                                                             FILED
                                                              MAY 29 2013
 1
                                                          SUSAN M SPRAUL, CLERK
 2                                                          U.S. BKCY. APP. PANEL
                                                            OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                              OF THE NINTH CIRCUIT
 5   In re:                            )    BAP No.    CC-12-1445-MkTaJu
                                       )
 6   JAMES W. SIMPSON,                 )    BK. No.    11-38929
                                       )
 7                    Debtor.          )
                                       )
 8                                     )
     JAMES W. SIMPSON,                 )
 9                                     )
                      Appellant,       )
10                                     )
     v.                                )    MEMORANDUM*
11                                     )
     DEUTSCHE BANK NATIONAL TRUST      )
12   COMPANY; JAN P. JOHNSON,          )
     Chapter 13 Trustee; KRISTIE       )
13   PEREZ, Bankruptcy Specialist      )
     at Carrington Mortgage            )
14   Services LLC,                     )
                                       )
15                    Appellees.       )
                                       )
16
                         Submitted Without Oral Argument
17                              on May 16, 2013**
18                              Filed – May 29, 2013
19             Appeal from the United States Bankruptcy Court
                   for the Eastern District of California
20
          Honorable Thomas C. Holman, Bankruptcy Judge, Presiding
21
22   Appearances:     Appellant James W. Simpson, pro se, on brief;
                      Nicolas A. Daluiso of Robinson Tait, P.S., on
23                    brief, for Appellee Deutsche Bank National Trust
                      Company.
24
25
          *
           This disposition is not appropriate for publication.
26   Although it may be cited for whatever persuasive value it may
     have, see Fed. R. App. P. 32.1, it has no precedential value.
27
     See 9th Cir. BAP Rule 8013-1.
28        **
           By order entered March 28, 2013, this appeal was deemed
     suitable for submission without oral argument.
 1   Before: MARKELL, TAYLOR, and JURY, Bankruptcy Judges.
 2
 3                              INTRODUCTION
 4        Chapter 131 debtor James Simpson (“Simpson”) objected to the
 5   claim of creditor Deutsche Bank National Trust Company as
 6   Indenture Trustee for New Century Home Equity Loan Trust Series
 7   2006-2 (“Deutsche Bank”) on the ground that Deutsche Bank did not
 8   have standing.   The bankruptcy court initially sustained the
 9   objection, and it also entered an order disallowing the claim.
10   After Deutsche Bank amended its claim and presented further
11   evidence, however, the court vacated its prior disallowance order
12   and overruled Simpson’s claim objection.
13        Simpson appeals from the order overruling his claim
14   objection and vacating the disallowance order.   We AFFIRM, but
15   this affirmance is without prejudice to Simpson filing in the
16   bankruptcy court a § 502(j) reconsideration motion based on the
17   undisputed fact that, subsequent to the filing of this appeal,
18   Deutsche Bank foreclosed on the property securing its claim,
19   thereby extinguishing its claim.
20                                  FACTS
21        On August 2, 2011, Simpson filed his chapter 13 bankruptcy
22   petition in pro per.   On September 29, 2011, Deutsche Bank timely
23   filed Proof of Claim No. 3-1 (“POC 3-1”) asserting a secured
24   claim in the amount of $605,614.27.
25
26        1
           Unless specified otherwise, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     all “Rule” references are to the Federal Rules of Bankruptcy
28   Procedure, Rules 1001-9037.

