FILED
AUG 11 2017
SUSAN M. SPRAUL, CLERK
1 NOT FOR PUBLICATION U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
2
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
4
5 In re: ) BAP No. AZ-16-1133-BTaF
)
6 AIDA AZIZ, ) Bk. No. 15-12354-EPB
)
7 Debtor. )
)
8 )
AIDA AZIZ, )
9 )
Appellant, )
10 )
v. ) AMENDED MEMORANDUM1
11 )
U.S. BANK, NA )
12 )
Appellee. )
13 ______________________________)
14 Submitted Without Oral Argument on February 23, 2017
15 Originally Filed - August 3, 2017
Amended - August 11, 2017
16
Appeal from the United States Bankruptcy Court
17 for the District of Arizona
18 Honorable Eddward P. Ballinger, Jr., Bankruptcy Judge, Presiding
19
Appearances: Appellant Aida Aziz on brief pro se; Mark D.
20 Chernoff and Patricia A. Premeau of the Chernoff
Law Firm, PC on brief for appellee U.S. Bank, N.A.
21
22 Before: BRAND, TAYLOR and FARIS, Bankruptcy Judges.
23
24
25
26
1
This disposition is not appropriate for publication.
27 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 9th
28 Cir. BAP Rule 8024-1.
1 Chapter 132 debtor Aida Aziz appeals an order overruling her
2 objection to the claim of U.S. Bank, N.A. For the reasons set
3 forth below, we DISMISS the appeal as MOOT.
4 I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
5 A. Prepetition events
6 In 2008, Debtor's son, Mena Bishara, purchased a residence
7 in Scottsdale, Arizona ("Property") with an $830,231.00 loan
8 provided by U.S. Bank. Bishara executed a promissory note and
9 deed of trust in favor of U.S. Bank. The deed of trust was
10 recorded in Maricopa County.
11 U.S. Bank initiated a trustee's sale in 2010, which was
12 continued multiple times due to litigation between the parties
13 that commenced in state court in 2011. Bishara claimed, among
14 other things, that his signature on the recorded deed of trust
15 was forged and therefore void. However, Bishara admitted to
16 receiving the funds, purchasing the Property with them, and not
17 making any payments on the loan since May 2009. The action was
18 later removed to the federal district court. That court
19 dismissed the suit with prejudice based on Bishara's admissions.
20 Bishara appealed to the Ninth Circuit Court of Appeals, which
21 affirmed the district court's ruling in June 2015.
22 On September 17, 2015, Bishara transferred the Property by
23 quitclaim deed to Debtor. Together as plaintiffs, Bishara and
24 Debtor then filed a new lawsuit in state court raising the same
25 arguments that were rejected and deemed "futile" in the first
26
27 2
Unless specified otherwise, all chapter, code and rule
references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
28 the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
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1 action. The second lawsuit was dismissed with prejudice in
2 February 2016; U.S. Bank was awarded attorney's fees.
3 B. Postpetition events
4 Meanwhile, Debtor filed her chapter 13 bankruptcy case on
5 September 28, 2015, just eleven days after Bishara quitclaimed
6 the Property to her.
7 1. U.S. Bank's initial proof of claim
8 U.S. Bank filed its initial $1,141,956.75 proof of claim in
9 Debtor's case in February 2016. By then, prepetition arrearages
10 on the Bishara loan were $314,155.48. The initial proof of claim
11 mistakenly stated that Debtor, as opposed to Bishara, executed
12 the note secured by the deed of trust for the Property. Debtor
13 objected to U.S. Bank's claim, arguing that the attached exhibits
14 contained the alleged forged note and deed of trust. In reply,
15 U.S. Bank contended that Debtor was precluded from claiming the
16 loan documents were forged; she had already litigated that issue
17 and lost. In addition, U.S. Bank argued that, because Debtor was
18 not a party to the deed of trust, she lacked standing to
19 challenge its validity.
