FILED JUL 23 2014 1 NOT FOR PUBLICATION 2 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP Nos. CC-13-1303-DKiTa ) CC-13-1426-DKiTa 6 IDA MANASARYAN, ) ) Bk. No. 12-17095-MT 7 Debtor. ) ______________________________) 8 SERGEY KORCHINSKY, ) ) 9 Appellant, ) ) 10 v. ) ) 11 SKYLINE VISTA EQUITIES, LLC; ) BANK OF AMERICA, N.A.; IDA ) 12 MANASARYAN; CORI B. JONES, ) ) 13 Appellees. ) ______________________________) 14 In re: ) BAP No. CC-13-1411-DKiTa 15 ) SERGEY KORCHINSKY, ) Bk. No. 12-17169-AA 16 ) Debtor. ) 17 ______________________________) SERGEY KORCHINSKY, ) 18 ) Appellant, ) 19 ) v. ) 20 ) SKYLINE VISTA EQUITIES, LLC; ) 21 BANK OF AMERICA, N.A.; ) CORI B. JONES, ) 22 ) Appellees. ) 23 ______________________________) 24 In re: ) BAP No. CC-13-1427-DKiTa ) 25 RUZANNA MANASARYAN, ) Bk. No. 12-13444-MT ) 26 Debtor. ) ______________________________) 27 28 1 SERGEY KORCHINSKY, ) ) 2 Appellant, ) ) 3 v. ) M E M O R A N D U M1 ) 4 SKYLINE VISTA EQUITIES, LLC; ) BANK OF AMERICA, N.A.; ) 5 CORI B. JONES, ) ) 6 Appellees. ) ______________________________) 7 Argued and Submitted on June 26, 2014 8 at Pasadena, California 9 Filed - July 23, 2014 10 Appeals from the United States Bankruptcy Court for the Central District of California 11 Honorable Maureen A. Tighe and Honorable Alan M. Ahart, 12 Bankruptcy Judges, Presiding 13 Appearances: Mohammad Azhar Asadi, of Law Offices of M. Azhar 14 Asadi & Associates APC, argued for Appellant Sergey Korchinsky; Leslie M. Werlin argued for 15 Appellees Bank of America, N.A. and ReconTrust Company, N.A.; William Fitch argued for Appellee 16 Skyline Vista Equities, LLC. 17 Before: DUNN, KIRSCHER, and TAYLOR, Bankruptcy Judges. 18 Facing a foreclosure sale of real property he owned, 19 Appellant filed a bankruptcy case in the name of an alias; 20 failed to inform the secured creditor of his pending bankruptcy 21 case; and transferred, postpetition, fractional interests in the 22 real property to two other individuals with pending bankruptcy 23 cases. After the foreclosure sale took place, the secured 24 creditor was notified of the bankruptcy of one of the transferees 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. 28 See 9th Cir. BAP Rule 8013-1.
-2- 1 of an interest in the real property. The purchaser at the 2 foreclosure sale sought and obtained in that bankruptcy case an 3 in rem order granting relief from the automatic stay as to any 4 and all bankruptcy cases pending that involved the real property. 5 Appellant thereafter asserted in state court proceedings 6 that the foreclosure sale was void, having been conducted in 7 violation of the automatic stay in his bankruptcy case. The 8 Appellant filed a motion to reopen the bankruptcy case in which 9 the in rem order had been entered in order to seek relief from 10 the order. When the bankruptcy court denied the motion to 11 reopen, Appellant filed the first appeal. 12 The secured creditor then filed a motion for relief from the 13 automatic stay in the bankruptcy case of the Appellant and each 14 individual allegedly holding an interest in the real property 15 based upon Appellant’s postpetition transfers. The bankruptcy 16 court granted in rem relief in all cases, and annulled the 17 automatic stay in each case. Appellant appealed all three of 18 those orders. 19 For the reasons stated in this Memorandum, we AFFIRM in all 20 four appeals. 21 I. FACTUAL BACKGROUND 22 On October 24, 2005, Sergey Korchinsky (“Sergey”) obtained a 23 loan in the amount of $920,000, evidenced by a promissory note 24 (“Note”) secured by a deed of trust (“Trust Deed”) on real 25 property ("Property") in Granada Hills, California. Countrywide 26 Home Loans, Inc. (“Countrywide”) was the lender. On 27 September 16, 2011, Countrywide assigned the Trust Deed to The 28 Bank of New York Mellon fka The Bank of New York, as Trustee for
-3- 1 the Certificateholders of CWALT, Inc., Alternative Loan Trust 2 2005-71, Mortgage Pass-Through Certificates, Series 2005-71. The 3 assignment was recorded on October 13, 2011. ReconTrust 4 Company, N.A. (“ReconTrust”), was the trustee under the Trust 5 Deed, and Bank of America, N.A. (“BofA”) (hereinafter, ReconTrust 6 and BofA are collectively referred to as the “Bank”) is the 7 servicer on the Note. 8 Beginning in August 2008, Sergey defaulted on the Note. On 9 February 17, 2012, the Bank served a notice of default, recorded 10 on February 22, 2012, advising that Sergey was $262,346.06 in 11 default and that the Bank had elected to sell the Property if the 12 default was not cured. On July 23, 2012, the Bank served a 13 notice of sale, recorded on July 25, 2012, stating that the Bank 14 intended to conduct an auction (“Trustee’s Sale”) of the Property 15 on August 17, 2012. 16 The Trustee’s Sale was held as scheduled on August 17, 2012, 17 at which time the Property was sold to Skyline Vista Equities, 18 LLC (“Skyline”). The Trustee’s Deed Upon Sale was recorded on 19 September 4, 2012. 20 The Tale of Three Bankruptcy Cases: A Pattern is Established2 21 22 The notice of the Trustee’s Sale set off a series of events 23 24 2 We exercised our discretion to review the bankruptcy 25 court's electronic docket and pleadings on record therein for the three bankruptcy cases included in the factual discussion below. 26 See O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 27 887 F.2d 955, 957–58 (9th Cir. 1989); Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 28 2003).