                                        2
 1           In POC 3-1, Deutsche Bank identified itself as the creditor
 2   and Carrington Mortgage Servicers (“Carrington”) as the Note’s
 3   servicing agent.      The basis for the claim was a note (“Note”)
 4   secured by deed of trust (“Deed of Trust”) on real estate in Elk
 5   Grove, CA (“Property”).      Attached to POC 3-1 were copies of the
 6   Note, the Deed of trust, an Assignment of the Deed of Trust (the
 7   “Assignment”), and a legal description of the Property.
 8           The Note was executed on May 26, 2006 in the principal
 9   amount of $450,000.      The Note identified New Century Mortgage
10   Company (“NCMC”) as lender and Simpson’s wife, Pamela Simpson, as
11   the sole borrower.2      The last page of the Note contains what
12   appears to be an endorsement in blank signed by an NCMC
13   executive.
14           The Deed of Trust, also executed on May 26, 2006, was
15   recorded on June 1, 2006.      The named beneficiary was the lender,
16   NCMC.       Since they both held title to the Property, both Simpson
17   and his wife signed the Deed of Trust as “borrowers.”      Under ¶ 13
18   of the Deed of Trust, co-signers like Simpson — those who execute
19   the Deed of Trust but not the Note — only pledge their interest
20   in the Property as collateral to secure the payment obligation
21   under the Note; they are not personally obligated to pay the sums
22   secured by the Deed of Trust.      In other words, Simpson presumably
23   had no in personam liability for the debt evidenced by the Note;
24   it was nonrecourse as to him.3
25
             2
26            Pamela Simpson is not a party to Simpson’s bankruptcy case.
             3
27         Consistent with paragraph 13 of the Deed of Trust, the
     parties treated the Note as the sole obligation of Pamela
28                                                      (continued...)

                                          3
 1        The Assignment, executed on April 27, 2007, reflects NCMC’s
 2   assignment of the beneficial interest in the Deed of Trust to
 3   Deutsche Bank.
 4        On November 8, 2011, Simpson objected to POC 3-1.     He
 5   asserted that (i) he did not list Carrington as a creditor on his
 6   petition; (ii) neither Deutsche Bank nor Carrington had the right
 7   to assert creditor status; (iii) he did not sign the Note;
 8   (iv) Deutsche Bank committed perjury on behalf of Carrington by
 9   submitting the Note which did not contain his signature;
10   (v) Deutsche Bank had submitted three different versions of the
11   Note with different stamps and markings; and (vi) Deutsche Bank
12   had never produced the original Note for inspection by Simpson
13   per his requests.   Therefore, Simpson reasoned, Deutsche Bank had
14   not submitted the documentation necessary to demonstrate that it
15   was a holder of the Note.
16        One month later, Deutsche Bank opposed Simpson’s claim
17   objection.   Deutsche Bank attached a declaration by Kristie Perez
18   (“Perez”), an employee of Carrington who declared that Carrington
19   was the servicer of the Note on Deutsche Bank’s behalf and that
20   true and correct copies of the Note and Deed of Trust were
21   attached as exhibits to her declaration.
22        On January 10, 2012, the bankruptcy court heard the claim
23   objection and sustained it, but also granted leave to amend.    The
24
25        3
           (...continued)
26   Simpson. Nonetheless, the debt provided for in the Note may well
     have qualified as a community claim, as it was incurred in a
27   community property state during marriage and related to the
     primary residence of a married couple. See generally §§ 101(7),
28   541(a)(2).

                                      4
 1   bankruptcy court found that Perez’s declaration did not establish
 2   that Deutsche Bank possessed the original Note.   Thus, Deutsche
 3   Bank had not demonstrated that it was the Note’s holder as
 4   required for standing to enforce the claim.   On January 13, 2012,
 5   the bankruptcy court entered an order (“Conditional Order”)
 6   sustaining the objection, but also giving Deutsche Bank until
 7   February 7, 2012 to file an amended proof of claim.   As specified
 8   in the Conditional Order:   “[i]f Deutsche fails to file an
 9   amended proof of claim within the allowed time, [Simpson] may
10   submit an order disallowing [POC 3-1] . . . .”    Civil Minute
11   Order (Jan. 13, 2012).
12        One week after the deadline, on February 14, 2012, Deutsche
13   Bank filed Proof of Claim 6-2 (“POC 6-2”).4   Deutsche Bank
14   indicated that this served to amend a previously filed claim, but
15   confusingly stated that it amended POC 6-1.   Even if POC 6-2 was
16   intended to amend POC 6-1, the Panel understands that the
17   overarching intent was to amend POC 3-1.5   Deutsche Bank again
18   filed a declaration by Perez, but this time she also declared
19   that Deutsche Bank possessed the original Note and that she had
20   reviewed it.
21        On February 19, 2012, five days after Deutsche Bank’s
22   filing, Simpson filed a proof of service indicating that he had
23   served Deutsche Bank with his proposed order disallowing POC 3-1
24
25        4
           According to Deutsche Bank, Proof of Claim 6-1 (“POC 6-1”)
26   was a misfiling, and POC 6-2 is the operative document.
          5
27         The relevant content of POC 3-1 and POC 6-2 is identical,
     including the creditor’s name, the claim amount, and the basis
28   for the claim.

