FILED JUL 29 2020 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT
UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT
In re: BAP No. HI-20-1071-BTL PACIFIC RIM PROPERTY SERVICE CORPORATION, Bk. No. 19-01051-RF Debtor.
WILLIAM H. GILLIAM, Appellant, v. ASSOCIATION OF APARTMENT MEMORANDUM* OWNERS OF KUHIO SHORES AT POIPU, Appellee.
Appeal from the United States Bankruptcy Court for the District of Hawaii Robert J. Faris, Chief Bankruptcy Judge, Presiding
Before: BRAND, TAYLOR, and LAFFERTY, Bankruptcy Judges.
INTRODUCTION
Appellant William H. Gilliam appeals an order granting the Association
of Apartment Owners of Kuhio Shores at Poipu ("AOAO") retroactive
* This disposition is not appropriate for publication. 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 Cir. BAP Rule 8024-1. annulment of the automatic stay under § 362(d)(1). 1 Because Gilliam lacked
standing to oppose the AOAO's motion, and further lacks standing to appeal
the order granting the stay annulment, we DISMISS for lack of jurisdiction.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
A. Prepetition events
Vivian T. Lord, Gilliam's late mother, incorporated the debtor as North
Pacific Rim Property Service Corporation in 1995. In 2002, Lord changed the
corporate name to Pacific Rim Property Service Corporation ("Pacific Rim").
Until her death in 2009, Lord was the sole shareholder of Pacific Rim and held
all offices in that entity.
Pacific Rim acquired the subject property known as the Condominium
in the mid-1990's. Lord resided there until her death in 2009. At all times
relevant, title to the Condominium has been held by Pacific Rim.
Pacific Rim was administratively dissolved by the State of Hawaii on
December 4, 2012, for failure to file annual reports or remit the required fees.
At that time, given that Lord was deceased, there were no shareholders or
officers of Pacific Rim.
On December 2, 2013, an identically named Pacific Rim Property
Service Corporation filed its Articles of Incorporation, with Gilliam executing
the document ("New Corporation"). Gilliam's mailing address was in Oregon.
1 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
2 Despite incorporating under the same name, Pacific Rim was never legally
reinstated under Hawaii Revised Statutes § 414-403. Further, title to the
Condominium was never transferred to the New Corporation.
The AOAO filed suit against Pacific Rim in the Hawaii state court to
foreclose its lien on the Condominium for unpaid assessments totaling
approximately $184,000. In addition, tax liens on the Condominium totaled
approximately $58,000. With no existing shareholders or officers responsible
for handling the affairs of Pacific Rim, the state court appointed George R.
Robinson as the receiver ("Receiver") to wind up and settle its affairs. One of
his tasks was to determine ownership of the Condominium. Gilliam
contended that either he or the New Corporation was its legal owner. As
provided in the order appointing the Receiver, if Gilliam could provide a
legal conveyance document conclusively establishing his or the New
Corporation's legal ownership of the Condominium, the state court would
consider discharging the Receiver from his duties.
The Receiver later prepared a report to the state court recommending a
court-ordered sale of the Condominium to settle Pacific Rim's debts. The
Receiver noted that Gilliam was unable to show any evidence of ownership of
the Condominium despite claiming both that he lived there and that he was
using it as a vacation rental property.
The AOAO then filed a Motion for Instructions for the Receiver, which,
if granted, would enable him to sell the Condominium. A hearing was set for
3 August 20, 2019. Meanwhile, the state court entered an order in June 2019,
denying Gilliam's motion to intervene in the state court action.
B. Postpetition events
On August 19, 2019, the day before the scheduled hearing for the
Motion for Instructions, Gilliam, as the purported statutory trustee, filed a
skeletal chapter 11 bankruptcy case for Pacific Rim. The bankruptcy court
dismissed the case on September 5, 2019, for failure to pay filing fees and to
file the required documents.
After the case dismissal, the AOAO moved to annul the automatic stay
under § 362(d), requesting that relief be granted retroactively to the petition
date ("Motion to Annul Stay"). The hearing for the Motion for Instructions
had taken place on August 20 as scheduled, but the order granting relief to
sell the Condominium was not entered until after Pacific Rim's chapter 11
case had been dismissed. The AOAO argued that annulment of the stay was
warranted because Gilliam had no authority to file a bankruptcy case on
behalf of Pacific Rim, which the AOAO contended he did solely to frustrate
the court-ordered sale. The AOAO argued that Gilliam was not the statutory
trustee for Pacific Rim as he claimed, that he had no ownership interest in the
entity, and that he had no ownership interest in the Condominium. Further,
argued the AOAO, if a bankruptcy was to be filed for Pacific Rim only the
Receiver could do so, and he did not consent to the filing.
