In re: Fanda Hezam Fadel, 9th Cir. BAP (2013)

7/25/2019 In re: Fanda Hezam Fadel, 9th Cir. BAP (2013)

1/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

I n r e: ) BAP No. CC- 12- 1061- Ki DMk)

FANDA HEZAM FADEL, ) Bk. No. RS 11- 33453- MJ)

Debt or . ))

))

FANDA HEZAM FADEL, ))

Appel l ant , ))

v. ) O P I N I O N)DCB UNI TED LLC, TRUSTEE OF )THE EI SENHOWER UDT 7- 22- 11, )

))

Appel l ee. )______________________________)

Ar gued and Submi t t ed on J ul y 19, 2012,at Pasadena, Cal i f or ni a

Fi l ed - May 31, 2013

Appeal f r om t he Uni t ed St ates Bankr upt cy Cour tf or t he Cent r al Di st r i ct of Cal i f or ni a

Honor abl e Mer edi t h A. J ur y, Bankrupt cy J udge, Pr esi di ng

Appear ances: J enny L. Dol i ng, Esq. of t he Law Of f i ces of J ennyL. Dol i ng ar gued f or appel l ant , Fanda Hezam Fadel ;J eannet t e Mar sal a, Esq. of Pr ober & Raphael ALC

ar gued f or appel l ee, DCB Uni t ed LLC, Tr ust ee of t heEi senhower UDT 7- 22- 11.

Bef or e: KI RSCHER, DUNN, and MARKELL, Bankr upt cy J udges.

FILEDMAY 31 2013

SUSAN M SPRAUL, CLU.S. BKCY. APP. PANOF THE NINTH CIRCU


2/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1 Unl ess speci f i ed ot her wi se, al l chapt er , code, and r ul er ef er ences ar e t o t he Bankr upt cy Code, 11 U. S. C. 101- 1532, andt he Feder al Rul es of Bankr upt cy Procedur e, Rul es 1001- 9037. TheFeder al Rul es of Ci vi l Pr ocedur e ar e r ef er r ed t o as Ci vi l Rul es.

- 2-

KI RSCHER, Bankr upt cy J udge:

Appel l ee, DCB Uni t ed, LLC, Trust ee of t he Ei senhower UDT 7-

22- 11 ( DCB) , pur chased a si ngl e f ami l y resi dence l ocat ed i n La

Qui nt a, Cal i f or ni a ( t he Pr oper t y) at a f or ecl osur e sal e on J ul y

22, 2011, t wo days af t er appel l ant , debt or Fanda Hezam Fadel

( Mr s. Fadel ) , f i l ed her chapt er 131 bankrupt cy pet i t i on. At t he

t i me of t he f or ecl osur e sal e, Mr s. Fadel r esi ded i n t he Pr oper t y

wi t h her husband, Mohamed Fadel ( Mr . Fadel ) , and t hei r seven

chi l dr en. Despi t e Mr s. Fadel s cl ai ms t o t he cont r ar y, t he

bankrupt cy cour t ul t i mat el y det er mi ned t hat she di d not hol d anowner shi p i nt er est i n t he Pr oper t y, t he f or ecl osur e sal e was not

voi d, and t hus DCB was ent i t l ed t o r el i ef f r om t he aut omat i c st ay

t o pr oceed wi t h an unl awf ul det ai ner act i on agai nst Mr s. Fadel i n

st at e cour t .

Because Mr s. Fadel conveyed any i nt erest she had i n t he

Proper t y i n 2001 to Mr . Fadel , and because she di d not

subsequent l y acqui r e an i nt er est i n t he Pr oper t y vi s- - vi z

Cal i f orni a s communi t y pr oper t y l aw, we AFFI RM.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Mr s. Fadel has been marr i ed t o Mr . Fadel si nce 1988.

Throughout t hei r mar r i age, Mr . Fadel has been empl oyed out si de of

t he home whi l e Mr s. Fadel , wi t h t he except i on of i nt er mi t t ent

empl oyment , has st ayed at home t o car e f or t hei r seven chi l dr en.

Mr . Fadel pur chased t he Propert y i n 2001. The gr ant deed,


3/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

282 I t i s not cl ear i n t he r ecor d how B of A became t he f i r st

l i enhol der on t he Pr oper t y, but t hi s f act i s not i n di sput e.

- 3-

r ecorded on March 7, 2001, grant ed t he Proper t y t o Mohamed Fadel ,

a marr i ed man, as hi s sol e and separat e pr opert y. On t hat same

dat e, an i nt er spousal t r ansf er gr ant deed ( t he I nt er spousal

Deed) was r ecor ded f r om Mr s Fadel conveyi ng al l of her i nt er est s,

whether communi t y or ot herwi se, t o Mr . Fadel , who cont i nued t o

hol d t he Pr oper t y as hi s sol e and separ at e pr oper t y.

I n August 2003, Mr . Fadel obt ai ned a l oan f or $275, 000 f r om

Paci f i c Republ i c Mor t gage Cor por at i on. I n exchange f or t he l oan,

Mr . Fadel execut ed a deed of t r ust agai nst t he Pr oper t y i n f avor

of t he l ender . The deed of t r ust l i st s t he bor r ower as Mohamed

Fadel , a mar r i ed man, as hi s sol e and separ at e pr oper t y. Mr . Fadel event ual l y def aul t ed on t he l oan. To f end of f

f or ecl osur e by Bank of Amer i ca ( B of A) , 2 on J anuar y 31, 2011,

Mr . Fadel f i l ed hi s own chapt er 7 bankrupt cy case. Al t hough hi s

Schedul e A i dent i f i ed t he Pr oper t y, i t di d not i dent i f y how t i t l e

t o t he Pr oper t y was hel d ( i . e. , husband, wi f e, j oi nt , or

communi t y) . Mr . Fadel s Schedul e D i dent i f i ed B of A as t he f i r st

l i enhol der on t he Pr oper t y. Al t hough many codebt or s wer e l i st ed

i n Mr . Fadel s Schedul e H, Mr s. Fadel was not l i st ed as a codebt or

on t he deed of t r ust note, nor was t he debt t o B of A even

ment i oned. Mr . Fadel r ecei ved hi s di scharge on May 26, 2011, and

hi s case was cl osed on J une 17, 2011.

St i l l f aced wi t h a pendi ng f or ecl osur e sal e of t he Pr oper t y

on J ul y 22, 2011, Mr s. Fadel f i l ed her own chapt er 13 bankrupt cy

case on J ul y 20, 2011. Mr s. Fadel s Schedul e A i dent i f i ed t he

Pr oper t y, and i t t oo di d not i dent i f y how t i t l e t o t he Pr oper t y


4/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4-

was hel d. I n Mr s. Fadel s Schedul e H, t he box none was checked,

i ndi cat i ng t hat no codebt or s wer e l i abl e on any of her debt s.

Mr s. Fadel s counsel not i f i ed B of A of t he bankrupt cy when she

f i l ed her pet i t i on on J ul y 20, 2011. B of A pr oceeded wi t h t he

f or ecl osur e sal e of t he Pr oper t y on J ul y 22, 2011, as pl anned.

DCB was t he successf ul bi dder . DCB r ecorded i t s t r ust ee s deed on

August 8, 2011.

On August 3, 2011, Mr s. Fadel f i l ed a chapt er 13 pl an, whi ch

pur por t ed t o cur e al l pr epet i t i on ar r ear ages owed on t he Pr oper t y

and to make mont hl y deed of t r ust note payment s t o B of A and the

second l i enhol der . DCB opposed conf i r mat i on of t he pl an becauseMr s. Fadel had no debt t o reor gani ze wi t h DCB, and because she had

no i ncome t o f und a pl an. The managi ng member of DCB st at ed i n

hi s decl arat i on i n support t hat DCB was unaware of any bankr upt cy

at t he t i me i t pur chased t he Pr oper t y. The bankrupt cy cour t

over r ul ed DCB s obj ect i on and conf i r med t he pl an.

On Sept ember 15, 2011, DCB moved f or r el i ef f r om st ay under

362( d) ( 1) t o pr oceed wi t h an unl awf ul det ai ner act i on agai nst

Mr s. Fadel i n st at e cour t ( St ay Rel i ef Mot i on) . DCB asser t ed

t hat i t had acqui r ed t i t l e t o t he Pr oper t y at t he f or ecl osur e sal e

on J ul y 22, 2011. I n suppor t , DCB at t ached copi es of t he gr ant

deed and t he I nt erspousal Deed. Thr ough t hese deeds, DCB asser t ed

t hat Mr s. Fadel had r el i nqui shed her communi t y i nt er est i n t he

Pr oper t y.

Mr s. Fadel opposed t he St ay Rel i ef Mot i on, cont endi ng t hat :

( 1) because t he sal e occur r ed post pet i t i on and vi ol at ed t he

aut omat i c st ay, i t was voi d and DCB l acked st andi ng t o seek

r el i ef ; and ( 2) because B of A had accept ed her post pet i t i on deed


5/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

283 The par t i es i ndi cat e i n t he r ecor d t hat B of A

subsequent l y ret ur ned al l pl an payment s submi t t ed by Mr s. Fadel .

