In re Winters
| Decision Date | 15 July 2019 |
| Docket Number | Bankruptcy Number: 18-28535 |
| Citation | 604 B.R. 54 |
| Parties | IN RE: Matthew James WINTERS, Debtor. |
| Court | U.S. Bankruptcy Court — District of Utah |
Matthew James Winters, West Jordan, UT, pro se.
Mary M. Hunt tr, Dorsey & Whitney, Salt Lake City, UT, for Trustee.
In this case, a mortgage creditor postponed a scheduled nonjudicial foreclosure sale upon notice of the Debtor's bankruptcy filing. Shortly after the Debtor filed the Chapter 7 petition, the successor trustee, Orange Title, cancelled the foreclosure sale and filed a Motion for Relief From Stay. Subsequently, the Debtor sought an order for contempt and sanctions against Orange Title, PennyMac Loan Services ("PennyMac"), and the law firm Aldridge Pite ("AP"), asserting that the postponement of the foreclosure sale was an impermissible violation of the automatic stay. In response, AP, joined by Orange Title, filed a motion for summary judgment requesting that the Court deny the Debtor's motion for contempt sanctions. Dkt. No. 82. Hereinafter, all references to the docket will be in Case No. 18-28535 unless otherwise specified. PennyMac filed a Joinder to AP and Orange Title's Motion for Summary Judgment (the "MSJ"), and Memorandum in Support, requesting the same relief. Dkt. No. 89.
The matter before the Court is AP and Orange Title's Motion for Summary Judgment as to whether Orange Title's postponement of the nonjudicial foreclosure sale constituted a sanctionable violation of the automatic stay. The Court conducted a hearing on AP and Orange Title's MSJ on April 26, 2019. The Court has reviewed the briefing, including the exhibits attached to AP and Orange Title's Motion (Dkt. No. 82), and the Debtor's Memorandums in Opposition, Dkt. Nos. 90 & 94) and has conducted its own independent research of applicable law. For the reasons set forth in this memorandum decision, the Court will grant AP and Orange Title's Motion for Summary Judgment.
The Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 1334(a) – (b), 157(b). AP and Orange Title's Motion for Summary Judgment is a core proceeding under 28 U.S.C. § 157(b)(2)(H). Venue is appropriate in this District under 28 U.S.C. §§ 1408 – 1409, and notice of the hearing was properly given to all parties in interest.
1. Debtor is the owner of real property commonly known as 8084 S. Partridge Run Way, West Jordan, UT 84088. Dkt. No. 18.
2. PennyMac Loan Services, LLC, is the current beneficiary under a Deed of Trust encumbering the Subject Property. The Deed of Trust is dated December 22, 2015 and was recorded in the official records of Salt Lake County on December 23, 2015, as instrument number 12194160. Dkt. No. 82.
3. The Deed of Trust was assigned to PennyMac by an assignment recorded in the official records of Salt Lake County on June 16, 2017, as instrument number 12557034. Dkt. Nos. 38-1 and 38-2, respectively, Exs. A and B. Declaration of Orange Title in Support of Opposition to Motion for of Contempt of the Automatic Stay ("Decl. of Orange Title").
4. Orange Title was substituted as the Trustee under the Deed of Trust pursuant to an Appointment of Successor Trustee recorded in the official records of Salt Lake County on June 28, 2017, as instrument number 12565136. Id. , Ex. C. (Dkt. No. 38-3).
5. Orange Title, as substituted trustee under the Deed of Trust, issued a Notice of Trustee's Sale dated September 28, 2018, scheduling the nonjudicial foreclosure sale for November 14, 2018. Id. , Ex. D. (Dkt. No. 38-4).
6. Debtor filed the present Chapter 7 bankruptcy case on November 14, 2018.
7. Upon notification of the filing of the bankruptcy and the automatic stay, Orange Title had the auctioneer postpone the nonjudicial foreclosure sale date from November 14, 2018, to December 5, 2018. Dkt. No. 38. Decl. of Orange Title, ¶ 9.
