                                                            FILED
                                                             NOV 19 2014

 1                                                       SUSAN M. SPRAUL, CLERK
                                                           U.S. BKCY. APP. PANEL
                                                           OF THE NINTH CIRCUIT
 2
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No.      NC-14-1052-PaJuKu
                                   )
 6   GIGI ELLIS,                   )      Bk. No.      13-32612
                                   )
 7                                 )
                    Debtor.        )
 8   ______________________________)
                                   )
 9   GIGI ELLIS,                   )
                                   )
10                  Appellant,     )
                                   )      O P I N I O N
11   v.                            )
                                   )
12   JUNYING YU,                   )
                                   )
13                  Appellee.1     )
     ______________________________)
14
15                  Argued and Submitted on October 23, 2014
                          at San Francisco, California
16
                           Filed - November 19, 2014
17
               Appeal from the United States Bankruptcy Court
18                 for the Northern District of California
19     Hon. Hannah L. Blumenstiel, U.S. Bankruptcy Judge, Presiding2
20
21   Appearances:     George S. Wynns argued for appellant Gigi Ellis.
22   Before:   PAPPAS, JURY, AND KURTZ, Bankruptcy Judges.
23
24
          1
25           Appellee Junying Yu did not file a brief or appear in
     this appeal.
26
          2
             Judge Blumenstiel presided at the hearing and entered the
27
     order reviewed in this appeal. However, Judge Dennis Montali is
28   the presiding bankruptcy judge in the case and later entered a
     decision and order denying Appellant’s request for a stay pending
     appeal.
 1   PAPPAS, Bankruptcy Judge:
 2
 3        Chapter 73 debtor Gigi Ellis (“Ellis”) appeals the order of
 4   the bankruptcy court granting Junying Yu’s (“Yu”) motion for
 5   relief from the automatic stay under §§ 362(d)(1) and (2), and
 6   granting in rem relief pursuant to § 362(d)(4).   We DISMISS the
 7   appeal from the stay relief order as MOOT because Ellis has since
 8   been granted a discharge in her bankruptcy case and, therefore,
 9   the automatic stay has terminated by operation of § 362(c)(2)(C).
10   We REVERSE the grant of in rem relief because Yu was not a
11   creditor with a claim secured by an interest in the subject
12   property as required by § 362(d)(4).
13                                  FACTS
14        Ellis purchased a house in San Francisco in 2005 (the
15   “Property”).   She financed this purchase with a loan from Long
16   Beach Mortgage Company; the loan was evidenced by a note and deed
17   of trust on the Property.
18        Ellis defaulted on the note and deed of trust by failing to
19   make required payments in mid-2008.    Since her default, Ellis has
20   filed five chapter 13 and chapter 7 bankruptcy cases in the
21   Northern District of California bankruptcy court, including the
22   case out of which this appeal arises.   All of her prior cases
23   were dismissed either because Ellis failed to file required
24
25
          3
             Unless otherwise indicated, all chapter and section
26   references are to the Bankruptcy Code, 11 U.S.C. §§ 101–1532, all
27   Rule references are to the Federal Rules of Bankruptcy Procedure,
     Rules 1001–9037, and all Civil Rule references are to the Federal
28   Rules of Civil Procedure 1–86.

                                     -2-
 1   documents or because she failed to make chapter 13 plan payments.
 2        On June 11, 2009, Deutsche Bank National Trust Company, as
 3   Trustee for Long Beach Mortgage Loan Trust 2005-2 (“Deutsche
 4   Bank”) purchased the Property at a trustee’s foreclosure sale.
 5   Deutsche Bank then sued Ellis in state court, and on August 7,
 6   2012, obtained an unlawful detainer judgment by default against
 7   Ellis and her uncle, who also resided at the Property.
 8        On August 23, 2013, Yu purchased the Property from Deutsche
 9   Bank and a grant deed in Yu’s favor was recorded the same day.
10   Deutsche Bank also assigned all of its rights under the unlawful
11   detainer judgment to Yu on October 15, 2013; Yu recorded that
12   assignment on October 28, 2013.
13        After Ellis filed the current chapter 13 case on December 9,
14   2013, Yu filed a Motion for Relief from Stay and In Rem Relief
15   under § 362(d)(2) and § 362(d)(4) on January 3, 2014.     As grounds
16   for his request that the bankruptcy court allow him to continue
17   his efforts to take possession of the Property, Yu alleged in the
18   motion that he owned the Property, that Ellis lacked any
19   cognizable interest in it, and that “[t]he evidence shows that
20   Debtor has filed this petition in an attempt to delay, hinder,
21   and defraud Movant, and that her scheme involved multiple
22   bankruptcy filings affecting such real property.”
23        The same day, Yu filed an ex parte motion for an order
24   shortening the time for the hearing on the stay relief motion,
25   alleging that there was an imminent danger of irreparable damage
26   to the Property, and also because of the history of allegedly bad
27   faith bankruptcy filings by Ellis.      The bankruptcy court granted
28   the request for shortened notice on the hearing, but subject to a

