Azam v. U.S. Bank Nat'Lass'N (In re Azam)

• Decision Date: 08 May 2015
• Docket Number: BAP No. CC-13-1538-DKiKu,BAP No. CC-13-1345-DKiKu,Adv. No. 13-01229-TA,BAP No. CC-14-1136-DKiKu,Adv. No. 13-01243-TA
• Court: Bankruptcy Appellate Panels. U.S. Bankruptcy Appellate Panel, Ninth Circuit
• Parties: In re: NAZIE AZAM, Debtor. NAZIE AZAM, Appellant, v. US BANK NATIONAL ASSOCIATION, as Trustee Successor in Interest to Bank of America as Successor by merger to Lasalle Bank NA as Trustee for WaMu Mortgage Pass-Through Certificate Series 2006-AR12 Trust; BANK OF AMERICA NATIONAL ASSOCIATION as Successor by merger to Lasalle Bank NA as Trustee for WaMu Mortgage Pass-Through Certificate Series 2006-AR12 Trust; BANK OF AMERICA, NATIONAL ASSOCIATION; RUZICKA & WALLACE LLP; RICHARD S. SONTAG, ESQ.; DESS RICHARDSON, ESQ., Appellees.

In re: NAZIE AZAM, Debtor.NAZIE AZAM, Appellant, v. US BANK NATIONAL ASSOCIATION, as Trustee Successor in Interest toBank of America as Successor by merger to Lasalle Bank NA asTrustee for WaMu Mortgage Pass-Through Certificate Series 2006-AR12 Trust;BANK OF AMERICA NATIONAL ASSOCIATION as Successor by merger to Lasalle BankNA as Trustee for WaMu Mortgage Pass-Through Certificate Series 2006-AR12Trust; BANK OF AMERICA, NATIONAL ASSOCIATION; RUZICKA & WALLACE LLP;RICHARD S. SONTAG, ESQ.; DESS RICHARDSON, ESQ., Appellees.

BAP No. CC-13-1345-DKiKu

BAP No. CC-13-1538-DKiKu

BAP No. CC-14-1136-DKiKu

Adv. No. 13-01229-TA

Adv. No. 13-01243-TA

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

Argued and Submitted: February 19, 2015

May 8, 2015

NOT FOR PUBLICATION

Bk. No. 13-14339-TA

MEMORANDUM¹

Argued and Submitted on February 19, 2015 at Los Angeles, California

Appeals from the United States Bankruptcy Court for the Central District of California

Honorable Theodor C. Albert, Bankruptcy Judge, Presiding

Appearances: Nina R. Ringgold argued for Appellant Nazie Azam; Kerry Ann Moynihan of Bryan Cave LLP argued for Appellee Bank of America National Association; David D. Piper of Keesal, Young & Logan argued for Appellees US Bank National Association, as Trustee Successor in Interest to Bank of America as Successor by merger to LaSalle Bank NA as Trustee for WaMu Mortgage Pass-Through Certificates Series 2006-AR12 Trust and Bank of America as Successor by merger to LaSalle Bank NA as Trustee for WaMu Mortgage Pass-Through Certificates Series 2006-AR12 Trust; Richard S. Sontag of Ruzicka & Wallace, LLP on brief for Appellees Ruzicka & Wallace LLP, Richard S. Sontag, Esq. and Dess Richardson, Esq. ("Attorney Defendants").

Before: DUNN, KIRSCHER, and KURTZ, Bankruptcy Judges.

These three related appeals constitute but a small sample of Appellant Nazie Azam's litigation efforts to retain real property long after she stopped making payments on the underlying debt. The following orders, currently before this Panel for review, stem from two adversary proceedings Ms. Azam filed in her most recent bankruptcy² case:

(1) the bankruptcy court's order denying motion for temporary restraining order ("TRO Denial Order") (BAP No. CC-13-1345);

(2) the bankruptcy court's order dismissing Ms. Azam's adversary proceeding ("Abstention/Dismissal Order")(BAP No. CC-14-1136); and(3) the bankruptcy court's order remanding a state court unlawful detainer action Ms. Azam had removed to the bankruptcy court ("Remand Order")(BAP No. CC-13-1358).

For the reasons set forth in this Memorandum, we DISMISS the appeal of the TRO Denial Order as moot and we AFFIRM the Abstention/Dismissal Order and the Remand Order.

I. FACTUAL BACKGROUND

Distilled to their essence, the common underlying facts relevant to each pending appeal are as follows.

A. Events Leading to Foreclosure

In August 2006, Ms. Azam borrowed $1.4 million ("Azam Loan") from Washington Mutual Bank, N.A. ("WaMu"). The Azam Loan was secured by a deed of trust ("DOT") against real property ("Property") in Laguna Niguel, California. The named Trustee in the DOT was California Reconveyance Company ("CRC").

After WaMu failed, on January 14, 2009, JP Morgan Chase Bank, N.A. ("Chase") purchased the Azam Loan from the Federal Deposit Insurance Corporation ("FDIC") and executed an assignment of the DOT to LaSalle Bank, N.A. ("LaSalle Bank").³

Also on January 14, 2009, CRC as the Trustee of the DOT recorded a Notice of Default which stated that the Azam Loan was more than $42,000 in arrears. CRC thereafter recorded, on April 17, 2009, a Notice of Sale which noticed a foreclosure sale ("Trustee's Sale") of the Property for May 6, 2009.

Ultimately, the Trustee's Sale ("Foreclosure") took place on December 8, 2009, and the Trustee's Deed Upon Sale ("Trustee's Deed") was recorded on December 21, 2009. The Trustee's Deed transferred title to the Property to Bank of America, N.A., as successor by merger to LaSalle Bank ("BANA Trustee"). In February 2011, Bank of America, N.A. ("BANA") sold its securitization trust administration business to US Bank National Association ("US Bank").