-4- 1 which culminated in the orders currently on appeal. 2 Sergey filed a chapter 133 bankruptcy petition (“Sergey 3 Bankruptcy Case”) on August 9, 2012. Notably, the petition was 4 in the name of Sergey Sahakyan. Only the petition was filed. 5 The mailing matrix included two creditors: BAC Home Loans 6 Servicing, LP with a post office box address, and “DWP,” also 7 with a post office box address. Neither address included an 8 individual officer or agent. Sergey used an address other than 9 the Property address as his mailing address for purposes of the 10 Sergey Bankruptcy Case. 11 On August 9, 2012, the Bankruptcy Clerk entered an order 12 directing Sergey to file, inter alia, his bankruptcy schedules, 13 Statement of Financial Affairs, and Chapter 13 Plan 14 (collectively, “Bankruptcy Documents”) not later than August 23, 15 2012. Sergey filed his Bankruptcy Documents on August 22, 2012, 16 but they were completely devoid of any information. All 17 provisions either were marked “N/A” or left blank entirely. 18 On August 16, 2012, postpetition, a grant deed (“Grant 19 Deed”) was executed4 with respect to the Property which purported 20 to transfer a fractional interest in the Property from Sergey to 21 3 22 Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and 23 all “Rule” references are to the Federal Rules of Bankruptcy 24 Procedure, Rules 1001-9037. The local rules of the Bankruptcy Court for the Central District of California are referred to as 25 “LBRs.” The Federal Rules of Civil Procedure are referred to as “Civil Rules.” 26 4 27 The use of the passive voice to describe this act is intentional in light of Sergey’s later assertions that the Grant 28 Deed is a forgery.
-5- 1 Sergey, Ida Manasaryan (“Ida”), and Ruzanna Manasaryan 2 (“Ruzanna”). The Grant Deed was recorded on August 17, 2012, the 3 date set for the Trustee’s Sale. 4 At the time the Grant Deed was executed and recorded, 5 Ruzanna was a debtor in a pending chapter 7 case (“Ruzanna 6 Bankruptcy Case”). The Ruzanna Bankruptcy Case had been filed as 7 a chapter 13 case on April 12, 2012, but was converted to 8 chapter 7 on May 2, 2012, on Ruzanna’s motion. In her Bankruptcy 9 Documents filed on May 12, 2012, Ruzanna listed only real 10 property located on Cumpston Street in Los Angeles (“Ruzanna 11 Residence”).5 12 The Ruzanna Bankruptcy Case ultimately was dismissed on 13 November 26, 2012, after Ruzanna repeatedly failed to appear at 14 her § 341(a) Meeting of Creditors. Although Ruzanna amended her 15 Bankruptcy Documents on August 10, 2012, she never added the 16 Property as an asset in which she claimed an interest. 17 At the time the Grant Deed was executed and recorded, Ida 18 also was a debtor in a pending chapter 7 case (“Ida Bankruptcy 19 5 20 On June 27, 2012, Ruzanna filed a motion to vacate an order granting relief from the automatic stay as to the Ruzanna 21 Residence that had been entered in the alleged unrelated 22 chapter 13 case of Federico J. Tribel. In her motion to vacate, Ruzanna stated that unknown to her, and by use of her forged 23 signature, a portion of the Ruzanna Residence had been deeded to Mr. Tribel. The lender (“Ruzanna Lender”) on the Ruzanna 24 Residence had obtained an in rem order (“Ruzanna In Rem Order”) 25 granting relief from the automatic stay as to the Ruzanna Residence. The Ruzanna Lender thereafter noticed a new 26 foreclosure sale for April 12, 2012. Ruzanna purportedly learned 27 of the Ruzanna In Rem Order after the purchaser at the public auction of the Ruzanna Residence initiated an unlawful detainer 28 action against Ruzanna in state court.
