Miller v. Deutsche Bank National Trust Co.

FILED
United States Court of Appeals
Tenth Circuit

February 1, 2012
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

In re: MARK STANLEY MILLER,
also known as A Moment to
Remember Photo & Video, also known
as Illusion Studioz; JAMILEH
MILLER, No. 11-1232

Debtors.

MARK STANLEY MILLER;
JAMILEH MILLER,

Appellants,

v.

DEUTSCHE BANK NATIONAL
TRUST COMPANY,

Appellee.

APPEAL FROM THE UNITED STATES
BANKRUPTCY APPELLATE PANEL FOR THE TENTH CIRCUIT
(BAP No. 10-073-CO)

Submitted on the briefs: *

*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Mark S. Miller and Jamileh Miller, Pro se.

Susan J. Hendrick, Aronowitz & Mecklenburg, LLP, Denver, Colorado, for the
Appellee.

Before KELLY, Circuit Judge, PORFILIO, Senior Circuit Judge, and
MATHESON, Circuit Judge.

PORFILIO, Senior Circuit Judge.

After Deutsche Bank National Trust Company (Deutsche Bank) brought a

foreclosure action against the home owned by appellants Mark Stanley Miller and

Jamileh Miller and obtained an Order Authorizing Sale (OAS) from a Colorado

court, the Millers filed a Chapter 13 bankruptcy petition. Upon the filing of their

petition, an automatic stay entered, halting the foreclosure proceedings. See

11 U.S.C. § 362(a). Deutsche Bank obtained an order from the bankruptcy court

relieving it from the stay to permit the foreclosure to continue. See id. § 362(d).

The Tenth Circuit Bankruptcy Appellate Panel (BAP) affirmed the bankruptcy

court’s order granting Deutsche Bank relief from the automatic stay. The Millers

now appeal from the BAP’s order affirming relief from stay.

The issue before us is whether Deutsche Bank established that it was a

“party in interest” entitled to seek and obtain relief from the stay. See id.

Because we conclude that Deutsche Bank did not meet its burden of proof on this

issue, we reverse the BAP’s order and remand for further proceedings.

-2-
 BACKGROUND

On April 20, 2006, the Millers executed a promissory note (Note) in the

amount of $216,236 in favor of IndyMac Bank, F.S.B. (IndyMac). The Note was

secured by a Deed of Trust assigning a security interest in the Millers’ Colorado

home to the public trustee of Arapahoe County and creating a power of sale in the

public trustee. The Deed of Trust identified Mortgage Electronic Registration

Systems, Inc. (MERS), acting as a nominee for IndyMac, as its beneficiary. It

further provided that “[t]he Note . . . (together with this Security Instrument) can

be sold one or more times without prior notice to Borrower.” Aplt. App. at 31.

1. State Court Proceedings

The Millers failed to make the required payments on the Note. In February

2010, Deutsche Bank, claiming to be the current holder of the Note, filed a

foreclosure action in the Arapahoe County, Colorado District Court and sought an

OAS under Colorado Rule of Civil Procedure 120. 1

On May 4, 2010, the Millers filed their “Motion for Hearing on

Jurisdiction” in the Rule 120 proceeding. The Millers argued that Deutsche Bank

lacked standing to seek an OAS. See Aplee. Supp. App. at 56 (arguing that

1
Deutsche Bank applied for the OAS in the name of “Deutsche Bank
National Trust Company, as Trustee of the IndyMac INDX Mortgage Loan Trust
2006-AR13, Mortgage Pass-Through Certificates, Series 2006-AR13 Under the
Pooling and Servicing Agreement dated May 1, 2006.” Aplee. Supp. App. at 49.

-3-
“standing to bring [a Rule 120] proceeding stems from an interest recorded in the

public record which the Petitioner here does not have and has made no effort to

present such evidence to the court”).

On May 6, 2010, the state district court entered an order denying the

Millers’ motion. In this order, the court determined that Deutsche Bank had made

a sufficient showing that it was an “interested person” entitled to an OAS. The

text of the order reads as follows:

The issue before the Court is whether the party seeking the ord[e]r
auth[or]izing sale is an “interested person” as that term is used in
C.R.C.P. 120. A copy of the note is attached to the motion requesting
an order auth[oriz]ing sale. The note on page 6 below the
respo[n]d[e]nts’ signatures is endorsed in blank by Lender. No
evidence has been presented to suggest that the endorsement is not
genuine or that the pet[i]tioner is not in possession of the original
note. The pet[i]tioner is entitled to an order auth[oriz]ing sale.

