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In re Odell

United States Bankruptcy Appellate Panel of the Sixth Circuit

January 30, 2018

In re: Deborah Dean Odell, Debtor.

         On Appeal from the United States Bankruptcy Court for the Northern District of Ohio at Cleveland. No. 16-15518-Jessica E. Price Smith, Judge.

          Joel K. Jensen, LERNER, SAMPSON & ROTHFUSS, Cincinnati, Ohio, for Appellee.

          Deborah Odell, Berea, Ohio, pro se.

          Before: HARRISON, HUMPHREY, and PRESTON, Bankruptcy Appellate Panel Judges.

          OPINION

          C. KATHRYN PRESTON, BANKRUPTCY APPELLATE PANEL JUDGE.

         Deborah Dean Odell ("Debtor") appeals the Bankruptcy Court's decision lifting the automatic stay to allow a mortgagee to pursue foreclosure proceedings in state court. For the reasons explained below, we DISMISS Debtor's appeal as moot.

         I. BACKGROUND

         Debtor filed her Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Ohio ("Bankruptcy Court") on October 10, 2016. Ten days later, Debtor filed her schedules, in which she listed as an asset her interest in a home that she inherited from her mother (the "Property"). In her schedules, Debtor stated that the value of the Property was $47, 000. Debtor also listed HSBC Bank USA ("HSBC") as a mortgagee of the Property and having a claim in the amount of $64, 382.64. On November 4, 2016, Debtor filed an amended Schedule C, claiming a "homestead exemption" of her interest in the Property in the amount of $136, 925. No objections to Debtor's claim of exemption were made.

         On January 25, 2017, HSBC filed a Motion for Relief from Stay and Abandonment (the "Motion"). In its Motion, HSBC asserted that the amount of debt secured by the Property exceeded the value of the Property. HSBC argued that relief from the stay and abandonment were warranted because the Property was of no value to the bankruptcy estate and was not necessary for an effective reorganization. On February 16, 2017, Debtor filed an objection to the Motion and requested a hearing. Debtor admitted that seventeen years prior, on February 14, 2000, her mother had granted a mortgage on the Property to CIT Group/Consumer Finance, Inc., to secure a debt in the amount of $58, 288.50. However, Debtor denied that the lien had been properly perfected and asserted that the subsequent assignment of the lien was fraudulent by virtue of a "robo-signature."

         The Bankruptcy Court held a hearing on the Motion on March 7, 2017. Debtor was not represented by an attorney. The Bankruptcy Court explained to Debtor that the issue was that the Property was subject to a mortgage securing a loan which had not been paid. Following a discussion with HSBC regarding the amount outstanding on the first mortgage and Debtor's appraisal of the Property at $47, 000, the Bankruptcy Court granted HSBC's Motion. On March 27, 2017, Debtor timely filed a Notice of Appeal. Debtor received her Chapter 7 discharge on July 7, 2017.

         II. ISSUE ON APPEAL

         In this appeal, Debtor primarily argues that the Bankruptcy Court erred when it granted HSBC's Motion. Because this Panel finds that the automatic stay has terminated under 11 U.S.C. § 362(c), whether the Bankruptcy Court was correct in granting the Motion is immaterial and the sole issue is whether Debtor's appeal is moot. See BC Brickyard Assocs., Ltd. v. Ernst Home Ctr., Inc. (In re Ernst Home Ctr., Inc.), 221 B.R. 243, 247 (B.A.P. 9th Cir. 1998) ("Mootness is a jurisdictional issue which can be raised sua sponte[.]"). If so, there is no need to discuss the merits. See Mills v. Green, 159 U.S. 651, 653, 16 S.Ct. 132, 133 (1895) ("The duty of this court, as of every other judicial tribunal, is to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the matter in issue in the case before it.").

         III. JURISDICTION & THE MOOTNESS DOCTRINE

         The Bankruptcy Appellate Panel for the Sixth Circuit ("BAP") has jurisdiction to hear and decide appeals. 28 U.S.C. § 158(b). A bankruptcy court's decision to lift the automatic stay pursuant to 11 U.S.C. § 362(d) is an appealable final order. In re Schaffrath, 214 B.R. 153, 154 (B.A.P. 6th Cir. 1997) ("Grants and denials of motions for relief from the automatic stay are final, appealable orders."). However, federal courts have "no authority to render a decision upon moot questions or to declare rules of law that cannot affect the matter at issue." Cleveland Branch, NAACP v. City of Parma, 263 F.3d 513, 530 (6th Cir. 2001) (citing Church of Scientology v. United States, 506 U.S. 9, 12, 113 S.Ct. 447, 449 (1992)). "[A] case is moot when the issues presented are no longer 'live' or the parties lack a legally cognizable interest in the outcome." Cnty. of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. ...


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