United States District Court, D. Nevada
In re Carlton E Graham and Hyacinth A. Graham Debtors.
PNC MORTGAGE, A Division of PNC BANK, N.A., Appellees. Carlton E. Graham and Hyacinth A. Graham, Appellants,
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
case involves an appeal of a bankruptcy court order.
Appellants Carlton and Hyacinth Graham (collectively,
“Appellants”) appeal from the (a) Order Granting
Motion for Relief from the Automatic Stay (California
Property); (b) Order Granting Motion for Relief from the
Automatic Stay (Nevada Property) (collectively, the
“Stay Relief Orders”); (c) Order Denying
Debtors' Motion to Declare PNC Mortgage, a Division of
PNC Bank, N.A. an Unsecured Creditor (the “Denial
Order”); and (d) Order Overruling Debtors'
Objection to Claim 19-1 of PNC Mortgage (“Nevada Claim
Allowance Order, ” and together with the Stay Relief
Orders and Denial Order, the “Orders”), entered
by the U.S. Bankruptcy Court for the District of Nevada (the
“Bankruptcy Court”) on February 13, 2015.
Notice of Appeal was filed on February 23, 2015. (ECF No. 1).
The Opening Brief was filed by Appellants on March 25, 2015.
(ECF No. 5). Appellee PNC Mortgage (“Appellee”)
filed its Answering Brief concurrently with appendices on
April 23, 2015. (ECF Nos. 8-10). The instant Motion to
Dismiss Appeal was filed on October 10, 2016. (ECF No. 11).
Appellants Responded on October 25, 2016, and Appellee
Replied on November 2, 2016. (ECF Nos. 12, 13). Appellants
filed a Motion to Stay Order for Temporary Writ of
Restitution or Stop Eviction on November 28, 2016. (ECF No.
14). Appellee Responded on December 8, 2016. (ECF No. 15).
Court finds the following facts relevant to this appeal. In
April 2003, Appellants obtained a mortgage loan from National
City Mortgage Co. d/b/a Accubanc Mortgage in the original
principal amount of $322, 700 (the “Nevada
Note”), to finance the purchase of residential property
located at 2706 Riceville Drive, Henderson, Nevada 89052 (the
“Nevada Property”). The Nevada Note is secured by
a first-position Deed of Trust recorded on April 24, 2003
(the “Nevada Deed of Trust”) in the Official
Records in the Clark County Recorder's Office
2003, Appellants obtained another mortgage loan from National
City Mortgage Co. d/b/a Accubanc Mortgage in the original
principal amount of $296, 000 (the “California Note,
” and together with the Nevada Note, the
“Notes”), to finance the purchase of residential
property located at 841 South Whitney Court, San Dimas,
California (the “California Property, ” and
together with the Nevada Property, the
“Properties”). The California Note is secured by
a first-position Deed of Trust recorded on June 9, 2003 in
the Official Records, with National City Mortgage Company
serving as trustee thereunder, for the benefit of National
City Mortgage Co.
as successor by merger, is the holder of both the Notes and
the Deeds of Trust.
March 27, 2012, Appellants filed a voluntary petition for
relief under Chapter 13 of the Bankruptcy Code. On June 11,
2012, Appellee timely filed a secured proof of claim
(assigned as Claim 12-1) in the amount of $200, 074.29
relating to the California Property. On August 13, 2012,
Appellee timely filed a secured proof of claim (assigned as
Claim 19-1) in the amount of $213, 587.90 relating to the
Nevada Property. Appellants would eventually object to both
proofs of claim filed by Appellee.
on June 18, 2013, Appellants objected to Appellee's proof
of claim for the California Property. (App. 46-64).
Appellants contended that Appellee did not hold an interest
in the California Note and Deed of Trust. (See id.). In
response, Appellee demonstrated that, as holder of the Note,
it was entitled to enforce the Note. (App. 65-117). On
October 21, 2013, the Bankruptcy Court entered an order
overruling Appellants' objection to Appellee's proof
of claim of the California Property. (App. 121-23).
on November 19, 2014, Appellants objected to Appellee's
proof of claim for the Nevada Property on the basis that,
among other things, the Nevada Note and Deed of Trust was
securitized. (App. 240-251). In response to Appellants'
objection, Appellee demonstrated that it could enforce the
Nevada Note as the note holder. (App. 251-335). The
Bankruptcy Court rejected Appellants' arguments, and on
February 13, 2015, entered an order overruling
Appellants' objection to Appellee's proof of claim on
the Nevada Property. (App. 399-401).
to filing of the bankruptcy action ultimately giving rise to
this appeal, on or about March 12, 2012, the Appellants filed
a Petition for Judicial Review in Nevada state court
challenging Appellee's authority to foreclose on the
Nevada Property. Appellee filed its Response brief to the
Petition for Judicial Review in state court on March 27,
2012, the same date Appellants initiated the bankruptcy
proceedings ultimately giving rise to this appeal. Appellants
then obtained a continuance of final resolution before the
Bankruptcy Court at least twenty-nine times, and the Nevada
Property languished for three years in the mandatory
November 18, 2014, Appellee moved for entry of an order in
the Bankruptcy Court, pursuant to 11 U.S.C. § 362(d)(1),
terminating the automatic stay to the Nevada Property and the
California Property because Appellants had made no
post-petition payments to Appellee relating to the Nevada
Property under the Nevada Note or relating to the California
Property under the California Note. The Appellants had not
actually made any payments on the Nevada Property since at
least as early as December 2010. On February 17, 2015, the
Bankruptcy Court entered its stay relief orders, which lifted
the automatic stay of the Nevada Property and the California
Property. After the Bankruptcy Court lifted the stay, the
state district court resumed the action on the Petition for
Judicial Review. On or about April 9, 2015, the state court
issued its Findings of Fact and Conclusions of Law and
thereby rejected all of Appellants' arguments, many of
which are raised in this Court, and found that a foreclosure
certificate may issue. On or about April 27, 2015, Appellants
filed a notice of appeal of the state court action. The
parties briefed the issues before yet another tribunal. On or
about December 31, 2015, the Nevada Court of Appeals issued
its Order of Affirmance.
about January 28, 2016, Appellee properly recorded a notice
of sale on the California Property. On or about May 12, 2016,
Appellee conducted a foreclosure sale on the California
Property. Non-parties Ninhchau Nguyen and Yen Pham purchased
the California Property at the foreclosure sale. On or about
May 2, 2016, Appellee recorded its Foreclosure Certificate
from the Nevada Mediation Program. On or about July 26, 2016,
Appellee recorded a notice of sale of the Nevada Property. On
or about August 26, 2016, Appellee conducted a foreclosure
sale. Non-party NREI, LLC purchased the ...