Id. at 51 (emphasis added).

The state court thus reached its conclusions based on its review of a copy

of the Note, which had been indorsed in blank. There is no evidence that the state

court was presented with the original Note before it authorized the sale. A few

days later, the Millers again moved for a hearing on the jurisdictional issue. The

state court summarily denied their motion. It later entered an OAS and an

additional summary order finding that Deutsche Bank had established jurisdiction

in its pleadings and that the Millers had “not specified a legal reason why

jurisdiction has not been established.” Id. at 62.

-4-
 2. Proceedings in Bankruptcy Court

The Millers filed their Chapter 13 bankruptcy petition on June 22, 2010.

On October 7, 2010, Deutsche Bank filed its motion for relief from stay. In its

motion, Deutsche Bank recited that it was the current owner of the Note and Deed

of Trust. A copy of the Note, indorsed in blank, was attached to the motion. 2

The Millers responded in two ways. First, they filed an adversary

proceeding in which they accused Deutsche Bank of filing a fraudulent

foreclosure and fraudulently seeking relief from stay. (The adversary proceeding

is not a subject of this appeal.) Second, they lodged an objection to the motion

for relief from stay. In their objection, the Millers asserted that Deutsche Bank

was not the proper party in interest and lacked standing to bring the motion.

Specifically, they complained that Deutsche Bank had not produced the original

Note or proved that it was in possession of the Note.

On November 3, 2010, the bankruptcy court held a hearing on the motion

for relief from stay. During the hearing, counsel for Deutsche Bank proffered a

copy of the Note indorsed in blank by IndyMac, along with a copy of the Deed of

Trust. The bankruptcy judge asked counsel “where is the original of the note

right now?” Aplt. App., Vol. II at 95. Counsel responded, “The original of the

2
The copy of Deutsche Bank’s motion in the record on appeal does not
include an attached copy of the Note.

-5-
note has been requested, and it should be on the way to our firm here shortly. I

can present that at any evidentiary hearing.” Id.

Apparently, no further evidentiary hearing was held on the issue of

Deutsche Bank’s possession of the Note. Instead, the bankruptcy court made

findings from the bench at the close of the hearing on the motion for relief from

stay. The court observed that it had a copy of the Note and that “I have

representation of counsel that the original is on its way.” Id. at 107. After noting

the state court’s findings that Deutsche Bank had standing to proceed under

Colorado Rule of Civil Procedure 120, the bankruptcy court found that “sufficient

grounds exist for the lifting of the automatic stay” and that relief from stay was

appropriate. Id. at 110.

3. The BAP Appeal

The Millers appealed the bankruptcy court’s order granting relief from stay

to the BAP. The BAP began its decision by noting that “[t]he details surrounding

the assignment to Deutsche Bank are not part of the record on appeal.” Aplee.

Supp. App. at 6 n.8. In particular, the record submitted to the BAP did not even

contain a copy of the Note, much less the original. 3

3
To the extent the Millers assert that the absence of a copy of the indorsed
Note from the BAP record prevents us from taking notice of the indorsement in
this appeal, we disagree. The bankruptcy court had in its possession a copy of the
Note, indorsed in blank, and made a finding based on the copy that the Note had
been so indorsed. It was the Millers’ duty as the appealing parties to designate
(continued...)

-6-
 In its decision, the BAP spent little time discussing the adequacy of proof

that Deutsche Bank was in possession of the original Note, and the legal

consequences thereof. Instead, the BAP relied on the Rooker-Feldman doctrine.

See Rooker v. Fid. Trust Co., 263 U.S. 413 (1923); D.C. Court of Appeals v.

Feldman, 460 U.S. 462 (1983). Though noting that the bankruptcy court had not

expressly mentioned this doctrine, it concluded that the court had relied on the

state court’s decision on the standing issue. The BAP further concluded that in

light of this doctrine, which generally prohibits federal courts from entertaining

suits by parties who have lost in state court and who seek review of state court

decisions in federal court, “the bankruptcy court properly declined to revisit the

state court’s decision that Deutsche Bank was an ‘interested person’ entitled to a

Rule 120 order of sale.” Aplee. Supp. App. at 16. Armed with the state-court

decision finding Deutsche Bank had standing to proceed with the foreclosure, the

BAP reached a further conclusion that Deutsche Bank had standing to seek relief

from stay.