                                      5
 1   in accordance with the Conditional Order.      Deutsche Bank opposed,
 2   arguing that it missed the February 7 deadline only because of
 3   technical glitches with the bankruptcy court’s electronic filing
 4   system.   Nonetheless, on March 19, 2012, the bankruptcy court
 5   entered an order disallowing POC 3-1 (“Disallowance Order”).      The
 6   Disallowance Order said nothing about POC 6-2.
 7        On June 5, 2012, Simpson objected to POC 6-2 and filed a
 8   supporting memorandum of points and authorities.      He contended
 9   that POC 6-2 was untimely filed.       He also restated his earlier
10   challenges to POC 3-1 and made various new contentions.      The crux
11   of his substantive arguments was that Deutsche Bank did not have
12   standing to prosecute a proof of claim due to various infirmities
13   with the conveyances of the relevant interests in the Note and
14   the Deed of Trust.
15        After a hearing, the bankruptcy court found that Deutsche
16   Bank had established that it possessed the original Note, which
17   was endorsed in blank, and that it was the successor beneficiary
18   under the Deed of Trust.   Accordingly, the court determined that
19   Deutsche Bank was the Note’s holder and thus had standing to
20   prosecute the proof of claim.
21        As to the timeliness of POC 6-2, the court stated that its
22   Conditional Order was not self-executing; it did not
23   automatically disallow POC 3-1.    Rather, the Conditional Order
24   merely permitted Simpson to lodge a proposed order disallowing
25   POC 3-1 if Deutsche Bank did not meet the February 7, 2012
26   deadline.   By the time Simpson had submitted his proposed order
27   on February 19, 2012, Deutsche Bank had already amended POC 3-1
28   by filing POC 6-2 on February 14, 2012.      Given this sequence of

                                        6
 1   events, the bankruptcy court determined that it had erred by
 2   entering the Disallowance Order.       Alternately, the court held
 3   that the untimeliness of POC 6-2 was the result of excusable
 4   neglect.
 5        On August 16, 2012 the bankruptcy court entered an order
 6   overruling Simpson’s objection to POC 6-2 and vacating the
 7   Disallowance Order.   In effect, the court determined that POC 6-2
 8   was an allowed secured claim against the bankruptcy estate.
 9        On August 24, 2012, Simpson timely filed this appeal, BAP
10   No. EC-12-1445.    He appeals the bankruptcy court’s order of
11   August 16, 2012, challenging Deutsche Bank’s standing and the
12   court’s decision to vacate the Disallowance Order.
13        On August 29, 2012, Deutsche Bank moved for relief from stay
14   to foreclose on the Property.   The bankruptcy court granted the
15   motion on October 3, 2012.   Simpson timely appealed the order
16   lifting stay, BAP No. EC-12-1527, but did not obtain a stay
17   pending appeal from either the bankruptcy court or the Panel.        On
18   November 30, 2012, the Property was sold at a nonjudicial
19   foreclosure sale.   After the sale, we dismissed this second
20   appeal, BAP No. EC-12-1527, as moot.
21        In this appeal, BAP No. EC-12-1445, Simpson first argues
22   that POC 6-2 did not amend POC 3-1, but rather was a new untimely
23   filed proof of claim.   He next contends that the bankruptcy court
24   did not have sufficient grounds to vacate the Disallowance Order.
25   Relying on various alleged deficiencies in the Note, the Deed of
26   Trust, and the Assignment, Simpson also argues that Deutsche Bank
27   lacked standing.    Finally, Simpson argues that the bankruptcy
28

