United States District Court, E.D. Michigan, Southern Division
In re DOSHIA MARIE BANKS, Debtor.
WELLS FARGO BANK, N.A., Appellee. DOSHIA MARIE BANKS, Appellant,
OPINION DISMISSING APPEAL AS MOOT
J. MICHELSON, U.S. DISTRICT JUDGE.
Banks thought she was buying a home in Detroit, Michigan. To
purchase property on Huntington Road, Banks entered into an
installment land contract with the Otis Williams Family
Trust. But at the time the Trust issued the installment
contract, the Trust did not own the Huntington Road house.
The house was owned by an investment company through a
securitized bundle of mortgages. Wells Fargo served as the
investment company's indenture trustee. After Wells Fargo
initiated eviction proceedings against Banks, she filed for
Chapter 13 bankruptcy protection. Wells Fargo successfully
moved for relief from the automatic stay and the Bankruptcy
Court dismissed her petition. Banks now appeals.
2005, Ernest Cornelius obtained a loan to purchase a property
on Huntington Road in Detroit. (R. 7, PID 54.) He secured the
loan with a mortgage on the property. (R. 7, PID 54.)
Eventually, the originator of the mortgage sold it to an
investment company who bundled it into a security. (R. 7, PID
54.) Sometime later still, Wells Fargo became the indenture
trustee for the investment company and was assigned the
mortgage. In September 2015, Wells Fargo recorded the
assignment. (R. 7, PID 54.)
January 2016, Cornelius executed a quit claim deed granting
the property to the Otis Williams Family Trust. (R. 6, PID
37.) But the Trust did not record the deed until October
2016. (R. 7, PID 54.) In the meantime, neither Cornelius nor
the Trust made payments on the mortgage, so Wells Fargo began
in February 2016, Wells Fargo published a notice of
foreclosure in the Detroit Legal News. As required by
Michigan law, Wells Fargo ran the notice for four consecutive
weeks, ending in early March. (R. 7, PID 55.) Wells Fargo
also posted a Notice of Foreclosure on the property.
(Id.) In March 2016, Wells Fargo bought the property
at Sheriff's sale and the redemption period expired six
months later. (Id.)
long after the expiration of the redemption period, Doshia
Marie Banks wanted to purchase the home on Huntington Road.
In February 2017, unaware that the Otis Williams Family Trust
did not hold title, Banks entered into an installment land
contract with the Trust. (R. 6, PID 31-34.) After paying the
Trust $3500 towards the house, Banks moved in. (R. 6, PID
little over a month later, Wells Fargo initiated eviction
proceedings against Banks. (R. 7, PID 55.) After learning of
the eviction proceedings, Banks filed for Chapter 13
bankruptcy protection and listed the Huntington Road property
as her residence. (R. 6, PID 24.) Soon after filing her
petition, Banks filed a Motion to Impose the Automatic Stay.
(R. 6, PID 24; R. 7, PID 55.) The stay put a stop to the
eviction proceedings. (R. 6, PID 24.)
to continue the eviction proceedings, about a month later
Wells Fargo moved to lift the stay. The Bankruptcy Court
scheduled a motion hearing. (R. 7, PID 55.) Yet a few days
before the hearing, Banks asked for a new date, claiming the
hearing conflicted with previously scheduled medical
appointments. (R. 7, PID 55.) As Banks was unable to
adequately corroborate the medical appointments, the
Bankruptcy Court denied Banks' request and held the
hearing without her. (R. 6, PID 25; R. 7, PID 56.)
the hearing, the Bankruptcy Court granted Wells Fargo's
motion to lift the stay, reasoning, in part, that the
Huntington Road property was not part of the Bankruptcy
Estate and so the automatic stay did not apply. (R. 1, PID
6.) The same day, but unrelated to Wells Fargo's motion
to lift the stay, the Bankruptcy Court dismissed Banks'
Chapter 13 petition because she was not making her plan
payments. (R. 7, PID 56.)
now appeals. She says the Bankruptcy Court should have
treated the Huntington Road property as part of her estate.
(Id.) So Banks says the Bankruptcy Court was wrong
to lift the automatic stay. (R. 6. PID 22.) Banks asks this
Court to “void” the order lifting the stay. (R.
6, PID 29.) Banks does not challenge the Bankruptcy
Court's dismissal of her Chapter 13
response, Wells Fargo makes two arguments. First, Banks'
appeal is moot. Because the Bankruptcy Court dismissed
Banks' petition, “the automatic stay is terminated
by operation of law.” (R. 7, PID 58.) So Wells Fargo
argues the Court lacks jurisdiction to hear Banks'
appeal. In the alternative, Wells Fargo says the Bankruptcy
Court did not abuse its discretion in lifting the stay. (R.
7, PID 59.)
implicates a federal court's jurisdiction. In a
bankruptcy appeal, mootness “involves equitable
considerations as well as the requirement of Article III of
the Constitution that there be a live case or
controversy.” Bartel v. Bar Harbor Airways,
Inc., 196 B.R. 268, 272 (S.D.N.Y. 1996) (internal
quotations omitted). The constitutional “test for
mootness is whether the relief sought would, if granted, make
a difference to the legal interest of the parties.”
Wedgewood Ltd. P'ship I v. Twp. of Liberty, 610
F.3d 340, 348 (6th Cir. 2010) (quoting Ford v.
Wilder, 469 F.3d 500, 504 (6th Cir. 2006) (internal
quotations omitted)). In bankruptcy proceedings, “[a]n
appeal is also moot when ‘even ...