Bankruptcy Case No: 15-26859
GEORGE J. HAZEL, District Judge.
This case is before the Court on appeal from the Order of the Bankruptcy Court, which terminated the Automatic Stay halting foreclosure proceedings of the Property belonging to Appellant Innocent Obi Enweze ("Enweze"). Appellee Bayview Loan Servicing, LLC ("Bayview") has filed a Motion to Dismiss the Appeal as Moot. ECF No. 9. Oral argument is deemed unnecessary in this case because the facts and legal arguments are adequately presented in the briefs and records, and the decisional process would not he significantly aided by oral argument. Fed. R. Bankr. P. 8019; see also Loc. R. 105.6. Because the Court finds the appeal to be moot, the appeal is dismissed. The Motion to Dismiss the Appeal as Moot. ECF No. 9, is granted.
Enweze was the owner of the Property located at 14903 Habersham Circle. Silver Spring. MD (the `Property"). ECF No. 6 at 5.
Bayview filed a Motion for Relief from the Stay, arguing that Debtor Enweze had "no interest in the property because the foreclosure sale held on November 17, 2015, prior to the filing of bankruptcy, divested the mortgagor [Enweze] of all rights of redemption and vested equitable title in the purchaser [JLG] at the foreclosure sale." ECF No. 2-1 at 1. In response. Enweze argued that because "the foreclosure auction had not yet been ratified by the Circuit Court," he was still able to "save the Property through a Chapter 13 Plan," based upon his remaining retention of "legal title"
The Bankruptcy Court rejected this argument at Enweze's bankruptcy hearing held June 2, 2016, holding that Kameni did not apply in Enweze's case, and rather, that the case of In re Denny, 242 B.R. 593 (Bankr. D. Md. 1999) was precedent. Doc. 76 at 4.
While the appeal was pending, the Circuit Court for Montgomery County entered an Order of Ratification of Sale on August 26, 2016. ECF No. 9 at 2. Bayview subsequently filed a Motion to Dismiss the Appeal as Moot on October 12, 2016. ECF No. 9. Bayview argued that "Appellant's appeal argument is moot because the sale has ratified." Id. at 3. Enweze filed his Response in Opposition on November 3, 2016. ECF No. 10, Enweze contended that "it, the Court reverses [the Bankruptcy Court's] decision, Mr. Enweze could file a motion with the Montgomery County Circuit Court to vacate the ratification order.'" Id. at 2-3. The Court has reviewed the record and relevant case law, and now finds the appeal to be moot.
The Court "may dismiss a bankruptcy appeal if it appears that the case has become either constitutionally or equitably moot." Walker v. Grigsby, No. CIV.A.AW-06-62, 2006 WL 4877450. at *2 (Bankr. D. Md. Apr. 11, 2006). This appeal is both. Under the doctrine of constitutional mootness, "a case is moot when the issues presented are no longer `live' or the parties lack a legally cognizable interest in the outcome." Los Angeles Cty. v. Davis, 440 U.S. 625, 631 (1979). "Federal courts lack jurisdiction to decide moot cases because their constitutional authority extends only to actual cases and controversies." Iron Arrow Honor Society v. Heckler, 464 U.S. 67, 70 (1983). Thus, federal courts must refrain from rendering judgments that would amount to mere "advisory opinions." See Williams v. Johnson, 386 F.Supp. 280, 283 D. Md. 1974) (citing Muskrat v. United States, 219 U.S. 346 (1911)). To survive a challenge of mootness, a party must have suffered an actual injury that "can be redressed by a favorable judicial decision." Iron Arrow Honor Society, 464 U.S. at 70. Accordingly, an appeal must be dismissed as moot when "an event occurs while a case is pending appeal that makes it impossible for the court to grant `any effectual relief what[so]ever" to a prevailing party." church of Scientology v. United States. 506 U.S. 9, 12 (1992). Additionally, under the doctrine of equitable mootness, the Court may also exercise its "discretion in matters of remedy and judicial administration" to avoid results that are "impractical, imprudent, and therefore inequitable." Walker, 2006 WL 4877450, at *3.
Here, Enweze's injury cannot be redressed by a favorable judicial decision. Enweze asks this Court to "reinstate the stay," and his entire argument on appeal is that he should be permitted to "save" the Property in a Chapter 13 bankruptcy plan because the sale had not yet been ratified. ECF No. 6 at 5, However, not only is it undisputed that Enweze's Property has already been sold at a foreclosure auction, but also that the sale has now been ratified by the Circuit Court. ECF No. 9 at 2: ECF No. 10 at 2. Because Enweze failed to obtain a stay in the interim, the bankruptcy appeal is moot. See In re March, 988 F.2d 498, 499 (4th Cir. 1993) (citing In re Sullivan Central Plaza, I, Ltd., 914 F.2d 731, 733 (5th Cir. 1990) ("If the debtor fails to obtain a stay, and if the property is sold in the interim, the district court will ordinarily be unable to grant any relief, Accordingly, the appeal will be moot."): In re Lashley, 825 F.2d 362, 364 (11th Cir. 1987) ("When a debtor does not obtain a stay pending appeal of a bankruptcy court order setting aside an automatic stay and allowing a creditor to foreclose on property the subsequent foreclosure renders moot any appear)).
This case is also moot as an equitable matter because a third-party, JLG Investments, has purchased the Property through the foreclosure sale, and that sale has been ratified, Hence, reversing the Bankruptcy Court's Order could act to impair the rights of third parties. See In re McLean Square Assocs., G.P., 200 B.R. 128, 133 (E.D. Va. 1996) (holding that bankruptcy appeal was also moot on equitable grounds where reversal of bankruptcy court's order would seem to require a third party to vacate the premises); Mac Panel Co. v. Virginia Panel Corp., 283 F.3d 622, 626 (4th Cir. 2002) (holding that reversing order of bankruptcy court would require undoing of financial transactions involving third parties, and thus appeal was equitably moot). Because it is impossible to award effective relief at this juncture, and attempting to do so could lead to inequitable results the case must be dismissed.
For the foregoing reasons, Bayview's Motion to Dismiss the Appeal as Moot. Ea. No. 9, is granted. A separate Order shall issue.