Theresa Marshall v. Deutsche Bank National Trust

United States Bankruptcy Appellate Panel
For the Eighth Circuit
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No. 18-6022
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In re: Theresa Marshall
Debtor
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Theresa Marshall
Debtor - Appellant
v.
Deutsche Bank National Trust Company
Creditor - Appellee
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Appeal from United States Bankruptcy Court
for the Eastern District of Arkansas - Little Rock
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Submitted: December 18, 2018
Filed: January 14, 2019
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Before SALADINO, Chief Judge, NAIL and DOW, Bankruptcy Judges.
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SALADINO, Chief Judge.
The Debtor, Theresa Marshall, appeals the bankruptcy court’s 1 order which
granted a motion for relief from the automatic bankruptcy stay filed by Deutsche
Bank National Trust Company, as Trustee for Vendee Mortgage Trust 1993-1,
United States Department of Veterans Affairs, Guaranteed REMIC Pass Through
Certificates (“Bank”). For the following reasons, we dismiss the appeal for lack of
jurisdiction.
FACTUAL BACKGROUND
On May 3, 2018, debtor filed a petition under Chapter 13 of the United States
Bankruptcy Code. On June 28, 2018, Bank filed its Amended Motion for Relief from
Stay asserting that it was the servicer of a promissory note and deed of trust
encumbering certain real property owned by the debtor and located in Little Rock,
Arkansas (the “Property”). The motion sought relief from the automatic stay for
cause, including debtor’s conduct in filing multiple bankruptcy cases on the eve of
foreclosure, filing frivolous pleadings and failing to act in good faith.
The motion was set for hearing on July 12, 2018. Debtor sought a continuance
of that hearing, but that request was denied by the bankruptcy court on July 3 2018.
The hearing took place as scheduled, debtor failed to appear and on July 16, 2018,
the bankruptcy court entered its order granting relief from stay. Debtor timely filed
a notice of appeal. The underlying bankruptcy case was subsequently dismissed on
September 4, 2018.
During the course of this appeal, debtor has filed numerous motions and
emergency motions with this Panel. The most recent emergency motions filed by
debtor represent that the Property was sold to Bank at a foreclosure sale on
September 6, 2018, and that debtor was later evicted from the Property on October
31, 2018. Bank’s supplemental brief concurs with those representations.
1
The Honorable Richard D. Taylor, United States Bankruptcy Judge for the
Eastern District of Arkansas.
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In her appellate brief, debtor appears to argue that the bankruptcy court abused
its discretion in denying her motion to continue the hearing set for July 12, 2018,
and that Bank did not have legal standing to foreclose. Bank’s initial appellee brief
responded to those arguments. However, we ordered the parties to submit
supplemental briefs on the issue of whether this appeal is moot due to the foreclosure
sale of the property and the dismissal of the bankruptcy case. Those briefs have now
been filed.
DISCUSSION
We previously addressed the effect of a foreclosure sale on an appeal of an
order granting relief from the automatic stay:
Federal courts are courts of limited jurisdiction and can
only hear actual cases or controversies as defined under
Article III of the Constitution. Hickman v. State of
Missouri, 144 F.3d 1141, 1143 (8th Cir. 1998). When a
case no longer presents an actual, ongoing case or
controversy, the case is moot and the federal court no
longer has jurisdiction to hear it. Id. “When circumstances
change while an appeal is pending that make it impossible
for the court to grant ‘any effectual relief whatsoever’ to a
prevailing party, the appeal must be dismissed as moot.”
Williams v. Citifinancial Mortgage Co. (In re Williams),
256 B.R. 885, 8[95] (B.A.P. 8th Cir. 2001).
….
Even if the stay had not terminated by operation of law,
we would not be able to undo the foreclosure sale because
“[o]nce foreclosed property is sold to a bona fide third-
party purchaser, a court generally lacks the power to craft
an adequate remedy for the debtor.” United States v.
Fitzgerald, 109 F.3d 1339, 1342 (8th Cir. 1997).
“Therefore, a debtor who fails to obtain a stay of the sale
has no remedy on appeal and the appeal is moot.” Id.
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Tigue v. Sosne (In re Tigue), 363 B.R. 67, 70, 71 (B.A.P. 8th Cir. 2007) (ruling
debtor’s appeal of a stay relief order in mortgagee’s favor was moot because the
house had been sold).
In addition, we have said:
As noted in Nieters v. Sevcik (In re Rodriquez), 258 F.3d
757 (8th Cir. 2001), a sale in a bankruptcy case is not
“subject to modification by an appellate court unless the
appellant receives a stay pending appeal.” Id. at 759.
“Generally, federal courts are not empowered to give
opinions on moot questions or declare rules of law which
cannot affect the matter in issue in the case before it.” Id.
at 758 (citing Church of Scientology v. United States, 506
U.S. 9 (1992)); see also Prasil v. Dietz, (In re Prasil), 215
B.R. 582, 584 (B.A.P. 8th Cir. 1998) (“an appeal may be
rendered moot when the occurrence of certain events
prevent an appellate court from granting effective relief”).
Therefore, since no effective relief can be accorded Mr.
Dudley, the issues raised on appeal are moot and we need
not reach the merits of the appeal on the motion for relief
from stay. See In re Security Life Ins. Co., 228 F.3d, 865,
870 (8th Cir. 2000).
Dudley v. Powers (In re Dudley), 273 B.R. 197, 199 (B.A.P. 8th Cir.) (holding
debtor’s appeal of stay relief moot because foreclosure sale had been held), aff'd, 49
F. App'x 91 (8th Cir. 2002). See also Fields v. Option One Mortg. Corp. (In re
Fields), 266 B.R. 415, 417–18 (B.A.P. 8th Cir. 2001), aff'd, 32 F. App'x 178 (8th
Cir. 2002) (holding debtor's appeal of stay relief in favor of the mortgage holder
moot because the debtor did not seek a stay pending appeal and the mortgage holder
took title to the property at its foreclosure sale).
Here, debtor never obtained a stay pending appeal and the parties agree that
the underlying property was sold to Bank at a foreclosure sale on September 6, 2018.
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Debtor was subsequently evicted from the property. In addition, the bankruptcy
case was dismissed on September 4, 2018. Since we cannot provide any effective
relief to debtor, the issues raised on appeal are moot.
CONCLUSION
For the foregoing reasons, this appeal is dismissed for lack of jurisdiction.
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