In RE: Steven H. Lucore and Judy L. Lucore
Filing
21
ORDER Denying 16 Motion for Rehearing. Signed by Judge Janis L. Sammartino on 5/29/2018. (All non-registered users served via U.S. Mail Service)(mpl)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
SOUTHERN DISTRICT OF CALIFORNIA
10
11
12
STEVEN H. LUCORE, SR., JUDY L.
LUCORE,
Appellants,
13
14
15
16
17
Case No.: 17-CV-308 JLS (MDD)
Bankruptcy Case No.: 13-08534-MM13
ORDER DENYING MOTION FOR
REHEARING
v.
SPECIALIZED LOAN SERVICING
LLC, AS SERVICER FOR WELLS
FARGO BANK, N.A. AS TRUSTEE
FOR THE CERTIFICATE HOLDERS
OF THE LMT 2006-9 TRUST,
18
(ECF No. 16)
Appellee.
19
20
Presently before the Court is Appellants Steven H. Lucore, Jr. and Judy L. Lucore’s
21
Amended Motion for Re-Hearing.1 (“MTN, ECF No. 16). Appellee Specialized Loan
22
Servcing LLC filed a Response in Opposition to, (ECF No. 17), and Appellants filed a
23
24
25
26
27
28
1
Appellants originally filed their Motion for Rehearing on April 4, 2018, (ECF No. 15), which was
thirteen days after this Court entered its Order affirming the bankruptcy court’s decision. Appellants then
filed an amended Motion four days later. The Court considers Appellants’ original Motion to have met
the timing requirements set forth in the Federal Rules of Bankruptcy Procedure. See Fed. R. Bankr. P.
8022.
1
17-CV-308 JLS (MDD)
1
Reply in Support of, (ECF No. 20), the Motion.2 The Court vacated the hearing on the
2
motion and took it under submission pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 18.)
3
Having considered Appellants’ arguments and the law, the Court rules as follows.
4
BACKGROUND
5
This Court’s prior Order contains a complete and accurate recitation of the relevant
6
portions of the factual and procedural histories underlying Appellants’ Motion. (See “Prior
7
Order,” ECF No. 12, at 1–3.)3 This Order incorporates by reference the background as set
8
forth therein. As relevant to this Order, the Court affirmed the bankruptcy court’s decision
9
on March 22, 2018 and the present Motion for Rehearing followed.
10
LEGAL STANDARD
11
Federal Rule of Bankruptcy Procedure 8022 requires a motion for rehearing to “state
12
with particularity each point of law or fact that the movant believes the district court . . .
13
has overlooked or misapprehended and must argue in support of the motion.” Fed. R.
14
Bankr. P. 8022(a)(2). “Petitions for rehearing are designed to ensure that the appellate
15
court properly considered all relevant information in rendering its decision.” In re Hessco
16
Indus., Inc., 295 B.R. 372, 375 (B.A.P. 9th Cir. 2003) (citing Armster v. U.S. District Court,
17
C.D. Cal., 806 F.2d 1347, 1356 (9th Cir. 1986)). “A petition for rehearing is not a means
18
by which to reargue a party’s case.” Id. (citing Anderson v. Knox, 300 F.2d 296, 297 (9th
19
Cir. 1962)).
20
ANALYSIS
21
Appellants advance two points of law or fact that they argue this Court overlooked
22
or misapprehended. First, that Appellee had the original note and second, that there was
23
insufficient evidence to cast serious doubt on Appellee’s rights. (MTN 7.) The Court
24
25
26
27
28
Federal Rule of Bankruptcy Procedure 8022 provides that “[u]nless the district court or BAP requests,
no response to a motion for rehearing is permitted.” Fed. R. Bankr. P. 8022(a)(3). Appellee did not move
for leave to file a response, nor did the Court request a response. Therefore, the Court will not consider
Appellee’s opposition brief or Appellants’ reply brief. Moreover, the Court’s conclusion would not
change were the Court to consider either brief.
3
Pin citations refer to the CM/ECF page numbers electronically stamped at the top of each page.
2
2
17-CV-308 JLS (MDD)
1
discusses each argument in turn.
2
Appellants argue that Appellee did not prove it held the original note because
3
Appellee only provided a copy of the note. (Id.) Appellants advanced this argument for
4
the first time in their answering brief—not their opening brief. The Court noted that
5
Appellants did not include this issue in their original appeal and therefore waived the
6
argument. (Prior Order 12 (citing Fed. R. Bankr. P. 8014(a); and Eberle v. City of Anaheim,
7
901 F.2d 814, 818 (9th Cir. 1990)).) Alternatively, the Court also determined that the
8
record contained sufficient support for the bankruptcy court’s finding that Appellee
9
possessed the Note. (Id.)
10
Here, Appellants do not address the waiver issue and do not offer an argument
11
different from the one included in their answering brief. (Compare MTN 7 (“Appellee did
12
not prove it held the original note because it only provided a copy, and there was no original
13
note properly authenticated and submitted on the red [sic].”), with ECF No. 11-1 (“There
14
is no evidence in the record that [Appellee] had possession of the original note.”).)
15
Appellants advance exactly the same argument as before and it fails for the same reason as
16
before. The bankruptcy court cited In re Veal, 450 B.R. 897 (9th Cir. BAP 2011), and
17
determined that Appellee possessed the Note, endorsed in blank. (Prior Order 11.)
