United States District Court, D. Maryland
Xinis United States District Judge
case is an appeal from an Order of the Bankruptcy Court that
lifted an automatic stay imposed pursuant to 11 U.S.C. §
362(a), thereby allowing Appellee Citibank to pursue eviction
proceedings against Appellant Jamal Khan and Samina Khan.
See ECF No. 1-1. 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 be significantly aided by oral
argument. Fed.R.Bankr.P. 8019; see also Md. Local R.
105.6. The appeal will be dismissed as moot.
December 21, 2005, Appellant Jamal Khan ("Khan")
executed a promissory note and deed of trust in favor of
Pulte Mortgage, LLC relating to the property located at 1410
Meadowsweet Drive, Sandy Spring, Maryland 20860 (the
"Property"). ECF No. 3-3. Khan failed to make the
required monthly payments under this loan. As a result, on
May 10, 2010, the substitute trustees under the deed of trust
filed a judicial foreclosure complaint seeking foreclosure
and sale of the Property. See Cohn v. Khan, Case No.
331795V (Montgomery Cnty. Cir. Ct. May 10, 2010); ECF No.
22-2. A foreclosure sale occurred, in which the Property was
sold to Appellee Citibank, N.A., as Trustee on behalf of GSR
Mortgage Loan Trust 2006-AR2 ("Citibank").
See ECF No. 22-3.
filed a Motion of Exceptions to Sale on September 16, 2010.
See ECF No. 22-4. After a hearing, the Montgomery
County Circuit Court ratified the foreclosure sale to
Citibank on May 10, 2011. See ECF No. 22-5. The
substitute trustee's deed, which demonstrated
Citibank's ownership of the Property, was recorded in the
Montgomery County Property Records on June 16, 2011.
See Substitute Trustees' Deed, ECF No. 3-3 at
the Property was sold to Citibank, and after Khan attempted
to vacate the ratification of the sale, the Montgomery County
Circuit Court granted Citibank possession of the Property on
November 21, 2013. See Order of Possession, ECF No.
22-6. Khan appealed several of the state court's rulings.
However, the trial court's orders were affirmed, and so a
Writ of Possession was issued to Citibank on April 29, 2016.
See Montgomery Cnty. Docket, ECF No. 22-2 at 17.
2, 2016, Citibank executed a deed of trust to JSH Properties,
LLC ("JSH") for the Property. See Deed,
ECF No. 3-9. Khan filed his Chapter 13 Bankruptcy Petition
with the United States Bankruptcy Court for the District of
Maryland the next day. Citibank filed a Motion for Relief
from the Automatic Stay on June 27, 2016, because Citibank
wished to move forward with the eviction and Khan still
resided at the Property. See ECF No. 3-1. On July
13, 2016, Khan opposed Citibank's motion for relief from
the automatic stay. See ECF No. 3-5. Nonetheless,
the deed conveying the Property to JSH was recorded on July
18, 2016. See ECF No. 22 at 8.
25, 2016, the bankruptcy court held a hearing on
Citibank's motion for relief from the stay. See
Bankr. Transcript, ECF No. 22-7. The bankruptcy court granted
the motion for relief. It first noted that the movant,
Citibank, submitted a substitute of trustees' deed dated
June 8, 2011, which evidenced Citibank's ownership of the
Property and its standing to pursue the pending motion for
relief. See ECF No. 22-7 at 8. The bankruptcy court
went on to explain that Khan as the debtor had been
completely disposed of all legal and equitable title to the
Property and therefore only held a mere possessory interest
in it. Because a mere possessory interest is not subject to a
plan of reorganization, the court found cause to lift the
stay under 11 U.S.C. § 362(d)(1).
days after the July 25th hearing, Co-Debtor Samina Khan filed
a motion to deny relief from the stay imposed pursuant to 11
U.S.C. § 1301 for Citibank's failure to properly
serve her. See ECF No. 3-6. Samina Khan also filed a
"motion to dismiss" the lift of stay for largely
the same reasons. See ECF No. 3-8. The bankruptcy
court held a hearing on August 22, 2016 at which Samina Khan
failed to appear.
August 22, 2016, Khan also moved to dismiss the relief from
stay arguing, inter alia, that Citibank had no legal
standing to pursue a motion to lift the stay because it had
sold the Property to JSH on May 2nd, the day before Khan
filed for bankruptcy. The bankruptcy court struck the motion
for failure to comply with its filing procedures.
See ECF No. 1-2 at 2.
September 9, 2016, the bankruptcy court issued an order
denying Samina Khan's requested relief. See ECF
No. 1-1. That same order also lifted the automatic stay.
Id. On the same day, Jamal Khan filed a notice of
appeal of the bankruptcy court's order. Khan, however,
did not request that the bankruptcy court stay its order
pending his appeal, and so transfer of the property to JSH
proceeded to conclusion.
STANDARD OF REVIEW
district court, sitting as an appellate court in bankruptcy,
reviews the bankruptcy court's findings of fact for clear
error, and its conclusions of law are reviewed de
novo. Fed. R. Bankr. P. 8013; see also First
Nat'lBank of Md. v. Stanley (In re Stanley), 66 F.3d
664, 667 (4th Cir. 1995).