OSINUPEBI

CourtDistrict Court, E.D. Pennsylvania
DecidedJune 14, 2021
Docket2:21-cv-00602
StatusUnknown

This text of OSINUPEBI (OSINUPEBI) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
OSINUPEBI, (E.D. Pa. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CIVIL ACTION IN RE LINDA OSINUPEBI, NO. 21-602-KSM

MEMORANDUM MARSTON, J. June 14, 2021 This bankruptcy appeal involves an unusual set of circumstances. At the outset, the bankruptcy court dismissed the underlying bankruptcy petition because the debtor, Linda Osinupebi, failed to file the proper documents. The only exception to that dismissal was an open motion filed by the Bank of New York Mellon (“BNYM”), which asked the court to find that a sheriff’s sale of Linda’s home was exempt from the bankruptcy’s automatic stay. Resolving that motion has required years of litigation and numerous orders from the bankruptcy court, the most recent of which is the subject of this appeal. In addition to having an unusual procedural posture, this case is further complicated by the unfortunate circumstance that Linda died earlier this year, and this appeal was filed by her daughter, Oluwaseyi Osinupebi. Interested Parties BNYM and Nasr Properties I, LLC argue that Oluwaseyi lacks standing to challenge the bankruptcy court’s order validating the sheriff’s sale. Oluwaseyi, who was an active participant in the bankruptcy court proceedings, argues that she is pecuniarily affected by the order, and therefore, has appellate standing. For the reasons discussed below, we agree with BNYM and Nasr Properties and quash the appeal. I. Facts and Procedural History A. The Bankruptcy Case: Phase I In February 2007, Linda Osinupebi executed a note and mortgage on 711 Yeadon Ave, Yeadon, Pennsylvania. (Bankr. Doc. No. 10-1, Ex. A, Note, Mortgage, and Assignment of Mortgage.) On April 8, 2015, the mortgagor, BNYM, filed a foreclosure action in state court, and declaratory judgment was entered against Linda and in favor of BNYM later that year. See Bank of N.Y. Mellon v. Osinupebi, No. 2015-003131, Opinion at p. 2 (Pa. Ct. Comm. Pl. July 15,

2019); see also Bankr. Doc. No. 49-2 at p. 3. After multiple motions to postpone a sheriff’s sale of the property and one petition to open the foreclosure, the home was ultimately sold to BNYM at a sheriff’s sale on June 15, 2018. See Bank of N.Y. Mellon, No. 2015-003131, Opinion at p. 2 (July 15, 2019); see also Bankr. Doc. No. 49-2 at p. 3. Also on June 15, 2018, at 12:23 p.m., Linda filed a pro se Chapter 7 bankruptcy petition, and the case was assigned to Bankruptcy Judge Jean K. FitzSimon. (Bankr. Doc. No. 1.) When Linda failed to submit the necessary documents with the petition, the bankruptcy court ordered her to file the required documents by June 28, 2018, or the case would be dismissed. (Bankr. Doc. No. 4.) Meanwhile, on June 27, 2018, BNYM filed a motion for relief from the automatic stay and request for in rem relief as to the Yeadon Avenue home. (See Bankr. Doc. No. 10.)

With the motion, BNYM included an email from the Delaware County Sheriff’s Office which stated that the overall sheriff’s sale ended at 12:45 p.m. (Id. at ¶ 9.) Erroneously believing that the bankruptcy proceeding was filed at 12:55 p.m.,1 BNYM argued that the sale occurred before the bankruptcy filing and therefore, the Yeadon property was not part of the bankruptcy estate or subject to the automatic stay. (Id. at ¶¶ 10–12.) BNYM asked for relief from the stay to allow delivery of the sheriff’s deed. (Id. at p. 6.) On June 28, 2018, while BNYM’s motion was pending, the bankruptcy court dismissed Linda’s bankruptcy petition for failure to file the necessary documents. (Bankr. Doc. No. 12.)

1 The bankruptcy petition was filed at 12:23 p.m., but not entered on the docket until 12:55 p.m. However, the case remained open for the limited purpose of the court ruling on the pending motion for relief from the stay. (Id.) In August 2018, the court granted BNYM’s motion and vacated the automatic stay so that BNYM could “pursue its state court rights” with respect to the Yeadon property. (Bankr. Doc.