B. Events after Foreclosure

After the Foreclosure, Ms. Azam began a broad and vigorous campaign to challenge the Foreclosure and to prevent BANA, and later US Bank, from exercising its rights with respect to the Property.

Between April 2, 2010 and July 10, 2010, four bankruptcy cases were filed in the Bankruptcy Court for the Central District of California which listed the Property as the address of the putative debtor:

(1) April 10, 2010 - an involuntary chapter 7 petition was filed against Mike Parris (Case No. 1-10-bk-13850-GM); this case was dismissed April 15, 2010. Attorney Defendants' Brief, p. 4.

(2) May 14, 2010 - an involuntary chapter 7 petition was filed against Linda Parris (Case No. 1-10-bk-15763-GM); this case was dismissed July 9, 2010. On June 30, 2010, during the pendency of the case, the bankruptcy court entered, on BANA's motion, an in rem order granting relief from the automatic stay as to the Property. Id.

(3) May 28, 2010 - Ms. Azam filed a voluntary chapter 7 petition(Case No. 8-10-bk-17236-TA)("First Azam Bankruptcy), in which Ms. Azam received a chapter 7 discharge on September 15, 2010. On July 21, 2010, during the pendency of the First Azam Bankruptcy, the bankruptcy court entered an in rem order granting relief from the automatic stay as to the Property. This in rem order was entered on BANA Trustee's motion and over Ms. Azam's opposition.

(4) July 7, 2010 - Ms. Azam filed a voluntary chapter 13 petition (Case No. 8-10-19287-TA) ("Second Azam Bankruptcy"), while the First Azam Bankruptcy was still pending. The Second Azam Bankruptcy was dismissed on July 30, 2010. Attorney Defendants' Brief, pp. 4-5.

The litigation field widened to include the Orange County (California) Superior Court ("State Court") on July 2, 2010, when Ms. Azam filed an action against BANA in which she challenged the Foreclosure.⁴ That action was dismissed on October 20, 2011. On May 16, 2011, Ms. Azam filed a second action against BANA in State Court, again challenging the Foreclosure.⁵ The second action was dismissed on September 20, 2011.

C. Unlawful Detainer Action

BANA Trustee commenced an Unlawful Detainer Action on February 15, 2012. Ms. Azam, through counsel, filed an answer to the complaint on February 24, 2012. On March 15, 2012, the StateCourt granted BANA Trustee's motion for summary judgment, and entered judgment for restitution of the Property ("Restitution Judgment") in favor of BANA Trustee and against Ms. Azam and all unnamed occupants.

Ms. Azam immediately moved for reconsideration of the order granting the summary judgment motion; she also filed an ex parte application for a stay of lockout under the Restitution Judgment. The state court denied both requests for relief on April 5, 2012.

Sometime thereafter, the Orange County Sheriff's Department posted the property with a notice to vacate, which led to the filing by Ms. Azam of yet another chapter 13 bankruptcy case ("Third Azam Bankruptcy") (Case No. 8:12-bk-20322-TA) on August 30, 2012. The Third Azam Bankruptcy also was short-lived. On October 9, 2012, the bankruptcy court granted BANA Trustee's motion for relief from stay, effective also as to successors, transferees and assigns, over Ms. Azam's opposition. The bankruptcy court then dismissed the Third Azam Bankruptcy on November 28, 2012.

After BANA Trustee had obtained relief from stay in the Third Azam Bankruptcy, Ms. Azam filed an action in the United States District Court for the Central District of California ("District Court") against BANA, BANA Trustee, and others regarding the Foreclosure. The District Court denied Ms. Azam's motion for a restraining order through which she sought protection from her upcoming eviction from the Property. Ms. Azam appealed the order of the District Court to the Ninth Circuit Court of Appeals, which affirmed.

Meanwhile, back in the Unlawful Detainer Action, the State Court granted US Bank's motion to substitute US Bank as plaintiff in place of BANA Trustee. A new writ for possession of the Property thereafter was issued in the name of US Bank by the Orange County Superior Court Clerk's office. This sparked, inter alia, Ms. Azam's motion in the Unlawful Detainer Action to vacate the Restitution Judgment and for other relief. Attorney Defendants' Brief at p. 5. Ms. Azam's April 4, 2013, appeal from the State Court's denial of this requested relief was still pending at the time the briefs in the appeals before this Panel were filed. Id. at pp. 5-6.

On April 17, 2013, the State Court entered a stay of execution of the Restitution Judgment pending appeal in favor of Ms. Azam, conditioned upon Ms. Azam posting by May 8, 2013 a bond in the amount of $58,790.32. Id. at p. 6. Rather than post the required bond, Ms. Azam removed the Unlawful Detainer Action to the District Court, which on April 30, 2013, summarily remanded the proceeding back to the State Court on the basis that removal had been improper. Id. In the inevitable appeal, on July 4, 2014, the Ninth Circuit Court of Appeals issued an order affirming the District Court's remand. Id.

On May 14, 2013, the State Court dissolved the stay pending appeal. Id. at p. 7. Ms. Azam appealed both that action and the order denying her subsequent re-application to vacate the Restitution Judgment. Id.

Having apparently used all of the State Court avenues she could think of, Ms. Azam again turned to the bankruptcy court. OnMay 16, 2013, Ms. Azam filed a new chapter 13 case (Case No. 8:13-bk-14339-TA) ("Fourth Azam Bankruptcy"). An order granting US Bank's motion for relief from the automatic stay to allow eviction proceedings to continue in the State Court was entered July 22, 2013. Ms. Azam's appeal of that order is pending before the District Court.

D. The Orders on Appeal Before the Panel

All of the orders that are the subject of the appeals...