- 5-

of t r ust note payment s, t her eby subst ant i al l y consummat i ng t he

pl an, DCB was bound by t he pr ovi si ons of t he conf i r med pl an. 3

The f i r st hear i ng on DCB s St ay Rel i ef Mot i on t ook pl ace on

November 2, 2011. The bankr upt cy cour t not ed t hat at t he t i me of

pl an conf i r mat i on, i t di d not r ecogni ze t he i ssue of whet her Mr s.

Fadel hel d an i nt er est i n t he Pr oper t y, but , r at her , assumed t hat

she di d, and t hat DCB s pur chase of t he Pr oper t y vi ol at ed t he

st ay. However , wi t h Mr s. Fadel s i nt er est i n t he Pr oper t y i n

quest i on, f or whi ch t he bankr upt cy f i l i ng may or may not have

i mposed an aut omat i c st ay, t he cour t was not cer t ai n whether t he

sal e was voi d. The bankrupt cy cour t not ed t hat t he I nt er spousalDeed i ndi cated t hat t he Proper t y, whi ch woul d other wi se be

communi t y pr oper t y, di d not bel ong t o Mr s. Fadel .

Af t er f ur t her di scussi on, t he bankrupt cy cour t or der ed

addi t i onal br i ef i ng on t he i ssue of whet her Mr s. Fadel hel d an

i nt er est i n t he Pr oper t y at t he t i me she f i l ed her chapt er 13

pet i t i on, whi ch woul d det er mi ne whet her an aut omat i c st ay exi st ed

or not wi t h r espect t o t he Pr oper t y. I n her suppl ement al br i ef ,

Mr s. Fadel r ai sed a mul t i t ude of ar gument s t o est abl i sh an

i nt er est i n t he Pr oper t y, despi t e her name not appear i ng on t he

t i t l e. Mr s. Fadel f i r st ar gued t hat she hel d a possessor y

i nt er est i n t he Pr oper t y at t he t i me of her bankrupt cy f i l i ng,

whi ch const i t ut ed pr oper t y of t he est at e pr ot ect ed by t he

aut omat i c st ay. Next , Mr s. Fadel , who i s of Ar ab descent , ar gued

t hat even t hough her cul t ur al bel i ef i s t hat r eal pr oper t y shoul d

be t i t l ed i n t he name of t he husband, Cal i f or ni a s communi t y


6/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 6-

pr oper t y l aw nonet hel ess gave her an i nt er est i n t he Pr oper t y

pr ot ect ed by t he aut omat i c st ay. Speci f i cal l y, Mr s. Fadel ar gued

t hat she had acqui r ed a pr o t ant o communi t y pr oper t y i nt er est i n

t he Proper t y si nce communi t y f unds were used t o reduce t he debt on

t he Pr oper t y and f und i mpr ovement s t o i t . Fi nal l y, Mr s. Fadel

ar gued t hat , based on t he Fi f t h Ci r cui t case of Br own v. Chesnut

( I n r e Chesnut ) , 422 F. 3d 298 ( 5t h Ci r . 2005) [ her ei naf t er

Chesnut ] , she hel d at l east an ar guabl e i nt er est i n t he

Pr oper t y on the pet i t i on dat e due t o her communi t y i nt er est , and B

of A vi ol at ed t he aut omat i c st ay when i t conduct ed t he f or ecl osur e

sal e wi t hout f i r st obt ai ni ng r el i ef under 362( d) . Mr s. Fadelasked t he bankr upt cy cour t t o adopt Chesnut and hol d t hat t he

aut omat i c st ay appl i ed t o t he Pr oper t y, even i f i t was l at er

det er mi ned t hat she had no i nt er est i n i t . I n her decl ar at i on i n

suppor t , Mr s. Fadel st at ed t hat even t hough t i t l e t o t he Pr oper t y

was i n Mr . Fadel s name onl y, she al ways bel i eved t hat she and her

husband owned t he Pr oper t y j oi nt l y.

DCB count ered Mr s. Fadel s ar gument s, cont endi ng t hat si nce

t he Pr oper t y was never par t of her bankrupt cy est at e, i t was not

pr ot ect ed by t he aut omat i c st ay, and thus t he f or ecl osur e sal e was

not voi d. DCB not ed t hat Mr s. Fadel was not on t he t i t l e or an

obl i gor on t he not e secur ed by t he deed of t r ust . As f or any

possi bl e communi t y i nt erest , DCB cont ended t hat al t hough under

CAL. FAM. CODE 760 t he pr esumpt i on i s t hat al l pr oper t y acqui r ed

dur i ng a marr i age i s communi t y pr opert y, CAL. EVI D. CODE 662

pr ovi des a conf l i ct i ng pr esumpt i on t hat t he owner of t he l egal

t i t l e t o pr oper t y i s pr esumed t o be t he owner of t he f ul l

benef i ci al t i t l e. Thus, ar gued DCB, l egal t i t l e, whi ch may be


7/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 7-

r ebut t ed onl y by cl ear and convi nci ng evi dence, t r umps t he

communi t y pr oper t y pr esumpt i on. Accor di ng t o DCB, evi dence of

communi t y f unds bei ng used t o i mpr ove t he Pr opert y coul d not r ebut

Mr s. Fadel s admi t t ed and cl ear i nt ent t o have t he Pr oper t y t i t l ed

i n Mr . Fadel s name as hi s sol e and separ at e pr oper t y, despi t e her

cl ai m t hat she al ways bel i eved i t was communi t y pr oper t y.

DCB al so count er ed t he cases ci t ed by Mr s. Fadel , cont endi ng

t hat t hey concer ned t he di vi si on of pr oper t y upon di ssol ut i on, not

t he char act er i st i cs of pr oper t y dur i ng mar r i age and, i n any event ,

no wr i t i ng evi denci ng t he Fadel s i nt ent t o t r ansmut e t he Pr oper t y

i nt o communi t y pr oper t y, such as t he recor di ng of a qui t cl ai mdeed, exi st ed as of t he pet i t i on dat e. At best , ar gued DCB, even

i f Mr s. Fadel had a r i ght t o rei mbur sement f or communi t y

cont r i but i ons, t hat r i ght i s a monet ar y r i ght ; i t does not change

l egal t i t l e t o t he Pr oper t y. Fi nal l y, ar gued DCB, Mr s. Fadel s

cl ai med possessory i nt er est onl y pr ot ect ed her f r om l oss of

possessi on t hr ough evi ct i on pr oceedi ngs, whi ch i s why DCB sought

r el i ef f r om st ay t o commence i t s unl awf ul det ai ner act i on.

Af t er car ef ul l y consi der i ng t he i ssue, t he bankrupt cy cour t

gr ant ed t he St ay Rel i ef Mot i on at t he cont i nued hear i ng on

December 5, 2011. The cour t f i r st det er mi ned t hat t he

conf i r mat i on or der had no pr ecl usi ve ef f ect as t o DCB s St ay

Rel i ef Mot i on because DCB was never a credi t or of Mr s. Fadel and

because t he pl an at t empt ed t o reor gani ze a debt f or whi ch Mr s.

Fadel was not obl i gated.

I n r eachi ng i t s deci si on t hat t he Pr oper t y was not pr oper t y

of Mr s. Fadel s est at e on t he pet i t i on dat e and t her ef or e no st ay

vi ol at i on occur r ed r ender i ng t he sal e voi d, t he bankrupt cy cour t


8/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 8-

det er mi ned t hat l egal t i t l e t r umped any communi t y i nt er est she

hel d i n t he Proper t y, unl ess Mr s. Fadel was unaware she was gi vi ng

away her i nt er est i n i t . On t hat i ssue, t he cour t f ound t hat Mr s.

Fadel , f or cul t ur al r easons, knowi ngl y and knowl edgeabl y gr ant ed

any i nt er est she may have had i n t he Pr oper t y t o Mr . Fadel as hi s

sol e and separ at e pr oper t y, and no subsequent wr i t i ng exi st ed

t r ansmut i ng i t t o communi t y pr oper t y. The cour t r ej ect ed Mr s.

Fadel s ar gument t hat communi t y cont r i but i ons t o the Proper t y gave

her a pr o t ant o communi t y pr oper t y i nt er est i n i t , as t hat i ssue

was r el evant onl y bet ween spouses upon di ssol ut i on; i t was not

r el evant as t o t hi r d par t i es wher e t i t l e cont r ol s.The bankr uptcy cour t di st i ngui shed Chesnut f r om t he i nst ant

case, r easoni ng t hat Texas l aw cont r ol l ed t he Chesnut deci si on,

whi ch i s di f f er ent f r om Cal i f or ni a l aw. Under Cal i f or ni a l aw,

l egal t i t l e t r umps t he pr esumpt i on t hat pr oper t y acqui r ed dur i ng

t he marr i age i s communi t y pr opert y. The cour t agr eed t hat Mr s.

Fadel had a possessor y i nt er est i n t he Pr oper t y on t he pet i t i on

dat e, but det er mi ned t hat t he act of sel l i ng t he Pr oper t y at

f or ecl osur e af f ected t i t l e, not possessi on al one. Fi nal l y,

al t hough the cour t agr eed wi t h Mr s. Fadel t hat per haps t he bet t er

cour se of act i on woul d have been f or B of A t o obt ai n a comf ort

or der bef or e conduct i ng t he f or ecl osur e sal e, t hat di d not change

t he out come - Mr s. Fadel had no i nt er est i n t he Pr oper t y. The

order gr ant i ng t he St ay Rel i ef Mot i on was ent ered on December 15,

2011 ( St ay Rel i ef Or der ) .