In response to the Motion to Annul Stay, Gilliam filed a one-page
4 handwritten document stating that he opposed annulling the stay and
requesting a 30-day extension. Gilliam stated that his computer and files had
been stolen in a burglary and therefore he needed more time to file a proper
opposition.
The bankruptcy court orally granted the Motion to Annul Stay at a
hearing. Gilliam did not appear. Before the court entered a written order,
Gilliam filed a motion to reconsider. He argued that the court should
reconsider its ruling to annul the stay given his excusable neglect to file a
proper opposition, and because he is entitled to deference under Hawaii law
as the statutory trustee of Pacific Rim.
The bankruptcy court then entered a written order granting the Motion
to Annul Stay. It further denied Gilliam's motion to reconsider. The court
noted that Gilliam's asserted standing to oppose the Motion to Annul Stay as
trustee or receiver for Pacific Rim had no basis in fact or law. The court
further noted that it would not allow Gilliam to take the contradictory
position in his own chapter 13 case that he, not Pacific Rim, was the owner of
the Condominium.2 This timely appeal followed.
2 Gilliam has now filed a chapter 13 case and claimed an ownership interest in the Condominium. On March 13, 2020, the bankruptcy court entered an order in Gilliam's case determining that the Receiver had sole control over Pacific Rim's assets including the Condominium, that the Condominium was not property of Gilliam's estate despite his post-receivership transfer of title to himself, and that the Receiver was not required to turn over the Condominium to Gilliam.
5 II. JURISDICTION
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FILED JUL 29 2020 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT
UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT
In re: BAP No. HI-20-1071-BTL PACIFIC RIM PROPERTY SERVICE CORPORATION, Bk. No. 19-01051-RF Debtor.
WILLIAM H. GILLIAM, Appellant, v. ASSOCIATION OF APARTMENT MEMORANDUM* OWNERS OF KUHIO SHORES AT POIPU, Appellee.
Appeal from the United States Bankruptcy Court for the District of Hawaii Robert J. Faris, Chief Bankruptcy Judge, Presiding
Before: BRAND, TAYLOR, and LAFFERTY, Bankruptcy Judges.
INTRODUCTION
Appellant William H. Gilliam appeals an order granting the Association
of Apartment Owners of Kuhio Shores at Poipu ("AOAO") retroactive
* This disposition is not appropriate for publication. 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 Cir. BAP Rule 8024-1. annulment of the automatic stay under § 362(d)(1). 1 Because Gilliam lacked
standing to oppose the AOAO's motion, and further lacks standing to appeal
the order granting the stay annulment, we DISMISS for lack of jurisdiction.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
A. Prepetition events
Vivian T. Lord, Gilliam's late mother, incorporated the debtor as North
Pacific Rim Property Service Corporation in 1995. In 2002, Lord changed the
corporate name to Pacific Rim Property Service Corporation ("Pacific Rim").
Until her death in 2009, Lord was the sole shareholder of Pacific Rim and held
all offices in that entity.
Pacific Rim acquired the subject property known as the Condominium
in the mid-1990's. Lord resided there until her death in 2009. At all times
relevant, title to the Condominium has been held by Pacific Rim.
Pacific Rim was administratively dissolved by the State of Hawaii on
December 4, 2012, for failure to file annual reports or remit the required fees.
At that time, given that Lord was deceased, there were no shareholders or
officers of Pacific Rim.
On December 2, 2013, an identically named Pacific Rim Property
Service Corporation filed its Articles of Incorporation, with Gilliam executing
the document ("New Corporation"). Gilliam's mailing address was in Oregon.
1 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
2 Despite incorporating under the same name, Pacific Rim was never legally
reinstated under Hawaii Revised Statutes § 414-403. Further, title to the
Condominium was never transferred to the New Corporation.