8. As of November 21, 2018, PennyMac instructed Orange Title to cancel the foreclosure sale. Thus, the non-judicial foreclosure sale did not proceed on December 5, 2018. Id. at ¶ 10.
9. On January 3, 2019, PennyMac moved to terminate the automatic stay with regard to the real property on Partridge Run Way.
10. The Court conducted a hearing on PennyMac's Motion for Relief on January 31, 2019; at which time, the Court granted relief from stay. Dkt. No. 54.
11. The Debtor subsequently appealed the Court's decision to grant PennyMac's Motion for Relief to the 10th Circuit Bankruptcy Appellate Panel. Dkt. No. 56. Notice of Appeal. The present motion before the court is somewhat related to the matter on appeal as it arises out of essentially the same facts, however, here, the Debtor is seeking sanctions for alleged violations of the stay.
12. PennyMac voluntarily cancelled the sale on November 21, 2018 and has not sought to reschedule it.
Under Fed. R. Civ. P. 56(a), as incorporated into bankruptcy proceedings by Fed. R. Bankr. P. 7056, the Court is required to "grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Substantive law determines which facts are material and which are not. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Whether a dispute is "genuine" turns on whether "the evidence is such that a reasonable [fact finder] could return a verdict for the nonmoving party." Id. In sum, the Court's function at the summary judgment stage is to "determine whether there is a genuine issue for trial." Id. at 249, 106 S.Ct. 2505.
The moving party bears the burden to show that it is entitled to summary judgment, Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), including the burden to properly support its summary judgment motion as required by Rule 56(c). Murray v. City of Tahlequah, Okla., 312 F.3d 1196, 1200 (10th Cir. 2002). If the moving party has failed to meet its burden, "summary judgment must be denied," and the nonmoving party need not respond because "no defense to an insufficient showing is required." Reed v. Bennett, 312 F.3d 1190, 1195 (10th Cir. 2002) (citation omitted). Once the moving party meets its initial burden, "the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter." Concrete Works of Colorado, Inc. v. City & County of Denver, 36 F.3d 1513, 1518 (10th Cir. 1994). The nonmoving party may not rely solely on allegations in the pleadings but must instead designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct. 2548.
When considering a motion for summary judgment, the Court views the record in the light most favorable to the non-moving party, Schrock v. Wyeth, Inc., 727 F.3d 1273, 1279 (10th Cir. 2013), but the Court does not weigh the evidence or make credibility determinations. Nat'l Am. Ins. Co. v. Am. Re–Insurance Co., 358 F.3d 736, 742–43 (10th Cir. 2004) (citing Cone v. Longmont United Hosp. Ass'n, 14 F.3d 526, 533 (10th Cir. 1994) ).
The Debtor has asserted Utah Code § 57-1-26(2), which governs the postponements of nonjudicial foreclosure sales, explicitly mandates that the trustee immediately cancel any foreclosure sale noticed for a date after the automatic stay arose. Utah Code § 57-1-26(2), provides as follows:
The Debtor has referenced this section of the Utah Code, asserting that Orange Title's oral postponement of the nonjudicial foreclosure constitutes a violation of the automatic stay in his Chapter 7 bankruptcy case.
In relevant part, 11 U.S.C. § 362(a)(1) provides:
(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302 or 303 of this title ... operates as a stay applicable to all entities, of—(1) the commencement or continuation (emphasis added), including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the Debtor that was or could have been commenced before the commencement of the case.
Section 362(k)(1) further provides:
The 10th Circuit Bankruptcy Appellate Court (the "BAP") has determined that a debtor seeking damages under § 362(k) bears the burden of proving by a preponderance of the evidence three elements: (1) that a violation of the automatic stay occurred; (2) that the violation was willfully committed; and (3) that the debtor suffered damages as a result of the violation. In re Kline, 472 B.R. 98, 103 (10th Cir. BAP 2012). This Court is persuaded by the reasoning in Kline. Accordingly, for reasons outlined...
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