Selene Finance LP v. United States Bankruptcy Court for the Western District of Oklahoma

FILED
U.S. Bankruptcy Appellate Panel
of the Tenth Circuit
NOT FOR PUBLICATION 1
January 16, 2020
UNITED STATES BANKRUPTCY APPELLATE PANEL
Blaine F. Bates
OF THE TENTH CIRCUIT Clerk
_________________________________
IN RE WILLIAM JEFFREY BAP No. WO-19-020
BOYDSTUN,
Debtor.
__________________________________
Bankr. No. 19-10630
WILLIAM JEFFREY BOYDSTUN, Chapter 7
Appellant,
v. OPINION
SELENE FINANCE LP,
Appellee.
_________________________________
Appeal from the United States Bankruptcy Court
for the District of Oklahoma Western
_________________________________
Submitted on the briefs. 2
_________________________________
Before NUGENT, Chief Judge, MICHAEL, and MOSIER, Bankruptcy Judges.
_________________________________
NUGENT, Chief Judge.
1
This unpublished opinion may be cited for its persuasive value, but is not
precedential, except under the doctrines of law of the case, claim preclusion, and issue
preclusion. 10th Cir. BAP L.R. 8026-6.
2
After examining the briefs and appellate record, the Court has determined
unanimously that oral argument would not materially assist in the determination of this
appeal. The case is therefore submitted without oral argument.
_________________________________
William Jeffery Boydstun “forgot” to object to Selene Finance LP’s stay relief
motion and the Bankruptcy Court lifted the stay, allowing Selene to foreclose its
mortgage on his home under a prepetition final state court foreclosure judgment in which
the state court found that Selene was the holder of the note and entitled to enforce its
mortgage lien. Now he challenges Selene’s statutory standing to seek relief under 11
U.S.C. § 362(d). But he never advanced that argument against Selene’s stay relief
motion, because he didn’t object to it. The Bankruptcy Court denied his “motion to
vacate” that order, and he appeals. We conclude that the Bankruptcy Court’s denial of
Boydstun’s motion to vacate under Federal Rules of Civil Procedure Rule 59(e) 3 or
60(b) 4 was not an abuse of its discretion. Nor did the Bankruptcy Court abuse its
discretion by granting Selene relief from the automatic stay after Selene established a
colorable claim of a lien against Boydstun’s property. These orders should be
AFFIRMED.
Jurisdiction and Standard of Review
An order denying a motion under Rule 59(e) or Rule 60(b) is final for purposes of
appellate review if the underlying order from which relief is sought was also final. 5 An
3
All future references to “Rule” or “Rules” are to the Federal Rules of Civil
Procedure, unless otherwise indicated. Fed. R. Bankr. P. 9023 makes Fed. R. Civ. P.
59(e) applicable in bankruptcy cases. A motion under Rule 59(e) is more accurately
called a motion to alter or amend an order or judgment.
4
Fed. R. Bankr. P. 9024 makes Rule 60(b) applicable in bankruptcy cases.
5
Stubblefield v. Windsor Capital Grp.,74 F.3d 990, 993 (10th Cir. 1996).
2
order granting relief from the automatic stay is a final order for purposes of appellate
review. 6
Orders denying relief under Rule 59(e) or Rule 60(b) are reviewed for an abuse of
discretion. 7 A ruling on a motion for relief from the automatic stay is likewise reviewed
for abuse of discretion. 8 An abuse of discretion may occur when a ruling is premised on
an erroneous conclusion of law or on clearly erroneous fact findings. 9 A lower court
decision that is “arbitrary, capricious or whimsical, or results in a manifestly
unreasonable judgment,” may also constitute an abuse of discretion. 10
Facts
In 2008, William Jeffrey Boydstun (“Appellant”) made a $137,025 promissory
note to Taylor, Bean & Whitaker Mortgage Corp. (“Note”), secured by a mortgage on his
Oklahoma residence (“Mortgage”). 11 The Note was indorsed in blank by Taylor, Bean &
6
Rajala v. Gardner, 709 F.3d 1031, 1034 (10th Cir. 2013) (citing Franklin Sav.
