In Re Frank J. Redmond

Filing 28

ORDER DENYING APPEAL by Judge Manuel L. Real: IT IS HEREBY ORDERED that Appellant's appeal is DENIED. See document for details. (Made JS-6. Case Terminated.) (gk)

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JS-6

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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) CASE NO. CV 17-464-R
)
Appellant,
) ORDER DENYING APPEAL
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v.
) Bankruptcy No.: 6:14-bk-17941 MJ
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FRANK JOSEPH REDMOND,
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Appellee.
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)
This matter comes before the Court on appeal from the United States Bankruptcy Court for

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the Central District of California. Appellant filed his opening brief on August 14, 2017. (Dkt. No.

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22). Having been thoroughly briefed by both parties, this Court took the matter under submission

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on October 12, 2017.

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RICHARD SCOTT FRACASSE,

On August 21, 2012, Appellant obtained a monetary judgment against Appellee. On

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August 28, 2013, Appellant obtained a writ of execution against Appellee’s residence located at

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41750 Avenida Ortega, Temecula, California (“the Residence”). The Riverside County Superior

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Court granted Appellant’s request for judicial foreclosure. However, on June 18, 2014, before

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Appellant could complete foreclosure, Appellee filed for bankruptcy, resulting in an automatic

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stay of foreclosure proceedings. On March 29, 2016, the bankruptcy Trustee entered into a

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settlement agreement with Appellant which allowed him to foreclose on the Residence. The

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Trustee moved for final approval on the settlement agreement, and Appellant moved for relief

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from the automatic stay in the bankruptcy case in order to proceed with judicial foreclosure on the

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Residence, per the settlement. These motions were set for hearing on April 26, 2016. At the

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hearing, the Bankruptcy Court granted the motion to approve the settlement agreement and also

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granted Appellant’s motion for relief on the condition that Appellant “recommence the [judicial

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foreclosure] procedure, not pick it up wherever [Appellant was], and do it anew.” Appellant,

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however, failed to include the Bankruptcy Court’s oral order to restart the foreclosure process in

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the written order, and he did not recommence the foreclosure process as required. The foreclosure

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sale on the Residence was held on January 5, 2016, at which point Appellant purchased the

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Residence with a credit bid. Appellee, understanding this sale to be in violation of the April 26

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Order, sued Appellant and moved for a preliminary injunction and to amend the April 26 Written

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Order to reflect the Bankruptcy Court’s oral order. At the hearing, the Bankruptcy Court found

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that “the order that was very clearly made by the Court at the hearing on April of 2016 that

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[Appellant] had to start over in his state court execution procedure, did not make it to the [written]

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order” but “clearly [Appellant was] supposed to start over whether or not it was in the [written]

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order.”

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On February 27, 2017, the Bankruptcy Court amended its April 26 Order nunc pro tunc to

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include the Bankruptcy Court’s oral condition that the stay is lifted as long as foreclosure

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proceedings begin anew. The February 27 Order states, “[t]he stay is lifted to allow [Appellant] to

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obtain a new writ of execution to levy upon the [Residence]. Once the new writ of execution is

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obtained, [Appellant] may proceed with a judicial foreclosure sale against that property….” The

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February 27 Order also voided the Sheriff’s deed resulting from the judicial foreclosure sale that

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was conducted in violation of the April 26 Order. Finally, the Bankruptcy Court granted

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Appellee’s motion for a preliminary injunction, enjoining Appellant from “commencing or

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continuing any lawful detainer proceeding against [Appellee]…except as otherwise ordered by the

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Court in the underlying bankruptcy case.” On April 18, 2017, the February 27 Order was

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amended nunc pro tunc to include a legal description of the Residence.

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Appellant challenges the February 27 Order and April 18 Order on the grounds that the
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Bankruptcy Court exceeded its jurisdiction in amending the April 26 Order nunc pro tunc.

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Appellant argues that the court erred in requiring Appellant to obtain a new writ of execution on

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the Residence, voiding the Sheriff’s deed on the Residence even though it was obtained in

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violation of the Bankruptcy Court Order, and enjoining Appellant from foreclosing on Appellee’s

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property except as ordered by the Bankruptcy Court.

