Enweze v. Bayview Loan Servicing, LLC

Filing 11

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 2/7/2017. (aos, Deputy Clerk)

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IN THE UNITED STATES DISTRICT COURT _
fOR THE J)JSTRICT Of MARYLAND
Southern Dh-isioll

INNOCENT

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OBI ENWEZE,

Appellant,

v.
District Case No.: G.III-16-21-19
BA YVIEW LOAN SERVICING,

LLC,
Bankruptcy

Case No: 15-26859

Appellee

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MEMORANDUM

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OPINION

This case is before the Court on appeal from the Order of the Bankruptcy
terminated
Appellant
("Bayview")

the Automatic

Stay halting f()rcc\osurc

Innocent Obi Enweze ("Enweze").

Appellee

Bayview

of the Property belonging
Loan Servicing,

has filed a Motion to Dismiss the Appcal as Moot. ECF No.9.

deemed unnecessary

in this case because the filcts and legal arguments

in the briefs and records. and the decisional
argument.

proceedings

Court. which
to

LLC

Oral argument

arc adequatcly

process would not be signilicantly

is

presented

aided by oral

Fed, R, Bankr. P. SOI9: .lee also Loc, R. IOS,G, Because the Court finds the appeal to

be moot. the appeal is dismissed,

The Motion to Dismiss the Appeal as Moot. ECF NO.9, is

granted.

I.

BACKGROUND
Enweze was the owner of the Property located at 14903 Ilabersham

MD (the "PropeI1y").

ECI' No. G at 5.1 Bayview

Id On July 29. 2015. a foreclosure
I Pin cites to doculllents
by that system.

tiled 011the Court's

Loan Servicing.

LLC was the mortgage

action was filed against the Property.
electronic

Circle. Silver Spring.
lender.

Id On or about

filing system (eM/EeF) refer to the page numbers

generated

Novcmber

23. 2015. thc Propcrty was sold at a forcclosurc

party . .JLG Investments.

Ill. Prior to the "ratitication ..2 ofsalc.

bankruptcy

pctition.' on Dcccmbcr

Automatic

Stay on the forcclosure

Bayvicw

tiling of bankruptcy.

becausc thc forcclosurc

divested thc mortgagor

title in thc purchascr

pctition initialcd an

sale hcld on N()\'cmbcr

rctcntion

sale:'

primarily

upon thc case OfOC\l'C/I Loa/l SClTici/lg.

3563658

(D. Md . .July 17.2014).

ECF No. 2-1 at J. In rcsponsc.

13 Plan:'

bascd upon his

NO.6 at 5-9. Enwczc rclicd

LLC \'. Kal/lc/li.

P.JM 14.877.2014

in which thc District Court aftirmcd

automatic

and vcstcd

auction had not yet bcen rati tied by thc Circuit

of "legal titlc". to thc Propel1y. Scc Ecr

ofthc

17. 2015. prior to thc

IEnweze] of all rights of rcdcmption

hc was still able to "savc thc Property through a Chaptcr

rcmaining

13

Scc ill.

I.JI.GI at thc tiJrcclosurc

Enwezc argucd that bccause "the liJrcclosurc
Court:'

Enweze tiled a Chaptcr

5. 2015. Id Filing thc bankruptcy
proccedings.

by a third-

tilcd a Motion tiJr Rclicf Irom thc Stay. arguing that Debtor Enwczc had "no

intcrcst in thc property

equitable

auction and purchascd

rctroactive

extension

tiJrcclosure

sale had takcn placc. but aticr thc salc had bcen scheduled.;

thc Bankruptcy

stay. whcrc the Debtor had tilcd Ii)!' bankruptcy

WI.
Court's
bcti)rc thc

ECF No. 2-5 at 1-4 .