20 2. U.S. Bank's amended proof of claim
21 Thereafter, U.S. Bank filed an amended proof of claim. The
22 amended claim clarified that Debtor was not a party to the note
23 and therefore she did not personally owe the note payments;
24 Debtor only held title to the Property based on the quitclaim
25 deed. Nonetheless, her ownership interest was subject to the
26 debt and U.S. Bank's lien rights. U.S. Bank argued that, if
27 Debtor wanted to keep the Property, she had to pay for it, making
28 the bank an implied creditor of her bankruptcy.
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1 Debtor objected to U.S. Bank's amended proof of claim,
2 raising essentially the same arguments she did in her objection
3 to the initial proof of claim. She requested that the court
4 disallow the amended claim due to U.S. Bank's failure to provide
5 appropriate documentation to support it.
6 In reply, U.S. Bank represented that it was not seeking any
7 monetary relief from Debtor; rather, it had filed the initial and
8 amended proofs of claim simply to enforce its lien rights against
9 the Property. However, argued U.S. Bank, Debtor would have to
10 pay for the Property if she intended to keep it.
11 The bankruptcy court held a hearing on April 13, 2016.3
12 Debtor has not provided a transcript so we are not certain what
13 took place. However, that same day, the bankruptcy court issued
14 a Minute Entry/Order for Matter Taken Under Advisement. In
15 addition to granting U.S. Bank relief from stay, the Under
16 Advisement order stated that Debtor's objection to U.S. Bank's
17 amended proof of claim "was moot in light of the bank's agreement
18 that it seeks no distribution from Debtor's estate (other than
19 for fees and sanctions [requested in U.S. Bank's motion for
20 relief from stay])." U.S. Bank's request for fees and sanctions
21 was denied. The Under Advisement order directed counsel for U.S.
22 Bank "to file and serve an appropriate form of order."
23 Before an order was submitted by U.S. Bank and entered by
24 the bankruptcy court, Debtor filed a motion for reconsideration,
25
26
27 3
This hearing also included U.S. Bank's pending motion for
relief from stay and Debtor's objection to that motion. That
28 issue is not part of this appeal.
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1 which the bankruptcy court summarily denied.4
2 C. Post-appeal events
3 Although no order had yet been entered respecting Debtor's
4 claim objection or U.S. Bank's motion for relief from stay or
5 request for sanctions, Debtor appealed the bankruptcy court's
6 Under Advisement order on May 12, 2016. Thereafter, U.S. Bank
7 submitted an order, which the bankruptcy court signed and entered
8 on May 16, 2016. Curiously, the May 16 order did not dispose of
9 Debtor's claim objection; it referenced only U.S. Bank's relief
10 from stay motion and the court's denial of sanctions to U.S.
11 Bank.
12 U.S. Bank then moved to dismiss Debtor's appeal, arguing
13 that it was moot because the foreclosure sale had now taken
14 place. The motions panel determined that the relief from stay
15 issue was moot, but not the claim objection or sanctions issues.
16 Therefore, those two issues remained live and appealable.5 U.S.
17 Bank's request for attorney's fees, costs and sanctions was
18 denied for failure to comply with the separate motion requirement
19 under Rule 8020(a).
20 After briefing by the parties, it was discovered that the
21 Panel lacked a final order from the bankruptcy court on Debtor's
22 claim objection; the Under Advisement order entered on April 13
23 and the May 16 order did not serve as a final order on that
24
25
4
Debtor has not argued that the bankruptcy court abused its
26 discretion by denying her motion for reconsideration. In any
event, based on our decision here, we need not reach that issue.
27
5
U.S. Bank has not cross-appealed the bankruptcy court's
28 ruling denying sanctions.
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1 issue. Ross v. Thompson (In re Levine), 162 B.R. 858, 859 (9th
2 Cir. BAP 1994) (court's "under advisement ruling" was not a final
3 appealable order because it did not evidence the judge's
4 intention that the order was the court's final act, as counsel
5 was directed in that order to lodge an order consistent with the
6 under advisement ruling).