Mr s. Fadel f i l ed a t i mel y mot i on f or r econsi der at i on of t he

St ay Rel i ef Or der ( t he Reconsi der at i on Mot i on) . She agai n asked

t he bankr upt cy cour t t o adopt t he hol di ng i n Chesnut . Mr s. Fadel


9/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 9-

al so cont ended t hat t he bankrupt cy cour t er r ed i n r ul i ng that she

di d not have an i nt er est i n t he Pr oper t y as of t he pet i t i on dat e.

She ar gued, f or t he f i r st t i me, t hat t he Pr oper t y was pr ot ect ed by

t he codebt or st ay under 1301( a) because, pur suant t o CAL. FAM.

CODE 910 and 914, she was l i abl e on t he deed of t r ust debt

i ncur r ed by Mr . Fadel dur i ng t hei r mar r i age.

Mr s. Fadel f ur t her asser t ed, f or t he f i r st t i me, t hat because

she does not speak, r ead, or wr i t e i n Engl i sh, she di d not know

what she was si gni ng when Mr . Fadel r equest ed t hat she si gn t he

I nt er spousal Deed, and t her ef ore t he pr esumpt i on of undue

i nf l uence t r umped t he t i t l e pr esumpt i on i n CAL. EVI D. CODE 662.I n her decl ar at i on, Mr s. Fadel cl ai med she had no i nt ent i on of

gr ant i ng away her i nt er est i n t he Pr oper t y. Mr . Fadel st at ed i n

hi s decl ar at i on t hat Mr s. Fadel di d not under st and t hat si gni ng

t he I nt er spousal Deed meant she was r el i nqui shi ng her i nt er est i n

t he Pr oper t y.

Fi nal l y, Mr s. Fadel r ai sed t wo of her pr evi ous argument s t hat

(1) CAL. FAM. CODE 914 and 920 gave her a pro t ant o communi t y

pr oper t y i nt er est i n t he Pr oper t y on t he pet i t i on dat e due t o her

r i ght t o rei mbur sement , whi ch she ar gued coul d be determi ned

out si de of di ssol ut i on, and ( 2) because DCB vol unt ar i l y submi t t ed

i t sel f t o t he bankr upt cy cour t s j ur i sdi ct i on by opposi ng

conf i r mat i on, i t was bound by the conf i r mat i on or der even i f i t

was not a cr edi t or . DCB opposed t he Reconsi derat i on Mot i on.

The bankr uptcy cour t deni ed t he Reconsi derat i on Mot i on. I t

determi ned t hat no codebt or st ay exi st ed because al l document ary

evi dence i ndi cat ed t hat Mr s. Fadel was not an obl i gor on t he deed

of t r ust not e. The cour t al so expr essed i t s rel uct ance t o gi ve


10/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 10-

any wei ght t o Mr s. Fadel s undue i nf l uence cl ai m, as i t woul d onl y

pr ovi de the Fadel s, who wer e not di sput i ng an i nt er est i n

pr oper t y, t he oppor t uni t y to conspi r e t o cr eat e undue i nf l uence

and mani pul at e t he syst em f or t hei r benef i t . The cour t not ed t hat

even i f Mr s. Fadel s asser t i on wer e t r ue, i t woul d onl y render t he

I nt er spousal Deed voi dabl e, not voi d. The cour t al so r ej ect ed

Mr s. Fadel s ar gument t hat she had acqui r ed a pr o t ant o communi t y

pr oper t y i nt er est i n t he Pr oper t y due t o a r i ght of r ei mbur sement

because r ei mbur sement i s a monet ary r i ght , not a pr oper t y

i nt er est , and such r i ght ar i ses onl y bet ween spouses upon

di ssol ut i on.Fi nal l y, t he bankrupt cy cour t agai n decl i ned t o adopt

Chesnut . Not i ng t hat t he Ni nt h Ci r cui t has not yet consi der ed t he

arguabl e pr oper t y pr i nci pl e, t he bankrupt cy cour t r easoned t hat

Chesnut i s cont r ar y t o Cal i f or ni a s r ecor d not i ce pol i cy, whi ch

al l ows par t i es t o det er mi ne t i t l e t o r eal pr oper t y and t o r el y on

t hat i nf or mat i on. Her e, t he gr ant deed and t he I nt er spousal Deed

not i f i ed t he wor l d t hat Mr . Fadel hel d t i t l e t o t he Pr oper t y as

hi s sol e and separ at e pr oper t y, and t hat Mr s. Fadel had no

i nt er est i n i t . However , t he bankrupt cy cour t r ecogni zed t hat

Chesnut r ai sed a ser i ous quest i on of l aw and i nf ormed Mr s. Fadel

t hat i t woul d gr ant her a st ay pendi ng appeal , i f r equest ed.

An order denyi ng t he Reconsi derat i on Mot i on was ent ered on

Febr uar y 3, 2012. Mr s. Fadel t i mel y appeal ed t he St ay Rel i ef

Or der and t he Reconsi derat i on Or der on t hat same dat e. The

bankrupt cy cour t ent er ed an or der gr ant i ng a st ay of t he St ay

Rel i ef Or der pendi ng appeal on Febr uar y 16, 2012.


11/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 11-

II. JURISDICTION

The bankr uptcy cour t had j ur i sdi ct i on under 28 U. S. C. 1334

and 157( b) ( 2) ( G) . We have j ur i sdi ct i on under 28 U. S. C. 158.

III. ISSUES

1. Di d t he bankrupt cy cour t er r when i t det er mi ned t hat DCB was

not bound by t he conf i r mat i on order ?

2. Di d t he bankr upt cy cour t abuse i t s di scr et i on i n gr ant i ng t he

St ay Rel i ef Mot i on?

3. Di d t he bankr upt cy cour t abuse i t s di scr et i on i n denyi ng t he

Reconsi der at i on Mot i on?

IV. STANDARDS OF REVIEW

We r evi ew f i ndi ngs of f act f or cl ear er r or and i ssues of l aw

de novo. Hoopai v. Count r ywi de Home Loans, I nc. ( I n r e Hoopai ) ,

369 B. R. 506, 509 ( 9t h Ci r . BAP 2007) .

Whet her pr oper t y i s i ncl uded i n a bankrupt cy est at e i s a

quest i on of l aw subj ect t o de novo r evi ew. St i cka v. Lamber t ( I n

r e Lamber t ) , 283 B. R. 16, 18 ( 9t h Ci r . BAP 2002) .

We r evi ew an or der gr ant i ng r el i ef f r om st ay f or abuse of

di scr et i on. Kr onemyer v. Am. Cont r act or s I ndem. Co. ( I n r e

Kr onemyer ) , 405 B. R. 915, 919 ( 9t h Ci r . BAP 2009) .

A deni al of a mot i on f or r econsi der at i on i s r evi ewed f or an

abuse of di scr et i on. Hansen v. Moor e ( I n r e Hansen) , 368 B. R.

868, 875 ( 9t h Ci r . BAP 2007) .

I n det er mi ni ng whet her t he bankr upt cy cour t abused i t s

di scr et i on, we f i r st det er mi ne de novo whet her t he [ bankrupt cy]

cour t i dent i f i ed t he cor r ect l egal r ul e t o appl y t o t he r el i ef

r equest ed. Uni t ed St ates v. Hi nkson, 585 F. 3d 1247, 1262 ( 9t h

Ci r . 2009) ( en banc) . I f t he bankrupt cy cour t i dent i f i ed t he


12/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

284 Sect i on 101( 10) ( B) and ( C) pr ovi de addi t i onal def i ni t i ons

not r el evant t o t hi s di scussi on.

- 12-

cor r ect l egal r ul e, we t hen det er mi ne whet her i t s appl i cat i on of

t he cor r ect l egal st andar d [ t o t he f acts] was ( 1) i l l ogi cal , ( 2)

i mpl ausi bl e, or ( 3) wi t hout suppor t i n i nf er ences t hat may be

dr awn f r om t he f act s i n t he r ecor d. I d. ( i nt er nal quot at i on

marks omi t t ed) .

V. DISCUSSION

A. The bankruptcy court did not err in determining that theconfirmation order was not binding on DCB.

Sect i on 1327( a) pr ovi des t hat [ t ] he pr ovi si ons of a

conf i r med pl an bi nd t he Debt or and each cr edi t or , whet her or not

t he cl ai m of such credi t or i s pr ovi ded f or by t he pl an, andwhet her or not such cr edi t or has obj ect ed t o, has accept ed, or has

r ej ect ed t he pl an.

