United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION AND ORDER
W. Grimm United States District Judge
Jaswinder Kaur obtained, and then defaulted on, a loan for
13115 Thackery Place, Germantown, Maryland 20874 (the
“Property”). Promissory Note 1, ECF No. 6-13, at
1; Kaur's Bankr. Sched. D 13, ECF No. 6-9. Wells Fargo
Bank, N.A. (“Wells Fargo”), whose predecessor in
interest had furnished the loan and who had recorded a deed
of trust against the Property in the Montgomery County
Circuit Court Land Records, initiated foreclosure proceedings
following the default. Deed of Tr. 1, ECF No. 6-13, at 8;
see Brown v. Kaur, Case No. 413085V (Cir. Ct.
Montgomery Cty.) (“Foreclosure
Action”). Kaur then filed a Voluntary Chapter 13
Bankruptcy Petition in the United States Bankruptcy Court for
the District of Maryland, Case No. 16-25432-TJC, on November
22, 2016, Pet., ECF No. 6-1, which stayed the Foreclosure
Action pursuant to 11 U.S.C. § 362(a), see
State Ct. Docket.
Bankruptcy Court, Wells Fargo filed a Motion for Relief from
Automatic Stay and an Equitable Servitude, so that it could
proceed with the Foreclosure Action without further
impediment. Mot. for Relief, ECF No. 1-1. The Bankruptcy
Court granted the motion, and Kaur noted this appeal. ECF No.
1. Wells Fargo moves to dismiss the appeal as moot because
the Property has been sold to a third-party purchaser. ECF
No. 10. Its motion is meritorious, and
accordingly, I will dismiss this appeal as moot.
December 21, 2016, the Bankruptcy Court issued an Order
Dismissing the Bankruptcy Case for Failure to Complete
Required Filings and Notice that Automatic Stay is
Terminated. Order, ECF No. 6-20. The dismissal order provided
notice “that the automatic stay imposed by 11 U.S.C.
§ 362(a) is terminated, ” thereby mooting Wells
Fargo's Motion for Relief from Automatic Stay.
Id.; see also Order Continuing Hr'g 1,
ECF No. 6-35 (stating that dismissal order terminated
Fargo requested a hearing on its Motion for Equitable
Servitude, which the dismissal order had not addressed.
See Order Continuing Hr'g 1-2. The Bankruptcy
Court granted the motion at a hearing on February 13, 2017.
See Feb. 13, 2017 Proceeding Memo, ECF No. 6-44;
Feb. 16, 2017 Order, ECF No. 6-53. It memorialized its ruling
by order on February 16, 2017, stating: “SO ORDERED For
the reasons stated on the record at the hearing held on
February 13, 2017. With respect to the equitable servitude,
the court finds that the prior bankruptcy cases were filed as
a scheme to hinder or delay the creditor from exercising its
rights. 11 USC 362(d)(4).” Feb. 16, 2017 Order 1. The
order also granted the Motion for Relief from Automatic Stay.
Property was sold to a third-party purchaser on February 15,
2017. Report of Sale with Affidavit of Fairness Pursuant to
Rule 14-305(a), ECF No. 10-3; see also State Ct.
Court must dismiss a bankruptcy appeal as moot if “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, ” rendering
the case constitutionally or equitably moot. Khan v.
Citibank, No. PX 16-3121, 2017 WL 2311185, at *2 (D. Md.
May 26, 2017) (quoting Church of Scientology v. United
States, 506 U.S. 9, 12 (1992) (internal citation
omitted)); see also Walker v. Grigsby, No. AW-06-62,
2006 WL 4877450, at *2 (Bankr. D. Md. Apr. 11, 2006). A case
is constitutionally moot “when the issues presented are
no longer ‘live' or the parties lack a legally
cognizable interest in the outcome.” Khan,
2017 WL 2311185, at *2 (quoting Los Angeles Cty. v.
Davis, 440 U.S. 625, 631 (1979)). Because federal
courts' “constitutional authority extends only to
actual cases and controversies, ” they “lack
jurisdiction to decide moot cases.” Id.
(quoting Iron Arrow Honor Soc'y v. Heckler, 464
U.S. 67, 70 (1983)). Thus, “[t]o survive a challenge of
[constitutional] mootness, a party must have suffered an
actual injury that ‘can be redressed by a favorable
judicial decision.'” Id. (quoting Iron
Arrow Honor Soc'y, 464 U.S. at 70).
Kahn, the debtor's “only request on appeal
[was] that this Court reverse the bankruptcy court's lift
of the automatic stay.” Id. at *3. The Court
dismissed the debtor's appeal, concluding that it was
“moot and must be dismissed” because the property
at issue “ha[d] been sold to a third party and Khan no
longer ha[d] any interest in the Property, ” such that
a “judicial determination to overturn the bankruptcy
court's lift of the stay would have no practical
effect.” Id. at *2-3 (citing In re McLean
Square Assocs., G.P., 200 B.R. 128, 131 (E.D. Va. 1996)
(“[I]t is well established that courts must dismiss an
appeal as moot if an affirmance ‘would ostensibly
require something to be done which had already taken place,
' while a reversal ‘would ostensibly avoid an event
which had already passed beyond recall.' ” (quoting
Brownlow v. Schwartz, 261 U.S. 216, 217-18
(1923))). The Court noted that, “[h]ad Khan wished to
preserve the justiciability of his claims, he could have
sought to stay the enforcement of the bankruptcy court's
order lifting the automatic stay pending his appeal, ”
and that “[f]ailure to seek such relief may result in
mooting the claims by virtue of subsequent events.”
Id. at *3; see also Farmers Bank v.
Kittay (In re March), 988 F.2d 498, 499 (4th Cir. 1993)
(holding that, because the debtor “failed to obtain a
stay of the district court's order pending appeal and
thereby allowed [the mortgagee] to foreclosure on the
property at issue . . ., the foreclosure rendered moot any
appeal on the applicability of the [11 U.S.C.] § 362(a)
stay”). Similarly, here, Kaur only seeks on appeal a
reversal of the Bankruptcy Court's lift of the automatic
stay and equitable servitude, rulings for which he did not
seek to stay enforcement. And, the Property was sold and Kaur
no longer has an interest in it, such that his appeal,
“which centers on the propriety of lifting a stay so
that the sale of the property can proceed, ” is moot.
the doctrine of equitable mootness, it “is a pragmatic
principle, grounded in the notion that, with the passage of
time after a judgment in equity and implementation of that
judgment, effective relief on appeal becomes impractical,
imprudent, and therefore inequitable.” Khan,
2017 WL 2311185, at *3 (quoting Mac Panel Co. v. Va.
Panel Corp., 283 F.3d 622, 625 (4th Cir. 2002). The
(1) whether the appellant sought and obtained a stay; (2)
whether the . . . equitable relief ordered has been
substantially consummated; (3) the extent to which the relief
requested on appeal would affect the success of the . . .
equitable relief granted; and (4) the extent to which the
relief requested on appeal would affect the interests of
Id. (quoting Mac Panel, 283 F.3d at 625).
case, as in Kahn, the Property was sold to a
third-party purchaser, and neither party to this litigation
retains an interest in it. Therefore, as in Kahn,
“this Court cannot practically grant the requested
relief to reverse the lift of the stay and in effect
re-enjoin [Wells Fargo's] ability to convey the property
because the property has already transferred to [the
third-party purchaser].” Id. And consequently,
“for the reversal of the lift of stay to have any
meaning, it would have to substantially affect the rights of
the third party [purchaser].” Id. Further,
“[t]his is all ...