-6- 1 Case”). The Ida Bankrupcy Case had been filed as a chapter 13 2 case on August 7, 2012. Similar to Mr. Korchinsky, Ida filed 3 only the petition on that date. Her mailing matrix included the 4 identical creditors as did Mr. Korchinsky’s: BAC Home Loans 5 Servicing, LP with a post office box address, and “DWP,” also 6 with a post office box address. Neither address included an 7 individual officer or agent. Ida ultimately filed her Bankruptcy 8 Documents on August 22, 2012, but they also were completely 9 devoid of any information. All provisions either were marked 10 “N/A” or left blank entirely. Ida listed no interest in real 11 property in her schedules.6 12 On September 10, 2012, the United States Trustee (“UST”) 13 filed a motion to dismiss the Ida Bankruptcy Case for abuse. The 14 UST Motion asserted that the Ida Bankruptcy Case had not been 15 filed for any legitimate purpose. The UST cited to the grant 16 deed transferring the Granada Hills Property to Ida for the 17 apparent purpose of stopping foreclosure proceedings. The UST 18 cited to yet another grant deed transferring real property from 19 20 6 A relief from stay motion (“Wilshire Motion”) was brought 21 by Wilshire Finance Partners, Inc. (“Wilshire”) alleging that on 22 August 3, 2012, shortly before Wilshire’s August 9, 2012 scheduled foreclosure sale on real property in Granada Hills, 23 California (“Granada Hills Property”), and four days before the Ida Bankruptcy Case was filed, a grant deed was recorded 24 transferring the Granada Hills Property from Wilshire’s borrower, 25 Geghetsik Nersisyan, to Ida. Ida responded to the Wilshire Motion, asserting that she had more than 35% equity in the 26 Granada Hills Property. To her response she attached “Sale 27 Escrow Instructions” dated August 2, 2012, reflecting a proposed sale from Geghetsik Nersisyan to a third party buyer, Hovhannes 28 Yesayan.
-7- 1 Maria Trinidad Figueroa to Ms. Figueroa and Ida as joint tenants, 2 also in an apparent effort to stop a pending foreclosure sale of 3 Ms. Figueroa’s property. Following a hearing on the UST’s 4 motion, on October 18, 2012, the bankruptcy court entered an 5 order dismissing the Ida Bankruptcy Case with a one year bar to 6 refiling. 7 The Property, Foreclosure Proceedings, and Annulment of the Automatic Stay 8 9 Although Sergey filed the Sergey Bankruptcy Case on 10 August 9, 2012, he did not notify the Bank of the pending case.7 11 The Trustee’s Sale of the Property was held as scheduled on 12 August 17, 2012, and the Property was sold to Skyline.8 A 13 Trustee’s Deed Upon Sale was recorded in due course on 14 September 4, 2012. 15 On September 26, 2012, Skyline filed a motion for relief 16 from stay (“Skyline Motion”) in the Ida Bankruptcy Case, alleging 17 it was entitled to relief pursuant to § 362(d)(1) based on Ida’s 18 bad faith and pursuant to § 362(d)(4) on the basis that the 19 filing was part of a scheme to hinder, delay or defraud 20 creditors. 21 Sergey was served with the Skyline Motion at the Property 22 address and via telephonic notice.9 Ida appeared and opposed the 23 7 24 The Bank contends it first received notice of the Sergey Bankruptcy Case on September 7, 2012. 25 8 It appears that the Bank received notice of the Ida 26 Bankruptcy Case thereafter on or about August 27, 2012. 27 9 Two days after the Skyline Motion was filed, Sergey 28 continue...
-8- 1 Skyline Motion, asserting that the Bank was aware of the active 2 Ida Bankruptcy Case at the time of the Trustee’s Sale such that 3 it should be rescinded. 4 On October 18, 2012, the bankruptcy court entered an order 5 (“Skyline Order”) granting the Skyline Motion, annulling the 6 automatic stay retroactively to the date the Ida Bankruptcy Case 7 was filed, and extending the annulment of the stay to be binding 8 and effective as against any other “currently pending bankruptcy 9 cases” based on the bankruptcy court’s finding that the filing of 10 the Ida Bankruptcy Case was “part of a scheme to delay, hinder, 11 or defraud creditors that involved . . . transfer of all or part 12 ownership of, or other interest in, the Property without the 13 consent of the secured creditor or court approval.” The Skyline 14 Order was served on Sergey at the Property address. Neither Ida 15 nor Sergey appealed the Skyline Order. 16 Sergey On the Offensive 17 In January 2013, Sergey filed a state court complaint 18 against the Bank alleging that the Trustee’s Sale should be 19 deemed void, because it was conducted in violation of the 20 21 22 23 9 ...continue amended the petition in his bankruptcy case to add Sergey 24 Korchinsky as an “aka” for the debtor Sergey Sahakyan (Sergey 25 Bankruptcy Case docket no. 17); he also filed an amended statement of his social security number (Sergey Bankruptcy Case 26 docket no. 16). These amendments made it clear that until 27 September 28, 2012, there was nothing in the Sergey Bankruptcy Case that would have put either the Bank or Skyline on notice 28 that Sergey had a pending bankruptcy case.
-9- 1 automatic stay in the Sergey Bankruptcy Case.10 Sergey asserted 2 that the Grant Deed by which an interest in the Property was 3 transferred to Ida was a forgery, with the consequence that the 4 Skyline Order could not apply to provide annulment of the 5 automatic stay in the Sergey Bankruptcy Case. 6 Sergey thereafter filed a motion (“Sergey Motion”) in the 7 bankruptcy court on March 29, 2013, to reopen the Ida Bankruptcy 8 Case for the purpose of vacating the Skyline Order based on the 9 same assertions. The Bank and Skyline both opposed the Sergey 10 Motion. On June 19, 2013, the bankruptcy court entered its order 11 (“Sergey Order”) denying all relief requested in the Sergey 12 Motion, based on the available avenue for relief in the pending 13 state court litigation. In ruling on the Sergey Motion, but not 14 dispositive to its ruling, the bankruptcy court expressly 15 rejected Sergey’s contentions that he had not been served either 16 17 10 The Bank alleges that this was Sergey’s second attempt 18 to get relief in the state court. On October 29, 2012, Sergey 19 filed a state court complaint (Case No. PC053965), seeking, inter alia, a determination that the Trustee’s Sale was void because it 20 was conducted in violation of the automatic stay in the Sergey Bankruptcy Case. Case No. PC053965 apparently was dismissed 21 after Sergey failed to pay the filing fee. 22 In a Supplemental Declaration filed July 23, 2013, in response to the Bank RFS Motion, Sergey contends that although he 23 is the named plaintiff in Case No. PC053965, he did not file that case. He asserts that he did not know about the existence of 24 Skyline on the date it was filed, October 29, 2012, nor did he 25 know of any transfer of the Property. He contends he learned of the Trustee’s Sale on or about December 5, 2012, when one of his 26 tenants informed him of an approaching lockout. 27 Sergey further asserts that when he received the file in Skyline’s pending unlawful detainer action on January 22, 2013, 28 he learned that someone had filed an answer in his name.