Ass’n v. Office of Thrift Supervision, 31 F.3d 1020, 1022 n.3 (10th Cir. 1994)).
7
Hayes Family Tr. v. State Farm Fire & Cas. Co., 845 F.3d 997, 1004 (10th Cir.
2017) (a ruling on a Rule 59(e) motion is generally reviewed for abuse of discretion);
Zurich N. Am. v. Matrix Serv., Inc., 426 F.3d 1281, 1289 (10th Cir. 2005) (citing Servants
of Paraclete v. Does, 204 F.3d 1005, 1009 (10th Cir. 2000)) (reviewing denial of a Rule
60(b) motion for an abuse of discretion).
8
Franklin Sav. Ass’n, 31 F.3d at 1023.
9
In re JE Livestock, Inc., 375 B.R. 892, 894 (10th Cir. BAP 2007) (citing Kiowa
Indian Tribe v. Hoover, 150 F. 3d 1163, 1165 (10th Cir. 1998)). See also In re Busch, 294
B.R. 137, 140 (10th Cir. BAP 2003) (describing abuse of discretion standard as requiring
a definite and firm conviction that the bankruptcy court made a clear error of judgment or
exceeded the bounds of permissible choice in the circumstances).
10
Moothart v. Bell, 21 F.3d 1499, 1504-05 (10th Cir. 1994)
11
Appellee’s App. at 26.
3
Whitaker. 12 Through a series of assignments, the Mortgage was ultimately assigned to
Selene Finance LP in 2014 and the assignment was filed of record on July 1, 2015.13
When Appellant defaulted on the Note, Selene foreclosed in Oklahoma state court
and obtained summary judgment on its petition (the “Foreclosure Judgment”) on
February 8, 2019. 14 The Foreclosure Judgment states that Selene introduced the Note and
Mortgage sued upon and the state court found that:
Plaintiff [Selene] is the holder of the note and/or has the right to
enforce the note. The Court further finds that the Defendant, William J.
Boydstun, made, executed and delivered the Note and Mortgage sued upon
by Plaintiff; and that said Plaintiff is the holder thereof, and there is a balance
due and owing . . . that said amounts are secured by said Mortgage and
constitute a first, prior and superior lien upon the real estate and premises
hereinafter described, and that any and all right, title or interest which the
Defendants have . . . in said real estate and premises, is subsequent, junior
and inferior to the Mortgage and lien of the Plaintiff . . .
The Court further finds that default has occurred in the performance
of the terms and conditions of said Note and Mortgage as alleged in
Plaintiff’s Petition and that the Plaintiff is entitled to the foreclosure of the
Mortgage . . . . 15
The state court entered a money judgment in favor of Selene in the amount of
$130,868.97 plus interest, together with other advances, expenses, and attorney fees, and
ordered Selene’s Mortgage foreclosed and the property sold. 16 The Appellant did not
appeal the Foreclosure Judgment.
12
Appellee’s App. at 28. A note payable to an identified person may become
payable to bearer if it is indorsed in blank. A note payable to bearer may be negotiated by
transfer of possession of the note alone. See 12A Okla. Stat. Ann. § 3-205(b) (2019);
Klein v. Fed. Life Ins. Co., 37 P.2d 937, 938 (1934).
13
Appellee’s App. at 29, 37, 39.
14
Appellee’s App. at 7.
15
Foreclosure Judgment at 2-3 in Appellee’s App. at 8-9.
16
Appellee’s App. at 10-11.
