United States District Court, D. Maryland
MEMORANDUM OPINION AND ORDER
XINIS UNITED STATES DISTRICT JUDGE
and Cyriacus Okoro (“Debtors” or the
“Okoros”) appeal the order of the United States
Bankruptcy Court for the District of Maryland granting relief
from an automatic stay imposed under 11 U.S.C. § 362(a).
ECF No. 1-2 at 1. Both the Okoros and Appellee Wells Fargo
Bank, N.A. (“Wells Fargo”) have submitted their
briefs, and no hearing is necessary. See Fed. R.
Bankr. P. 8019(b)(3); D. Md. Loc. R. 105.6.
Court has opined twice on different matters related to this
bankruptcy. See Okoro v. Wells Fargo Bank, N.A., 567
B.R. 267 (D. Md. 2017); Okoro v. Wells Fargo Bank,
N.A., Civ. No. PX 16-0616, 2016 WL 5870031 (D. Md. Oct.
6, 2016). The basic facts surrounding the bankruptcy
proceedings need not be repeated here. This appeal in
particular involves real property located at 7211 Oakley
Road, Glenn Dale, MD 20769 (the “Property”).
Relevant to this appeal, Wells Fargo moved the Bankruptcy
Court for relief from the automatic stay imposed by 11 U.S.C.
§ 362(a) after the bankruptcy Trustee's abandonment
of the Property, the Debtors' discharge, and the
Trustee's Report of No Distribution. See ECF No.
1-3 at 4. The Okoros opposed the motion for relief from the
automatic stay. ECF No. 3-11 at 1. On March 3, 2017, the
Bankruptcy Court issued an order granting relief from the
automatic stay with respect to the Property on the grounds
that the Trustee had filed its Report of No Distribution and
consented to closure of the case. Accordingly, the Bankruptcy
Court determined that lifting the automatic stay was
warranted so as to allow any pending foreclosure action
against the Property to proceed. ECF No. 1-2 at 1.
District Court reviews the Bankruptcy Court's findings of
fact for clear error and conclusions of law de novo.
See Cypher Chiropractic Ctr. v. Runski, 102 F.3d
744, 745 (4th Cir. 1996). This Court may affirm the
Bankruptcy Court based on any ground apparent in the record.
See Wells Fargo Bank, N.A. v. Farag, No.
5:15-CF-422-BO, 2016 WL 2944561, at *2 (E.D. N.C. May 18,
Okoros raise a number of contentions in their appeal,
including that the Bankruptcy Court erred in granting Wells
Fargo relief from the automatic stay because Wells Fargo
failed to establish standing to file for such relief; that
the Bankruptcy Court erred by granting relief from the stay
while a matter was pending with this Court; and that granting
the relief from the automatic stay “before final
resolution of Debtors' challenge to the validity of Wells
Fargo's lien violates Debtors' rights to due
process.” ECF No. 2 at 5-6. At bottom, these challenges
revolve around whether Wells Fargo properly was in possession
of the promissory note secured by the Okoros' mortgage
and had the authority to foreclose on the Property.
See ECF No. 2 at 8. The Okoros also claim that the
Bankruptcy Court should have refrained from lifting the stay
while the Okoros' previous appeal to this Court was
pending. ECF No. 2 at 15.
fundamental flaw in the Okoros' argument is that the
Bankruptcy Court's decision to lift the stay was not at
all dependent on the validity of Wells Fargo's
“evidence, ” whether Wells Fargo possessed a lien
against the Property, or whether Wells Fargo had a right to
enforce such a lien. Instead, the Bankruptcy Court determined
that the legal prerequisites for the lifting of the automatic
stay were met.
Bankruptcy Court was correct. The purpose of the automatic
stay is to prevent actions to collect from a debtor or that
would threaten a debtor's estate. Sanders v.
Farina, 67 F.Supp.3d 727, 729 (E.D. Va. 2014). Here, an
Order of Abandonment as to the Property had been issued,
see ECF No. 1-3 at 4; thus, the Property was no
longer part of the estate. See In re Perry, 29 B.R.
787, 794 (D. Md. 1983). Further, the Trustee had filed his
Report of No Distribution on May 19, 2016, ECF No. 1-3 at 4,
which led to the Okoros' discharge and the full
administration of the bankruptcy estate. See Okoro,
567 B.R. at 274.
light of the Debtors' discharge and the Trustee's
abandonment of the Property, the automatic stay as to the
Property was terminated as a matter of law. In re
Perry, 29 B.R. at 794; In re Gecy, 510 B.R.
510, 521 (Bankr. D.S.C. 2014); In re Thomas, 27 B.R.
59, 60 (Bankr. D. Me. 1983) (Because “the debtors
received their discharge, and . . . the trustee abandoned the
property in question . . . the automatic stay of acts against
that property has terminated.”); see 11 U.S.C.
§ 362(c)(2)(C); In re Banks, 577 B.R. 659, 665
(Bankr. E.D. Va. 2017) (“In a case under chapter 7, the
automatic stay remains in effect as to actions against the
debtor until the debtor is granted or denied a
discharge.”). Additionally, closure of the bankruptcy
case itself lifts an automatic stay. 11 U.S.C. §
362(c)(2)(A); see Butler v. DirectSAT USA, LLC, 307
F.R.D. 445, 448 (D. Md. 2015) (the automatic stay continues
until the bankruptcy case is dismissed or closed, or
discharge of the debtor's debts is granted or denied).
Accordingly, the Bankruptcy Court committed no error in
granting relief from the automatic stay.
Okoros argue that because of their other pending appeal in
this Court, the Bankruptcy Court's grant of relief from
the stay violated their Due Process rights. ECF No. 2 at
15-17. The Court cannot discern the rationale for this
argument. In the civil case before this Court, the Okoros, in
essence, challenged the validity of Wells Fargo's
entitlement to proceed against the Property; their appeal of
the Bankruptcy Court's dismissal of their Adversary
Proceeding involved essentially identical underlying
contentions. See Okoro, 2016 WL 5870031, at *2-*4;
Okoro, 567 B.R. at 270. The Bankruptcy Court's
grant of relief from the automatic stay neither implicated
nor affected the status the Okoros' other appeal before
this Court. Indeed, given the Okoros' three separate
suits involving the Property, the Court is hard-pressed to
find a Due Process violation occurred here.
reasons given, this Court AFFIRMS the Order of the Bankruptcy
Court granting relief from the automatic stay. It is this 8th
day of March, 2018, by the United States District Court for
the District of Maryland, ORDERED that:
1. The Bankruptcy Court's Order entered March 3, 2017
(ECF No. 60 in Bankruptcy No. 16-11751) is AFFIRMED.
2. The Clerk is directed to transmit copies of this
Memorandum Opinion and Order to the parties and CLOSE this