-10- 1 with the Skyline Motion or the Skyline Order.11 Sergey timely 2 appealed the Sergey Order on June 28, 2013, and it is pending 3 before the Panel as BAP No. CC-13-1303. 4 Thereafter, on July 12, 2013, the Bank filed two motions 5 each in the Sergey Bankruptcy Case, the Ida Bankruptcy Case, and 6 the Ruzanna Bankruptcy Case. The first motion sought to reopen 7 the cases; these motions were granted on July 22, 2013. The 8 second motion (“Bank RFS Motions”) sought annulment of the 9 automatic stay based on bad faith, annulment of automatic stay 10 pursuant to § 362(d)(4), and a “comfort order” to the effect that 11 the Trustee’s Sale was not void as a result of the annulment of 12 the automatic stay. The Bank asserted that the relief was 13 necessary because Sergey continued to assert in state court 14 proceedings that the Trustee’s Sale was void. Sergey opposed the 15 Bank RFS Motions. 16 The bankruptcy court entered an order (“Bank RFS Order”) in 17 each of the three cases granting the Bank RFS Motions.12 At the 18 11 19 “[Sergey] argues that he had no knowledge of the [Skyline Motion or the Skyline Order] until January 22, 2013, 20 when [Sergey] received the Unlawful Detainer Complaint. . . . The Court finds this argument to be unpersuasive. On September 21 26, 2012, [Sergey] was served with the [Skyline Motion], wherein 22 Skyline made clear it was requesting both a finding under § 362(d)(4) and extraordinary relief. The [Skyline] Order was 23 entered on November 21, 2012. [Sergey] was again served with the 24 [Skyline Order], which clearly showed what relief the Court had granted to Skyline. Again, there was no objection to the form of 25 order by [Sergey] under [LBR] 9021-1(3)(B).” See Sergey Order at 2:23-28. 26 12 27 The Bank RFS Order in the Sergey Bankruptcy Case was entered on August 16, 2013, by Judge Alan M. Ahart, the case 28 continue...
-11- 1 August 7, 2013 hearing on the Bank RFS Motions in the Ida 2 Bankruptcy Case and the Ruzanna Bankruptcy Case, the bankruptcy 3 court stated its intent to docket its Tentative Ruling as its 4 findings of fact and conclusions of law in connection with its 5 decision to grant the Bank RFS Motions. The Tentative Ruling was 6 docketed October 15, 2013. 7 In the Tentative Ruling, the bankruptcy court affirmatively 8 found that the elements required to grant relief under 9 § 362(d)(4) were present, i.e., that the bankruptcy cases of 10 Sergey, Ida, and Ruzanna were part of a scheme to hinder, delay 11 or defraud creditors that included transfers of the Property and 12 multiple bankruptcy filings. The bankruptcy court also 13 considered issues relating to good faith and prejudice to the 14 parties and ruled that annulment of the stay was warranted. 15 Sergey timely appealed each of the Bank RFS Orders.13 16 12 17 ...continue judge for the Sergey Bankruptcy Case. The Bank RFS Orders in the 18 Ida Bankruptcy Case and the Ruzanna Bankruptcy Case were entered 19 on August 23, 2013, by Judge Maureen Tighe, the case judge for the Ida Bankruptcy Case and the Ruzanna Bankruptcy Case. 20 13 Each Bank RFS Order contained the following “additional” 21 relief beyond relief pursuant to § 362(d)(4) and annulment: 22 Separate and independent from the relief provided 23 above, the Court hereby confirms that (i) pursuant to 11 U.S.C. §§ 105(a) and 362(j), the [Skyline Order] 24 annulled the stay in this debtor’s bankruptcy case 25 retroactive to the date of the bankruptcy petition and (ii) that pursuant to the [Skyline Order], the stay in 26 this debtor’s bankruptcy case does not affect 27 postpetition acts by the Movants with respect to the Property, except to the extent that an appellate court 28 continue...