                                       -3-
     proviso:
 1
             The court hereby GRANTS the request for a hearing on
 2           shortened notice, on the condition that [Yu’s] counsel
             delivers this order and the motion for relief from stay
 3           (and supporting documents) to Debtor by personal
             service no later than the close of business on
 4           Wednesday, January 8, 2014.
 5   Order Shortening Time at 1, January 7, 2014.
 6           According to a certificate, Yu’s process server attempted to
 7   personally serve Ellis on January 7, and twice on January 8,
 8   2014.       He finally effected personal service on Ellis at 6:00 a.m.
 9   on January 9, 2014.      Yu had also sent copies of the documents by
10   overnight mail to Ellis on January 7, 2014; according to a
11   receipt, they were delivered to Ellis on January 8, 2014.4
12           Ellis filed a lengthy objection to Yu’s stay relief motion
13   on January 9, 2014, arguing, among other things, that “Yu is not
14   a secured creditor of the Debtor and does not claim to be a
15   secured creditor of the Debtor” and that the alleged assignment
16   of the unlawful detainer judgment from Deutsche Bank to Yu was
17   invalid.      The objection was accompanied by Ellis’ five-page
18   declaration disagreeing with several of Yu’s factual allegations
19   regarding the alleged deterioration of the Property and asserting
20
21           4
             At oral argument before the Panel, Debtor argued that the
22   reported mail delivery of the documents on January 8, 2014 was
     not true, and that the documents were actually received on
23   January 9, 2014. The declaration of Jordan Fong of Yu’s
     attorney’s office, “Proof of Service by Overnight Delivery,”
24
     found in the bankruptcy court’s docket attaches “FedEx Travel
25   History Statement 862783209546” showing actual delivery to Ellis’
     address on Wednesday, January 8, 2014, at 8:32 p.m. While the
26   precise date and time of delivery will not impact our decision,
27   we exercise our discretion to review that declaration in
     resolving the issues in this appeal. O'Rourke v. Seaboard Surety
28   Co. (In re E.R. Fegert), 887 F.2d 955, 957-58 (9th Cir. 1989).

                                         -4-
 1   legal defenses.5   On January 10, 2014, Ellis also filed a five-
 2   page “Notice of Noncompliance,” accompanied by a nine-page
 3   affidavit, indicating that the Yu’s service of the stay relief
 4   motion on her was untimely and that she would not attend the
 5   scheduled hearing on January 13.6
 6        The bankruptcy court conducted the hearing on the stay
 7   relief motion on January 13, 2014.    Ellis did not attend.   After
 8   noting her absence, and hearing from counsel for Yu, the court
 9   granted the motion, finding:
10        Regarding service, I am going to find that service was
          sufficient. . . . I find it to have been substantially
11        in compliance with Judge Montali’s order, based in part
          on the fact that the Debtor herself acknowledges when
12        she received the papers and that she has filed detailed
          opposition to the relief sought.
13
          Regarding the merits of the motion, I find that Ms.
14        Ellis’ ownership and possessory interest in the
          property has been terminated. Ownership interest
15        terminated upon the sale of the Property in
          foreclosure, and possessory interest terminated upon
16        the entry of the unlawful detainer judgment for
          possession, of which your client has accepted what
17
18        5
             Ellis’ declaration was not included in the excerpts of
19   record on appeal. We have located what appears to be the
     declaration Ellis submitted to the bankruptcy court in its docket
20   at 25. Again, we exercise our discretion to review that
     declaration. In re E.R. Fegert, 887 F.2d at 957-58.
21
          6
22           The bankruptcy court would later observe, in an Order
     Denying Further Stay Pending Appeal entered on February 20, 2014,
23   that:
24
          Debtor was aware of the [stay relief motion and request
25        for hearing on shortened notice] on or before January
          9, as she filed an 11-page objection and a 5-page
26        declaration on that date. This detailed response is
27        compelling proof that Debtor was not denied any due
          process and any defects in the service of the moving
28        papers were harmless.

