Bevell et al v. Deutsche Bank National Trust Company

Filing 6

ORDER that the Debtors' 4 Motion for Expedited Stay Pending Appeal is denied. Signed by Judge James A Teilborg on 7/10/2012.(LFIG)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 17 ) ) ) Debtors. _________________________________ ) ) ) ) John N. Bevell and Sean A. Bevell, ) ) Appellants, ) ) vs. ) ) Deutsche Bank National Trust Company,) ) ) Appellee. ) ) John N. Bevell and Sean A. Bevell, Dist. Ct. BK No. CV 12-1417-PHX-JAT 2:10-bk-24724-RTB ORDER 18 19 Pending before the Court is the Debtors’ motion for expedited stay pending appeal. 20 Doc. 4. Specifically, the Debtors seek to have this Court stay the Bankruptcy Court’s Order 21 (BK Doc. 87) in which the Bankruptcy Court granted Appellee’s motion to lift the automatic 22 stay. In that Order, the Bankruptcy Court lifted the stay as it relates to a pending Trustee sale 23 of the Debtors’ residence. The Debtors claim the sale of their residence is scheduled for July 24 12, 2012. Doc. 4 at 1. 25 Whether to grant or deny a request for a stay is “an exercise of judicial discretion,” 26 the proprietary of which is “dependent upon the circumstances of the particular case.” 27 Virginian R. Co. v. United States, 272 U.S. 658, 672-73 (1926). “A stay is not a matter of 28 right, even if irreparable injury might otherwise result.” Id. at 672. “The party requesting 1 a stay bears the burden of showing that the circumstances justify an exercise of that 2 discretion.” Nken v. Holder, 556 U.S. 418, 433-34 (2009). 3 In order for this Court to grant or deny a request for a stay, the Court must consider 4 four factors: “(1) whether the stay applicant has made a strong showing that he is likely to 5 succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) 6 whether issuance of the stay will substantially injure the other parties interested in the 7 proceeding; and (4) where the public interest lies.” Hilton v. Braunskill, 481 U.S. 770, 776 8 (1987). The first of two of these factors “are the most critical,” and “[i]t is not enough that 9 the chance of success on the merits be ‘better than negligible.’” Nken, 556 U.S. at 434 10 (quoting Sofinet v. INS, 188 F.3d 703, 707 (7th Cir. 1999)). 11 Prior to coming to this Court, the Debtors moved the Bankruptcy Court for a stay 12 pending appeal. The Bankruptcy Court denied that request because the Court found that the 13 Debtors had not shown any likelihood of success on appeal. BK Doc. 119. 14 In the motion to stay before this Court, the Debtors argue 15 The “special endorsement” the bankruptcy court relied on to bootstrap [footnote omitted] “Deutsche Bank” into having standing was effectively nullified by our First Objections to its amended motion for relief from stay and by our first Judicial Notice. [footnote omitted] The “special endorsement” Judge Baum relied on was examined in our Objections’ page 8 under the bold heading “FOURTH.” As all can see we challenged it as unauthorized, unauthenticated alteration under Arizona law, and the lost note law should have been applied. 16 17 18 19 Doc. 4 at 3. The Debtors then conclude that the Bankruptcy Court lifting the automatic 20 bankruptcy stay in this case was an abuse of discretion. Id. at 5. 21 In sum, the Debtors disagree with the Bankruptcy Judge’s conclusion that the note 22 was properly indorsed to Appellee. The Debtors then conclude that because the indorsement 23 was defective, Appellee does not have standing to have a Trustee sale of the residence. 24 It appears that the Debtors argue that the indorsement was defective because it was 25 on a copy of the note, rather than on the original note. Id. at 4. Other than their own 26 argument, the Debtors offer no evidence that Appellee does not possess the original note. 27 However, even if the Debtors’ allegations are true, the Arizona Supreme Court has held that 28 -2- 1 a secured lender does not have to produce the original note to conduct a Trustee sale. Hogan 2 v. Wash. Mut. Bank, 277 P.3d 781, 782 ¶ 5 (Ariz. 2012) (rejecting the “show-me-the-note” 3 argument). 4 Thus, because the Debtors’ only claim for relief fails, this Court agrees with the 5 Bankruptcy Court that the Debtors have not shown a likelihood of success on appeal. 6 Accordingly, under Hilton, their request for a stay of the Bankruptcy Court’s order lifting the 7 automatic stay pending appeal will be denied. 8 Based on the foregoing, 9 IT IS ORDERED that the Debtors’ motion for expedited stay pending appeal (Doc. 10 11 4) is denied. DATED this 10th day of July, 2012. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3-

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