As t he bona f i de pur chaser of t he Pr oper t y at t he f or ecl osur e

sal e t wo days af t er Mr s. Fadel f i l ed her chapt er 13 bankrupt cy

case, we agr ee wi t h t he bankr upt cy cour t t hat DCB was not a

cr edi t or of Mr s. Fadel bound by t he conf i r mat i on or der . Sect i on

101( 10) ( A) def i nes a cr edi t or as an ent i t y that has a cl ai m

agai nst t he debt or t hat ar ose at t he t i me of or bef or e t he or der

f or r el i ef concer ni ng t he debt or . 4 Sect i on 101( 5) , i n per t i nent

par t , def i nes a cl ai m as a r i ght t o payment , . . . . See Bl ue

v. Town of Lake Bl dg. Cor p. ( I n r e Bl ue) , 247 B. R. 748, 751- 52

( Bankr . N. D. I l l . 2000) ( par t y not a credi t or of t he debt or i s not

bound by debt or s conf i r med chapt er 13 pl an) . As such, DCB was

not pr ecl uded f r om movi ng f or r el i ef f r om t he aut omat i c st ay.

Whi l e Mr s. Fadel concedes t hat DCB was not a credi t or , she


13/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 13-

cont ends DCB was st i l l bound by t he conf i r mat i on order , whi ch was

f i nal and not appeal ed, because DCB vol unt ar i l y subj ect ed i t sel f

t o the bankrupt cy cour t s j ur i sdi ct i on when i t obj ect ed t o her

pl an as a par t y i n i nt er est . Mr s. Fadel ci t es no aut hor i t y t o

suppor t her asser t i on. We al so r ej ect Mr s. Fadel s ar gument t hat

t he bankrupt cy cour t er r ed by vacat i ng t he conf i r mat i on or der

under Ci vi l Rul e 60( b) ( 4) . Not hi ng i n t he r ecor d r ef l ect s t hat

t he order was vacated. The bankr upt cy cour t di d not er r when i t

det ermi ned t hat DCB was not bound by t he conf i r mat i on or der .

B. The bankruptcy court did not abuse its discretion when itgranted the Stay Relief Motion.

1. Applicable law.

Upon t he f i l i ng of a bankrupt cy pet i t i on, an est at e i s

creat ed compr i sed of al l l egal or equi t abl e i nt er est s of t he

debt or i n pr oper t y, wher ever l ocat ed or by whomever hel d, as

of t he commencement of t he case. 541( a) ( 1) . Accor di ng t o

541( a) ( 2) , pr oper t y of t he bankrupt cy est at e i ncl udes:

Al l i nt er est s of t he debt or and t he debt or s spouse i ncommuni t y propert y as of t he commencement of t he[ bankrupt cy] case t hat i s-

( A) under t he sol e, equal , or j oi nt management andcont r ol of t he debt or ; or

( B) l i abl e f or an al l owabl e cl ai m agai nst t he debt or , orf or bot h an al l owabl e cl ai m agai nst t he debt or and anal l owabl e cl ai m agai nst t he debt or s spouse, t o t heext ent t hat such i nt er est i s so l i abl e.

Whi l e t hi s pr ovi si on def i nes what i nt er est s of t he debt or ar e

i ncl uded i n t he bankrupt cy est at e, i t does not addr ess t he

t hr eshol d quest i ons of t he exi st ence and scope of t he debt or s

i nt er est i n a gi ven asset . Dumas v. Mant l e ( I n r e Mant l e) , 153

F. 3d 1082, 1084 ( 9t h Ci r . 1998) ( quot i ng St at e of Cal . v. Far mer s


14/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5 Rul e 7001( 2) and Ni nt h Ci r cui t l aw r equi r e an adver sary

pr oceedi ng t o det er mi ne an i nt er est i n pr oper t y. Br ady v.Andr ew ( I n r e Commerci al W. Fi n. Corp. ) , 761 F. 2d 1329, 1336- 38( 9t h Ci r . 1985) . Nei t her of t he par t i es r ai sed any i ssue as t owhet her Mr s. Fadel coul d al l ege a pr oper t y i nt er est as a def enset o a cont est ed mat t er or i f she needed t o i ni t i at e an adver sar ypr oceedi ng. As t he i ssue has not been r ai sed, t he Panel t akes noposi t i on on whet her any wai ver has occur r ed. Ung. v Boni ( I n r eBoni ) , 240 B. R. 381, 386( 9t h Ci r . BAP 1999) .

- 14-

Mkts. , I nc. ( I n r e Far mer s Mkts. , I nc. ) , 792 F. 2d 1400, 1402 ( 9t h

Ci r . 1986) ) . Rat her , t he bankrupt cy cour t must l ook t o st at e

pr oper t y l aw t o det er mi ne whet her , and to what ext ent , t he debt or

has any l egal or equi t abl e i nt er est s i n pr oper t y as of t he

commencement of t he case. I d. ( ci t i ng But ner v. Uni t ed St ates,

440 U. S. 48, 55 (1979) ) . 5

The f i l i ng of t he bankr upt cy pet i t i on cr eat es an aut omat i c

st ay under 362( a) , whi ch oper at es t o enj oi n speci f i c act s

agai nst t he debt or , pr oper t y of t he debt or and pr oper t y of t he

est at e. 362( a) ( 3) , ( 4) , ( 5) and ( 6) . However , under 362( d) ,

a par t y i n i nt er est may r equest r el i ef f r om t he st ay. Uponr equest , 362( d) r equi r es t he bankrupt cy cour t t o gr ant r el i ef

f r om t he aut omat i c st ay upon t he showi ng of cause, or when no

equi t y exi st s i n a pr oper t y and t he pr oper t y i s not necessary to

debt or s ef f ect i ve r eor gani zat i on. See 362( d) ( 1) and ( d) ( 2) .

What const i t ut es cause t o t er mi nat e t he st ay i s det er mi ned on a

case- by- case basi s. Del aney- Mor i n v. Day ( I n r e Del aney- Mor i n) ,

304 B. R. 365, 369 ( 9t h Ci r . BAP 2003) ( ci t i ng MacDonal d v.

MacDonal d ( I n re MacDonal d) , 755 F. 2d 715, 717 (9t h Ci r . 1985) ) .

2. Analysis.

Mr s. Fadel assi gns sever al er r or s t o t he bankrupt cy cour t s

deci si on t o gr ant DCB r el i ef f r om st ay t o pr oceed wi t h i t s


15/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 15-

unl awf ul det ai ner act i on agai nst her i n st at e cour t . We addr ess

each ar gument i n t urn.

a. Legal title presumption trumps the communityproperty presumption.

Under t he f or m of t i t l e pr esumpt i on, t he descri pt i on i n a

deed as t o how t i t l e i s hel d pr esumpt i vel y r ef l ect s t he act ual

owner shi p st at us of t he pr oper t y. I n r e Mar r i age of Br ooks, 169

Cal . App. 4t h 176, 184- 85 ( Cal . Ct . App. 2008) ( ci t i ng I n r e Mar r i age

of Hai nes, 33 Cal . App. 4t h 277, 292 ( Cal . Ct . App. 1995) ) . Thi s

common l aw presumpt i on has been codi f i ed i n CAL. EVI D. CODE 662,

whi ch st at es, The owner of t he l egal t i t l e t o pr oper t y i spr esumed t o be t he owner of t he f ul l benef i ci al t i t l e. Thi s

pr esumpt i on may be rebut t ed onl y by cl ear and convi nci ng pr oof .

Cal i f or ni a s f or m of t i t l e pr esumpt i on i s based on pr omot i ng t he

publ i c pol i cy i n f avor of t he stabi l i t y of t i t l es to pr oper t y,

and al l egat i ons t hat l egal t i t l e does not r epr esent benef i ci al

owner shi p have been hi st or i cal l y di sf avor ed because soci et y and

t he cour t s have a rel uct ance to t amper wi t h dul y execut ed

i nst r ument s and document s of l egal t i t l e. I n r e Mar r i age of

Br ooks, 169 Cal . App. 4t h at 184- 85 ( ci t at i ons and quot at i on mar ks

omi t t ed) . Absent a showi ng t o t he cont r ar y, t he char act er i zat i on

of t he Pr oper t y i n t he t i t l e wi l l cont r ol .

I t i s undi sput ed t hat t he Fadel s acqui r ed t he Pr oper t y dur i ng

marr i age. Under CAL. FAM. CODE 760, a gener al pr esumpt i on exi st s

t hat pr oper t y acqui r ed dur i ng t he marr i age i s communi t y pr oper t y.

However , t he af f i r mat i ve act of speci f yi ng a f or m of owner shi p i n

t he conveyance of t i t l e . . . r emoves such pr oper t y f r om t he mor e

gener al pr esumpt i on. I n r e Mar r i age of Lucas, 27 Cal . 3d 808,


16/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 16-

814- 15 ( Cal . 1980) , r ev d on other gr ounds by CAL. FAM. CODE 2581

( ci t i ng Socol v. Ki ng, 36 Cal . 2d 342, 346 ( Cal . 1950) ) . The act

of t aki ng t i t l e to pr oper t y i n t he name of one spouse dur i ng

marr i age wi t h t he consent of t he other spouse ef f ect i vel y r emoves

t hat pr oper t y f r om t he gener al communi t y pr oper t y pr esumpt i on. I n

t hat si t uat i on, t he pr oper t y i s pr esumabl y t he separ at e pr oper t y

of t he spouse i n whose name t i t l e i s t aken. I n r e Mar r i age of

Br ooks, 169 Cal . App. 4t h at 186- 87 ( ci t i ng 5 Mi l l er & St ar r , Cal .