                                     -5-
 1        appears to me to be a valid assignment. So I’m going
          to grant the motion for relief from stay under [§]
 2        362(d)(1)7 and (2).
 3        With regard to [Yu’s request for in rem relief], I note
          that the Debtor has filed a number of bankruptcy cases
 4        since acquiring the Property. . . . She has failed to
          prosecute most of the cases that she has filed, and all
 5        of the cases that she has filed in the years since
          acquiring the Property. . . . She was required to, but
 6        did not, attend a meeting of creditors pursuant to
          section 341 of the Bankruptcy Code. . . . It appears
 7        that she has filed the several cases that she has filed
          since acquiring the Property as part of a scheme to
 8        hinder and delay her creditors, including J.P. Morgan,
          and by virtue of your client’s assignment, your client.
 9        So I’m going to grant in rem relief as well.
10   Hr’g Tr. 4:11–6:1, January 13, 2014.
11        On January 27, 2014, the bankruptcy court entered an Order
12   Granting In Rem Relief from the Automatic Stay.     The order
13   memorialized the findings made on the record at the January 13,
14   2014 hearing and terminated the automatic stay under §§ 362(d)(1)
15   and (2).   The order also granted in rem relief in Yu’s favor
16   under § 362(d)(4), providing that, “this order terminating the
17   automatic stay under 11 U.S.C. § 362 as to [Yu’s] interest in the
18   Property shall be binding in any other case filed under the
19   Bankruptcy Code purporting to affect the Property that is filed
20   not later than two years after the date of this Order, such that
21   the automatic stay under 11 U.S.C. § 362(a) shall not apply to
22   [Yu’s] interest in the Property.”     Order at 2.
23
24        7
             Yu had not sought stay relief under § 362(d)(1); his
25   motion alleged that relief was warranted under § 362(d)(2). But
     that the bankruptcy court granted Yu relief from the stay for
26   “cause” when Yu had not asserted that in his motion is of no
27   moment. Ellis did not challenge this discrepancy on appeal, and
     below, we deem Ellis’ appeal from that aspect of the motion is
28   now moot and must be dismissed.

                                     -6-
 1        Ellis filed a timely notice of appeal of the stay relief
 2   order on February 3, 2014.
 3                      EVENTS SUBSEQUENT TO THE APPEAL
 4        We may take judicial notice of events in the bankruptcy case
 5   occurring subsequent to the filing of an appeal if they resolve
 6   the dispute between the parties.        Pitts v. Terrible Herbst, Inc.,
 7   653 F.3d 1081, 1087 (9th Cir. 2011) (“[I]f events subsequent to
 8   the filing of the case resolve the parties' dispute, we must
 9   dismiss the case as moot.”).    We have done so, and observe that
10   on April 16, 2014, Ellis voluntarily converted her chapter 13
11   case to a case under chapter 7, and that on July 22, 2014, the
12   bankruptcy court granted Ellis a discharge under § 727(a).
13                                JURISDICTION
14        The bankruptcy court had jurisdiction under 28 U.S.C.
15   §§ 1334 and 157(b)(2)(G).     Our jurisdiction is based upon 28
16   U.S.C. § 158, and we discuss one aspect of that jurisdiction
17   below.
18                                   ISSUES
19        Whether the bankruptcy court’s order terminating the
20   automatic stay is moot.
21        Whether the bankruptcy court abused its discretion in
22   granting in rem relief.
23                             STANDARDS OF REVIEW
24        We review our own jurisdiction, including questions of
25   mootness, de novo. Silver Sage Partners, Ltd. v. City of Desert
26   Hot Springs (In re City of Desert Hot Springs), 339 F.3d 782, 787
27   (9th Cir. 2003).
28        The decision of a bankruptcy court to grant in rem relief