3
(...continued)
the record for the BAP appeal. See Fed. R. Bankr. P. 8006. Having failed to
provide a complete record on this issue, they could not challenge the bankruptcy
court’s findings concerning the copy of the Note containing the indorsement. See
Lopez v. Long (In re Long), 255 B.R. 241, 245 (10th Cir. B.A.P. 2000) (“[W]hen
the record on appeal fails to include copies of the documents necessary to decide
an issue on appeal, [the BAP] is unable to rule on that issue and may summarily
affirm the bankruptcy court.”).

-7-
 ANALYSIS

1. Standard of Review

“Although this appeal is from a decision by the BAP, we review only the

Bankruptcy Court’s decision.” C.O.P. Coal Dev. Co. v. C.W. Mining Co. (In re

C.W. Mining Co.), 641 F.3d 1235, 1240 (10th Cir. 2011) (internal quotation marks

omitted). “We review matters of law de novo, and we review factual findings

made by the bankruptcy court for clear error.” Id. (citation omitted). “[W]e treat

the BAP as a subordinate appellate tribunal whose rulings are not entitled to any

deference (although they certainly may be persuasive).” Parks v. Dittmar (In re

Dittmar), 618 F.3d 1199, 1204 (10th Cir. 2010).

The bankruptcy court’s decision whether to grant relief from stay is

reviewed for an abuse of discretion. Chizzali v. Gindi (In re Gindi), 642 F.3d

865, 872 (10th Cir. 2011), overruled on other grounds by TW Telecom Holdings,

Inc. v. Carolina Internet Ltd., 661 F.3d 495, 497 (10th Cir. 2011). We review the

application of the Rooker-Feldman doctrine de novo. See Mann v. Boatright,

477 F.3d 1140, 1145 (10th Cir. 2007) (holding that the dismissal of a complaint

pursuant to the Rooker–Feldman doctrine is reviewed de novo).

2. Relief from Stay Standard

The Bankruptcy Code provides that “[o]n request of a party in interest and

after notice and a hearing, the court shall grant relief from the stay” if the party in

interest has made the appropriate showing to obtain such relief. 11 U.S.C.

-8-
§ 362(d). 4 The Bankruptcy Code does not define the term “party in interest” for

purposes of this subsection. Courts have concluded, however, that in order to

invoke the court’s power to award relief under § 362(d), a party must be either a

creditor or a debtor of the bankruptcy estate. See, e.g., Roslyn Savings Bank v.

Comcoach Corp. (In re Comcoach Corp.), 698 F.2d 571, 573 (2d Cir. 1983). The

question, then, is whether Deutsche Bank has established its status as a creditor of

the Millers’ bankruptcy estate.

3. Applicability of Rooker-Feldman and Other Preclusion Doctrines

Deutsche Bank argues that in reaching their conclusions on the standing

issue, the BAP and the bankruptcy court properly relied on the Rooker-Feldman

doctrine. But we conclude this reliance was unjustified for at least two reasons.

First, given the posture of the parties in this bankruptcy court proceeding, the

issue should have been analyzed as one of collateral estoppel (issue preclusion)

rather than application of the Rooker-Feldman doctrine. Second, neither

4
The Code provides that with the exception of the debtor’s equity in the
property, the party opposing relief from stay has the burden of proof on all issues.
11 U.S.C. § 362(g)(2). Whether a party has standing to seek relief as a party in
interest, however, is an issue distinct from whether that party’s underlying claim
is valid. We conclude that Deutsche Bank bears the burden of proving its
statutory standing as a “party in interest.” See Colorado Farm Bureau Federation
v. U.S. Forest Service, 220 F.3d 1171, 1174 (10th Cir. 2000) (affirming dismissal
of complaint where plaintiffs failed to carry their burden of establishing statutory
standing under Administrative Procedures Act). Cf. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992) (stating general rule that party invoking
federal jurisdiction bears burden of establishing Article III standing).

-9-
Rooker-Feldman nor issue preclusion applies because the state court finding of

“standing” was not a final judgment to which these doctrines could attach.

The Rooker-Feldman doctrine precludes a losing party in state court who

complains of injury caused by the state-court judgment from bringing a case

seeking review and rejection of that judgment in federal court. See, e.g., Exxon

Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291-92 (2005). While the

Millers did “lose” in state court on their standing argument, it is Deutsche Bank

that now seeks affirmative relief in a federal court, in the form of relief from the

automatic stay.