The AOAO filed suit against Pacific Rim in the Hawaii state court to
foreclose its lien on the Condominium for unpaid assessments totaling
approximately $184,000. In addition, tax liens on the Condominium totaled
approximately $58,000. With no existing shareholders or officers responsible
for handling the affairs of Pacific Rim, the state court appointed George R.
Robinson as the receiver ("Receiver") to wind up and settle its affairs. One of
his tasks was to determine ownership of the Condominium. Gilliam
contended that either he or the New Corporation was its legal owner. As
provided in the order appointing the Receiver, if Gilliam could provide a
legal conveyance document conclusively establishing his or the New
Corporation's legal ownership of the Condominium, the state court would
consider discharging the Receiver from his duties.
The Receiver later prepared a report to the state court recommending a
court-ordered sale of the Condominium to settle Pacific Rim's debts. The
Receiver noted that Gilliam was unable to show any evidence of ownership of
the Condominium despite claiming both that he lived there and that he was
using it as a vacation rental property.
The AOAO then filed a Motion for Instructions for the Receiver, which,
if granted, would enable him to sell the Condominium. A hearing was set for
3 August 20, 2019. Meanwhile, the state court entered an order in June 2019,
denying Gilliam's motion to intervene in the state court action.
B. Postpetition events
On August 19, 2019, the day before the scheduled hearing for the
Motion for Instructions, Gilliam, as the purported statutory trustee, filed a
skeletal chapter 11 bankruptcy case for Pacific Rim. The bankruptcy court
dismissed the case on September 5, 2019, for failure to pay filing fees and to
file the required documents.
After the case dismissal, the AOAO moved to annul the automatic stay
under § 362(d), requesting that relief be granted retroactively to the petition
date ("Motion to Annul Stay"). The hearing for the Motion for Instructions
had taken place on August 20 as scheduled, but the order granting relief to
sell the Condominium was not entered until after Pacific Rim's chapter 11
case had been dismissed. The AOAO argued that annulment of the stay was
warranted because Gilliam had no authority to file a bankruptcy case on
behalf of Pacific Rim, which the AOAO contended he did solely to frustrate
the court-ordered sale. The AOAO argued that Gilliam was not the statutory
trustee for Pacific Rim as he claimed, that he had no ownership interest in the
entity, and that he had no ownership interest in the Condominium. Further,
argued the AOAO, if a bankruptcy was to be filed for Pacific Rim only the
Receiver could do so, and he did not consent to the filing.
In response to the Motion to Annul Stay, Gilliam filed a one-page
4 handwritten document stating that he opposed annulling the stay and
requesting a 30-day extension. Gilliam stated that his computer and files had
been stolen in a burglary and therefore he needed more time to file a proper
opposition.
The bankruptcy court orally granted the Motion to Annul Stay at a
hearing. Gilliam did not appear. Before the court entered a written order,
Gilliam filed a motion to reconsider. He argued that the court should
reconsider its ruling to annul the stay given his excusable neglect to file a
proper opposition, and because he is entitled to deference under Hawaii law
as the statutory trustee of Pacific Rim.
The bankruptcy court then entered a written order granting the Motion
to Annul Stay. It further denied Gilliam's motion to reconsider. The court
noted that Gilliam's asserted standing to oppose the Motion to Annul Stay as
trustee or receiver for Pacific Rim had no basis in fact or law. The court
further noted that it would not allow Gilliam to take the contradictory
position in his own chapter 13 case that he, not Pacific Rim, was the owner of
the Condominium.2 This timely appeal followed.
2 Gilliam has now filed a chapter 13 case and claimed an ownership interest in the Condominium. On March 13, 2020, the bankruptcy court entered an order in Gilliam's case determining that the Receiver had sole control over Pacific Rim's assets including the Condominium, that the Condominium was not property of Gilliam's estate despite his post-receivership transfer of title to himself, and that the Receiver was not required to turn over the Condominium to Gilliam.
5 II. JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and
157(b)(2)(G). Aheong v. Mellon Mortg. Co. (In re Aheong), 276 B.R. 233, 242-43 &
n.8 (9th Cir. BAP 2002) (the bankruptcy court retains jurisdiction to review
motions to annul the automatic stay even after a case is dismissed or closed).
We discuss our jurisdiction under 28 U.S.C. § 158 below.
III. ISSUE
Does Gilliam have standing to challenge the order annulling the stay?