-12- 1 II. JURISDICTION 2 The bankruptcy court had jurisdiction under 28 U.S.C. 3 §§ 1334 and 157(b)(2)(G). We have jurisdiction under 28 U.S.C. 4 § 158. 5 III. ISSUES 6 Whether the bankruptcy court abused its discretion when it 7 refused to reopen the Ida Bankruptcy Case on the Sergey Motion. 8 Whether the bankruptcy court abused its discretion when it 9 exercised jurisdiction over the Bank RFS Motions while the appeal 10 of the Sergey Order was pending. 11 Whether the bankruptcy court erred in determining that the 12 Bank had standing to prosecute the Bank RFS Motions eighteen 13 months after the Trustee Sale had been conducted and the 14 Trustee’s Deed had been recorded to vest title in Skyline. 15 Whether the bankruptcy court erred when it found that the 16 Property was transferred to Ida and Ruzanna with intent to 17 hinder, delay or defraud a creditor. 18 Whether the bankruptcy court abused its discretion when it 19 annulled the automatic stay as to the Property in the Bank RFS 20 Orders. 21 IV. STANDARDS OF REVIEW 22 We review a bankruptcy court’s denial of a motion to reopen 23 a bankruptcy case for abuse of discretion. See Weiner v. Perry, 24 Settles & Lawson, Inc. (In re Weiner), 161 F.3d 1216, 1217 (9th 25 26 13 ...continue 27 orders otherwise. The relief provided in paragraphs 3, 4, 9, 10a and 10b herein is separate and independent 28 from the relief provided in the [Skyline Order].
-13- 1 Cir. 1998); Lopez v. Specialty Rests., Inc. (In re Lopez), 2 283 B.R. 22, 26 (9th Cir. BAP 2002). 3 We review the bankruptcy court's application of procedural 4 rules and whether a particular procedure comports with due 5 process de novo. All Points Cap. Corp. v. Meyer (In re Meyer), 6 373 B.R. 84, 87 (9th Cir. BAP 2007); Beneficial Cal. Inc. v. 7 Villar (In re Villar), 317 B.R. 88, 92 (9th Cir. BAP 2004); see 8 also Berry v. U.S. Trustee (In re Sustaita), 438 B.R. 198, 207 9 (9th Cir. BAP 2010) (whether adequate due process notice was 10 given in any particular instance is a mixed question of law and 11 fact reviewed de novo) (citing Demos v. Brown (In re Graves), 12 279 B.R. 266, 270 (9th Cir. BAP 2002)). 13 The rule that a notice of appeal will divest a court of 14 jurisdiction “is not absolute.” Neary v. Padilla 15 (In re Padilla), 222 F.3d 1184, 1190 (9th Cir. 2000). We review 16 de novo whether the bankruptcy court had jurisdiction over an 17 issue following the filing of a notice of appeal. See Rains v. 18 Flinn (In re Rains), 428 F.3d 893 (9th Cir. 2005). 19 “Standing is a legal issue that we review de novo.” 20 Kronemyer v. Am. Contractors Indemn. Co. (In re Kronemyer), 21 405 B.R. 915, 919 (9th Cir. BAP 2009). 22 The decision of a bankruptcy court to grant relief from the 23 automatic stay under § 362(d) is reviewed for abuse of 24 discretion. Kronemyer, 405 B.R. at 919. This includes a 25 decision to grant in rem relief (First Yorkshire Holdings, Inc. 26 v. Pacifica L 22, LLC (In re First Yorkshire Holdings, Inc.), 27 470 B.R. 864, 870-71 (9th Cir. BAP 2012)), and a decision to 28 annul the automatic stay (Gasprom, Inc. v. Fateh (In re Gasprom,
-14- 1 Inc.), 500 B.R. 598, 607-08 (9th Cir. BAP 2013)). 2 We review the bankruptcy court's findings of fact for clear 3 error. In re Brooks-Hamilton, 400 B.R. 238, 245 (9th Cir. BAP 4 2009). Clear error exists when, on the entire evidence, the 5 reviewing court is left with the definite and firm conviction 6 that a mistake was made. Oney v. Weinberg (In re Weinberg), 7 410 B.R. 19, 28 (9th Cir. 2009); Hoopai v. Countrywide Home 8 Loans, Inc. (In re Hoopai), 369 B.R. 506, 509 (9th Cir. BAP 9 2007). 10 De novo review requires that we consider a matter anew, as 11 if no decision had been made previously. United States v. 12 Silverman, 861 F.2d 571, 576 (9th Cir.1988); B–Real, LLC v. 13 Chaussee (In re Chaussee), 399 B.R. 225, 229 (9th Cir. BAP 2008). 14 A bankruptcy court abuses its discretion if it applies an 15 incorrect legal standard or misapplies the correct legal 16 standard, or its factual findings are illogical, implausible or 17 without support from evidence in the record. TrafficSchool.com 18 v. Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011). 19 We may affirm the decision of the bankruptcy court on any 20 basis supported by the record. Shanks v. Dressel, 540 F.3d 1082, 21 1086 (9th Cir. 2008). 22 V. DISCUSSION 23 A. BAP No. 13-1303 24 In his Opening Brief on Appeal, Sergey asserts that the 25 bankruptcy court’s fundamental error that led to each of the four 26 appeals currently before the Panel was the failure to find that 27 the Grant Deed had been forged. 28 However, in entering the Sergey Order, which is the subject
-15- 1 of BAP No. 13-1303, the bankruptcy court explicitly made no 2 findings with respect to the validity of the Grant Deed. 3 “[W]hether [Sergey] is successful in prosecuting his Complaint to 4 Void the Trustee Sale of the . . . Property is outside the scope 5 of the [Skyline Order].” Because the validity of the Grant Deed 6 could be litigated in the state court proceedings, the bankruptcy 7 court determined that reopening the Ida case to vacate the 8 Skyline Order was not necessary.14 9 Sergey’s Opening Brief further asserts that the bankruptcy 10 court incorrectly found that Sergey had been served with the 11 Skyline Motion and the Skyline Order. Implicit in the bankruptcy 12 court’s findings is a determination that the notice provided to 13 Sergey satisfied due process requirements. We agree. The record 14 on appeal reflects that Sergey was served with the Skyline Motion 15 14 Generally, “the reopening of a closed bankruptcy case is 16 a ministerial act that functions primarily to enable the file to 17 be managed by the clerk as an active matter and that, by itself, lacks independent legal significance and determines nothing with 18 respect to the merits of the case.” Menk v. Lapaglia 19 (In re Menk), 241 B.R. 896, 913 (9th Cir. BAP 1999) (citations omitted). A motion to reopen implicates a narrow range of 20 administrative issues, such as, for example, whether further estate administration is necessary, whether a trustee should be 21 appointed, and whether another filing fee is required. Id. at 22 916–17. This Panel has previously ruled that it is not appropriate in proceedings on a motion to reopen to make 23 substantive determinations on claims for relief. Id. In this appeal, however, Sergey does not assert that the 24 bankruptcy court erred in denying his motion to reopen on the 25 ground that extraneous issues intruded in the court's decision to deny the motion. We therefore deem this issue to have been 26 waived by Sergey. See, e.g., Arpin v. Santa Clara Valley Transp. 27 Agency, 261 F.3d 912, 919 (9th Cir. 2001) (generally, issues not “specifically and distinctly argued” in a party's opening brief 28 are deemed waived).