Nos. 24 & 25.) Linda, through her daughter and power-of-attorney, Oluwaseyi, moved for reconsideration of that order. (Bankr. Doc. Nos. 28 & 36 (framed as “motion to reverse”).) Among other things, Linda argued that BNYM’s motion wrongly alleged that the bankruptcy petition was filed at 12:55 p.m. Because the petition was actually filed at 12:23 p.m., there was no proof that the sale, which ended at 12:45 p.m., occurred before the petition was filed, and therefore, the sheriff’s sale may have violated the automatic stay. (Bankr. Doc. No. 36). On December 12, 2018, the bankruptcy court held a hearing on the motion to reconsider and ultimately granted the motion. (Bankr. Doc. No. 41.) The court vacated the August 2018 order lifting the automatic stay as to the Yeadon property, along with its amendments — Bankr. Doc. Nos. 26 and 29. (Id.) But, importantly, the order did not include any findings of fact,

explicitly rule on the validity of the sheriff’s sale, or vacate the sale. With that motion decided and the remainder of the bankruptcy case dismissed, nothing else happened in the bankruptcy action for over a year. B. The State Court Actions 1. BNYM’s Foreclosure Action Meanwhile, the deed transferring the property to BNYM was recorded on July 19, 2018. See Bank of N.Y. Mellon, No. 2015-003131, Opinion at p. 3 (July 15, 2019); see also Bankr. Doc. No. 49-2 at p. 4. Linda moved in the state foreclosure action to strike the recorded deed, and BNYM petitioned the state court for confirmation of the sheriff’s sale and the sheriff’s deed. See Bank of N.Y. Mellon, No. 2015-003131, Opinion at p. 1 (July 15, 2019); see also Bankr. Doc. No. 49-2 at p. 2. The state court denied Linda’s motion, and granted BNYM’s petition on May 23, 2019 holding: “The sheriff’s sale of the real property commonly known as 711 Yeadon Ave. . . . was not impacted or impaired by Defendant’s bankruptcy” and the “sheriff’s sale and

sheriff’s deed recorded July 19, 2019 are hereby confirmed.” See Bank of N.Y. Mellon, No. 2015-003131, Order (May 23, 2019); see also Bankr. Doc. No. 49 at p. 4. Specifically, the Court found that although the overall sheriff’s sale for the day ended at 12:45 p.m., the “hammer” fell as to the Yeadon property at 11:55 a.m. See Bank of N.Y. Mellon, No. 2015-003131, Opinion at p. 8 (July 15, 2019); Bankr. Doc. No. 49-2 at p. 9. Because the sheriff’s sale was final before the bankruptcy petition was filed, Linda “was unable to claim protection of an automatic stay to prevent the sale.” See Bank of N.Y. Mellon, No. 2015-003131, Opinion at p. 8 (July 15, 2019); Bankr. Doc. No. 49-2 at p. 9. Linda appealed the trial court’s ruling, and on November 14, 2019, the appellate court quashed her appeal.

2. Nasr Properties’ Eviction Action After the deed was recorded in July 2018, BNYM sold the property to Nasr Properties. And in February 2019, Nasr Properties filed an eviction action in the Pennsylvania Court of Common Pleas. See Nasr Properties, I, LLC v. John Doe No. 1, No. 2019-001574, Complaint (Pa. Ct. Comm. Pl. Feb. 27, 2019). On January 7, 2020, the Pennsylvania Court of Common Pleas entered judgment in favor of Nasr Properties and granted the company possession of the home. Id. at Order (Jan. 7, 2020); see also Bankr. Doc. No. 44-1 at p. 5. C. The Bankruptcy Case: Phase II Having lost in state court, Linda returned to bankruptcy court. On January 10, 2020, Linda filed an emergency motion to reopen the bankruptcy action, asking the bankruptcy court to “reverse the recent judgment entered” by the state court. (Bankr. Doc. No. 44.) Judge FitzSimon scheduled a hearing, and when Linda did not attend, the court denied her motion for failure to appear at the hearing and because it was unclear what relief Linda sought in

bankruptcy. (Bankr. Doc. No.

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