                                       -7-
 1   under § 362(d)(4) is reviewed for abuse of discretion.     First
 2   Yorkshire Holdings, Inc. v. Pacifica L 22, LLC (In re First
 3   Yorkshire Holdings, Inc.), 470 B.R. 864, 868 (9th Cir. BAP 2012).
 4   A bankruptcy court abuses its discretion if it applies an
 5   incorrect legal standard, misapplies the correct legal standard,
 6   or if its factual findings are illogical, implausible or without
 7   support from evidence in the record.      TrafficSchool.com v.
 8   Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011) (citing United
 9   States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)(en banc)).
10                                DISCUSSION
11                                    I.
12                The appeal of the stay relief provisions
                      in the stay relief order is moot.
13
14        We cannot exercise jurisdiction over a moot appeal.         United
15   States v. Patullo (In re Patullo), 271 F.3d 898, 900 (9th Cir.
16   2001); GTE Cal., Inc. v. FCC, 39 F.3d 940, 945 (9th Cir. 1994)
17   (“The jurisdiction of federal courts depends on the existence of
18   a ‘case or controversy’ under Article III of the Constitution.”).
19   A moot case is one where the issues presented are no longer live
20   and no case or controversy exists.     Pilate v. Burrell (In re
21   Burrell), 415 F.3d 994, 998 (9th Cir. 2005).      The test for
22   mootness is whether an appellate court can still grant effective
23   relief to the prevailing party if it decides the merits in his or
24   her favor.   Id.   If an issue becomes moot while the appeal is
25   pending, an appellate court must dismiss the appeal.     In re
26   Patullo, 271 F.3d at 900.
27        As noted above, after Ellis commenced this appeal, she filed
28   a motion to convert her bankruptcy case from one under chapter 13

                                      -8-
 1   to one under chapter 7; the case was converted.    Thereafter, the
 2   bankruptcy court granted Ellis a discharge under § 727(a).
 3        Under § 362(c)(2)(C), the provisions of the § 362(a)
 4   automatic stay that would shield Ellis from any legal actions by
 5   Yu to recover the Property from her continued in effect only
 6   “until the earliest of . . . the time a discharge is granted or
 7   denied.”   Here, it is not disputed that Ellis has been granted a
 8   discharge by the bankruptcy court.     Since the entry of the
 9   discharge order in the bankruptcy case there has been no
10   automatic stay in effect.    Consequently, even were we to overturn
11   that part of the stay relief order that terminated the automatic
12   stay in Yu’s favor under § 362(d)(1) and (2), that stay has now
13   terminated as a matter of law.   Bigelow v. Comm’r, 65 F.3d 127,
14   129 (9th Cir. 1995) (“a stay immediately dissolves upon issuance
15   of a discharge by the bankruptcy court. §362(2)(C)”).    Simply
16   put, we lack the ability to grant Ellis any effective relief as
17   to this aspect of the order on appeal.
18        The Ninth Circuit has instructed that, when an appellate
19   court cannot grant effective relief to an appellant, the appeal
20   must be dismissed as moot.   Pitts, 653 F.3d at 1087 (9th Cir.
21   2011) (“[I]f events subsequent to the filing of the case resolve
22   the parties’ dispute, we must dismiss the case as moot.”); Cook
23   v. Fletcher (In re Cook), 730 F.2d 1324, 1326 (9th Cir. 1984)
24   (dismissing appeal of stay relief order as moot where the chapter
25   7 discharge was issued after the appeal was filed).
26        The appeal of that part of the stay relief order terminating
27   the automatic stay under §§ 362(d)(1) and (2) is therefore
28   DISMISSED as MOOT.