Real Est ate 12: 41, p. 12- 110 ( 3d ed. 2006) ) . See Wol f e v.

J acobson ( I n r e J acobson) , 676 F. 3d 1193, 1201 ( 9t h Ci r . 2012) ( i n

Cal i f orni a no communi t y pr oper t y pr esumpt i on exi st s wher e a spouseacqui r es proper t y i n hi s name al one wi t h the ot her spouse s

consent ) . Her e, t he r ecor ded gr ant deed, t he r ecor ded

I nt er spousal Deed and al l other document s r el ated t o t he pur chase

of t he Pr oper t y conf i r m t hat t he owner ( and t he per son r esponsi bl e

f or r epayment of t he deed of t r ust not e) was onl y Mr . Fadel . These

document s, showi ng cl ear t i t l e t o t he Pr oper t y i n Mr . Fadel as hi s

sol e and separat e pr oper t y, di spl ace any communi t y pr oper t y

presumpt i on.

The onl y way Mr s. Fadel coul d overcome t he f or m of t i t l e

presumpt i on was to show undue i nf l uence by Mr . Fadel . Under

Cal i f orni a s communi t y pr oper t y l aw, t he pr esumpt i on of undue

i nf l uence, based on t he conf i dent i al r el at i onshi p bet ween spouses,

ar i ses when an i nt er spousal t r ansact i on advant ages one spouse over

t he ot her . See CAL. FAM. CODE 721. I n t hat ci r cumst ance, t i t l e

pr esumpt i on and appl i cat i on of CAL. EVI D. CODE 662 ar e i mpr oper .

I n r e Mar r i age of Hai nes, 33 Cal . App. 4t h at 301- 02. I n ot her

wor ds, t he r ebut t abl e pr esumpt i on of undue i nf l uence, i f pr oven,


17/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 17-

t r umps t he t i t l e pr esumpt i on. I d. When a pr esumpt i on of undue

i nf l uence appl i es t o a t r ansact i on, t he spouse who was advant aged

by t he t r ansact i on must est abl i sh t hat t he di sadvant aged spouse s

act i on was f r eel y and vol unt ar i l y made, wi t h a f ul l knowl edge of

al l t he f act s, and wi t h a compl et e under st andi ng of t he ef f ect of

t he t r ansact i on. I n r e Mar r i age of Fossum, 192 Cal . App. 4t h 336,

344 ( Cal . Ct . App. 2011) ( ci t at i ons and quot at i on mar ks omi t t ed) .

The quest i on of whether t he spouse gai ni ng an advant age has

over come t he pr esumpt i on of undue i nf l uence i s a quest i on f or t he

t r i er of f act , whose deci si on wi l l not be r ever sed on appeal i f

suppor t ed by subst ant i al evi dence. I d. ( ci t at i ons and quot at i onmarks omi t t ed) .

I n her decl ar at i on i n suppor t of t he Reconsi der at i on Mot i on,

Mr s. Fadel st at ed, f or t he f i r st t i me, t hat she di d not know what

t he I nt erspousal Deed was when she si gned i t and t hat i t was not

her i nt ent i on t o gi ve up her communi t y i nt er est i n t he Proper t y by

si gni ng t he document . The bankrupt cy cour t r ej ect ed Mr s. Fadel s

t est i mony as sel f - ser vi ng, and i t cont r adi ct ed her ear l i er

st at ement t hat , based on her cul t ur al bel i ef s, al l pr oper t y shoul d

be t i t l ed i n t he name of her husband. The cour t f ur t her concl uded

t hat even i f undue i nf l uence exi st ed, t he I nt er spousal Deed woul d

mer el y be voi dabl e, not voi d.

Al t hough Mr s. Fadel r ai sed undue i nf l uence bef or e the

bankrupt cy cour t , she appear s t o r ai se i t onl y i n passi ng on

appeal . To t he extent she assi gns er r or t o t he bankrupt cy cour t s

f i ndi ng of no undue i nf l uence, we di sagr ee. Fi r st , Mr s. Fadel

r ai sed t hi s def ense f or t he f i r st t i me i n her Reconsi der at i on

Mot i on, so t he bankrupt cy cour t di d not have t o consi der i t . See


18/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 18-

I n r e Gr eco, 113 B. R. 658, 664 ( D. Haw. 1990) , af f d and r emanded,

Gr eco v. Tr oy Corp. , 952 F. 2d 406 ( 9t h Ci r . 1991) ( a mot i on f or

r econsi der at i on i s not f or asser t i ng new l egal t heor i es or new

f act s t hat coul d have been r ai sed at t he i ni t i al hear i ng) ;

Zi mmerman v. Ci t y of Oakl and, 255 F. 3d 734, 740 ( 9t h Ci r . 2001)

( cour t does not abuse i t s di scr et i on when i t di sr egar ds l egal

argument s made f or t he f i r st t i me i n a mot i on t o amend) ( ci t i ng

Rosenf el d v. U. S. Dep t of J ust i ce, 57 F. 3d 803, 811 ( 9t h Ci r .

1995) ) . To t he ext ent t he bankr upt cy cour t di d consi der her undue

i nf l uence ar gument , we agr ee t hat Mr s. Fadel knowi ngl y and

knowl edgeabl y si gned t he I nt er spousal Deed t o ef f ect uate heri nt ent and cul t ur al bel i ef t hat Mr . Fadel woul d hol d t i t l e t o t he

Pr oper t y as hi s separ at e pr oper t y. I f she was i gnor ant of i t s

l egal r ami f i cat i ons, even assumi ng she coul d asser t such a cl ai m

now, at best t hi s woul d onl y render t he I nt er spousal Deed

voi dabl e, not voi d. Fal l on v. Tr i angl e Mgmt . Ser vs. , I nc. , 169

Cal . App. 3d 1103, 1106 ( Cal . Ct . App. 1985) ( [ A] deed [ i s]

voi dabl e, not voi d, i f obt ai ned as a r esul t of undue i nf l uence . .

. . [ A] deed . . . pr ocur ed by dur ess cannot be set asi de as

agai nst a par t y pur chasi ng i n i gnor ance of t he f act s const i t ut i ng

t he dur ess, t hat i s t o say as agai nst a pur chaser f or a val uabl e

consi der at i on and wi t hout not i ce of t he dur ess. ) ( ci t i ng Conn.

Li f e I ns. Co. v. McCor mi ck, 45 Cal . 580 ( Cal . 1873) ) . See al so

Camacho v. Camacho, 1994 WL 424429, at *4 ( E. D. Cal . 1994) ( ci t i ng

Fal l on and hol di ng same) . Moreover , because t he Fadel s are not

di sput i ng owner shi p of t he Pr oper t y, and because t hey ar e st i l l

mar r i ed, whet her t he def ense of undue i nf l uence appl i es i s

doubt f ul , especi al l y si nce Mr s. Fadel under t ook no act i on t o


19/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6 A r i ght of r ei mbur sement pr ovi ded by t hi s par t i s subj ectt o t he f ol l owi ng pr ovi si ons:

( a) The r i ght ar i ses r egar dl ess of whi ch spouse appl i es t he

pr oper t y t o t he sat i sf act i on of t he debt , r egar dl ess ofwhet her t he pr oper t y i s appl i ed t o t he sat i sf act i on of t hedebt vol unt ar i l y or i nvol unt ar i l y, and r egar dl ess of whet hert he debt t o whi ch t he pr oper t y i s appl i ed i s sat i sf i ed i nwhol e or i n par t . The r i ght i s subj ect t o an expr ess wr i t t enwai ver of t he r i ght by t he spouse i n whose f avor t he r i ghtar i ses.

( b) The measure of r ei mbur sement i s t he val ue of t he pr oper t yor i nt er est i n pr oper t y at t he t i me t he r i ght ar i ses.

( c) The r i ght shal l be exer ci sed not l at er t han t he ear l i erof t he f ol l owi ng t i mes:

( 1) Wi t hi n t hr ee year s af t er t he spouse i n whose f avor t her i ght ar i ses has act ual knowl edge of t he appl i cat i on of t hepr oper t y t o t he sat i sf act i on of t he debt .

( 2) I n pr oceedi ngs f or di vi si on of communi t y andquasi - communi t y pr opert y pur suant t o Di vi si on 7 ( commenci ngwi t h Sect i on 2500) or i n pr oceedi ngs upon t he deat h of aspouse.

- 19-

r esci nd t he I nt er spousal Deed pr i or t o DCB s pur chase of t he

Pr oper t y. See Fal l on, 169 Cal . App. 3d 1103, 1106. Mr . Fadel s

at t empt t o t est i f y as t o what Mr s. Fadel knew or di d not know

about t he l egal r ami f i cat i ons of si gni ng t he I nt er spousal Deed was

i nappr opr i at e, and t he bankrupt cy cour t was f r ee t o r ej ect i t .

FED. R. EVI D. 602. Not abl y, Mr . Fadel never t est i f i ed t hat he

i nt ended anythi ng ot her t han that he woul d sol el y and separ at el y

hol d t i t l e t o t he Pr oper t y.

b. CAL.FAM.CODE 920 does not give Mrs. Fadel anownership interest in the Property.