It is undeniable that the Millers have not accepted the state court’s

judgment on the standing issue. They do raise as a defense a similar standing

issue to that on which they lost in state court. 5 But attempts merely to relitigate

an issue determined in a state case are properly analyzed under issue or claim

preclusion principles rather than Rooker-Feldman. This is because, in addition to

the inherently limited scope of Rooker-Feldman, preclusion in federal court on

the basis of a state-court judgment is determined by state law, not a

federally-specified doctrine. “[I]ncorporation of preclusion principles into

5
We also note that the standing required for a creditor to proceed under Rule
120(a) (“any interested person”) is not precisely the same as the statutory
standing required to seek relief from stay under § 362(d) (a “party in interest”).
In light of our other reasons for rejecting the preclusive effect of the state court
order, we need not determine whether the slight difference in wording would have
any effect on the preclusion analysis.

-10-
Rooker-Feldman risks turning that limited doctrine into a uniform federal rule

governing the preclusive effect of state-court judgments, contrary to the Full Faith

and Credit Act.” Lance v. Dennis, 546 U.S. 459, 466 (2006) (citing 28 U.S.C.

§ 1738).

We must therefore consider the preclusive effect under Colorado law of the

standing determination the Colorado state court reached in the Rule 120

proceeding. We note that Rule 120 itself provides that “[t]he granting of [a Rule

120 motion] shall be without prejudice to the right of any person aggrieved to

seek injunctive or other relief in any court of competent jurisdiction[.]” Colo. R.

Civ. P. 120(d) (emphasis added). By filing their bankruptcy petition, the Millers

sought and obtained injunctive relief in a court of competent jurisdiction, in the

form of the automatic stay.

We further note indications that the Colorado courts would limit the effect

of determinations in Rule 120 proceedings. The Colorado Court of Appeals has

stated that “proceedings pursuant to C.R.C.P. 120 are not adversarial in nature,

are not final, and generally no appeal may be taken to review the resulting

orders.” United Guar. Residential Ins. Co. v. Vanderlaan, 819 P.2d 1103, 1105

-11-
(Colo. Ct. App. 1991). 6 Accordingly, no final judgment is entered in Rule 120

proceedings and the rulings of the court in such proceedings do not have

preclusive effect. Id.

We conclude that neither the Rooker-Feldman doctrine nor issue preclusion

applies to prevent a federal court from determining whether Deutsche Bank is a

“party in interest” entitled to seek relief from stay. Because the BAP incorrectly

relied on Rooker-Feldman and because neither the bankruptcy court nor the BAP

conducted a proper statutory standing analysis under § 362(d), we could simply

stop our analysis here and remand for a further consideration of the standing

issue. The parties, however, have presented arguments on the merits concerning

standing, and the sufficiency of Deutsche Bank’s showing concerning standing in

this case is a legal issue that can be resolved on appeal. We will therefore now

proceed to discuss why Deutsche Bank has failed to demonstrate its standing as a

“party in interest.”

6
Cases from the Colorado federal district court have reached differing
results concerning whether orders in Rule 120 proceedings have preclusive effect
or sufficient finality under the Rooker-Feldman doctrine to prevent relitigation in
subsequent federal proceedings. See Goldenhersh v. Aurora Loan Servs., LLC,
No. 10-CV-01936-MSK, 2010 WL 3245166, at *2 (D. Colo. Aug. 16, 2010)
(discussing split in cases). We find those cases denying preclusive effect or
Rooker-Feldman treatment more persuasive than those granting preclusive effect
or applying Rooker-Feldman.

-12-
 4. Deutsche Bank’s Status as “Party in Interest”

We return to the key question: is Deutsche Bank a “creditor” of the Millers

with standing to seek relief from stay? To answer this question, we turn to the

Bankruptcy Code. According to the Bankruptcy Code, a “creditor” includes an

“entity that has a claim against the debtor.” 11 U.S.C. § 101(10)(a). A “claim” is

a “right to payment.” Id. § 101(5)(A).

Does Deutsche Bank have a “right to payment” from the Millers? In

examining this question, we begin with the principle that “[w]ithin the context of

a bankruptcy proceeding, state law governs the determination of property rights.”

In re Mims, 438 B.R. 52, 56 (Bankr. S.D.N.Y. 2010). We must therefore turn to

Colorado law, in particular that state’s version of the Uniform Commercial Code

(U.C.C. or Code).

