FILED
AUG 03 2017
SUSAN M. SPRAUL, CLERK
1 NOT FOR PUBLICATION U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
2
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
4
5 In re: ) BAP No. AZ-16-1133-BTaF
)
6 AIDA AZIZ, ) Bk. No. 15-12354-EPB
)
7 Debtor. )
)
8 )
AIDA AZIZ, )
9 )
Appellant, )
10 )
v. ) M E M O R A N D U M1
11 )
U.S. BANK, NA )
12 )
Appellee. )
13 ______________________________)
14 Submitted Without Oral Argument on February 23, 2017
15 Filed - August 3, 2017
16 Appeal from the United States Bankruptcy Court
for the District of Arizona
17
Honorable Eddward P. Ballinger, Jr., Bankruptcy Judge, Presiding
18
19 Appearances: Appellant Aida Aziz on brief pro se; Mark D.
Chernoff and Patricia A. Premeau of the Chernoff
20 Law Firm, PC on brief for appellee U.S. Bank, N.A.
21
Before: BRAND, TAYLOR and FARIS, Bankruptcy Judges.
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26
1
This disposition is not appropriate for publication.
27 Although it may be cited for whatever persuasive value it may have
(see Fed. R. App. P. 32.1), it has no precedential value. See 9th
28 Cir. BAP Rule 8024-1.
1 Chapter 132 debtor Aida Aziz appeals an order overruling her
2 objection to the claim of U.S. Bank, N.A. For the reasons set
3 forth below, we DISMISS the appeal as MOOT.
4 I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
5 A. Prepetition events
6 In 2008, Debtor's son, Mena Bishara, purchased a residence in
7 Scottsdale, Arizona ("Property") with an $830,231.00 loan provided
8 by U.S. Bank. Bishara executed a promissory note and deed of
9 trust in favor of U.S. Bank. The deed of trust was recorded in
10 Maricopa County.
11 U.S. Bank initiated a trustee's sale in 2010, which was
12 continued multiple times due to litigation between the parties
13 that commenced in state court in 2011. Bishara claimed, among
14 other things, that his signature on the recorded deed of trust was
15 forged and therefore void. However, Bishara admitted to receiving
16 the funds, purchasing the Property with them, and not making any
17 payments on the loan since May 2009. The action was later removed
18 to the federal district court. That court dismissed the suit with
19 prejudice based on Bishara's admissions. Bishara appealed to the
20 Ninth Circuit Court of Appeals, which affirmed the district
21 court's ruling in June 2015.
22 On September 17, 2015, Bishara transferred the Property by
23 quitclaim deed to Debtor. Together as plaintiffs, Bishara and
24 Debtor then filed a new lawsuit in state court raising the same
25 arguments that were rejected and deemed "futile" in the first
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27 2
Unless specified otherwise, all chapter, code and rule
references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
28 the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
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1 action. The second lawsuit was dismissed with prejudice in
2 February 2016; U.S. Bank was awarded attorney's fees.
3 B. Postpetition events
4 Meanwhile, Debtor filed her chapter 13 bankruptcy case on
5 September 28, 2015, just eleven days after Bishara quitclaimed the
6 Property to her.
7 1. U.S. Bank's initial proof of claim
8 U.S. Bank filed its initial $1,141,956.75 proof of claim in
9 Debtor's case in February 2016. By then, prepetition arrearages
10 on the Bishara loan were $314,155.48. The initial proof of claim
11 mistakenly stated that Debtor, as opposed to Bishara, executed the
12 note secured by the deed of trust for the Property. Debtor
13 objected to U.S. Bank's claim, arguing that the attached exhibits
14 contained the alleged forged note and deed of trust. In reply,
15 U.S. Bank contended that Debtor was precluded from claiming the
16 loan documents were forged; she had already litigated that issue
17 and lost. In addition, U.S. Bank argued that, because Debtor was
18 not a party to the deed of trust, she lacked standing to challenge
19 its validity.
20 2. U.S. Bank's amended proof of claim
21 Thereafter, U.S. Bank filed an amended proof of claim. The
22 amended claim clarified that Debtor was not a party to the note
23 and therefore she did not personally owe the note payments; Debtor
24 only held title to the Property based on the quitclaim deed.
25 Nonetheless, her ownership interest was subject to the debt and
26 U.S. Bank's lien rights. U.S. Bank argued that, if Debtor wanted
27 to keep the Property, she had to pay for it, making the bank an
28 implied creditor of her bankruptcy.