-16- 1 and the Skyline Order in the Ida Bankruptcy Case at the Property 2 address. Even assuming that the short notice period between the 3 service and the October 3, 2012 hearing might raise due process 4 issues, Sergey took no prompt action to address allegedly 5 improper notice once he had been served with the Skyline Order. 6 The Sergey Motion was not filed until March 2013, well after the 7 appeals period had run in the case, and only after Sergey had 8 been served with an unlawful detainer action in state court. In 9 addition, Sergey complains that Skyline filed no motion in his 10 bankruptcy case. However, Sergey filed the Sergey Bankruptcy 11 Case in a name unknown to the Bank and with an incorrect social 12 security number. Skyline had no way of knowing about the Sergey 13 Bankruptcy Case. The matrix information in the Sergey 14 Bankruptcy Case did not afford the Bank an opportunity to discern 15 the filing and its potential application to its creditor 16 interests. This record suggests Sergey went to great lengths to 17 keep the Bank from learning of the Sergey Bankruptcy Case. Had 18 Sergey been forthcoming about his own bankruptcy case 19 information, he likely would have received better, or at least 20 additional or different, notice. Under the circumstances, we 21 cannot say that the bankruptcy court erred when it determined 22 that service on Sergey at the Property address did not deprive 23 Sergey of his due process rights in connection with the Skyline 24 Motion and Order. 25 On this record, the Sergey Motion appears to have been 26 nothing more than an attempt to attack the Skyline Order 27 collaterally. Thus, we are satisfied that the bankruptcy court 28 did not abuse its discretion when it denied Sergey’s motion to
-17- 1 reopen the Ida Bankruptcy Case. Having denied Sergey’s motion to 2 reopen, the bankruptcy court did not need to reach Sergey’s 3 motion to vacate the Skyline Order. 4 B. BAP Nos. 13-1411, 13-1426 and 13-1427. 5 1. The Pendency of BAP No. 13-1303 Did Not Divest the Bankruptcy Court of Jurisdiction Over the Bank RFS Motions. 6 7 Sergey asserts on appeal that the pendency of the appeal of 8 the Sergey Order, BAP No. 13-1303, divested the bankruptcy court 9 of jurisdiction over “related matters.” 10 However, a valid notice of appeal does not completely divest 11 the trial court of jurisdiction in the underlying case; the trial 12 court retains jurisdiction over any part of the case not affected 13 by the notice of appeal. “When a proper notice of appeal has 14 been timely filed, the general rule is that jurisdiction over any 15 matters involved in the appeal is immediately transferred . . . 16 [to the appellate court].” See Matter of Thorp, 655 F.2d 997, 17 998 (9th Cir. 1991). See also Petrol Stops NW v. Cont’l Oil Co., 18 647 F.2d 1005, 1010 (9th Cir. 1991)(generally, the filing of a 19 notice of appeal divests a trial court of jurisdiction only over 20 matters involved in the appeal). Orders from contested matters 21 that adjudicate discrete disputes do not divest the bankruptcy 22 court of jurisdiction generally. 23 Sergey argues that because the issues on appeal in BAP 24 No. 13-1303 are exactly the same issues underlying the Bank 25 RFS Motions, i.e., whether the bankruptcy court should have 26 granted in rem relief from the automatic stay as to the Property, 27 the bankruptcy court erred when it exercised jurisdiction over 28 the Bank RFS Motions and entered the Bank RFS Orders in the three
-18- 1 bankruptcy cases. 2 Sergey is mistaken. The primary issue on appeal in BAP 3 No. 13-1303 is whether the Ida Bankruptcy Case should have been 4 reopened for the purpose of vacating the Skyline Order. Although 5 the Sergey Order includes a provision denying Sergey’s requested 6 relief from the Skyline Order as it applied to him, the 7 bankruptcy court did not reach the underlying issue, ruling 8 instead that the issue of the validity of the Grant Deed could be 9 raised in state court proceedings. Further, even if Sergey could 10 possibly be successful through BAP No. 13-1303 in obtaining 11 relief from the Skyline Order, the Bank, as a separate holder of 12 a secured interest in the Property at the time each of the 13 bankruptcy cases was filed, had its own right to seek relief from 14 the automatic stay, including retroactive relief and relief in 15 rem. Stated differently, the Bank RFS Motions addressed the 16 Bank’s rights vis-à-vis the Property. The Sergey Order on appeal 17 at most touched upon Skyline’s rights vis-à-vis the Property from 18 the date it was entered. 19 2. The Bank Had Standing to Prosecute the RFS Motions. 20 Sergey next asserts that the Bank had no standing to 21 prosecute the Bank RFS Motions, filed in July 2013, where the 22 Bank’s Trustee Sale on August 17, 2012, and the recording of the 23 Trustee’s Deed in favor of Skyline divested the Bank of any 24 interest in the Property. This argument is specious on its face. 25 The purpose of the Bank RFS Motions was specifically to address 26 the issue of whether the Bank could have conducted the Trustee 27 Sale in August 2012 in the first instance. Resolution of this 28 issue necessarily involved adjudication of the Bank’s rights with