We ask first how Colorado law would classify the Note signed by the

Millers. Under Colorado law, a promise or order such as the Note is payable “to

order” “if it is payable (i) to the order of an identified person or (ii) to an

identified person or order.” Colo. Rev. Stat. § 4-3-109(b). The Note at issue here

is payable “to the order of Lender. Lender is IndyMac Bank, F.S.B., a federally

chartered savings bank[.]” Aplt. App., Vol. I at 14. Thus, the Note is payable to

the “order” of IndyMac Bank under § 4-3-109(b).

But “[a]n instrument payable to an identified person [such as IndyMac

Bank] may become payable to bearer if it is indorsed in blank pursuant to section

-13-
4-3-205(b).” Colo. Rev. Stat. § 4-3-109(c). 7 Section 4-3-205(b) provides that

“[i]f an indorsement is made by the holder of an instrument and it is not a special

indorsement, it is a ‘blank indorsement.’ When indorsed in blank, an instrument

becomes payable to bearer and may be negotiated by transfer of possession alone

until specifically indorsed.” (emphasis added).

Deutsche Bank presented evidence that IndyMac had indorsed the Note in

blank. Is proof of this indorsement sufficient under the U.C.C. requirements to

establish Deutsche Bank as the successor holder of the note? As we shall see, it

is not, because Deutsche Bank must also prove it has possession of the Note.

The U.C.C. identifies the requirements for “negotiation” of a note, that is,

for “transfer of possession . . . to a person who thereby becomes its holder.” Id.

§ 4-3-201(a). This statute provides that “if an instrument is payable to an

identified person, negotiation requires transfer of possession of the instrument

and its indorsement by the holder.” Id. § 4-3-201(b) (emphasis added). The

Official Commentary to section 4-3-201 explains that negotiation “always

requires a change in possession of the instrument because nobody can be a holder

without possessing the instrument, either directly or through an agent.”

7
For U.C.C. purposes, “‘Person’ means an individual, corporation, business
trust, estate, trust, partnership, limited liability company, association, joint
venture, government, government subdivision, agency, or instrumentality, or any
other legal or commercial entity.” Colo. Rev. Stat. § 4-1-201(26).

-14-
(emphasis added). See also Colo. Rev. Stat. § 4-1-201(b)(20)(A) (defining

“holder” of negotiable instrument as “person in possession” of it).

“Possession is an element designed to prevent two or more claimants from

qualifying as holders who could take free of the other party’s claim of

ownership.” Georg v. Metro Fixtures Contractors, Inc., 178 P.3d 1209, 1213

(Colo. 2008) (citation omitted). 8 “With rare exceptions, those claiming to be

holders have physical ownership of the instrument in question.” Id. (citation

omitted). 9 In the case of bearer paper such as the Note, physical possession is

essential because it constitutes proof of ownership and a consequent right to

payment. 10

8
We note that the 9th Circuit BAP has stated that because relief from stay is
a limited proceeding that does not ultimately determine the lender’s and debtor’s
rights, “the concern of real party in interest jurisprudence for avoiding double
payment is quite reduced” in such proceedings. Veal v. Am. Home Mortg.
Servicing, Inc. (In re Veal), 450 B.R. 897, 914 (9th Cir. B.A.P. 2011). We also
note, however, that after making this statement in Veal, the 9th Circuit BAP
reversed a bankruptcy court determination granting relief from stay because the
purported holder of the note and mortgage could not produce the original note or
otherwise provide proof under state law that it was the holder of the note or a
person entitled to enforce it. See id. at 917-18.
9
Colorado law recognizes a theory of “constructive possession” where the
instrument is held for its owner in the hands of a third party. See Georg, 178 P.3d
at 1213-14. There is no evidence of constructive possession or constructive
delivery in this case.
10
A lost instrument may be enforced in certain circumstances by a person
who was formerly in possession of it. See Colo. Rev. Stat. § 4-3-309. Here, even
assuming such a loss, Deutsche Bank has offered no proof that it was ever in
possession of the Note “and entitled to enforce it when loss of possession
(continued...)

-15-
 While Deutsche Bank has offered proof that IndyMac assigned the Note in

blank, it elicited no proof that Deutsche Bank in fact obtained physical possession

of the original Note from IndyMac, either voluntarily or otherwise. 11 Under the

U.C.C. requirements, Deutsche Bank has therefore failed to show that it is the

current holder of the Note.

