Crevier, In re, No. 86-6481

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: Before HUG and WIGGINS; WIGGINS
• Citation: 820 F.2d 1553
• Parties: In re Joseph F. CREVIER; Diana B. Crevier, Debtors. Joseph F. CREVIER and Diana B. Crevier, Plaintiffs-Appellees, v WELFARE & PENSION FUND FOR LOCAL 701, Mid-Jersey Trucking Industry, Defendant- Appellant
• Docket Number: No. 86-6481
• Decision Date: 09 July 1987

Page 1553

820 F.2d 1553 In re Joseph F. CREVIER; Diana B. Crevier, Debtors.
Joseph F. CREVIER and Diana B. Crevier, Plaintiffs-Appellees,
v
WELFARE & PENSION FUND FOR LOCAL 701, Mid-Jersey Trucking
Industry, Defendant- Appellant. No. 86-6481 United States Court of Appeals, Ninth Circuit
Argued and Submitted June 5, 1987. Decided July 9, 1987.

Donald W. Sieveke, Santa Ana, Cal., for plaintiffs-appellees.

Joel P. Schiff, Los Angeles, Cal., for defendant-appellant.

Appeal from the United States District Court for the Central District of California.

Page 1554

Before HUG and WIGGINS, Circuit Judges, and CROCKER, ^* District judge.

WIGGINS, Circuit Judge:

After Joseph and Diana Crevier (Creviers) filed a petition in bankruptcy, they secured a loan by conveying a trust deed on estate property without the trustee's or bankruptcy court's consent. They subsequently brought this action in the bankruptcy court under the Truth in Lending Act (TILA), 15 U.S.C. Secs. 1601-1646, to rescind the trust deed and loan. The bankruptcy court held the Creviers lacked standing under TILA. The district court reversed. We reverse and reinstate the bankruptcy court judgment on the ground that a Chapter 7 debtor who conveys an unauthorized lien on estate property fails to state a TILA claim for rescission of the lien.

BACKGROUND

In 1980, the Creviers petitioned for Chapter 11 bankruptcy to prevent Mercury Savings and Loan Association (Mercury) from foreclosing on their residence (the Property). In 1982, the bankruptcy court converted the proceeding to Chapter 7. The Creviers later waived their right to have their debts discharged in the bankruptcy proceeding under 11 U.S.C. Sec. 727.

In 1983, the bankruptcy court lifted the automatic stay of judicial proceedings under 11 U.S.C. Sec. 362 to permit Mercury to foreclose on the Property. Without the permission of the bankruptcy trustee or the court, the Creviers obtained a one-million dollar loan from OMNI Funding Group (OMNI) in exchange for a note secured by a deed of trust on the Property in favor of OMNI. The Creviers used most of the loan proceeds to satisfy Mercury's and other creditors' liens on the Property. OMNI assigned the Creviers' note and deed of trust to the defendant, Welfare and Pension Fund for the Mid-Jersey Trucking Industry, Local 701 (Fund). Upon learning of the loan, the trustee sued OMNI to avoid the trust deed under 11 U.S.C. Sec. 549, alleging that the Property belonged to the estate and that the transfer of the trust deed was therefore an unauthorized post-petition transfer.

The trustee later applied to the bankruptcy court to authorize a compromise of the action, with OMNI paying the estate $50,000 in exchange for the trustee ratifying OMNI's trust deed. The Creviers objected to the proposed compromise. They claimed to have earlier rescinded OMNI's trust deed on the ground that OMNI violated TILA by, among other things, failing to provide a required three-day notice of their right to rescind. The bankruptcy court approved the compromise with the caveat that "this Order is without prejudice to the rights, if any, of [the Creviers], including the right of rescission, which [they] may possess pertaining to any alleged [TILA] violations in connection with the loan made by OMNI...."

The Creviers sued the Fund in the district court under TILA for rescission of the trust deed and note. The court referred the action to the bankruptcy court on the grounds that the Creviers failed to state a claim under TILA and lacked standing. The bankruptcy court dismissed the action with prejudice, finding (1) any TILA claim belonged to the estate, (2) the trustee settled the claim by ratifying the lien transfer, and (3) therefore the Creviers lacked standing under TILA. The Creviers appealed and the district court reversed on the grounds that the Creviers had standing and were the real parties in interest to assert the TILA claim. On appeal to this court, the Fund argues that the Creviers lack standing and fail to state a TILA claim.

While the appeal was pending, the trustee determined that the Fund's trust deed rendered the Property worthless to the estate and abandoned the Property to the Creviers.

Page 1555

ANALYSIS

I. APPEALABILITY

We must determine on our own motion whether we have appellate jurisdiction. Pizza of Hawaii, Inc. v. Shakey's, Inc. (In re Pizza of Hawaii, Inc.), 761 F.2d 1374, 1377 (9th Cir.1985). The district court has jurisdiction to review appeals from final bankruptcy court orders. 28 U.S.C. Sec. 158*a). We have jurisdiction of appeals from final orders of the district court reviewing final bankruptcy court orders. Id. Sec. 158(d). The bankruptcy court judgment was a dismissal of the Creviers' TILA claims with prejudice and consequently was final. See King v. Stanton (In re Stanton), 766 F.2d 1283, 1286 (9th Cir.1985).

Although the district court's remand of the TILA action to the bankruptcy court for trial was not final, a non-final order of a district court reviewing a final order of a bankruptcy court is appealable, Sambo's Restaurants, Inc. v. Wheeler (In re Sambo's Restaurants, Inc.), 754 F.2d 811, 814-15 (9th Cir.1985), unless the intermediate court remands for factual development, In re Stanton, 766 F.2d at 1287-88. Here, we are merely presented with the legal issues of standing and failure to state a claim under TILA. For the purpose of review, the facts in the complaint are admitted as true. No factual issues are pending that would impede our review of these issues

II. STANDING

Because we are in as good a position as the district court to review the bankruptcy court's decision, we review it independently. Ragsdale v. Haller, 780 F.2d 794, 795 (9th Cir.1986). Standing is a question of law which we review de novo. Bruce v. United...