7 After a clerk's order, the bankruptcy court entered an
8 amended order on March 2, 2017, finally disposing of Debtor's
9 objection to U.S. Bank's amended claim as moot. Thus, Debtor's
10 premature notice of appeal became timely. Rule 8002(a).
11 On May 20, 2017, the bankruptcy court entered an order
12 dismissing Debtor's chapter 13 bankruptcy case for failure to
13 make plan payments and barring her from refiling a new bankruptcy
14 case in the District of Arizona for 180 days.
15 II. JURISDICTION
16 The bankruptcy court had jurisdiction under 28 U.S.C. §§
17 1334 and 157(b)(2)(B). We discuss our jurisdiction below.
18 III. ISSUES
19 1. Is the order on appeal moot now that Debtor's bankruptcy
20 case has been dismissed?
21 2. Is U.S. Bank entitled to sanctions or costs on appeal?
22 IV. STANDARD OF REVIEW
23 We review de novo our own jurisdiction, including the
24 question of mootness. Suter v. Goedert, 504 F.3d 982, 985 (9th
25 Cir. 2007).
26 V. DISCUSSION
27 A. The appeal is moot.
28 An appeal is constitutionally moot if it has become
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1 impossible for the appellate court to fashion meaningful relief.
2 Ederel Sport, Inc. v. Gotcha Int'l L.P. (In re Gotcha Int'l
3 L.P.), 311 B.R. 250, 253 (9th Cir. BAP 2004). If no effective
4 relief is possible, we must dismiss for lack of jurisdiction.
5 Ellis v. Yu (In re Ellis), 523 B.R. 673, 677 (9th Cir. BAP 2014).
6 Secured creditor U.S. Bank filed a proof of claim in
7 Debtor's case even though it had represented to the bankruptcy
8 court and to Debtor that it was not seeking a distribution under
9 her chapter 13 plan; it was seeking only to enforce its lien
10 rights and remedies under state law. Based on U.S. Bank's
11 representations, the bankruptcy court was satisfied that it was
12 not seeking any money from Debtor. Accordingly, the court deemed
13 Debtor's claim objection moot.
14 We disagree that, at the time the bankruptcy court ruled on
15 Debtor's claim objection, it was moot. Despite U.S. Bank's
16 representations otherwise, when the court ruled on Debtor's
17 objection, U.S. Bank had a pending objection to Debtor's first
18 amended chapter 13 plan contending that the plan failed to
19 account for or cure the arrearages on the Bishara loan. Based on
20 the objection to confirmation, it appeared that Debtor intended
21 to make, and U.S. Bank intended to receive, a distribution from
22 Debtor's chapter 13 plan.
23 However, during the course of this appeal, the claim
24 objection order has become moot due to the dismissal of Debtor's
25 bankruptcy case. Although dismissal of a debtor's underlying
26 bankruptcy case does not necessarily moot an appeal from an order
27 overruling a claim objection because of the preclusive effect the
28
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1 order can have in other courts, we do not face that issue here.6
2 In this case, the bankruptcy court made no dispositive ruling on
3 the merits of U.S. Bank's claim that could be given preclusive
4 effect in future litigation between the parties; the court
5 neither allowed nor disallowed the claim. In addition, without
6 an existing estate or chapter 13 plan, it is clear that U.S. Bank
7 will not be seeking any plan distribution from Debtor respecting
8 the Property. Thus, reversal of the claim objection order would
9 be meaningless. Accordingly, because we are unable to provide
10 Debtor with any meaningful relief, the appeal is moot and we must
11 dismiss for lack of jurisdiction.7
12
6
13 Compare Bevan v. Socal Commc’ns Sites, LLC (In re Bevan),
327 F.3d 994, 996–97 (9th Cir. 2003) (appeal from order overruling
14 claim objection not moot because of potential preclusive effect
that order might have in future litigation) (citing Siegel v. Fed.
15 Home Loan Mortg. Corp., 143 F.3d 525, 529 (9th Cir. 1998)), with
Ctr. For Biological Diversity v. Lohn, 511 F.3d 960, 965 (9th Cir.