                                        7
 1   court should not have found excusable neglect.6
 2        Deutsche Bank argues that it had standing to pursue its
 3   claim and that the bankruptcy court correctly determined that its
 4   failure to meet the amendment deadline was due to excusable
 5   neglect.    Deutsche Bank further contends that the different
 6   versions of the Note simply represented the state of the Note at
 7   different points in time: pre- and post-endorsement, and with and
 8   without a stamp indicating that a copy was certified.
 9                                JURISDICTION
10            The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
11   §§ 1334 and 157(b)(2)(B).    We have jurisdiction under 28 U.S.C.
12   § 158.
13                                    ISSUE
14        Did the bankruptcy court err in vacating the Disallowance
15   Order and in allowing POC 6-2?
16                             STANDARDS OF REVIEW
17        We review the bankruptcy court’s conclusions of law de novo
18   and its factual findings under the clearly erroneous standard.
19   Clear Channel Outdoor, Inc. v. Knupfer (In re PW, LLC), 391 B.R.
20   25, 32 (9th Cir. BAP 2008).    A finding of fact is clearly
21   erroneous only if it is illogical, implausible, or without
22   support in the record.    See Retz v. Samson (In re Retz), 606 F.3d
23   1189, 1196 (9th Cir. 2010).    If two permissible views of the
24
25        6
           Simpson also asserted on appeal that Deutsche Bank
26   committed bankruptcy fraud under 18 U.S.C. § 157. But we cannot
     rule upon this issue as bankruptcy fraud is a criminal matter not
27   within the jurisdiction of the bankruptcy court or this Panel.
     18 U.S.C. § 3231 (2012); see Griffith v. Oles (In re Hipp, Inc.),
28   895 F.2d 1503, 1518 (5th Cir. 1990).

                                        8
 1   evidence are possible, the trial judge's choice between them
 2   cannot be clearly erroneous.   Anderson v. City of Bessemer City,
 3   N.C., 470 U.S. 564, 573–74 (1985).
 4                                DISCUSSION
 5   A.   General Legal Principles Regarding Bankruptcy Claims
 6        Creditors may file proofs of claim.     § 501(a).   “A proof of
 7   claim is a written statement setting forth a creditor’s claim.”
 8   Rule 3001(a).   “A proof of claim executed and filed in accordance
 9   with [the Bankruptcy Rules] shall constitute prima facie evidence
10   of the validity and amount of the claim.”    Rule 3001(f).
11        In a Chapter 13 case, the creditor must file a proof of
12   claim with respect to any unsecured claim.    Rule 3002(a).   Even
13   then, however, the claim must be “allowed” before it can serve as
14   the basis for any distribution.   Allowance initially is not
15   difficult to obtain.   “A claim . . . , proof of which is filed
16   under section 501 . . . , is deemed allowed unless a party in
17   interest . . . objects.”   § 502(a).
18        “If [an] objection to a claim is made, the court . . . shall
19   determine the amount of such claim . . . as of the date of the
20   filing of the petition, and shall allow such claim in such
21   amount[,]” with various exceptions.    § 502(b).   The only
22   exception relevant here is that a claim shall not be allowed if
23   “such claim is unenforceable against the debtor and property of
24   the debtor, under any agreement or applicable law . . . .”
25   § 502(b)(6).    Put another way, “the court must allow the claim if
26   it is enforceable against either the debtor or his property.”
27   Johnson v. Home State Bank, 501 U.S. 78, 85 (1991) (emphasis in
28   original).