Alter a foreclosure sale. the lender submits certain documents to the circuit court. including a report orsak .. {.,"('OIl
\', Bierman. 429 F. App'x 225. 229 (4th Cir. 2011) (citing Md. Rule 14-305(3». "The circuit court then issues a
notice or sale and. ifno exceptions to the sale nrc tiled within 30 days. the circuit court 'shall ratify the sale.... III.
(citing Md. Rule 14-305(e) ... /\ circuit COllrt"S ratification ofa foreclosure sale certifies that the court viewed the
sale as fair. and constitutes a linal resolution of the sale:' lei. (internal citations omiltcd).
; Chaptcr 13 bankruptcies under II U.S.c. ~ 1301 ('/ S('C!. "are designed to allow certain debtors with regular income
to keep their property and to pay their debts according to a court-approved plan:' Uplin}!.t'r to. Contntoml'eallh f!l
I'irginia. 561 B.R. 56. 57 (E.D. Va. 2016).
,
-I Upon a foreclosure sale in Maryland. equitable title vests in the purchaser. while the "bare" or "dry" legal title
remains in the mortgagor until the court ratifies the sale and the purchase money is paid. ,\'ee gel1era/~r. Empire
PropeI'lies. I.LC \'. I/al'«\'. 386 Md. 628. 642-47 (2005); In re De So//:a. 135 B.R. 793. 795~96 (Bankr. D, Md.
.!

1991 ).
I\ameni also involved"a

misstep by the Rankruplcy Clerk's ollice:' in that Debtor Kameni did not receive an
immediate hearing on her emergency motion. as happens typically, and the District COut1 reasoned that "it was not
her fault that the hearing was not scheduled until altcr the foreclosure sale took place." ECF No. 2-5: see ()C\reu
LoaJ1SelTicing, 1.1.(' \', A'ameni. PJM 14-877.2014 WL 3563658 (D. Md. July 17.2014). No such misstep occurred
here.

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The Bankruptcy

Court rejeeted this argument

at Enweze's

holding that Kalllclli did not apply in Enweze's

2,2016,

that Kalllclli

reasoned

involved

Doc. 76 at4." The Bankruptcy

a special set of factual circumstances,

that the debtor has only a "scintilla

of rights" aller the li)ree!osure

ratitieation.lt!.
Bankruptcy

Enweze appealed

sale, and potential

the decision

protections

Court therefore

Stay. which allowed the sale to proceed to

to this Court on June 16,2016,

Court erred by lifting the Stay post-foreclosure

Enweze requested
stay:'

Motion for Relief from Automatic

Court

it!. at 4, and further noted

and defenses are able to be pursued in state court. It!. at 5. The Bankruptcy
granted Bayview's

hearing held June

case, and rather, that the case of 111
rc

242 B.R. 593 (Bankr. O. Md. 1999) was precedent.

DCIIIIY,

bankruptcy

arguing that the

sale but pre-ratification.

that the Court "reverse the decision of the Bankruptcy

ECF NO.6.

Court. and reinstate the

!d at 7.
While the appeal was pending,

Order of Ratification

the Circuit Court for Montgomery

of Sale on August 26, 2016. ECF NO.9 at 2. Bayview subsequently

Motion to Dismiss the Appeal as Moot on October
"Appellant's

appeal argument

Response

in Opposition

reverses

[the Bankruptcy

Montgomery
reviewed

II.

County entered an

12,2016.

ECF No.9.

is moot because the sale has ratified:'

on November
Court'sl

Bayview argued that

!d at 3. Enweze filed his

3, 2016. ECF No. 10. Enweze contended

decision,

tiled a

that "if the Court

Mr. Enweze could tile a motion with the

County Circuit Court to vacate the ratilieation

order:'

Id at 2-3. The Court has

the record and relevant case law. and now finds the appeal to be moot.

ANALYSIS
The Court "may dismiss a bankruptcy

constitutionally
4877450,

or equitably

moot:'

appeal if it appears that the case has become either

Walkcr \'. Grigshy. No. CIV.A.A W-06-62,

2006 WI.

at *2 (Bankr. O. Md. Apr. II, 2006). This appeal is both. Under the doctrine of

(, Doc. 76 refers to the Transcript of Ilearing before the f1on. \Venuclin I. Lipp. Case No. 15-26859,

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constitutionalmootness.

"a case is moot when the issues presented are no longer 'Iive' or the

parties lack a legally cognizable interest in the outcome'" Los Angeles Oy. \'. DlI\'is. 440 U,S,
625. 631 (1979). "Federal courts lack jurisdiction to decide moot cases because their
constitutional authority extends only to actual cases and controversies'" Iron Arrml' lIonor
Sociell' \'. lIeckler. 464 U.S. 67. 70 (1983). Thus. federal courts must refrain Irom rendcring
judgmcnts that would amount to mcrc "advisory opinions'" See Williams

1'.

