) (adversary action initiated by the
bankruptcy trustee); Lusardi, 329 F.3d at 1078 (quiet-title
proceeding initiated by the debtor).
 BANK OF NEW YORK MELLON V. 732 HARDY WAY TRUST 31

The concurrence seeks to reconcile the contradiction in
our precedent by suggesting that In re Globe and In re Pecan
Groves are no longer good law because they predate In re
Schwartz and are based on the now rejected premise that
violations of the automatic stay are voidable, not void.
Concurring Op. 16–18 & n.3. As already explained, In re
Schwartz did not, and had no reason to, consider what impact
the void-not-voidable rule had on our existing precedent that
limits the litigants entitled to enforce the automatic stay. And
there is nothing in our precedent instructing that In re Globe
and In re Pecan Groves have been disavowed. See, e.g.,
Duckor Spradling & Metzger v. Baum Tr. (In re P.R.T.C.,
Inc.), 177 F.3d 774, 778 (9th Cir. 1999) (citing In re Pecan
Groves for standing rule); see also Lei v. Demas Wai Yan (In
re Demas Wai Yan), 703 F. App’x 582, 583 (9th Cir. 2017)
(applying In re Globe and In re Pecan Groves’s limitation
on those who can enforce the automatic stay); Morgal v. Nw.
Title Agency, Inc., 201 F. App’x 486, 487 (9th Cir. 2006)
(same); Schneider v. San Bernardino Cnty., 33 F.3d 59, 1994
WL 441779, at *3 (9th Cir. Aug. 15, 1994) (unpublished)
(same).

Finally, I note that the result of the majority’s decision is
to allow litigants asserting a state-law claim that seeks to
enforce the automatic bankruptcy stay to obtain relief that
they cannot get directly under the Bankruptcy Code in
bankruptcy court. This is a peculiar state of affairs, and the
majority and the concurrence fail to explain why we should
allow such maneuvering.

For these reasons, I respectfully dissent.