                                       9
 1        The effect of an allowed claim is that the claimant is
 2   deemed to have a valid “right to payment,” the claim’s amount is
 3   established, and the claimant is entitled to a distribution from
 4   the bankruptcy estate; however, if a claim is disallowed, that
 5   disallowance is not a finding that the claimant engaged in any
 6   illegal activity, such as wrongful foreclosure or fraud.    See
 7   § 101(5); Rule 3021; Cotchett, Pitre & McCarthy v. Silver, 2012
 8   WL 1657620 at *13 (E.D. Cal. 2012); In re Hudson, 260 B.R. 421,
 9   430 (Bankr. W.D. Mich. 2001).
10        Secured creditors such as Deutsche Bank do not need to file
11   proofs of claim.    Meadowbrook Estates v. McElvany, Inc.
12   (In re Meadowbrook Estates), 246 B.R. 898, 902 (Bankr. E.D. Cal.
13   2000) (citing In re Tarnow, 749 F.2d 464, 465 (7th Cir. 1984)).
14   In the absence of a proof of claim, a secured creditor’s lien
15   passes through the bankruptcy and remains in place; “the debtor’s
16   [personal] liability for the secured creditor’s claim will be
17   discharged and the creditor will not receive a dividend from the
18   estate.”   Id.; see also Johnson, 501 U.S. at 83.    But when a
19   secured creditor wants to obtain a distribution under a confirmed
20   Chapter 13 plan, that creditor must file a proof of claim.    See
21   Rule 3021; Dixon v. I.R.S. (In re Dixon), 218 B.R. 150, 151 (10th
22   Cir. BAP 1998) (applying Rule 3021 in a Chapter 13 case).
23        A claim secured by property of the estate is bifurcated into
24   two claims if the value of the collateral is less than the amount
25   of the debt.   § 506(a).   There is a secured claim equal to the
26   value of the collateral and an unsecured claim for the remainder
27   (the deficiency).    Id.   The creditor’s property right in the lien
28   is thus preserved.   For the secured claim, the creditor can seek

                                       10
 1   relief from stay to foreclose its lien or accept payment in the
 2   Chapter 13 plan to protect its interest.    The Chapter 13 plan
 3   pays priority claims, and if proceeds remain, the plan generally
 4   pays all or part of the unsecured claim.    See § 1322(a)(2),
 5   (b)(1), (b)(8).   But see Downey Savs. & Loan Ass’n v. Metz
 6   (In re Metz), 820 F.2d 1495, 1498–99 (9th Cir. 1987) (Chapter 13
 7   plan with zero payments to unsecured creditors not necessarily
 8   filed in bad faith so long as all of debtor’s disposable income
 9   allocated to the plan).   Any remaining portion of the unsecured
10   claim at plan completion is discharged.     1328(a); see also
11   Lawrence Tractor Co. v. Gregory (In re Gregory), 705 F.2d 1118,
12   1122 (9th Cir. 1983) (Chapter 13 discharge includes unsecured
13   debts even if none of the plan payments were allocated to those
14   debts so long as the plan “provided for” the debts under
15   Section 1328(a) by “deal[ing] with [them] or refer[ring] to
16   [them]”).
17   B.   Simpson’s Contentions Regarding Deutsche Bank’s Claim
18        In this appeal, Simpson’s contentions boil down to three key
19   arguments: (1) the bankruptcy court should not have vacated the
20   March 19, 2012 Disallowance Order; (2) POC 6-2 should have been
21   disallowed as untimely; and (3) the bankruptcy court should have
22   sustained his objection to POC 6-2 for the same reason it
23   sustained his objection to POC 3-1, because Deutsche Bank did not
24   establish it was a person entitled to enforce the note and hence
25   lacked standing to file a proof of claim.    We will address each
26   of these arguments in turn.
27        1.     Vacatur of Disallowance Order
28        Simpson asserts that the bankruptcy court improperly vacated

                                      11
 1   the Disallowance Order.    Simpson claims, as a matter of
 2   procedure, that the court should not have vacated the
 3   Disallowance Order sua sponte and, in the alternative, should
 4   have given him advance notice and an opportunity for a hearing on
 5   the issue of whether the Disallowance Order should be
 6   reconsidered.
 7        We are not persuaded that Simpson’s procedural claims
 8   justify reversal of the bankruptcy court’s decision to vacate the
 9   Disallowance Order.   Section 502(j) and Rule 3008 govern
10   reconsideration of claims, but neither provision indicates that
11   the bankruptcy court was prohibited from sua sponte reconsidering
12   the Disallowance Order.    Moreover, another Bankruptcy Code
13   provision appears to explicitly give the court authority to act
14   on its own motion under such circumstances.   See § 105(a); see
15   also, Kirwan v. Vanderwerf (In re Kirwan), 164 F.3d 1175, 1177
16   (8th Cir. 1999) (holding that bankruptcy court had authority to
17   sua sponte reconsider disallowance of claims); (Oudomsouk v. Bank
18   of America, N.A. (In re Oudomsouk), 483 B.R. 502, 514-54 (Bankr.
19   M.D. Tenn. 2012) (same).
20        As for the requirement of advance notice and a hearing, that
21   is a closer issue, because the bankruptcy court apparently raised
22   the issue of reconsidering the Disallowance Order for the first
23   time in its tentative ruling issued just before the August 14,
24   2012 hearing on POC 6-2.   Rule 3008 and the accompanying Advisory
25   Committee Notes both generally indicate that advance notice and a
26   hearing are required.   But notice and hearing under the
27   bankruptcy code are flexible concepts, see § 102(1)(A), and the
28   Ninth Circuit has held that defective notice and opportunity for