-19- 1 respect to its secured interest in the Property and the impact of 2 a bankruptcy filing(s) on the exercise of the Bank’s rights. 3 Further, the Bank RFS Motions were filed in response to Sergey’s 4 assertions in the state court proceedings that the Trustee Sale 5 violated the automatic stay in the Sergey Bankruptcy Case. 6 In the case of a party seeking relief from the automatic 7 stay to foreclose an interest in real property, we have held that 8 a moving party must establish it had some interest in the 9 underlying note, either as a holder or as a person entitled to 10 enforce the note. See Veal v. Am. Home Mortg. Serv., Inc. 11 (In re Veal), 450 B.R. 897, 910-13 (9th Cir. BAP 2011). While 12 the Bank ostensibly no longer held any interest in the Property 13 when it filed the Bank RFS Motions in light of the Trustee’s Deed 14 recorded in favor of Skyline, two other factors are significant 15 in this analysis. First, the Bank was seeking such relief 16 specifically in response to Sergey’s assertion in the state court 17 that the Bank had no right to conduct the Trustee Sale in the 18 absence of relief from the automatic stay in the Sergey 19 Bankruptcy Case. The logical extension of Sergey’s argument is 20 that the Bank must still be the holder of the Note or the person 21 entitled to enforce the Note. Second, the Bank was seeking an 22 order with respect to the automatic stay that would establish its 23 rights prior to the Trustee’s Sale, a time at which it clearly 24 had standing. 25 Relying on Kronemyer v. Am. Contractors Indem. Co. 26 (In re Kronemyer), 405 B.R. 915, 919 (9th Cir. BAP 2009), and 27 First Fed. Bank v. Robbins (In re Robbins), 310 B.R. 626, 631 28 (9th Cir. BAP 2004), the bankruptcy court ruled that the Bank was
-20- 1 a “party in interest” with a colorable claim sufficient to confer 2 standing. We agree. 3 3. The Bankruptcy Court’s Finding That the Property Was Transferred With Intent to Hinder, Delay or Defraud a 4 Creditor Was Not Clearly Erroneous. 5 Section 362(d)(4) authorized the bankruptcy court to grant 6 in rem relief as to the Property, provided that appropriate 7 findings were made. Section 362(d)(4) provides: 8 On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay 9 provided under subsection (a) of this section, such as by terminating, annulling, modifying, or conditioning 10 such stay – . . . 11 (4) with respect to a stay of an act against real property under subsection (a), by a creditor whose 12 claim is secured by an interest in such real property, if the court finds that the filing of the petition was 13 part of a scheme to delay, hinder, or defraud creditors that involved either -- 14 (A) transfer of all or part ownership of, or other interest in, such real property without the consent of 15 the secured creditor or court approval; or (B) multiple bankruptcy filings affecting such real 16 property. 17 In In re First Yorkshire Holdings, Inc., 470 B.R. 864, 870 18 (9th Cir. BAP 2012), this Panel articulated the elements a 19 bankruptcy court must find present in order to grant in rem 20 relief as to property: a debtor’s bankruptcy filing must have 21 been part of a scheme; the purpose of the scheme must have been 22 to delay, hinder, or defraud creditors; and the scheme must have 23 involved either (a) the transfer of some interest in the real 24 property without the secured creditor’s consent or court 25 approval, or (b) multiple bankruptcy filings. The bankruptcy 26 court affirmatively found each element present in this case. 27 We observe again that in his Opening Brief on Appeal, Sergey 28 asserts that the bankruptcy court’s fundamental error that led to
-21- 1 each of the four appeals currently before the Panel was the 2 failure to find that the Grant Deed had been forged. Sergey 3 asserts that because the Grant Deed was fraudulent as to him, in 4 rem relief was not available under the express terms of the 5 statute. He contends that any transfer of an interest in the 6 Property was void, such that the bankruptcy court’s 7 § 362(d)(4)(A) finding was clearly erroneous. Further, because 8 the Grant Deed was ineffective to transfer an interest in the 9 Property to Ida and Ruzanna, the Property only was affected by 10 the filing of the Sergey Bankruptcy Case. 11 The bankruptcy court considered and rejected Sergey’s 12 evidence that the Grant Deed was forged and that Sergey had no 13 knowledge of its execution or recording. We must accept the 14 bankruptcy court's findings of fact unless we have a definite and 15 firm conviction that a mistake has been committed. Oney v. 16 Weinberg (In re Weinberg), 410 B.R. at 28; Hoopai v. Countrywide 17 Home Loans, Inc. (In re Hoopai), 369 B.R. at 509. We have no 18 such conviction with respect to these appeals. The record on 19 appeal adequately supports the bankruptcy court’s findings. In 20 particular, the pattern of the Sergey, Ida, and Ruzanna 21 bankruptcy filings, Sergey’s filing of the Sergey Bankruptcy Case 22 in a manner patently designed to preclude the Bank from learning 23 of the filing in order to protect its rights, Ida’s opposition to 24 the Skyline Motion suggesting she claimed an interest in the 25 Property, and the Amended Involuntary Petition filed in the 26 Bankruptcy Court for the District of Nevada which establishes 27 that creditors of Sergey believed he also used the names of Ida 28 and Ruzanna, all support the bankruptcy court’s findings that
