Torres v. Wells Fargo Bank N.A

Filing 9

ORDER by Judge Edward M. Chen granting 5 Defendant's Motion to Dismiss. (emclc2, COURT STAFF) (Filed on 9/11/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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TORRES,
Plaintiff,

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United States District Court
Northern District of California

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Case No. 18-cv-03422-EMC
ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS APPEAL

v.
WELLS FARGO BANK N.A,

Docket No. 5

Defendant.

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Appellant Isidoro Torres, proceeding pro se, appeals an order of the Bankruptcy Court

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denying his motion to reconsider its order granting Appellee Wells Fargo Bank’s motion for relief

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from the automatic stay imposed by 11 U.S.C. § 362(a). Wells Fargo argues the case is moot

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because the property at issue has been sold via foreclosure sale. For the reasons stated below,

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Wells Fargo’s motion to dismiss the appeal is GRANTED.

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I.

FACTUAL AND PROCEDURAL BACKGROUND

In 2006, Mr. Torres executed a promissory note secured by a mortgage on his real property

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at 1898 Seaview Drive, San Jose, CA 95122 (“Property”) in favor of Wells Fargo. See Docket

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No. 5, Exh. 2 (mortgage note), Exh. 3 (deed of trust). On February 22, 2018, Mr. Torres filed a

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Chapter 13 voluntary bankruptcy petition in the U.S. Bankruptcy Court for the Northern District

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of California. See id., Exh. 1 (Bankruptcy Court docket). The filing of the petition operated as an

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automatic stay on the collection of the Mr. Torres’ pre-filing debts. See 11 U.S.C. § 362(a). On

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March 15, 2018, Wells Fargo filed a motion for relief from the automatic stay, asserting that Mr.

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Torres had failed to pay on his mortgage since April 2013, that a foreclosure sale of the Property

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had been scheduled, and that Mr. Torres’ “filing of the bankruptcy petition was part of a scheme to

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delay, hinder, or defraud creditors that involved multiple bankruptcy cases affecting the Property.”

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See Docket No. 5, Exh. 5 at 3 (motion for relief). On April 6, 2018, the Bankruptcy Court granted

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the motion for relief and ordered the stay terminated, “thereby permitting enforcement of [Wells

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Fargo’s] contractual default remedies against the [Property].” Id., Exh. 7 (order). Three days

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later, the Bankruptcy Court dismissed the case after Mr. Torres failed to comply with a court order

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to file required documents. See id., Exh. 5 (order of dismissal).

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On April 25, 2018, Mr. Torres filed a motion for reconsideration of the order granting

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relief from the automatic stay. See id., Exh. 8 (motion for reconsideration). The Bankruptcy

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Court denied the motion on June 4, 2018. See id., Exh. 9 (order). The instant appeal followed.

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Mr. Torres then filed an emergency motion with the Bankruptcy Court to stay the foreclosure sale
pending appeal. The Bankruptcy Court denied the motion. See id., Exh. 15 (order denying

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United States District Court
Northern District of California

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emergency motion). Mr. Torres did not seek a stay from this Court.

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According to Wells Fargo, the Property was sold to a third party via foreclosure sale on
June 8, 2018. Docket No. 5 at 6.
II.

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DISCUSSION

Wells Fargo contends that in light of the sale of the Property, this appeal is now moot. See
Docket No. 5 at 6. Mr. Torres has not filed an opposition to the motion.
It is well established in the Ninth Circuit that “[b]ankruptcy’s mootness rule applies when

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an appellant has failed to obtain a stay from an order that permits a sale of a debtor’s assets.

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Whether an order directly approves the sale or simply lifts the automatic stay, the mootness rule

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dictates that the appellant’s failure to obtain a stay moots the appeal.” In re Onouli-Kona Land

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Co., 846 F.2d 1170, 1171 (9th Cir. 1988). Here, the Bankruptcy Court lifted the automatic stay,

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thereby allowing Wells Fargo to proceed with the foreclosure sale, and Mr. Torres failed to secure

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a stay pending appeal. Accordingly, this appeal is moot. See, e.g., In re Bronson, 610 F. App’x

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710, 711 (9th Cir. 2015) (dismissing bankruptcy appeal as moot where appellants “failed to obtain

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a stay from the bankruptcy court’s 2008 order permitting [creditor] to foreclose on the office

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building”).

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There is a “singular exception to the general mootness rule” that applies “when real
property is sold to a creditor who is a party to the appeal, but only when the sale is subject to
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statutory rights of redemption.” Save Al-Huda Sch. Found. v. Islamic Soc’y of San Francisco, No.

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C-09-05665-MHP, 2011 WL 672658, at *6 (N.D. Cal. Feb. 16, 2011) (citing Onouli–Kona Land

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Co., 846 F.2d at 1172–73). But the exception does not apply here because Wells Fargo represents

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that the Property was sold to a third party. See Docket No. 5 at 6. No statutory right of

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redemption applies.
III.

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CONCLUSION

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For the foregoing reasons, Defendant’s motion to dismiss the appeal is GRANTED.

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The Clerk of the Court shall enter judgment for the Defendant and close the case.

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This Order disposes of Docket No. 5.

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United States District Court
Northern District of California

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IT IS SO ORDERED.

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Dated: September 11, 2018

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______________________________________
EDWARD M. CHEN
United States District Judge

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