                                      12
 1   hearing is not grounds for reversal unless the appellant
 2   establishes prejudice.    Rosson v. Fitzgerald (In re Rosson),
 3   545 F.3d 764, 776-77 (9th Cir. 2008).      Here, Simpson has not
 4   demonstrated any prejudice.   The bankruptcy court’s decision to
 5   vacate the Disallowance Order was based on its interpretation of
 6   another of its orders – the Conditional Order – and we must give
 7   broad deference to the bankruptcy court in interpreting its own
 8   orders.   Rosales v. Wallace (In re Wallace), --- B.R. ---,
 9   2013 WL 1562832 (9th Cir. BAP 2013) (citing Marciano v. Fahs
10   (In re Marciano), 459 B.R. 27, 35 (9th Cir. BAP 2011)).      Simpson
11   has not pointed us to us any reason why the bankruptcy court’s
12   interpretation of the Conditional Order was erroneous.      Nor are
13   we independently aware of any such reason.      Accordingly, Simpson
14   has not demonstrated that he was prejudiced by the lack of
15   advance notice or the lack of an additional hearing, so the
16   reconsideration process, even if defective, would not justify a
17   reversal of the bankruptcy court.       In re Rosson, 545 F.3d at
18   776-77.
19        2.    Timeliness of POC 6-2
20        Simpson next asserts that POC 6-2 should have been
21   disallowed as untimely.   According to Simpson, untimeliness
22   necessarily flows from his interpretation of the Conditional
23   Order as absolutely barring the amendment of POC 3-1 on and after
24   February 7, 2014.   But the bankruptcy court disagreed with
25   Simpson’s interpretation of the Conditional Order.      Instead, the
26   court in interpreting its own order determined that the
27   Conditional Order did not bar Deutsche Bank from filing POC 6-2
28   one week later, on February 14, 2012.      As we discussed above, we

                                        13
 1   give deference to the bankruptcy court’s interpretation of its
 2   own orders, and we are not aware of any sound basis for
 3   concluding that the court misinterpreted its Conditional Order.
 4   Consequently, Simpson’s timeliness argument also fails.7
 5        3.     Deutsche Bank’s Standing
 6        Simpson finally asserts that Deutsche Bank was not a person
 7   entitled to enforce the note and thus lacked standing to file its
 8   proof of claim.   However, a creditor can establish that it is a
 9   person entitled to enforce a note by demonstrating that it holds
10   the original note endorsed in blank.   See Veal v. Am. Home Mortg.
11   Servicing, Inc. (In re Veal), 450 B.R. 897, 910-11 (9th Cir. BAP
12   2011).    Here, the bankruptcy court found based on Perez’s
13   declaration that Deutsche Bank held the original Note endorsed in
14   blank.    Nothing that Simpson alleges or argues persuades us that
15   the bankruptcy court’s finding was illogical, implausible or not
16   supported by the record.   Accordingly, Simpson’s standing
17   argument lacks merit.
18   C.   Harmless Error
19        As indicated above, none of Simpson’s arguments persuade us
20   that we should reverse the order appealed.   But even if there
21   were some sort of error in the bankruptcy court’s decision, we
22   still would not reverse because we must ignore harmless error.
23   See Van Zandt v. Mbunda (In re Mbunda), 484 B.R. 344, 355 (9th
24   Cir. BAP 2012).   Any bankruptcy court error here would have been
25
          7
26         In the alternative, the bankruptcy court found that
     Deutsche Bank’s untimely filing of POC 6-2 was due to excusable
27   neglect. In light of our conclusion that the bankruptcy court
     did not err in refusing to disallow POC 6-2 as untimely, we
28   decline to address the excusable neglect issue.