4
Instead, on February 26, 2019, Appellant filed a chapter 7 bankruptcy petition,
staying the foreclosure proceedings. Selene filed a Motion for Relief from Automatic Stay,
Motion for Order of Abandonment and Notice of Opportunity for Hearing (the “Stay
Relief Motion”) on March 12, 2019 17 and attached the Note, 18 Mortgage, 19 and
assignment 20 to its motion. It alleged Appellant’s default and lack of adequate protection
as cause for stay relief. When Appellant did not object or otherwise respond to the Stay
Relief Motion, the Bankruptcy Court entered its Order Granting Motion for Relief from
Automatic Stay and Motion for Order of Abandonment (the “Stay Relief Order”) on
March 28, 2019, authorizing Selene to pursue in rem relief against Appellant’s residence
and ordering the home abandoned from the bankruptcy estate. 21
Nine days later, on April 5, 2019, the Appellant filed a Motion to Vacate Order
for Relief of Stay and Order of Abandonment and Notice of Opportunity for Hearing (the
“Motion to Vacate”). 22 He did not specify either Rule 59(e) or Rule 60(b) as a basis for
relief from the Stay Relief Order. In his motion, Appellant complained that Selene had
not filed a proof of claim, hadn’t demonstrated that it held either the Note or the
Mortgage, hadn’t notified him of a default, and wasn’t his creditor. In his reply to
Selene’s objection to the Motion to Vacate, he claimed excusable neglect, stating that he
“missed filing the objection . . . due to being under stress and duress in this process,” was
17
Appellee’s App. at 22.
18
Appellee’s App. at 26.
19
Appellee’s App. at 29.
20
Appellee’s App. at 39.
21
Appellee’s App. at 56.
22
Appellant’s App. at 13.
5
preoccupied with responding to other papers filed by Selene in the case, and simply
“forgot.” 23
The Bankruptcy Court heard the Motion to Vacate on May 8, 2019, and addressed
the legal standards governing both Rule 59(e) motions to alter or amend a judgment and
Rule 60(b)(1) motions for relief from judgment. 24 The Bankruptcy Court concluded that
the Motion to Vacate was not a proper means of challenging the uncontested Stay Relief
Order because Appellant failed to question Selene’s standing in the first instance by
objecting to its Stay Relief Motion. It also concluded that Appellant failed to demonstrate
excusable neglect in failing to object, and that entering the Stay Relief Order was not
legal error because Selene had a “colorable claim” to stay relief based on the documents
attached to its motion including the Note, Mortgage, assignments and Foreclosure
Judgment. The Bankruptcy Court entered the Order Denying Debtor’s Motion to Vacate
Order for Relief of Stay and Order of Abandonment (the “Order Denying Motion to
Vacate”) on May 9, 2019. 25 Appellant appeals the denial of his Motion to Vacate. 26
Analysis
We first address the nature of the appealed order. Appellant’s notice of appeal
states that he “notices this Court of [his] appeal of this Court’s decision of the hearing
23
Appellant’s App. at 24, 25. At the hearing on the Motion to Vacate, the Debtor
claimed excusable neglect on the basis that he was pro se and that he was ill and
hospitalized, although no medical records or supporting physician affidavit was supplied.
Appellant’s App. at 55, 64.
24
Appellant’s App. at 53.
25
Appellant’s App. at 47.
26
Appellant’s App. at 49.
6
held on May 8, 2019,” 27 but does not specify whether he is appealing the Order Denying
Motion to Vacate, the Stay Relief Order, or both. The Bankruptcy Court heard the
Motion to Vacate at the May 8 hearing and issued the Order Denying Motion to Vacate
the Stay Relief Order the next day. Because the notice of appeal does not refer to the
underlying Stay Relief Order, we could construe the notice of appeal as pertaining only to
the Order Denying Motion to Vacate. 28 Appellant’s jurisdictional statement that
jurisdiction is based on the appeal of the Order Denying his Motion to Vacate supports
that conclusion. 29 But given the liberal construction typically afforded pro se litigants in
pleadings, we should at least consider whether to construe the notice of appeal as
encompassing the underlying Stay Relief Order as well. 30
This matters because differing case law standards govern appeals from orders
denying different types of post-judgment motions. An appeal from the denial of a Rule
59(e) motion permits review of the underlying order—even when the underlying order
27
Appellant’s App. at 49.