-22- 1 Sergey engaged in a course of conduct designed solely to protect 2 the Property from foreclosure. 3 Because the record supports the bankruptcy court’s findings 4 that the elements of § 362(d)(4) were established, the bankruptcy 5 court did not abuse its discretion when it granted the Bank in 6 rem relief in the Sergey, Ida, and Ruzanna bankruptcy cases. 7 4. The Bankruptcy Court Did Not Abuse Its Discretion When It Granted Retroactive Relief to the Bank. 8 9 Section 362(d) expressly authorizes a bankruptcy court to 10 terminate, annul, modify, or condition the automatic stay in a 11 bankruptcy case. Here, the bankruptcy court annulled the stay. 12 The use of the word “annulling” means that such relief from the stay may operate retroactively. This would 13 validate actions taken by a party at a time when the party was unaware of the stay. 14 15 3 COLLIER ON BANKRUPTCY ¶ 362.07[1] (Alan N. Resnick and Henry J. 16 Sommer eds., 16th ed. 2013). 17 In Fjeldsted v. Lien (In re Fjeldsted), 293 B.R. 12, 25 (9th 18 Cir BAP 2003), this Panel identified factors that a bankruptcy 19 court should consider when deciding whether to annul the 20 automatic stay: 21 (1) number of filings; (2) whether, in a repeat filing case, the circumstances indicate an intention to delay 22 and hinder creditors; (3) a weighing of the extent of prejudice to creditors or third parties if the stay 23 relief is not made retroactive, including whether harm exists to a bona fide purchaser; (4) the debtor’s 24 overall good faith (totality of the circumstances); (5) whether the creditor knew of the stay but 25 nonetheless took action, thus compounding the problem; (6) whether the debtor has complied and is otherwise 26 complying with the Bankruptcy Code and rules; (7) the relative ease of restoring the parties to the status 27 quo ante; (8) the costs of annulment to the debtor and to the creditor; (9) how quickly the creditor moved for 28 annulment, or how quickly the debtor moved to set aside
-23- 1 the sale or violative conduct; (10) whether, after learning of the bankruptcy, the creditor proceeded to 2 take steps in continued violation of the stay, or whether the creditor moved expeditiously to gain 3 relief; (11) whether annulment of the stay will cause irreparable injury to the debtor; and (12) whether stay 4 relief will promote judicial economy or other efficiencies. 5 6 The bankruptcy court determined, based upon the indicia of a 7 scheme to hinder, delay or defraud present in each bankruptcy 8 case, that annulment of the stay was appropriate. The bankruptcy 9 court further found that neither Sergey, Ida nor Ruzanna “made 10 anything more than a sham attempt to actually pursue 11 reorganization and discharge in good faith.” In deciding the 12 issue, the bankruptcy court noted the prejudice that otherwise 13 would result to the Bank and Skyline, particularly where Sergey 14 was actively seeking relief in the state court proceedings to set 15 aside the Trustee’s Sale as void. 16 In light of the bankruptcy court’s findings, supported by 17 evidence, that Sergey engaged in a scheme to delay, hinder or 18 defraud the Bank, and that the Bank and Skyline were being 19 prejudiced by Sergey’s actions going forward, we find no abuse of 20 discretion in the bankruptcy court’s annulment of the automatic 21 stay as to the Property as a means of correcting, or more 22 accurately, validating, the legal record regarding the transfer 23 of ownership of the Property to Skyline as a consequence of the 24 Trustee’s Sale. 25 VI. CONCLUSION 26 BAP No. 13-1303. The bankruptcy court did not abuse its 27 discretion when it declined to reopen the Ida Bankruptcy Case. 28 BAP Nos. 13-1411, 13-1426, 13-1427. The filing of BAP No.
-24- 1 13-1303 did not divest the bankruptcy court of jurisdiction to 2 consider the Bank RFS Motions. The Bank did not lose standing to 3 prosecute the Bank RFS Motions post-foreclosure where Sergey 4 asserted that the foreclosure itself was void. On the record 5 before it, the bankruptcy court did not abuse its discretion when 6 it granted the Bank RFS Motions, including when it annulled the 7 automatic stay as to the Property and when it granted in rem 8 relief. 9 We affirm the orders of the bankruptcy court in each of the 10 pending appeals. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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