18
The bankruptcy court’s inquiry into standing to seek relief is limited in the context
19
of a relief from stay motion and it does not decide a creditor’s claim or security on the
20
merits. In re Veal, 450 B.R. at 914 (citing Johnson v. Righetti (In re Johnson), 756 F.2d
21
738, 740–41 (9th Cir. 1985)). The stay proceedings are limited in nature because
22
23
24
25
the ultimate resolution of the parties’ rights are often reserved for
proceedings under the organic law governing the parties’ specific
transaction or occurrence. Stay relief involving a mortgage, for
example, is often followed by proceedings in state court or
actions under nonjudicial foreclosure statutes to finally and
definitively establish the lender’s and the debtor’s rights.
26
27
Id. (footnote omitted). Thus, a party seeking a bankruptcy stay relief need only establish
28
that it has a colorable claim to enforce a right against the property of the estate. Id. at 914–
3
17-CV-308 JLS (MDD)
1
15 (citing United States v. Gould (In re Gould), 401 B.R. 415, 425 n.14 (9th Cir. BAP
2
2009); and Biggs v. Stovin (In re Luz Int’l, Ltd.), 219 B.R. 837, 842 (9th Cir. BAP 1998);
3
and Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26, 32 (1st Cir. 1994)).
4
In California, assignees of a mortgage or deed of trust generally have a right to
5
commence nonjudicial foreclosure proceedings without an explicit requirement they have
6
an interest in the note. See Cal. Civ. Code § 2924(a); In re Veal, 450 B.R. at 917 n.34; see
7
also Putkkuri v. Recontrust Co., No. 08cv1919, 2009 WL 32567 at *2 (S.D. Cal. Jan.5,
8
2009) (“Production of the original note is not required to proceed with a non-judicial
9
foreclosure.”). The bankruptcy court stated that the essential elements from Veal were that
10
the note be endorsed in blank and that the movant be in possession of the note. (Record on
11
Appeal, ECF No. 4, at 84.) The bankruptcy court found both to be present in the record.
12
(Id.) Therefore, the bankruptcy court did not err in grating Appellee’s motion.
13
Appellants also argue that this Court should have followed In re Hubbel, 427 B.R.
14
789. 790 (N.D. Cal. 2010), by keeping the stay in place. (MTN 7.) This is the same
15
argument advanced in Appellants’ opening brief. (See ECF No. 8-1, at 10 (“This question
16
has already been decided and answered in a bankruptcy court appeal in Hubbel. The
17
Hubbel court made clear that a mortgage lender is not entitled to have an automatic stay
18
lifted where the borrower has transmitted a notice of rescission under the Truth in Lending
19
Act.”).) Hubbel addressed a similar (but not identical) situation as presented to the
20
bankruptcy court, but Hubbel only held that the bankruptcy court decision in that case did
21
not abuse its discretion. Nor is Hubbel controlling on this Court or the bankruptcy court;
22
the bankruptcy court had the discretion to keep the stay in place or remove the stay based
23
on a colorable claim to enforce a right against the property. Hubbel’s reasoning and
24
conclusions are persuasive, but this Court determined there was sufficient factual
25
distinction between this case and Hubbel. (Prior Order 9–10.) Hubbel does not compel a
26
different outcome than what the bankruptcy court determined.
27
Appellants’ second argument is that there was sufficient evidence to cast doubt on
28
Appellee’s rights to bring the motion to lift the bankruptcy stay. (MTN 8.) As before,
4
17-CV-308 JLS (MDD)
1
Appellants argue that the Truth in Lending Act, 15 U.S.C. § 1635(a), allows a borrower to
2
rescind a security interest on real property and Paul Lucore submitted a declaration that he
3
mailed his rescission to the creditor at the time. (Id.) Appellants contend that Appellee
4
did not rebut Mr. Lucore’s rescission and the original creditor did not contest the rescission
5
in Superior Court. (Id.)
6
As the Veal court noted, “stay proceedings are limited in nature because the ultimate
7
resolution of the parties’ rights are often reserved for proceedings under the organic law
8
governing the parties’ specific transaction or occurrence.” 450 B.R. at 914. A party
9
seeking a bankruptcy stay relief need only establish that it has a colorable claim to enforce
10
a right against the property of the estate. Id. at 914–15 (citations omitted). The bankruptcy
11
court determined there was sufficient evidence to find Appellee had a colorable claim. The
12
bankruptcy court also considered Appellants’ TILA evidence and argument when making
13
its finding. (Prior Order 10.)
14
Appellants again raise Hubbel to address the sufficiency of evidence issue. They
15
state, the “Hubbel court made clear that a mortgage lender is not entitled to have an
16
automatic stay lifted where the borrower has transmitted a notice of rescission under the
17
Truth in Lending Act.” (MTN 9.) That statement of the law is not correct; a bankruptcy
18
court has the discretion to lift the “automatic stay under 11 U.S.C. § 362(d)(2) if it finds
19
that the debtor has no equity in the property sought to be foreclosed upon, and that the
20
property is not necessary to an effective reorganization.” In re Bialac, 694 F.2d 625, 626
21
(9th Cir. 1982). Hubbel only held that, based on the facts before that court, the bankruptcy
22
court’s decision to maintain a stay in that case were not an abuse of discretion. Here, the
23
bankruptcy court had different facts before it than Hubbel and determined that those facts
24
did not cast serious doubt on Appellee’s right to relief from the stay. (See Prior Order 10.)
25
In sum, Appellants raise generally the same arguments that they brought on appeal.
26
However, “[a] petition for rehearing is not a means by which to reargue a party’s case.”
27
Hessco, 295 B.R. at 375. Therefore, the Court finds no error in its prior order.
28
///
5
17-CV-308 JLS (MDD)
1
2
3
4
5
CONCLUSION
In light of the foregoing, the Court DENIES Appellants’ Motion for Rehearing,
(ECF No. 16).
IT IS SO ORDERED.
Dated: May 29, 2018
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6
17-CV-308 JLS (MDD)
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?