28
See Lebahn v. Owens, 813 F.3d 1300, 1304 n.2 (10th Cir. 2016) (Court of
Appeals lacks jurisdiction to review orders not identified in the notice of appeal).
29
Appellant’s Brief at 5.
30
See Sines v. Wilner, 609 F.3d 1070, 1074 (10th Cir. 2010) (quoting Sanabria v.
United States, 437 U.S. 54, 67 n.21 (1978)) (noting that the appellate court should not be
hypertechnical in assessing the notice of appeal and that mistakes in designating the order
appealed from aren’t fatal if the intent to appeal a specific ruling can fairly be inferred
from the notice and the other party wasn’t misled or prejudiced); Sundance Energy Okla.,
LLC v. Dan D. Drilling Corp., 836 F.3d 1271, 1275 n. 2 (10th Cir. 2016) (designating
only the ruling on postjudgment motion in notice of appeal is “typically sufficient to
appeal the judgment itself.”); Bilder v. Mathers, 756 Fed. App’x. 802, 805 (10th Cir.
2018) (construing pro se party’s notice of appeal that mentioned only the order denying
reconsideration as an appeal of the district court’s underlying grant of summary judgment
where pro se party’s briefs complained about the merits of the summary judgment
decision.).
7
isn’t identified in the notice of appeal. 31 But, an appeal from the denial of a Rule 60(b)
motion for relief from judgment only raises for review the district court’s order of denial,
not the underlying judgment or order. 32 The Tenth Circuit has repeatedly recognized this
distinction. 33 Thus, the standards to be applied today turn on whether Appellant’s Motion
to Vacate was a motion to alter or amend or a motion for relief from judgment. 34
Long-standing Tenth Circuit authority holds that motions for “reconsideration,” 35
properly “motions to alter or amend judgment,” will generally be construed to be Rule
59(e) motions if they are filed within 14 days after the entry of the judgment. 36
Conversely, motions to “reconsider” filed after the 14-day deadline are generally
construed to be motions for relief from judgment under Rule 60(b). Rote application of
these standards would render Appellant’s Motion to Vacate a motion under Rule 59
31
See Artes-Roy v. City of Aspen, 31 F.3d 958, 961 n. 5 (10th Cir. 1994)
(permitting review of underlying summary judgment ruling where the notice of appeal
only referenced the denial of the Rule 59 motion if the intent to appeal underlying
judgment is clear, and the opposing party was not misled or prejudiced).
32
See Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991); United
States v. 31.63 Acres of Land, 840 F.2d 760, 761 (10th Cir. 1988) (citing Browder v. Dir.,
Dept. of Corrs., 434 U.S. 257, 263 n.7 (1978)); Lebahn v. Owens, 813 F.3d at 1305
(quoting Van Skiver, 952 F.2d at 1243).
33
See Commonwealth Prop. Advocates, LLC v. Mortg, Elec. Registration Sys.,
Inc., 680 F.3d 1194, 1200 (10th Cir. 2012) (quoting Hawkins v. Evans, 64 F.3d 543, 546
(10th Cir. 1995)) (recognizing difference in scope of appellate review of Rule 59(e) and
Rule 60(b) motions).
34
See Van Skiver, 952 F.2d at 1243 (noting that Rule 59(e) and Rule 60(b) are
distinct and serve different purposes).
35
The Rules do not recognize a postjudgment motion for reconsideration. Van
Skiver, 952 F.2d at 1243 (noting the dangers of filing a self-styled “motion to
reconsider”).
36
Id. See also In re Long, 255 B.R. 241 (10th Cir. BAP 2000). Currently, Fed. R.
Bankr. P. 9023 requires Rule 59(e) motions to be filed within 14 days.
8
motion and an appeal from an order denying that motion would imply an appeal of the
underlying Stay Relief Order as well.
But the Tenth Circuit has cautioned that its bright-line test isn’t always conclusive.
In Jennings v. Rivers 37, it noted that, because a Rule 60(b) motion may very well be filed
within the 14-day period, blind adherence to the 14-day test is inadvisable.