                                      14
 1   harmless as to Simpson.   As explained below, the undisputed fact
 2   that the Property has been foreclosed upon subsequent to the
 3   filing of this appeal provides Simpson with a complete defense
 4   against Deutsche Bank’s proof of claim, which defense Simpson can
 5   assert via a § 502(j) motion for reconsideration.   As a result,
 6   our decision affirming the bankruptcy court’s prior allowance of
 7   Deutsche Bank’s claim should be of little concern to Simpson,
 8   inasmuch as he now can assert in the bankruptcy court meritorious
 9   grounds for reconsideration of the allowance of Deutsche Bank’s
10   claim.8
11        When a debt is nonrecourse as to the debtor, or the creditor
12   otherwise does not have a valid deficiency judgment against the
13   debtor, the creditor’s recovery is limited to the value of the
14   collateral upon its sale or to any plan distributions made on
15   account of the secured claim.   In other words, the debtor has no
16   in personam liability related to the debt secured by the
17   property.   See First Nat’l Bank of Cal. v. Weinstein
18   (In re Weinstein), 227 B.R. 284, 292 (9th Cir. BAP 1998) (“[T]he
19   undersecured creditor with a nonrecourse unsecured claim would
20   not be entitled to a distribution in bankruptcy.”).     If the lien
21   securing the secured claim is foreclosed and the property is
22   sold, then the secured creditor’s claim must be disallowed
23   because, to the extent that the claim was secured, it has been
24   satisfied by the proceeds of the foreclosure sale, and, to the
25
          8
26         We pause here to emphasize that, while the post-appeal
     foreclosure does affect Deutsche Bank’s proof of claim, it does
27   not give Simpson valid grounds for reconsideration of either the
     bankruptcy court’s prior relief from stay order or the
28   foreclosure itself.

                                     15
 1   extent that the claim was unsecured, it is unenforceable.
 2        Applicable non-bankruptcy law gives particular significance
 3   to Deutsche Bank’s post-appeal foreclosure.   Under California
 4   law, there can be no deficiency judgment after a nonjudicial
 5   foreclosure sale such as occurred here after the notice of appeal
 6   was filed.   See Cal. Civ. Proc. Code § 580d (West 2012)
 7   (“Section 580d”).    Section 580d thus extinguishes any in personam
 8   liability that a borrower may have on a debt upon nonjudicial
 9   foreclosure of real property collateral securing that debt.
10        Here, Deutsche Bank may have had an allowed secured claim
11   against the estate at the time of the petition filing and until
12   the foreclosure sale.    That is the dispute the parties have
13   framed in this appeal.   But Deutsche Bank’s nonjudicial
14   foreclosure largely renders irrelevant the issues raised in this
15   appeal.
16        The nonjudicial foreclosure, the occurrence of which is not
17   and cannot be disputed, raises the legal effect of Section 580d.
18   The effect of this statute also is indisputable.   In light of the
19   foreclosure sale, any in personam liability that Simpson or his
20   estate otherwise may have had was extinguished.    This conclusion
21   is not affected by the possible community claim nature of the
22   debt underlying the Note.   After the nonjudicial foreclosure,
23   Section 580d renders nonrecourse any debt evidenced by the Note —
24   for both Simpson and his wife.
25        In sum, Section 580d rendered unenforceable Deutsche Bank’s
26   post-foreclosure deficiency claim against Simpson and his
27   bankruptcy estate.   As a result, the prior allowance of Deutsche
28   Bank’s claim is subject to reconsideration under § 502(j), and

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 1   any error of the bankruptcy court in its prior rulings leading up
 2   to the allowance of that claim would have been harmless.
 3                              CONCLUSION
 4        For the reasons set forth above, we AFFIRM the bankruptcy
 5   court’s allowance of Deutsche Bank’s claim, without prejudice to
 6   Simpson filing in the bankruptcy court a § 502(j) reconsideration
 7   motion based on Deutsche Bank’s foreclosure on the Property,
 8   which extinguished Deutsche Bank’s claim in its entirety.
 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

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