Colorado law does not limit enforcement of an obligation to a holder who

received the instrument through negotiation. A note may also be enforced by a

transferee. See Colo. Rev. Stat. § 4-3-203. “Transfer of an instrument, whether

or not the transfer is a negotiation, vests in the transferee any right of the

transferor to enforce the instrument.” Id. § 4-3-203(b). But transfer requires

delivery: “An instrument is transferred when it is delivered by a person other

than its issuer for the purpose of giving to the person receiving delivery the right

to enforce the instrument.” Id. § 4-3-203(a) (emphasis added). “Delivery” with

respect to an instrument “means voluntary transfer of possession” of the

instrument. Id. § 4-1-201(14). Because Deutsche Bank has failed to prove

10
(...continued)
occurred.” Id. § 4-3-309(a)(i).
11
“The former [U.C.C.] requirement that delivery is required for a negotiation
has been changed to a requirement that there be a change in possession of the
instrument. Change of possession can be either voluntary or involuntary. . . .
Clearly, therefore, a thief or finder [of a bearer instrument] is a holder[.]”
2 Frederick M. Hart, Erik F. Gerding & William F. Willier, Negotiable
Instruments Under the Uniform Commercial Code § 3.05[1] (2011) (emphasis
added) (footnotes omitted).

-16-
transfer of possession of the original Note it has failed to establish its status as a

transferee.

Deutsche Bank also argues that it has standing because under Colorado law

it can initiate a public trustee foreclosure without producing the original Note. It

cites Colo. Rev. Stat. § 38-38-101(1), which provides that the “holder of an

evidence of debt” may initiate a foreclosure. An “evidence of debt” includes a

promissory note such as the Note at issue here. Colo. Rev. Stat. § 38-38-

100.3(8). Under certain circumstances, the “holder of an evidence of debt” can

file a public trustee foreclosure without supplying the original note. See id.

§ 38-38-101(b)(I)-(III).

But this argument depends, first, on Deutsche Bank’s ability to show that it

is a “holder of an evidence of debt.” Article 38 defines a “holder of an evidence

of debt” as a person “in actual possession of” or “entitled to enforce an evidence

of debt.” Colo. Rev. Stat. § 38-38-100.3(10) (emphasis added). Section

38-38-100.3(10) lists a number of presumptive holders of a debt presumed to be

the “holder of an evidence of debt.” Each of these requires possession of the

evidence of debt, which Deutsche Bank has thus far failed to demonstrate. See id.

§ 38-38-100.3(10)(a)-(d).

Deutsche Bank appears to argue that notwithstanding its failure to prove it

has actual possession of the Note, it qualifies as a “person entitled to enforce an

evidence of debt” under § 38-38-100.3(10) and thus is a “holder of an evidence of

-17-
debt” because (1) it holds a copy of the Note indorsed in blank and (2) it can

initiate a foreclosure without presenting the original Note to the public trustee.

Deutsche Bank contends that it is a “qualified holder,” see id. § 38-38-100.3(21),

that would be permitted under Colorado law to foreclose without presenting the

original note, see id. § 38-38-101(B)(II). But foreclosure under this provision

requires either the bank or its attorney to execute a statement “citing the

paragraph of section 38-38-100.3(20) under which the holder claims to be a

qualified holder and certifying or stating that the copy of the evidence of debt is

true and correct” and that the bank agrees to “indemnify and defend any person

liable for repayment of any portion of the original evidence of debt in the event

that the original evidence of debt is presented for payment to the extent of any

amount, other than the amount of a deficiency remaining under the evidence of

debt after deducting the amount bid at sale, and any person who sustains a loss

due to any title defect that results from reliance upon a sale at which the original

evidence of debt was not presented.” Id. §§ 38-38-101(b)(II), 38-38-101(2)(a).

There is no evidence that Deutsche Bank or its attorneys have executed such a

certification or intend to do so. We therefore reject Deutsche Bank’s claim to

standing founded on these statutes.

5. Conclusion

For the foregoing reasons, the evidence is insufficient as it currently stands

to establish that Deutsche Bank is a “party in interest” entitled to seek relief from

-18-
stay. The bankruptcy court therefore abused its discretion by granting Deutsche

Bank relief from stay.

The Millers raise a number of other objections to the proceedings and

orders in the bankruptcy court and the BAP but we need not reach any of them in

light of the remand we now order. The judgment of the BAP is REVERSED and

the case is REMANDED to the BAP with instructions to remand to the

bankruptcy court for further proceedings in accordance with this opinion. The

Millers’ motion for leave to file a supplemental appendix is DENIED.

-19-