Nonet hel ess, Mr s. Fadel cont ends t he bankrupt cy cour t er r ed

i n det er mi ni ng t hat she di d not acqui r e an i nt er est i n t he

Pr oper t y by vi r t ue of Cal i f or ni a s communi t y pr oper t y l aw.

Speci f i cal l y, Mr s. Fadel ar gues t hat CAL. FAM. CODE 9206 pr ovi des


20/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 20-

her wi t h a r i ght t o rei mbur sement , whi ch she cont ends cr eated a

pr o tant o communi t y pr oper t y i nt er est i n t he Pr oper t y pr ot ect ed by

t he aut omat i c st ay. Mr s. Fadel ar gues that , under Cal i f or ni a l aw,

when communi t y f unds are used to reduce t he pr i nci pal of a deed of

t r ust debt on one spouse s separate pr oper t y, t he communi t y

acqui r es a pr o t ant o i nt er est i n t he pr oper t y, ci t i ng I n r e

Marr i age of Moor e, 28 Cal . 3d 366, 371- 72 ( Cal . 1980) ( en

banc) [ Moor e] , and I n re Marr i age of Marsden, 130 Cal . App. 3d 426,

436- 37 ( Cal . Ct . App. 1982) [ Marsden] , other wi se known as t he

Moor e/ Marsden r ul e. Mr s. Fadel notes t hat t he Moor e/ Marsden

r ul e was ext ended t o i ncl ude communi t y expendi t ur es f ori mpr ovement s t o one spouse s separat e pr oper t y i n Bono v. Cl ark,

103 Cal . App. 4t h 1409, 1423 ( Cal . Ct . App. 2002) .

Cont r ar y t o Mr s. Fadel s cont ent i ons, however , t he f or m of

t i t l e pr esumpt i on i s not r ebut t ed mer el y because t he pr oper t y i s

acqui r ed dur i ng mar r i age. [ T] he act of t aki ng t i t l e t o pr oper t y

i n t he name of one spouse dur i ng mar r i age wi t h t he consent of t he

ot her spouse ef f ect i vel y r emoves t hat pr oper t y f r om t he gener al

communi t y pr oper t y pr esumpt i on. . . . [ T] he pr oper t y i s pr esumabl y

t he separ at e pr oper t y of t he spouse i n whose name t i t l e i s t aken.

I n r e Br ooks, 169 Cal . App. 4t h at 186- 87. Mr s. Fadel , gi ven t he

r ebut t abl e f or m of t i t l e pr esumpt i on, had t he bur den t o pr ove by

cl ear and convi nci ng evi dence t hat an agr eement or under st andi ng

exi st ed bet ween t he par t i es t hat t he t i t l e r ef l ect ed i n t he deed

i s not what t he par t i es i nt ended. I d. at 189. Thi s pr esumpt i on

cannot be r ebut t ed by: t r aci ng t he f unds used t o pur chase t he

pr oper t y; t est i mony of an i nt ent i on not di scl osed t o t he gr ant ee

at t he t i me of t he execut i on of t he conveyance; or evi dence t hat


21/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 21-

t i t l e was t aken i n a par t i cul ar manner mer el y to obt ai n a l oan.

I d. at 190 ( ci t at i ons omi t t ed) . The cl ear and convi nci ng evi dence

st andar d r equi r es evi dence t hat i s so cl ear as t o l eave no

subst ant i al doubt [ and] suf f i ci ent l y st r ong t o command t he

unhesi t at i ng assent of ever y reasonabl e mi nd. I d.

The r ecor d i n t hi s case est abl i shes t hat t he f or m of t i t l e

pr esumpt i on pr evai l s over t he communi t y pr opert y pr esumpt i on and

t he appl i cat i on of t he Moor e/ Mar sden r ul e. Mr . Fadel acqui r ed

t i t l e t o t he Pr oper t y f r om a t hi r d par t y t hr ough a gr ant deed,

dur i ng hi s mar r i age t o Mr s. Fadel , on Mar ch 7, 2001. Mr s. Fadel ,

t hr ough a gr ant deed, conveyed al l of her r i ght , t i t l e, andi nt er est , i ncl udi ng communi t y or ot her wi se, t o Mr . Fadel on Mar ch

7, 2001. I n 2003, Mr . Fadel obt ai ned a l oan i n hi s own name

secur ed by t he Proper t y. The r ecor ded deed of t r ust st ates t hat

t he Pr oper t y used t o secur e t he l oan, i s hi s sol e and separ at e

pr oper t y. Subsequent l y, Mr . Fadel def aul t ed on t he l oan; a

f or ecl osur e was i ni t i at ed, and Mr . Fadel f i l ed a chapt er 7

bankr upt cy. He l i st ed t he Proper t y and t he secur ed debt on t he

Pr oper t y wi t hout any ref er ence t o any al l eged i nt er est hel d by

Mr s. Fadel . Af t er hi s di schar ge and t he cl osur e of hi s case,

Mr s. Fadel f i l ed a chapt er 13 bankrupt cy. She l i st ed t he Pr oper t y

and t he corr espondi ng secur ed debt wi t hout st at i ng any al l eged

i nt er est hel d by Mr . Fadel .

The grant deeds t hrough whi ch Mr . Fadel acqui r ed t he Pr oper t y

f r om t he t hi r d par t y and f r om Mr s. Fadel conveyed t hei r ent i r e

i nt er est s i n t he Pr oper t y i ncl udi ng any af t er - acqui r ed i nt er est

and any communi t y pr oper t y i nt er est . See 3 Mi l l er & St ar r , Cal .

Real Est at e 8. 5 ( 3d ed. 2012) . On t hi s r ecor d, we concl ude t hat


22/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 22-

Mr s. Fadel has not r ebut t ed, wi t h cl ear and convi nci ng evi dence,

t he f or m of t i t l e pr esumpt i on t hat Mr . Fadel hel d t he Pr oper t y as

hi s sol e and separate pr oper t y. Consequent l y t he Moor e/ Marsden

r ul e never became appl i cabl e.

Mr s. Fadel cont ends I n r e Boyd, 410 B. R. 95, 99 ( Bankr . N. D.

Cal . 2009) , hel d t hat a pr o tant o communi t y pr oper t y i nt er est

ar i ses even wher e the ot her spouse s separ at e pr oper t y at i ssue

was pur chased dur i ng t he marr i age. I n t hat case, t he non- debt or

spouse pur chased a home wi t h hi s separat e f unds dur i ng t he

mar r i age. The non- debt or spouse hel d t i t l e i n hi s name al one, and

t he debt or execut ed mul t i pl e i nt er spousal t r ansf er deedsdi scl ai mi ng any i nt er est i n t he home. Nonet hel ess, t he bankrupt cy

cour t , i n I n r e Boyd, ci t i ng Moor e/ Mar sden, st at ed t hat t he

communi t y ( and t hus debt or s bankr upt cy est ate) acqui r ed an

i nt er est i n the home because t he debt or s husband s i ncome, whi ch

was al l egedl y communi t y pr oper t y, was used t o r educe t he pr i nci pal

on t he deed of t r ust debt .

The Panel concl udes t hat I n r e Boyd i s di st i ngui shabl e, and

we r ej ect t he appl i cat i on of i t s concl usi ons i n t hi s appeal f or

t he f ol l owi ng r easons: ( 1) t he f or m of t i t l e pr esumpt i on

di scussed i n I n re Br ooks, 169 Cal . App. 4t h at 189- 91, was not

addr essed i n I n re Boyd; ( 2) t he t ypes of t he deeds wer e not

di scussed, i . e. , gr ant ver sus qui t cl ai m deeds; and ( 3) t he

appl i cat i on of t he Moor e/ Mar sden rul e appar ent l y was not cont est ed

i n I n r e Boyd but was vi gor ousl y ar gued i n t hi s case.

c. The codebtor stay does not apply.

The codebt or st ay of 1301( a) enj oi ns a cr edi t or f r om t aki ng

l egal act i on t o col l ect any par t of a consumer debt of t he debt or


23/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 7 Sect i on 1301( a) pr ovi des f or t wo except i ons to t hecodebt or st ay, nei t her of whi ch appl y her e.

- 23-

f r om any i ndi vi dual t hat i s l i abl e on such debt wi t h t he debt or ,

or t hat secur ed such debt . 7 Thus, t hree el ement s must be

sat i sf i ed f or t he codebt or st ay t o appl y: ( 1) t he debt must be a

consumer debt ; ( 2) t he consumer debt at i ssue must be a debt of

t he debt or ; and (3) t he codebt or must be l i abl e on t he debt wi t h

t he debt or .

Under 101( 8) , a consumer debt i s one i ncur r ed f or

per sonal , f ami l y, or househol d pur poses. A deed of t r ust debt ,

whi ch consi st s of debt i ncur r ed t o pur chase t he debt or s pr i nci pal

r esi dence or t o i mpr ove i t , i s a consumer debt under 101( 8) .

Zol g v. Kel l y ( I n r e Kel l y) , 841 F. 2d 908, 913 ( 9t h Ci r . 1988) .Thus, t he debt on t he Pr oper t y i s a consumer debt .