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Federal district courts have mandatory jurisdiction to hear appeals from final judgments,

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orders, and decrees of bankruptcy judges. 27 U.S.C. § 158(a)(1); In re Frontier Props., Inc., 979

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F.2d 1358, 1362 (9th Cir. 1992). On appeal from an order of a bankruptcy court, the district court

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reviews conclusions of law de novo and findings of fact for clear error. In re Greene, 583 F.3d

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614, 618 (9th Cir. 2009). The district court reviews the bankruptcy court’s grant or deny of relief

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from the automatic stay for abuse of discretion. In re Conejo Enters., 96 F.3d 346 (9th Cir. 1996).

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Decisions committed to the bankruptcy court’s discretion will be reversed only if they are “based

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on an erroneous conclusion of law” or “the record contains no evidence on which the bankruptcy

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court rationally could have based that decision.” Id. “It is well recognized that a bankruptcy court

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has the power to interpret and enforce its own orders.” In re Wilshire Courtyard, 729 F.3d 1279,

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1289 (9th Cir. 2013); Travelers Indemnity Co. v. Bailey, 557 U.S. 137, 151 (2009).

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In this case, the Bankruptcy Court did not abuse its discretion in granting relief from the

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automatic stay, nor did it exceed its jurisdiction in enforcing the order granting relief. The Court

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has reviewed both Appellant’s Appendix and Appellee’s Appendix and finds that there is clear

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evidence in the record supporting the Bankruptcy Court’s April 26 Order. The transcript from the

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April 26 hearing shows that the Bankruptcy Court considered arguments from the parties, the

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California Civil Code, and limits on the Bankruptcy Court’s jurisdiction in granting Appellant

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relief conditioned on his restarting the judicial foreclosure process in state court. Having reviewed

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the record and applicable law, the Court also finds that the April 26 Order was not based on an

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erroneous conclusion of law.

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The Bankruptcy Court did not exceed its jurisdiction in amending the April 26 Order nunc

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pro tunc because the Bankruptcy Court has inherent authority to enforce its own orders. Here, the

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April 26 hearing transcript clearly states that the Appellant must restart the judicial foreclosure
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process in state court as a condition for its grant of relief from the automatic stay. Appellant was

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directed to submit a written order to the Bankruptcy Court reflecting the orders made at the April

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26 hearing. The written order that Appellant submitted to the Bankruptcy Court omitted the

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condition that Appellant restart the foreclosure process. Therefore, the Bankruptcy Court did not

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err in amending the written order to accurately reflect what had been ordered at the April 26

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hearing. Appellant proceeded with foreclosure on the Residence in violation of the Bankruptcy

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Court’s order to restart the procedure. The Bankruptcy Court, consequently, voided the Sheriff’s

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deed that resulted from a violation of its order. Appellant was not relieved from his duty to

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comply with the April 26 orders because of his failure, inadvertent or not, to submit an accurate

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written order to the Court. Because the Bankruptcy Court is empowered to enforce its own orders,

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it did not err in voiding the Sheriff’s deed or enjoining Appellant from foreclosing on Appellee’s

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property.

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Appellant’s arguments that the Bankruptcy Court exceeded its jurisdiction based on the

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Rooker-Feldman doctrine are misplaced. The Rooker-Feldman doctrine holds that federal district

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courts have “no authority to review the final determinations of a state court in judicial

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proceedings.” In re Gruntz, 202 F.3d 1075, 1078 (9th Cir. 2000). “[B]ankruptcy courts are

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empowered to avoid state judgments, to modify them, and to discharge them.” Id. at 1079. Even

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if the Bankruptcy Court’s orders did nullify a state court judgment, the Bankruptcy Court did not

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violate the Rooker-Feldman doctrine because it is specifically empowered to avoid, modify, and

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discharge state judgments. Accordingly, the Bankruptcy Court did not exceed its jurisdiction.

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IT IS HEREBY ORDERED that Appellant’s appeal is DENIED. (Dkt. No. 22).
Dated: December 21, 2017.

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MANUEL L. REAL
UNITED STATES DISTRICT JUDGE

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