                                      -9-
 1                                   II.
       The bankruptcy court abused its discretion in granting in rem
 2      relief to Yu under § 362(d)(4)because he is not a creditor
           whose claim is secured by an interest in the Property.
 3
 4        Ellis argues that we should reverse the stay relief order
 5   because she was not served with copies of the stay relief motion
 6   in accordance with the bankruptcy court’s order shortening time
 7   for the hearing.    While we are skeptical of this argument, there
 8   is another, more fundamental reason appearing in the record
 9   requiring reversal.
10        Section 362(d)(4)(B) provides:
11        (d) On request of a party in interest and after notice
          and a hearing, the court shall grant relief from the
12        stay provided under subsection (a) of this section,
          such as by terminating, annulling, modifying, or
13        conditioning such stay– . . .
14        (4) with respect to a stay of an act against real
          property under subsection (a), by a creditor whose
15        claim is secured by an interest in such real property,
          if the court finds that the filing of the petition was
16        part of a scheme to delay, hinder, or defraud creditors
          that involved . . . (B) multiple bankruptcy filings
17        affecting such real property.
18   (emphasis added).   Applying its plain meaning, this provision of
19   the Code authorizes a bankruptcy court to grant the extraordinary
20   remedy of in rem stay relief only upon the request of a creditor
21   whose claim is secured by an interest in the subject property.
22        In this case, after a review of the record presented to us,
23   Yu has never claimed that he was a secured creditor of Ellis.
24   And in particular, Yu did not assert he was a secured creditor in
25   the stay relief motion.   Instead, in the bankruptcy court, and
26   now on appeal, both Ellis and Yu each assert that they own the
27   Property.   In other words, this is a dispute between two putative
28   owners of the same real property, not a contest where the parties

                                      -10-
 1   occupy a debtor-creditor relationship.8
 2        Two recent decisions, also from the Northern District of
 3   California bankruptcy court, emphasize that a party seeking in
 4   rem relief under § 362(d)(4) must establish, and the bankruptcy
 5   court must find, that the movant is a creditor whose claim is
 6   secured by an interest in the property in question.   In re
 7   Laconico, 2014 WL 3687202, at *1 (Bankr. N.D. Cal. July 24,
 8   2014); In re Robles, 2014 WL 3715092, at *1 (Bankr. N.D. Cal.
 9   July 24, 2014).
10        In In re Laconico, the bankruptcy court concluded that
11   “[b]efore a creditor can obtain in rem relief under § 362(d)(4),
12   the creditor must establish that the creditor holds a security
13   interest in the subject property.”    2014 WL 3687202, at *1.   The
14   bankruptcy court found that the moving party seeking in rem
15   relief in that case had adequately shown the bankruptcy court
16   proof that it was an assignee of both a note and the deed of
17
18        8
             In Yu’s stay relief motion, the ex parte request for an
19   order shortening time, and in the declaration of Yu’s counsel
     supporting the stay relief motion, Yu never refers to himself as
20   a creditor, let alone a secured creditor. Instead, he refers to
     himself as “Movant.” Section 101(10) defines creditor to mean
21   “an entity that has a claim against the debtor that arose at the
22   time of or before the order for relief concerning the debtor . .
     . .” “Claim” is defined by the Code, as relevant here, to mean
23   “a right to payment, whether or not such right is reduced to
     judgment, liquidated, unliquidated, fixed, contingent, matured,
24
     unmatured, disputed, undisputed, legal, equitable, secured or
25   unsecured . . . .” § 101(5)(A). We have reviewed the record,
     including the state court’s unlawful detainer judgment, and there
26   was no documentation or other evidence presented to the
27   bankruptcy court at the time it granted in rem stay relief to
     show that Yu’s entitlement to possession of the Property would
28   constitute a claim in the bankruptcy case as defined by the Code.