These sweeping pronouncements may have left room for confusion. A
district court’s analysis of a postjudgment motion in the first instance
requires a more nuanced approach than the statements would indicate. 38
District courts should evaluate postjudgment motions filed within [fourteen]
days of judgment based on the reasons expressed by the movant, not the
timing of the motion. Here, plaintiff’s motion plainly sought relief from
judgment based on attorney mistake: grounds for relief under Rule 60(b)(1).
Accordingly, it should have been analyzed under the standards applicable to
that rule. The district court’s use of the criteria established for Rule 59(e)
constitutes legal error. 39
Here, the Appellant called for the Bankruptcy Court to vacate the Stay Relief
Order. “Vacation” strikes us more as a cry for “relief from judgment” that Rule 60(b)
addresses than a prayer to alter or amend the order under Rule 59. 40 Rule 60(b) provides
that “[o]n motion and just terms, the court may relieve a party . . . from a final judgment,
order, or proceeding for the following reasons: [ ] mistake, inadvertence, surprise, or
37
394 F.3d 850 (10th Cir. 2005).
38
Id. at 855.
39
Id. at 855-56. See also Commonwealth. Prop. Advocates, LLC, 680 F.3d at
1200 (citing Jennings, 394 F.3d at 855) (stating that where the motion is timely under
both rules, “how we construe it depends upon the reasons expressed [in the motion] by
the movant.”).
40
Merriam-Webster Dictionary defines “vacate” as a transitive verb to “annul”
and lists as synonyms for vacate: nullify, cancel, avoid, and abate.
9
excusable neglect.” 41 In his Motion to Vacate, Appellant challenges Selene’s legal
standing to obtain stay relief—something he’d raised in other papers in the case and
something he could (and should) have raised in response to the Stay Relief Motion. He
essentially asserts that the Bankruptcy Court made a “mistake” under Rule 60(b)(1).
Then, in his reply to Selene’s objection to the Motion to Vacate, Appellant asserts what
sounds like excusable neglect. 42 He says he missed the objection deadline “due to being
under stress and duress in this process” and “forgot” to file an objection to the Stay Relief
Motion. 43 That fits easily within the ambit of Rule 60(b)(1)’s “excusable neglect” prong.
Whether his legal claims have merit is one circumstance to be considered as part of the
excusable neglect inquiry. 44 Because the Motion to Vacate implicates both notions of
judicial mistake and excusable neglect, we construe it as one for relief under Rule
60(b)(1). 45
41
Fed. R. Civ. P. 60(b).
42
Appellant’s App. at 25.
43
Id.44
Jennings, 394 F. 3d at 856-57 (stating that a relevant circumstance is “whether
the moving party’s underlying claim is meritorious”).
45
See Jennings, 394 F.3d at 854 (the “clear import” of plaintiff’s postjudgment
motion asking for an opportunity to present her damages case in the first instance due to
attorney mistake, not the reconsideration of matters encompassed in a decision on the
merits, was a Rule 60(b) motion).
10
Relief under Rule 60(b)(1)
Because Appellant’s Motion to Vacate relies on mistake and excusable neglect,
Rule 60(b)(1) applies. None of the other enumerated, specific grounds in Rule 60(b)(2)-
(6) do. 46
Courts only relieve parties from Rule 60(b)(1) mistakes in two instances: when a
party has made an excusable litigation mistake or a party’s attorney has acted without
authority; or when the judge has made a substantive mistake of law or fact in the final
judgment or order. 47 Appellant cannot claim that he committed an excusable litigation
mistake because that relief is generally only available for mistakes the party couldn’t
have avoided even if he filed an objection. 48 Nor do his arguments suggesting that the
Bankruptcy Court made a substantive mistake of law or fact in granting stay relief have
merit. He forfeited his challenge to Selene’s standing to obtain stay relief when he failed
to object to the Stay Relief Motion and did not present factual support for his lack of
46
Rule 60(b)(6)’s catch-all “any other reason” prong only comes into play in
exceptional circumstances, and then only when none of the other five clauses of the rule
apply. See Plotner v. AT&T Corp., 224 F.3d 1161 (10th Cir. 2000); Cashner v. Freedom
Stores, Inc., 98 F.3d 572, 579-80 (10th Cir. 1996) (recognizing an unanticipated
intervening change of circumstances may be sufficient for relief under Rule 60(b)(6), but
it does not relieve a party from failing to take legal steps to protect his own interests).