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1 Debtor objected to U.S. Bank's amended proof of claim,
2 raising essentially the same arguments she did in her objection to
3 the initial proof of claim. She requested that the court disallow
4 the amended claim due to U.S. Bank's failure to provide
5 appropriate documentation to support it.
6 In reply, U.S. Bank represented that it was not seeking any
7 monetary relief from Debtor; rather, it had filed the initial and
8 amended proofs of claim simply to enforce its lien rights against
9 the Property. However, argued U.S. Bank, Debtor would have to pay
10 for the Property if she intended to keep it.
11 The bankruptcy court held a hearing on April 13, 2016.3
12 Debtor has not provided a transcript so we are not certain what
13 took place. However, that same day, the bankruptcy court issued a
14 Minute Entry/Order for Matter Taken Under Advisement. In addition
15 to granting U.S. Bank relief from stay, the Under Advisement order
16 stated that Debtor's objection to U.S. Bank's amended proof of
17 claim "was moot in light of the bank's agreement that it seeks no
18 distribution from Debtor's estate (other than for fees and
19 sanctions [requested in U.S. Bank's motion for relief from
20 stay])." U.S. Bank's request for fees and sanctions was denied.
21 The Under Advisement order directed counsel for U.S. Bank "to file
22 and serve an appropriate form of order."
23 Before an order was submitted by U.S. Bank and entered by the
24 bankruptcy court, Debtor filed a motion for reconsideration, which
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27 3
This hearing also included U.S. Bank's pending motion for
relief from stay and Debtor's objection to that motion. That
28 issue is not part of this appeal.
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1 the bankruptcy court summarily denied.4
2 C. Post-appeal events
3 Although no order had yet been entered respecting Debtor's
4 claim objection or U.S. Bank's motion for relief from stay or
5 request for sanctions, Debtor appealed the bankruptcy court's
6 Under Advisement order on May 12, 2016. Thereafter, U.S. Bank
7 submitted an order, which the bankruptcy court signed and entered
8 on May 16, 2016. Curiously, the May 16 order did not dispose of
9 Debtor's claim objection; it referenced only U.S. Bank's relief
10 from stay motion and the court's denial of sanctions to U.S. Bank.
11 U.S. Bank then moved to dismiss Debtor's appeal, arguing that
12 it was moot because the foreclosure sale had now taken place. The
13 motions panel determined that the relief from stay issue was moot,
14 but not the claim objection or sanctions issues. Therefore, those
15 two issues remained live and appealable.5 U.S. Bank's request for
16 attorney's fees, costs and sanctions was denied for failure to
17 comply with the separate motion requirement under Rule 8020(a).
18 After briefing by the parties, it was discovered that the
19 Panel lacked a final order from the bankruptcy court on Debtor's
20 claim objection; the Under Advisement order entered on April 13
21 and the May 16 order did not serve as a final order on that issue.
22 Ross v. Thompson (In re Levine),
162 B.R. 858, 859 (9th Cir. BAP
23 1994) (court's "under advisement ruling" was not a final
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4
Debtor has not argued that the bankruptcy court abused its
26 discretion by denying her motion for reconsideration. In any
event, based on our decision here, we need not reach that issue.
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5
U.S. Bank has not cross-appealed the bankruptcy court's
28 ruling denying sanctions.
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1 appealable order because it did not evidence the judge's intention
2 that the order was the court's final act, as counsel was directed
3 in that order to lodge an order consistent with the under
4 advisement ruling).
5 After a clerk's order, the bankruptcy court entered an
6 amended order on March 2, 2017, finally disposing of Debtor's
7 objection to U.S. Bank's amended claim as moot. Thus, Debtor's
8 premature notice of appeal became timely. Rule 8002(a).
9 On May 20, 2017, the bankruptcy court entered an order
10 dismissing Debtor's chapter 13 bankruptcy case for failure to make
11 plan payments and barring her from refiling a new bankruptcy case
12 in the District of Arizona for 180 days.
13 II. JURISDICTION
14 The bankruptcy court had jurisdiction under
28 U.S.C. §§ 1334
15 and 157(b)(2)(B). We discuss our jurisdiction below.
16 III. ISSUES
17 1. Is the order on appeal moot now that Debtor's bankruptcy case
18 has been dismissed?
19 2. Is U.S. Bank entitled to sanctions or costs on appeal?
