Filed 8/14/14 McIntyre v. BNC Mortgage CA2/3
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                DIVISION THREE


GAIL JOHNSON-MCINTYRE,                                                   B200061

         Plaintiff and Appellant,                                        (Los Angeles County
                                                                         Super. Ct. No. YC050841
         v.                                                              c/w YC054052)

BNC MORTGAGE, INC., et al.,

         Defendants and Respondents.




         APPEAL from a judgment of the Superior Court of Los Angeles County,
Andrew Kaufman, Judge. Stay lifted. Appeal dismissed.
         Law Offices of Tshombe Sampson and Tshombe Sampson for Plaintiff and
Appellant.
         Houser & Allison, Eric D. Houser and Jeffrey S. Allison for Defendants and
Respondents.
                                        _________________________
                                INTRODUCTION
       Gail Johnson-McIntyre (appellant) appealed from the judgment entered
against her after the trial court sustained the demurrer of defendant BNC
Mortgage, Inc. (BNC), among others, and denied her leave to amend. We
reversed the judgment with respect to the cause of action alleged against BNC
for cancellation of trust deed and other instruments secured by appellant’s real
property. However, BNC filed for bankruptcy court protection (In re BNC
Mortgage LLC (case No. 09-10137-SCC) (BNC bankruptcy) and so we stayed
our disposition as to appellant pending notification from the bankruptcy court.
We have since received notification from BNC of a plan confirmation in the
BNC bankruptcy precluding all claimants in that proceeding from pursuing any
claim against BNC. Meanwhile, BNC obtained a separate judgment against
appellant finally adjudicating BNC’s rights in the trust deed secured by
appellant’s property. Therefore, the instant appeal is moot and so we lift the stay
and dismiss the appeal.
              FACTUAL AND PROCEDURAL BACKGROUND
       1. Appellant’s lawsuit against BNC
       Appellant’s complaint against BNC, among others, sought inter alia
cancellation of a trust deed and other instruments secured by appellant’s real
property. On February 19, 2009, this court filed its opinion in this case reversing
the order sustaining BNC’s demurrer to that cause of action. We concluded,
although appellant’s cause of action for cancellation of instruments did not
identify a defendant, and although the allegations about whether the trust deeds
were cancelled were vague, that appellant could amend her complaint to state a
cause of action against BNC for cancellation of the trust deed. Our opinion holds
only that appellant should be allowed to amend her complaint to state a cause of
action. We made no statement, and reached no conclusion, about whether
appellant would eventually succeed on such a cause of action against BNC.


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       2. BNC’s bankruptcy
       Just over a month before we filed our opinion, on January 9, 2009, the
BNC bankruptcy was commenced triggering an automatic stay. Consequently,
we stayed that portion of our disposition pertaining to BNC.
       The BNC bankruptcy was consolidated with In re Lehman Brothers
Holdings Inc., et al., case No. 08-13555-jmp. A Bar Date Order in that case filed
on July 2, 2009 established a deadline of September 22, 2009 for filing proofs of
claims against the Chapter 11 debtors, including BNC. That Bar Date Order
further provided that “ ‘any holder of a claim against the Debtors who is
required, but fails to file a proof of such claim in accordance with the Bar Date
Order . . . shall forever be barred, estopped, and enjoined from asserting such
claim against the Debtors (or filing a Proof of Claim with respect thereto).’ ”
(Italics added, (the Bar Date Order).) The claims register maintained by the
bankruptcy court does not reflect a proof of claim submitted by appellant against
BNC.
       On December 6, 2011 the bankruptcy court entered its Order Confirming
Modified Third Amended Joint Chapter 11 Plan of Lehman Brothers Holdings
Inc. and its Affiliated Debtors in In re Lehman Brothers Holdings Inc., et al.
(case No. 08-13555-JMP) (the Confirmation Plan), which maintained the
automatic stay. Paragraph 55 of the Confirmation Plan includes the order,
subject to the automatic stay or discharge, that “all entities who have held, hold
or may hold Claims against or Equity Interests in any or all of the Debtors
[including BNC] (whether proof of such Claims or Equity Interests has been filed
or not) and other parties in interest . . . are permanently enjoined, on and after the
Effective Date,” from, among other things, “commencing, conducting, or
continuing in any manner . . . any suit, action, or other proceeding of any kind”
or “enforcing, levying, attaching” any “judgment, award, decree, or order”
against BNC. (Italics added.)


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       3. BNC’s action against appellant in appellant’s bankruptcy
       Meanwhile, on May 20, 2008, BNC, as predecessor in interest to
American Home Mortgage Servicing, Inc., brought an adversary proceeding
against appellant and others in the United States Bankruptcy Court, Central
District of California (In re William A. McIntyre, et al., case No. 08-01483)
(hereinafter, the McIntyre bankruptcy). In that action, the court entered
judgment granting an equitable lien in favor of BNC against the real property
that is the subject of this appeal, and ordered that the lien be recorded and given
priority over appellant’s attorney’s unrecorded lien for fees. The bankruptcy
court’s opinion was affirmed by the United States District Court for the Central
District of California (case No. 2:09-cv-02327-ABC) who explained that BNC
“had erroneously, but in good faith, repaid the note secured by deed of trust on
[appellant’s] real property.” The court noted that “BNC benefitted [appellant’s]
land by paying off the previous note secured by deed of trust as part of an
unconsummated sale transaction . . . . As [appellant] received a windfall when
[her] note secured by deed of trust was paid off and BNC took nothing, an
equitable lien for BNC’s successor-in-interest is appropriate under California
law.” This ruling was affirmed by the Ninth Circuit Court of Appeal.