47
Utah ex rel. v. United States, 528 F.3d 712, 722-23 (10th Cir. 2008). See also
Cashner, 98 F.3d at 578 (Rule 60(b)(1) motion may be used to challenge a substantive
ruling by the court, i.e. a judicial mistake).
48
In re Crestview Funeral Home, Inc., No. NM-05-059, 2006 WL 2091200, at *4
(10th Cir. BAP July 26, 2006) (unpublished). Appellant is not entitled to a second bite at
the apple now simply because he failed to appreciate the legal ramifications of his failure
to object to the Stay Relief Motion below. See Yapp v. Excel Corp., 186 F.3d 1222, 1231
(10th Cir. 1999). Alternatively, Appellant could have filed a motion under 11 U.S.C.
§ 506 to determine Selene’s secured status.
11
standing claim. The Bankruptcy Court correctly concluded that Selene was not required
to file a proof of claim in a no-asset case, that Selene was not required to present an
original or certified copy of the mortgage loan documents, and that Selene’s documents
(the Note, Mortgage, and assignments), taken with the final state court Foreclosure
Judgment, demonstrated that Selene met the low threshold of proving it was a party in
interest with a colorable claim for stay relief as the noteholder and assignee of the
Mortgage. 49 Those findings were well within the Bankruptcy Court’s discretion and
supported by the record. It did not err in holding that Selene was a creditor with a
colorable claim and granting Selene stay relief.
That leaves Appellant’s claim of excusable neglect. In reviewing whether the
Bankruptcy Court abused its discretion on this question, we consider the Jennings
factors:
the danger of prejudice to the [opposing party], the length of the delay and
its potential impact on judicial proceedings, the reason for the delay,
49
See In re Castro, 503 Fed. App’x. 612 (10th Cir. 2012) (unpublished) (creditor
met low threshold of establishing a colorable claim of lien on property of the estate by
showing it was assignee of mortgage and promissory note and party in interest with
standing under § 362(d) to seek relief). See also In re Old Cold, LLC, 602 B.R. 798, 825-
26 (1st Cir. BAP 2019) (establishing colorable claim of a lien on estate property is a low
threshold in context of stay relief motion; a colorable claim is one where the creditor has
shown a reasonable likelihood that it has a meritorious claim); Grella v. Salem Five Cent
Savings Bank, 42 F.3d 26, 33-34 (1st Cir. 1994) (describing a hearing on a motion for
relief from stay as a summary proceeding of limited effect—whether the creditor has a
colorable claim to property of the estate and is granted permission to litigate its
substantive claims elsewhere); In re Edwards, 454 B.R. 100, 104-05 (9th Cir. BAP 2011)
(holder of duly-recorded trustee’s deed was presumptive current record owner of property
with colorable claim to enforce rights against property, as required to have standing to
seek stay relief).
12
including whether it was within the reasonable control of the movant, and
whether the movant acted in good faith. 50
Courts’ considerations also include who is at fault in the delay (perhaps the most
important single factor) and whether the movant’s underlying claim is meritorious. 51
Appellant’s belated challenge to Selene’s Stay Relief Motion prejudices Selene by further
delaying the state court foreclosure action while Selene incurs expenses to protect its
collateral. Appellant is at “fault” for the delay. He could have sought an extension of time
to respond to Selene’s Stay Relief Motion but didn’t. Instead, he moved to vacate the
Stay Relief Order and filed this appeal. His challenge to Selene’s standing to obtain stay
relief lacks merit. As discussed above, the Bankruptcy Court correctly concluded that
Selene has established a colorable claim of a lien against Appellant’s property.