16 2007) (citing Pilate v. Burrell (In re Burrell), 415 F.3d 994,
998-99 (9th Cir. 2005)) (potential preclusive effect of order on
17 appeal did not prevent appeal from that order from becoming moot).
7
18 In her appeal, Debtor also asserted that the bankruptcy
court erred in denying her request for sanctions against US Bank
19 under 18 U.S.C. §§ 152, 157 and 3571 for filing a false deed of
trust with its proof of claim. The denial of Debtor’s request for
20 sanctions also is moot. It raises the same issues as the claim
objection, the validity of the deed of trust included in the proof
21 of claim. We cannot afford meaningful relief to Debtor on this
issue for the same reason that we cannot do so with respect to her
22 appeal of the Court’s ruling on her claim objection.
23 Even if it is not moot, we would affirm the denial of the
Debtor’s request for sanctions. Debtor based her request entirely
24 on criminal statutes (18 U.S.C. §§ 152, 157 and 3571) for which
there is no private right of action. See Diamond v. Charles,
25 476 U.S. 54, 64–65 (1986) (a private citizen cannot compel the
enforcement of criminal law, as “a private citizen lacks a
26 judicially cognizable interest in the prosecution or
nonprosecution of another.”); see also Nordeen v. Bank of Am.,
27 N.A. ((n re Nordeen), 495 B.R. 468, 484-85 (9th Cir. BAP 2013)
(“[a]ny alleged perjury committed in the filing of a claim in a
28 (continued...)
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1 B. U.S. Bank's sanctions request is DENIED; however costs are
appropriate.
2
3 In its brief, U.S. Bank requested sanctions under Rule 8020
4 or Rule 9011; it contends that Debtor's appeal is frivolous.
5 Because U.S. Bank has not complied with the separate motion
6 requirement in both Rule 8020 and Rule 9011, that request is
7 DENIED. See Rule 8020(a); Rule 9011(c)(1)(A) (motion for
8 sanctions must "be made separately from other motions or requests
9 and shall describe the specific conduct alleged to violate
10 Rule 9011(b)").
11 However, U.S. Bank has also requested costs under Rule 8021,
12 which has no separate motion requirement. Because we are
13 dismissing this appeal, costs are appropriate under
14 Rule 8021(a)(1). Pursuant to Rule 8021(d), U.S. Bank has 14 days
15 after entry of judgment on appeal to file with the bankruptcy
16 court and serve its itemized and verified bill of costs for those
17
18 7
(...continued)
bankruptcy case is subject to criminal sanctions under 18 U.S.C.
19 § 152, not to any private right of action by the Nordeens”);
Miller v. Carrington Mortg. Servs., 2012 WL 3537056, at *9 (N.D.
20 Cal. Aug. 14, 2012) (“most courts seem to agree that there is no
private right of action for a violation of § 152") (citing Truong
21 v. Litman, 312 Fed. Appx. 377, 378 (2d Cir. 2009) (“find[ing] no
ground for disturbing the district court’s holding that the
22 Truongs have not made the difficult case for implying a private
right of action under 18 U.S.C. § 152, a criminal statute”) and
23 Heavrin v. Boeing Capital Corp., 246 F.Supp.2d 728, 731 (W.D. Ky.
2003) (stating that “there is no private cause of action under
24 18 U.S.C. § 152(4) for filing a false proof of claim in a
bankruptcy proceeding”; following the reasoning of a North
25 Carolina bankruptcy court)); Glassey v. Amano Corp., 2006 WL
889519, 15 *3 (N.D. Cal. Mar. 31 2006), aff’d, 285 F. App’x 426
26 (9th Cir. 2008) (“Glassey lacks standing to enforce any cause of
action based on Title 18 that he has alleged.”). Debtor could not
27 prevail on a claim for sanctions under Title 18. The bankruptcy
court did not err in denying an award of sanctions to plaintiff on
28 that basis.
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1 items allowable under Rule 8021(c).
2 VI. CONCLUSION
3 For the foregoing reasons, we DISMISS the appeal as MOOT.
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