20 IV. STANDARD OF REVIEW
21 We review de novo our own jurisdiction, including the
22 question of mootness. Suter v. Goedert,
504 F.3d 982, 985 (9th
23 Cir. 2007).
24 V. DISCUSSION
25 A. The appeal is moot.
26 An appeal is constitutionally moot if it has become
27 impossible for the appellate court to fashion meaningful relief.
28 Ederel Sport, Inc. v. Gotcha Int'l L.P. (In re Gotcha Int'l
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1 L.P.),
311 B.R. 250, 253 (9th Cir. BAP 2004). If no effective
2 relief is possible, we must dismiss for lack of jurisdiction.
3 Ellis v. Yu (In re Ellis),
523 B.R. 673, 677 (9th Cir. BAP 2014).
4 Secured creditor U.S. Bank filed a proof of claim in Debtor's
5 case even though it had represented to the bankruptcy court and to
6 Debtor that it was not seeking a distribution under her chapter 13
7 plan; it was seeking only to enforce its lien rights and remedies
8 under state law. Based on U.S. Bank's representations, the
9 bankruptcy court was satisfied that it was not seeking any money
10 from Debtor. Accordingly, the court deemed Debtor's claim
11 objection moot.
12 We disagree that, at the time the bankruptcy court ruled on
13 Debtor's claim objection, it was moot. Despite U.S. Bank's
14 representations otherwise, when the court ruled on Debtor's
15 objection, U.S. Bank had a pending objection to Debtor's first
16 amended chapter 13 plan contending that the plan failed to account
17 for or cure the arrearages on the Bishara loan. Based on the
18 objection to confirmation, it appeared that Debtor intended to
19 make, and U.S. Bank intended to receive, a distribution from
20 Debtor's chapter 13 plan.
21 However, during the course of this appeal, the claim
22 objection order has become moot due to the dismissal of Debtor's
23 bankruptcy case. Although dismissal of a debtor's underlying
24 bankruptcy case does not necessarily moot an appeal from an order
25 overruling a claim objection because of the preclusive effect the
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1 order can have in other courts, we do not face that issue here.6
2 In this case, the bankruptcy court made no dispositive ruling on
3 the merits of U.S. Bank's claim that could be given preclusive
4 effect in future litigation between the parties; the court neither
5 allowed nor disallowed the claim. In addition, without an
6 existing estate or chapter 13 plan, it is clear that U.S. Bank
7 will not be seeking any plan distribution from Debtor respecting
8 the Property. Thus, reversal of the claim objection order would
9 be meaningless.
10 Accordingly, because we are unable to provide Debtor with any
11 meaningful relief, the appeal is moot and we must dismiss for lack
12 of jurisdiction.
13 B. U.S. Bank's sanctions request is DENIED; however costs are
appropriate.
14
15 In its brief, U.S. Bank requested sanctions under Rule 8020
16 or Rule 9011; it contends that Debtor's appeal is frivolous.
17 Because U.S. Bank has not complied with the separate motion
18 requirement in both Rule 8020 and Rule 9011, that request is
19 DENIED. See Rule 8020(a); Rule 9011(c)(1)(A) (motion for
20 sanctions must "be made separately from other motions or requests
21 and shall describe the specific conduct alleged to violate
22 Rule 9011(b)").
23
24 6
Compare Bevan v. Socal Commc’ns Sites, LLC (In re Bevan),
327 F.3d 994, 996–97 (9th Cir. 2003) (appeal from order overruling
25 claim objection not moot because of potential preclusive effect
that order might have in future litigation) (citing Siegel v. Fed.
26 Home Loan Mortg. Corp.,
143 F.3d 525, 529 (9th Cir. 1998)), with
Ctr. For Biological Diversity v. Lohn,
511 F.3d 960, 965 (9th Cir.
27 2007) (citing Pilate v. Burrell (In re Burrell),
415 F.3d 994,
998-99 (9th Cir. 2005)) (potential preclusive effect of order on
28 appeal did not prevent appeal from that order from becoming moot).
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1 However, U.S. Bank has also requested costs under Rule 8021,
2 which has no separate motion requirement. Because we are
3 dismissing this appeal, costs are appropriate under
4 Rule 8021(a)(1). Pursuant to Rule 8021(d), U.S. Bank has 14 days
5 after entry of judgment on appeal to file with the bankruptcy
6 court and serve its itemized and verified bill of costs for those
7 items allowable under Rule 8021(c).
8 VI. CONCLUSION
9 For the foregoing reasons, we DISMISS the appeal as MOOT.
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