IV. STANDARD OF REVIEW
We consider appellate standing de novo. Motor Vehicle Cas. Co. v. Thorpe
Insulation Co. (In re Thorpe Insulation Co.), 677 F.3d 869, 879 (9th Cir. 2012).
V. DISCUSSION
The AOAO argues that Gilliam lacks standing to appeal the order
annulling the automatic stay. Gilliam appears to argue that he has standing
as the sole shareholder of the dissolved Pacific Rim. Contrary to his assertion,
Gilliam is not a shareholder, much less the sole shareholder, of Pacific Rim.
To determine if Gilliam has standing we must consider both
constitutional and prudential standing doctrines. Gilliam bears the burden of
establishing both constitutional standing and prudential standing. Veal v. Am.
Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 907 n.11 (9th Cir. BAP
2011). At its core, the standing inquiry, in all its forms, "is an inherently
factual inquiry into the nature of the rights asserted[.]" Id.
6 Constitutional standing is derived from the case and controversy
requirement of Article III of the Constitution and requires a plaintiff to
demonstrate "injury in fact, causation, and redressability." Republic of Marshall
Islands v. United States, 865 F.3d 1187, 1199 (9th Cir. 2017) (citing Lexmark Int'l,
Inc. v. Static Control Components, Inc., 572 U.S. 118, 125 (2014)). To satisfy
constitutional standing, Gilliam must demonstrate "'an invasion of a legally
protected interest which is (a) concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical.'" Bishop Paiute Tribe v. Inyo Cty., 863
F.3d 1144, 1153 (9th Cir. 2017) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555,
560 (1992)). To establish causation, Gilliam must show that his injury is "fairly
traceable" to the challenged action – here, the order annulling the automatic
stay in Pacific Rim's bankruptcy case. See Lujan, 504 U.S. at 560. Finally, to
prove redressability, Gilliam must persuade us that a favorable decision by
this Panel likely would redress his injury. Id. at 560-61.
Gilliam has not established that he has constitutional standing. He has
not identified any particularized or concrete injury arising from the
bankruptcy court's order annulling the stay of Pacific Rim. Gilliam is not the
debtor, nor does he have any interest in or control over the debtor or its
assets, including the Condominium. While he attacks the state court's
decision to appoint the Receiver and maintains that he is or should be the
statutory trustee for the entity, we have no jurisdiction over the state court's
order appointing the Receiver. For the same reason, Gilliam cannot show
7 redressability. Reversing this particular order would not redress any injury
that Gilliam claims he has suffered as a result of the state court proceedings.
Gilliam has also not established that he has prudential standing.
Prudential standing is a set of "judicially self-imposed limits on the exercise of
federal jurisdiction." In re Veal, 450 B.R. at 906 (internal quotation marks and
citations omitted). A facet of prudential standing particular to bankruptcy
appeals is the "person aggrieved" standard. Under this standard, only "those
persons who are directly and adversely affected pecuniarily by an order of
the bankruptcy court" have standing to appeal. Fondiller v. Robertson (In re
Fondiller), 707 F.2d 441, 442 (9th Cir. 1983). The appellant must demonstrate
that the order on appeal diminished its property, increased its burdens, or
otherwise detrimentally affected its rights. Id. An appellant cannot rest its
claim for relief on the legal rights or interests of another. Umpqua Shopping
Ctr., Inc. v. Tippet (In re Umpqua Shopping Ctr., Inc.), 111 B.R. 303, 305 (9th Cir.
BAP 1990) (citing Warth v. Seldin, 422 U.S. 490, 499 (1975)).
Gilliam has not shown how he is "directly and adversely affected
pecuniarily" by the bankruptcy court's decision to annul the stay in Pacific
Rim's bankruptcy case. As discussed above, Gilliam is not the debtor, nor
does he have any interest in or control over the debtor or its assets. Simply
put, the order annulling the stay has not diminished Gilliam's property,
increased his burdens, or otherwise detrimentally affected his rights.
Hypothetically, even if we were to reverse the order and potentially subject
8 the AOAO to a stay violation, any claim against the AOAO for damages
would be the Receiver's legal right and interest to pursue on behalf of Pacific
Rim, not Gilliam's.
Accordingly, because Gilliam lacks standing, this appeal must be
dismissed.
VI. CONCLUSION
For the reasons stated above, we DISMISS this appeal for lack of
standing.