./ohllSon. 386 1',

Supp, 280, 283 (D. Md. 1974) (citing Aluskl'll/ ", Vui/ed S/a/es. 219 U.S. 346 (191\ )). To survivc
a challcnge of mootncss. a party must havc suffcrcd an actual injury that "can bc rcdrcsscd by a
1~lvorablcjudicial dccision'" Iron Arro\\' IfiJI/or Socie/y, 464 U.S. at 70. Accordingly. an appeal
must be dismissed as moot whcn "an cvent occurs while a case is pcnding appcal that makcs it
impossible for the court to grant 'any effectual relief what[ so Icver' to a prevailing party'"
Church '!fScien/ology

". Vni/edS/a/es.

506 U.S, 9.12 (1992). Additionally. under the doctrinc

of equitable mootncss. thc Court may also cxercisc its "discrction in matters of rcmedy and
judicial administration" to avoid results that are "impractical. imprudent. and thercforc
incquitable," Walker. 2006 WI. 4877450, at *3.
Here. Enweze's injury cannot be redressed by a favorable judicial decision. Enweze asks
this Court to "reinstate the stay," and his entire argument on appeal is that he should be permitted
to "save" the Property in a Chapter 13 bankruptcy plan because the sale had not yet been ratified.
ECF NO.6 at 5. Ilowever. not only is it undisputed that Enweze's Property has already been sold
at a foreclosure auction. but also that the sale has now been ratified by the Circuit Court. ECF
NO.9 at 2: ECF No. 10 at 2, Because Enweze failed to obtain a stay in the interim, the
bankruptcy appeal is moot. See In re Ii/arch. 988 F.2d 498. 499 (4th Cir. 1993) (citing In re
Sullil'lln Cen/l'lIll'la::a. I. Lid .. 914 F.2d 731. 733 (5th Cir. 1990) ("Ifthc debtor 1~lilsto obtain a

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stay. and if the property is sold in the interim. the district coul1 will ordinarily be unable to grant
any rclief. Accordingly. the appeal will bc mool."):

/11

re Lashley. 825 r.2d 362. 364 (11th Cir.

1987) ("When a debtor does not obtain a stay pending appeal of a bankruptcy court order selling
aside an automatic stay and allowing a creditor to I(Jreclose on property the subsequent
foreclosure renders moot any appeal")).
This case is also moot as an equitable mailer because a third-party. JLG Investments. has
purchased the Propel1y through the I(Jrec1osure sale. and that sale has been ratilied. llence.
reversing the Bankruptcy Court's Order could act to impair the rights of third parties. See

/11

re

lv/cLeall Square !lssocs" UI' .. 200 B.R. 128. 133 (E.D. Va. 1996) (holding that bankruptcy
appeal was also moot on equitable grounds where reversal of bankruptcy court's order would
seem to require a third party to vacate the premises): Mac I'allel Co. ,'. Virginia I'allel Corp.. 283
r.3d 622. 626 (4th Cir. 2002) (holding that reversing order of bankruptcy COUI1
would require
undoing of tinancial transactions involving third parties. and thus appeal was equitably moot).
Because it is impossible to award effective relief at this juncture. and allempting to do so could
lead to inequitable results. the case must be dismissed.7

Even assuming arguendo that the appeal is not moot. it would not be successful on the merits. In re Dem~\'.cited
by the Bankruptcy Court. makes clear that in Maryland. "the fforcclosurej sale is complete 'when the gavel falls:
and that the debtor has 110 right thereafter to cure a delault under Section 1322 fofthe Bankruptcy CodeJ." In re
Dellll1'. ~4~ B.R. 593. 594 (flal1kr. D. Md. 1999); see also Il1l'e Shirley. 30 !l.R. 195. 196 (Bankr. D. Md. 1983)
(noting that although legal title does not pass to the buyer until ratified by the equity court, "rtlhc sate divests the
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mortgagor of all rights of redemption remaining ill the mortgagor at the time of the sale,"), lienee. the Bankruptcy
Court here did not err by lifting the stay based upon the pre-petition foreclosure sale of Enweze's Property,

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III.

CONCLUSION
For the foregoing reasons. Bayview's Motion to Dismiss the Appeal as Moot. Eer NO.9.

is granted. A separate Order shall issue.

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Date: Februarv 7.2017
George J. Hazel
United States District Judge

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