Considering the Jennings factors, we conclude that Appellant has not established
excusable neglect for his failure to respond to the Stay Relief Motion and the Bankruptcy
Court did not abuse its discretion in denying Appellant’s Motion to Vacate.
Relief under Rule 59(e)
Even if we construed Appellant’s Motion to Vacate as a Rule 59(e) motion, it does
not satisfy the applicable legal standards for altering or amending the Stay Relief Order.
Rule 59(e) motions go to the substantive correctness of the order. 52 Appellant had to
50
Jennings, 394 F.3d at 856 (quoting Pioneer Inv. Servs. Co. v. Brunswick Assoc.
Ltd. P’ship, 507 U.S. 380, 395 (1993)) (analysis of excusable neglect standard of Fed. R.
Bankr. P. 9006(b)(1)).
51
Jennings, 394 F.3d at 856-57 (citing City of Chanute v. Williams Natural Gas
Co., 31 F.3d 1041,1046 (10th Cir. 1994) and Cessna Fin. Corp. v. Bielenberg Masonry
Contracting, Inc., 715 F.2d 1442, 1444-45 (10th Cir. 1983)).
52
Yost v. Stout, 607 F.3d 1239, 1243 (10th Cir. 2010).
13
show one of the three grounds for relief: an intervening change in controlling law; the
existence of new evidence previously unavailable; or that action was necessary to correct
clear error or prevent manifest injustice. 53 There is no assertion of a law change or new
evidence. A Rule 59(e) motion cannot be used to raise arguments that could have been
raised prior to the entry of the order or judgment. 54 Appellant’s failure to question
Selene’s standing in defense of its Stay Relief Motion would have doomed his effort
under Rule 59(e).
If Appellant’s Motion to Vacate properly raised Selene’s alleged lack of standing
as a challenge to the substantive correctness of the Stay Relief Order under Rule 59(e),
we would be required to consider the merits of that Order. Specifically, we would
examine the Bankruptcy Court’s conclusion in the underlying Order that Selene had a
colorable claim to a lien on Appellant’s property as assignee of the Mortgage that secured
its Note. Section 362(d) provides that a “party in interest” may seek stay relief, and
creditors are parties in interest. 55 A “creditor” is an entity holding a claim against the
debtor and a “claim” is defined as, among other things, a right to payment. 56 As we noted
previously, Selene established a colorable claim to a right to payment by referencing the
53
Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). See
also Lamb v. Rizzo, 391 F.3d 1133, 1140 (10th Cir. 2004) (“A Rule 59(e) motion . . .
should be granted only to correct manifest errors of law or to present newly discovered
evidence.” (quoting Phelps v. Hamilton, 122 F.3d 1309, 1324 (10th Cir. 1997))).
54
Servants of the Paraclete, 204 F.3d at 1012. See also In re Expert S. Tulsa, LLC,
522 B.R. 634, 650 (10th Cir. BAP 2014), aff’d 619 Fed. App’x. 779 (10th Cir. Oct. 2015)
(unpublished).
55
See In re Miller, 666 F.3d 1255, 1261 (10th Cir. 2012) (concluding that a
creditor of the bankruptcy estate is a party in interest).
56
11 U.S.C. § 101(10)(A) and § 101(5)(A).
14
final state court Foreclosure Judgment and attaching to its Stay Relief Motion the Note,
Mortgage and assignment documents that evidenced a facially valid lien against the
property and Selene as the holder of the Note. The Bankruptcy Court properly concluded
that Selene had standing to seek stay relief and established a colorable claim for relief
from the automatic stay.
Conclusion
The Bankruptcy Court did not abuse its discretion in denying Appellant’s Motion
to Vacate under either Rule 60(b)(1) or Rule 59(e). Nor did it err in granting Selene relief
from the automatic stay. Those orders are AFFIRMED.
15