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 .I .- OBI ENWEZE, Appellant, v. District Case No.: G.III-16-21-19 BA YVIEW LOAN SERVICING, LLC, Bankruptcy Case No: 15-26859 Appellee * MEMORANDUM * 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. 5 2 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, 3 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 4 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 7 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, 5 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. - Date: Februarv 7.2017 George J. Hazel United States District Judge 6

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