                                    -11-
 1   trust securing the loan on the affected property.      Id.
 2        In re Robles is even more on point.       There, the bankruptcy
 3   court again noted that to obtain in rem relief under § 362(d)(4),
 4   “the creditor must establish that the creditor holds a security
 5   interest in the subject property.”      2014 WL 3715092, at *1.   And
 6   like this case, Robles addressed a scenario where the party
 7   seeking in rem relief based the request on its alleged ownership
 8   of the property.   The Robles court rejected that request for
 9   relief under § 362(d)(4), observing that a party without an
10   ownership interest does not benefit from the protections
11   contemplated in § 362(d)(4).   In rem relief was granted under
12   § 105(a).   Id.
13        Other bankruptcy courts in this circuit have likewise held
14   that the party seeking in rem relief must demonstrate that it is
15   a secured creditor.    In re Gonzalez, 456 B.R. 429, 442 (Bankr.
16   C.D. Cal. 2011), rev’d on other grounds, Quality Loan Serv. Corp.
17   v. Gonzalez (In re Gonzalez), 2012 U.S. Dist. LEXIS 188105 (C.D.
18   Cal. June 14, 2012).   So have courts from other circuits: In re
19   McCray, 342 B.R. 668, 670 (Bankr. D.D.C. 2006) (“§ 362(d)(4) is
20   limited to a stay of an act against real property and to ‘a
21   creditor whose claim is secured by an interest in such real
22   property.’ Here, [the movant] holds no claim secured by an
23   interest in the subject property.       Instead, it claims to own the
24   property pursuant to a foreclosure sale (which by definition
25   would extinguish the security interest it had in the
26
27
28

                                      -12-
 1   property)”);9 see also In re Stoltzfus, 2009 WL 2872860, at *6
 2   (Bankr. E.D. Pa. March 30, 2009) (“because the movants . . . do
 3   not hold claims secured by the . . . interest in real property,
 4   the provisions of section 362(d)(4) are not applicable”).        This
 5   view is also shared by a leading treatise on bankruptcy law:
 6   “the relief under § 362(d)(4) is available only to a creditor
 7   whose claim is secured by an interest in real property.”
 8   3 Collier on Bankruptcy ¶ 362.05[19][a] (Alan N. Resnick & Henry
 9   J. Sommer, eds. 16th ed. 2013).
10        Though Ellis argued the point,10 the bankruptcy court did
11   not address the undisputed fact that Yu was not a creditor whose
12   claim was secured by the Property.       However, the evidence
13
14
          9
             Although the bankruptcy court in McCray ruled that only
15   secured creditors could obtain in rem relief under § 362(d)(4),
16   it granted such relief to the property owner pursuant to its
     § 105(a) powers. However, this Panel has held that in rem stay
17   relief is not available under § 105(a). Johnson v. TRE Holdings,
     LLC (In re Johnson), 346 B.R. 190, 195-96 (9th Cir. BAP 2006).
18   Further, a request for in rem relief other than under the strict
19   rules of § 362(d)(4) would involve a request for an injunction or
     other equitable relief affecting an interest in property for
20   purposes of Rules 7001(2) and 7001(7). In re van Ness, 399 B.R.
     897, 904 (Bankr. E.D. Cal. 2009). Such a request would therefore
21
     require the procedural protections of an adversary proceeding
22   rather than a contested matter under Rule 9014. Id.
23        10
             In her objection to the stay relief motion, the very
     first line reads, “Movant Junying Yu is not a secured creditor of
24
     the Debtor and does not claim to be a secured creditor of the
25   Debtor.” Later, in opposition to the ex parte request for stay
     pending appeal to the bankruptcy court, she repeated the
26   argument: “Movant Yu does not claim to be either a secured or an
27   unsecured creditor of the Debtor here.” Yu never responded to
     Ellis’ argument that he is not a secured creditor, and the
28   bankruptcy court did not rule on Ellis’ argument.

                                       -13-
 1   submitted to the bankruptcy court by Yu unequivocally
 2   demonstrates that he sought in rem relief, not as a secured
 3   creditor, but as the putative owner of the Property.    Because Yu
 4   was not a “creditor whose claim is secured by an interest” in the
 5   Property, we conclude that the bankruptcy court applied an
 6   incorrect legal rule and thereby abused its discretion when it
 7   granted Yu in rem relief under § 362(d)(4).   Accordingly, that
 8   aspect of the bankruptcy court’s order is REVERSED.
 9                              CONCLUSION
10        We DISMISS the appeal from the bankruptcy court’s order
11   terminating the automatic stay under § 362(d)(1) and (2) as MOOT.
12   We REVERSE the bankruptcy court’s grant of in rem relief to Yu
13   under § 362(d)(4) because Yu was not a creditor whose claim is
14   secured by the Property.
15
16
17
18
19
20
21
22
23
24
25
26
27
28

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