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       4. Proceedings in this court
       We ordered the parties to submit letter briefs explaining what effect the
Confirmation Plan and other events herein described had on the instant appeal.
After reviewing the letter briefs from Houser & Allison, P.C. on behalf of BNC,
and from the Law Offices of Tshombe Sampson on behalf of appellant, we
issued an order to show cause why we should not dismiss the appeal as moot.1
                                   DISCUSSION
       Our order to show cause notified the parties of three independent bases for
dismissing this appeal. First, the issues herein have been adjudicated to a final
judgment in the McIntyre bankruptcy. Second, paragraph 55 of the Confirmation
Plan permanently enjoins appellant from continuing the instant action against
BNC. Third, it appears that BNC long ago assigned its interest in the trust deed
secured by the real property at issue in this appeal to American Home Mortgage
Servicing, Inc.
       In response to the order to show cause appellant addresses only one of the
three independent bases for dismissal. Appellant argues the judgment in the
McIntyre bankruptcy granting BNC an equitable lien on appellant’s property is
“incorrect and violated appellant’s constitutional right to equal protection of the
law and to due process of [the] law.” She contends that our decision is not moot
but instead “represents a basis for appellant to try to overturn the 9th Circuit’s
decision.”
       However, the instant action is barred by the doctrine of res judicata.
“Under res judicata, a final judgment on the merits of an action precludes the
parties or their privies from relitigating issues that were or could have been
raised in that action.” (Allen v. McCurry (1980) 449 U.S. 90, 94.) “Three


1
       We have received and reviewed the letter briefs filed by appellant’s attorney on
May 14, 2014 and by counsel for BNC on June 3, 2014 in response to the order to show
cause. We take judicial notice of the documents attached to appellant’s letter brief as
exhibits 3 and 4.
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elements must be met for res judicata to adhere: ‘(1) Was the issue decided in the
prior adjudication identical with the one presented in the action in question? (2)
Was there a final judgment on the merits? (3) Was the party against whom the
plea is asserted a party to or in privity with a party to the prior adjudication?
[Citations.]’ [Citation.]” (Nathanson v. Hecker (2002) 99 Cal.App.4th 1158,
1162.)
         The three elements have been met here. First, as appellant acknowledges,
“[t]he facts and issues in that [the McIntyre bankruptcy] are directly relevant to
the facts and issues here . . . .” At issue in both this action and the McIntyre
bankruptcy with respect to BNC, is whether BNC, or its successor-in-interest, is
entitled to a lien on appellant’s real property to secure the loan issued by BNC.
Second, the McIntyre bankruptcy resulted in a final judgment on the merits.
“California gives full faith and credit to a final order or judgment of a federal
court” and “ ‘a judgment or order [entered in a bankruptcy proceeding] once
rendered, is final for purposes of res judicata until reversed on appeal or modified
or set aside in the court of rendition. [Citations.]’ [Citation.]” (Nathanson v.
Hecker, supra, 99 Cal.App.4th at p. 1163, fn. omitted.) The judgment in the
McIntyre bankruptcy was affirmed and so it is final and unassailable. Lastly,
both appellant and BNC were the parties in the McIntyre bankruptcy and here.
Were we to reinstate appellant’s action here, she would not be able to state a
cause of action because the issue she seeks to pursue in this lawsuit has already
been litigated to a final determination in the McIntyre bankruptcy. Therefore,
res judicata bars appellant’s action here seeking cancellation of the trust deed.
         Furthermore, appellant is otherwise precluded by the proceedings in the
BNC bankruptcy from proceeding against BNC. Appellant never filed proof of a
claim in the BNC bankruptcy and so, the Bar Date Order “forever” enjoins her
from asserting or advancing any claim against BNC. Moreover, subject to the
automatic stay being lifted or discharge from bankruptcy, paragraph 55 of the
Confirmation Plan permanently enjoins appellant from “commencing,

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conducting, or continuing in any manner . . . any suit, action, or other
proceeding of any kind” or “enforcing, levying, attaching” any “judgment,
award, decree, or order” against BNC, irrespective of whether she ever filed a
proof of claim. (Italics added.)
       For the foregoing reasons, the appeal is moot. (Guardianship of Melissa
W. (2002) 96 Cal.App.4th 1293, 1300.) Given the instant lawsuit is barred by the
doctrine of res judicata, and in view of the BNC bankruptcy court’s orders
precluding appellant from pursuing a claim against BNC, reinstating the instant
lawsuit and reversing the order sustaining the demurrer to allow appellant to
amend her complaint to state a cause of action against BNC would be an idle act
because we cannot afford appellant any effective relief. Therefore, the appeal is
dismissed on the ground of mootness.




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                                    DISPOSITION
       The stay is lifted. The appeal as to BNC is dismissed as moot. BNC to
recover costs.


       NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS




                                               ALDRICH, J.




We concur:




                 CROSKEY, Acting P. J.




                 KITCHING, J.




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