Sect i on 1301( a) f ur t her r equi r es t hat t he consumer debt at

i ssue be a debt of t he debt or and t he codebt or must be l i abl e on

t he debt wi t h t he debt or . Thus, t he codebt or must be both l i abl e

on such debt and l i abl e wi t h t he debt or t o some t hi r d par t y.

Meyer v. Hi l l ( I n r e Hi l l ) , 268 B. R. 548, 553 ( 9t h Ci r . BAP

2001) ( appl yi ng same l anguage appear i ng i n 1322( b) ( 1) ) . The

phr ase such debt r ef er s t o t he consumer debt t hat t he cr edi t or

i s t r yi ng t o col l ect . As such, not onl y must bot h t he debt or and

codebt or be l i abl e t o some t hi r d par t y, t hey must al so bot h be

l i abl e on t he par t i cul ar debt t he credi t or i s t r yi ng t o col l ect.

I t i s undi sput ed t hat t he onl y obl i gor on t he deed of t r ust

note was Mr . Fadel . However , Mr s. Fadel cont ends t hat she i s

nonet hel ess per sonal l y l i abl e f or t he debt under CAL. FAM. CODE

914, whi ch pr ovi des i n r el evant par t :


24/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 24-

( a) a mar r i ed per son i s per sonal l y l i abl e f or t hef ol l owi ng debt s i ncur r ed by t he per son s spouse dur i ngmarr i age:

( 1) A debt i ncur r ed f or necessar i es of l i f e of t heper son s spouse whi l e t he spouses ar e l i vi ng t oget her .

. . . .

The necessar i es of l i f e i ncl ude f ood, cl ot hi ng, and shel t er .

Hogoboom & Ki ng, Cal . Pract i ce Gui de: Fami l y Law ( The Rut t er Gr oup

2012) 8: 753 [ Cal . Pr act i ce Gui de] .

The bankr uptcy cour t deter mi ned t hat t he codebtor st ay di d

not appl y because Mr s. Fadel was not an obl i gor on t he note. Thi s

concl usi on does not appear t o addr ess t he speci f i c i ssue sher ai ses. We begi n our r evi ew by not i ng t hat Mr s. Fadel i mpr oper l y

asser t ed t he codebt or st ay ar gument f or t he f i r st t i me i n t he

Reconsi der at i on Mot i on. Zi mmerman, 255 F. 3d at 740. We f ur t her

obser ve t hat nei t her Mr . Fadel nor Mr s. Fadel l i st ed each ot her i n

t hei r r espect i ve Schedul e H s as a codebt or on any debt . I n any

event , we r ej ect Mr s. Fadel s t heor y.

Fi r st , CAL. FAM. CODE 914( a) cannot be read i n a vacuum; i t

must be r ead i n conj unct i on wi t h CAL. FAM. CODE 914( b) and ( c) .

I mpor t ant l y, CAL. FAM. CODE 914( b) st at es:

( b) The separat e pr oper t y of a marr i ed per son may beappl i ed t o t he sat i sf act i on of a debt f or whi ch t heper son i s per sonal l y l i abl e pur suant t o t hi s secti on. I fsepar at e pr oper t y i s so appl i ed at a t i me when nonexemptpr oper t y i n t he communi t y est ate or separate pr oper t y oft he per son s spouse i s avai l abl e but i s not appl i ed t ot he sat i sf act i on of t he debt , t he mar r i ed per son i s

ent i t l ed t o rei mbur sement t o t he ext ent such pr oper t y wasavai l abl e. ( Emphasi s added) .

I n ot her wor ds, Mr s. Fadel s separ ate pr oper t y can be used t o

sat i sf y a debt i ncur r ed by Mr . Fadel dur i ng t he mar r i age and whi l e

t hey ar e l i vi ng t oget her . However , by i t s ver y l anguage, CAL. FAM.


25/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8 CAL. FAM. CODE 910 st at es, i n r el evant par t , t hat :

( a) t he communi t y est at e i s l i abl e f or a debt i ncur r ed byei t her spouse bef or e or dur i ng mar r i age, r egar dl ess of whi chspouse has t he management and cont r ol of t he proper t y andr egar dl ess of whet her one or bot h spouses ar e par t i es t o thedebt or t o a j udgment f or t he debt .. . . .

- 25-

CODE 914 appl i es onl y i n t he case wher e t he marr i ed per son s

separ at e pr oper t y was used t o sat i sf y a debt of hi s or her spouse,

and i t set s f or t h t he mar r i ed per son s r ei mbur sement r i ght s. See

Col l ect i on Bur eau of San J ose v. Rumsey, 24 Cal . 4t h 301, 312 ( Cal .

2000) . Because Mr . Fadel was i n def aul t on t he deed of t r ust

not e, B of A, pur suant t o t he deed of t r ust , f or ecl osed on t he

Pr oper t y i n an at t empt t o col l ect on t he col l at er al secur i ng t he

debt . The col l at er al ( i . e. , t he Pr oper t y) was never Mr s. Fadel s

separate pr oper t y and she di d not use any separate pr opert y t o

sat i sf y Mr . Fadel s debt . Ther ef or e, no r ei mbur sement r i ght s have

been t r i ggered under CAL. FAM. CODE 914, and t hat st atut e does notappl y. I n addi t i on, cont r ar y t o Mr s. Fadel s asser t i on, CAL. FAM.

CODE 9108 does not appl y here ei t her because t he Pr opert y was not

par t of t he communi t y est at e; i t was Mr . Fadel s sol e and separ at e

pr oper t y. Mr s. Fadel was not l i abl e on t he deed of t r ust not e by

vi r t ue of CAL. FAM. CODE 914, and t he not e was not a debt of t he

debt or . Consequent l y, t he codebt or st ay does not appl y.

d. We decline to adopt Chesnut.

The bankr uptcy cour t decl i ned t o adopt Chesnut , but , because

i t vi ewed t he i ssue as one havi ng pot ent i al l y gr eat l egal

si gni f i cance, i t gr ant ed Mr s. Fadel a st ay pendi ng appeal of t he

St ay Rel i ef Or der whi l e we consi der ed i t .

I n Chesnut , a st ay vi ol at i on case, t he cr edi t or conduct ed a


26/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 26-

post pet i t i on f or ecl osur e on r eal pr oper t y i n whi ch t he debt or

cl ai med a communi t y- owner shi p i nt er est wi t hout f i r st obt ai ni ng

r el i ef f r om st ay. Ti t l e t o t he pr oper t y was char act er i zed as t he

non- f i l i ng wi f e s separ at e pr oper t y, but t he debt or l i st ed t he

pr oper t y i n hi s Chapt er 13 bankrupt cy pet i t i on, cont endi ng t hat i t

was a communi t y asset si nce i t was pur chased dur i ng t he marr i age

and wi t h communi t y f unds. The debt or sued t he cr edi t or f or

al l egedl y vi ol at i ng t he aut omat i c st ay. Wi t hout deci di ng t he

subst ant i ve i ssue of whether t he pr opert y was a communi t y asset

bel ongi ng t o t he debt or or hi s bankr upt cy est at e, t he bankrupt cy

cour t det er mi ned t hat t he debt or at l east hel d an equi t abl ei nt er est i n t he pr oper t y t hat was adver sel y af f ect ed by the

f or ecl osur e sal e. Chesnut v. Br own, 300 B. R. 880, 883 ( Bankr .

N. D. Tex. 2004) .

The di st r i ct cour t r eversed, hol di ng t hat no vi ol at i on of t he

st ay occur r ed because t he debt or had no i nt er est i n hi s wi f e s

separate pr oper t y. Chesnut v. Br own, 311 B. R. 446, 449 ( N. D. Tex.

2004) . I n r eachi ng i t s deci si on, t he di st r i ct cour t not ed:

The bankr upt cy cour t deter mi ned, wi t hout ci t i ng anyaut hor i t y, t hat t he mer e f act t hat debt or gave not i ce ofhi s bankrupt cy f i l i ng and sai d t hat he cl ai med ani nt er est i n t he Pr oper t y was enough t o st op t hef or ecl osur e sal e. I f t hat wer e t he l aw, no one woul d beabl e t o r el y on chai n of t i t l e t o deal wi t h r eal pr oper t yi n Texas. The bankrupt cy cour t i n ef f ect r ul ed t hatpr oper t y acqui r ed dur i ng marr i age i s communi t y pr oper t ydespi t e how i t i s t i t l ed. The i ncept i on of t i t l e r ul e i st o t he cont r ar y: Pr oper t y acqui r ed dur i ng mar r i ageacqui r es i t s st at us of separ at e or communi t y at t he t i me

of i t s acqui si t i on. Henr y S. Mi l l er Co. v. Evans, 452S. W. 2d 426, 430 ( Tex. 1970) . As t he Texas Supreme Cour thas not ed, [ t ] he act of t he spouses i n t aki ng aconveyance of pr oper t y i n t he name of t he wi f e, l i mi t i ngt he t i t l e t o her separ at e use, unmi st akabl y evi dences ani nt ent i on t hat t he same shal l bel ong t o her separ at eest at e. I d. Mor eover , ext r i nsi c evi dence cannot beof f er ed t o cont r adi ct t he expr ess r eci t al s i n a deed


27/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 27-

wi t hout f i r st t ender i ng compet ent evi dence t hat t her e wasf r aud, acci dent , or mi st ake i n t he i nser t i on of t her eci t al s i n t he deed. I d. at 431. Ther e i s no suchevi dence her e.

At best , r easoned t he di st r i ct cour t , t he debt or maybe had a cl ai m

f or economi c cont r i but i on ( i . e. , a r i ght t o r ei mbur sement ) , but

such a cl ai m di d not cr eat e an owner shi p i nt er est i n t he r eal

pr oper t y. I d.

The Fi f t h Ci r cui t r eversed t he di st r i ct cour t , hol di ng t hat

t he aut omat i c st ay appl i es t o al l pr oper t y ar guabl y owned by t he

debt or , even i f i t i s l at er det er mi ned t hat t he debt or di d not own

t he pr oper t y. Chesnut v. Br own, 422 F. 3d at 304- 05. I n otherwor ds, t he st ay appl i es r egar dl ess of t he ul t i mat e mer i t s of t he

debt or s owner shi p i nt er est cl ai m.

We decl i ne t o adopt such a r ul e. As t he di st r i ct cour t i n

Chesnut so i nsi ght f ul l y put i t : I f t hat wer e t he l aw, no one

woul d be abl e t o r el y on chai n of t i t l e t o deal wi t h r eal pr oper t y

i n Texas. Chesnut , 311 B. R. at 449. The same woul d be t r ue i n

Cal i f or ni a, a st at e t hat has deci ded f or publ i c pol i cy r easons

t hat f or m of t i t l e pr evai l s, unl ess a spouse s undue i nf l uence

can be shown by cl ear and convi nci ng evi dence. Adopt i ng Chesnut

woul d essent i al l y r ender t he r ecor di ng syst em i n Cal i f or ni a ( and

many ot her Ni nt h Ci r cui t st at es) nugat or y, and i t conf l i ct s wi t h

Cal i f or ni a s pol i cy t hat credi t or s and ot her i nt er est ed par t i es

can r el y on t i t l e. I n r e Mar r i age of Br ooks, 169 Cal . App. 4t h at

185.

I n I n r e Pet t i t , a st ay vi ol at i on case, t he debt or s asked t he

Ni nt h Ci r cui t t o concl ude t hat , wher e t her e i s a bona f i de di sput e

as t o whet her pr oper t y i s par t of t he bankrupt cy est at e, t he


28/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 28-

bur den shoul d be on t he cr edi t or t o seek a det er mi nat i on f r om t he

bankrupt cy cour t bef or e obt ai ni ng t he di sput ed pr oper t y. I n r e

Pet t i t , 217 F. 3d 1072, 1081 ( 9t h Ci r . 2000) . The Cour t decl i ned

t o ext end Ni nt h Ci r cui t pr ecedent t o craf t a novel r ul e on t hi s

i ssue. I d. Her e, we have l ess t han a bona f i de di sput e over

pr oper t y i nt er est s; we have mer el y a debt or cl ai mi ng what she

cont ends i s an ar guabl e i nt er est i n a pr oper t y she consci ousl y

chose t o rel i nqui sh t o her husband.

The f act s i n t hi s case cer t ai nl y do not war r ant any change i n

Ni nt h Ci r cui t l aw. We decl i ne t o f ol l ow Chesnut because we ar e

convi nced t hat i t s expansi ve r eadi ng of t he t er m pr oper t y of t heest at e i s i nconsi st ent wi t h t he pl ai n l anguage of t hat t er m s

st at ut or y def i ni t i on. See 541( a) ( 1) ; see al so Moody v. Amoco

Oi l Co. , 734 F. 2d 1200, 1213 ( 7t h Ci r . 1984) ( st at i ng t hat

pr oper t y of t he est at e under 541( a) consi st s of t he debt or s

pr oper t y r i ght s as of t he dat e of t he bankrupt cy f i l i ng no

mor e, no l ess ) ; Frazer v. Dr ummond ( I n r e Fr azer ) , 377 B. R. 621,

626- 27 ( 9t h Ci r . BAP 2007) ( same) . J ahr v. Frank ( I n r e J ahr ) ,

2012 WL 3205417, at *7 ( 9t h Ci r . BAP Aug. 1, 2012) .

Si nce Mr s. Fadel had no communi t y i nt er est i n t he Pr oper t y as

of t he bankrupt cy pet i t i on dat e, whi ch woul d be pr ot ect ed by t he

aut omat i c st ay, and DCB showed suf f i ci ent cause f or r el i ef under

362( d) ( 1) t o pur sue i t s unl awf ul det ai ner act i on, t he bankrupt cy

cour t di d not abuse i t s di scr et i on when i t gr ant ed t he St ay Rel i ef

Mot i on.

C. The bankruptcy court did not abuse its discretion in denyingthe Reconsideration Motion.

Al t hough Mr s. Fadel di d not ci t e under whi ch r ul e she was


29/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 29-

br i ngi ng her Reconsi der at i on Mot i on, t he bankrupt cy cour t opt ed t o

t r eat i t as a t i mel y mot i on t o al t er or amend j udgment under Ci vi l

Rul e 59( e) , made appl i cabl e here by Rul e 9023, whi ch t hereby

t ol l ed t he appeal t i me of t he St ay Rel i ef Or der . We agr ee wi t h

t he bankrupt cy cour t s char act er i zat i on. A mot i on f or

r econsi der at i on f i l ed wi t hi n 14 days of t he under l yi ng or der i s

t r eated as a mot i on t o al t er or amend a j udgment under Ci vi l Rul e

59( e) and t ol l s t he t i me wi t hi n whi ch t o f i l e a not i ce of appeal

of t he under l yi ng or der unt i l t he or der on r econsi der at i on i s

ent er ed. Am. I r onwor ks & Er ect or s, I nc. v. N. Am. Const r . Cor p. ,

248 F. 3d 892, 898- 99 ( 9t h Ci r . 2001) ( appl yi ng t he f ormer 10- dayrul e) .

Amendment or al t erat i on of a j udgment i s appr opr i at e under

Ci vi l Rul e 59( e) onl y i f t he cour t ( 1) i s pr esent ed wi t h newl y

di scover ed evi dence t hat was not avai l abl e at t he t i me of t he

or i gi nal hear i ng, ( 2) commi t t ed cl ear er r or or made an i ni t i al

deci si on t hat was mani f est l y unj ust , or ( 3) t her e i s an

i nt er veni ng change i n cont r ol l i ng l aw. Zi mmer man, 255 F. 3d at 740

( ci t i ng School Di st . No. 1J , Mul t nomah Cnt y. v. ACandS, I nc. , 5

F. 3d 1255, 1263 ( 9t h Ci r . 1993) ) . Al t hough Mr s. Fadel appeal ed

t he Reconsi der at i on Or der , she f ai l s t o ar gue how t he bankrupt cy

cour t abused i t s di scr et i on i n denyi ng t he Reconsi der at i on Mot i on.

As such, she has wai ved t hi s i ssue f or pur poses of appeal . See

Wake v. Sedona I nst . ( I n r e Sedona I nst . ) , 220 B. R. 74, 76 ( 9t h

Ci r . 1998) ( an i ssue not br i ef ed i s deemed wai ved) . Even i f we

consi der ed i t , t he Reconsi der at i on Mot i on i mpr oper l y rai sed l egal

argument s and/ or al l eged new f act s t hat Mr s. Fadel coul d have

r ai sed at t he i ni t i al hear i ng, and i t i mpr oper l y rehashed


30/30

1

2

3

4

5

6

7

8

9

10

1112

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

30

argument s she had al r eady pr esent ed. I n r e Gr eco, 113 B. R. at

664. Ther ef or e, she asser t ed no appr opr i at e gr ounds f or grant i ng

t he Reconsi der at i on Mot i on. Zi mmerman, 255 F. 3d at 740. The

bankrupt cy cour t di d not abuse i t s di scr et i on i n denyi ng t he

Reconsi der at i on Mot i on.

VI. CONCLUSION

Under Cal i f or ni a l aw, DCB t ook f r ee and cl ear t i t l e t o t he

Pr oper t y upon compl et i on of t he f or ecl osur e sal e. See 4 Mi l l er &

St ar r , Cal . Real Est at e 10: 208 ( 3d ed. 2009) ( under Cal i f or ni a

l aw, [ t ] he pur chaser at t he f or ecl osur e sal e r ecei ves t i t l e f r ee

and cl ear of any r i ght , t i t l e, or i nt er est of t he t r ust or or anygr ant ee or successor of t he t r ust or . ) . Mr s. Fadel was not on t he

t i t l e t o t he Pr oper t y and she di d not acqui r e an owner shi p

i nt er est i n t he Pr oper t y vi s- - vi z Cal i f or ni a s communi t y pr oper t y

l aw pr i or t o t he sal e. Af t er t he f or ecl osur e sal e, Mr s. Fadel was

si mpl y a t enant at suf f er ance cl ai mi ng a possessory i nt er est i n

t he Pr oper t y t hr ough Mr . Fadel . Seei ng no er r or her e by t he

bankrupt cy cour t i n gr ant i ng DCB r el i ef t o pur sue i t s unl awf ul

det ai ner act i on, we AFFI RM.

Documents

In re: Fanda Hezam Fadel, 9th Cir. BAP (2013)