United States District Court, D. Maryland, Southern Division
TIFFANY L. NOELS, Appellant,
NANCY SPENCER GRIGSBY, Trustee Appellee
J. HAZEL, UNITED STATES DISTRICT JUDGE
Tiffany Noels appeals from an order issued by the United
States Bankruptcy Court for the District of Maryland on
February 26, 2018 denying her motion to reconsider. ECF No.
1. No. hearing is necessary. Fed.R.Bankr.P. 8019; see
also Loc. R. 105.6 (D. Md. 2016). Because the Court
finds the appeal to be moot, it will be dismissed.
Noels owned a home in Prince George's County (“the
Property”) that was recently the subject of a
foreclosure action in the Circuit Court of Maryland for
Prince George's County. ECF No. 5 at 5-6. Noels entered
into a loan modification agreement with her mortgage
servicer, Ocwen Loan Servicing, LLC (“Ocwen”).
Id. Noels claims that through this agreement she
received a “predatory mortgage loan.”
Id. at 6. She defaulted on her mortgage and Ocwen
initiated the foreclosure proceeding on February 10, 2016.
BSPLLC vs Noels, CAEF16-04126, docket (last visited
October 16, 2018).
the Circuit Court denied Noels's Motion to Dismiss the
Foreclosure Action on July 25, 2016, Noels filed a Petition
for Bankruptcy in the U.S. Bankruptcy Court for the District
of Maryland, No. 16-25654-WIL, which temporarily stayed the
Foreclosure Action. Noels filed a Chapter 13 Plan on April
17, 2017, proposing to pay “$1 per month for a term of
undetermined months” and noting in the margin that the
“alleged debt is emphatically disputed” and that
a “Ruling upon Adversary Complaint” would
“determine validity, owner, priority, extent of alleged
debt.” ECF No. 3-10 at 1. On August 24, 2017, the
Bankruptcy Court granted a motion for relief from the
automatic stay filed by the Creditor, allowing the
foreclosure proceedings to continue in the Circuit Court.
moved for the Bankruptcy Court to reconsider this order on
September 19, 2017, arguing that the loan modification
agreement, which the Creditor relied on to move for the
liftstay, was void under the terms of the agreement and
Maryland law. ECF No. 2-28 ¶ 3-6. The Bankruptcy Court
denied Noel's Motion to Reconsider on October 19, 2017.
Noels then filed an objection to the Proof of Claim related
to the Property and the loan modification agreement. ECF No.
5 at 7. In her objection, Noels again argued that the
agreement was void under the terms of the loan modification
contract and Maryland law. ECF No. 3-32 at ¶ 12, 16.
Noels claimed that “[a]t this juncture, since the
Agreement is void, and the terms and conditions of the
promissory note are not applicable, the Agreement is not
enforceable against the Debtor.” ECF No. 3-32 ¶
15. Noels also argued that the Proof of Claim did not comport
with Fed.R.Bankr.P. 3001(f). ECF No. 3-32 ¶ 18.The
Bankruptcy Court denied confirmation of Noels's Chapter
13 plan without leave to amend on December 5, 2017 and
ordered that the case would be dismissed without further
notice or hearing if it had not been converted to another
chapter or voluntarily dismissed within fourteen days. ECF
No. 3-40. Noels filed a Motion for Reconsideration on
December 19, 2017, ECF No. 3-43, which the Bankruptcy Court
denied on January 8, 2018, ECF No. 3-48.
February 6, 2018, the Bankruptcy Court dismissed Noels's
Chapter 13 action. ECF No. 3-49. Noels moved for
reconsideration, ECF No. 3-52, which the Bankruptcy Court
denied on February 26, 2018, ECF No. 3-54. Noels noticed this
appeal on March 13, 2018 and the Designation of Record was
docketed on April 13, 2018. ECF No. 3. Noels then filed her
Appellant's brief untimely on May 22, 2018. Appellee did not
appeals the Bankruptcy Court's decision hoping to be
afforded “an opportunity to fashion a Chapter 13 plan,
reinstate the automatic stay, and prevent the foreclosure
sale of her home.” ECF No. 5 at 13.
the Property was sold at a foreclosure sale and the Circuit
Court ratified the sale on March 28, 2018. BSPLLC vs
Noels, CAEF16-04126, docket (last visited October 16,
2018). Noels filed a Motion to Vacate the ratification order
and the Circuit Court denied that motion on September 27,
Court “may dismiss a bankruptcy appeal if it appears
that the case has become either constitutionally or equitably
moot.” Walker v. Grigsby, No. CIV.A.AW-06-62,
2006 WL 4877450, at *2 (Bankr. D. Md. Apr. 11, 2006). Under
the doctrine of constitutional mootness, “a case is
moot when the issues presented are no longer ‘live'
or the parties lack a legally cognizable interest in the
outcome.” Los Angeles Cty. v. Davis, 440 U.S.
625, 631 (1979). “Federal courts lack jurisdiction to
decide moot cases because their constitutional authority
extends only to actual cases and controversies.”
Iron Arrow Honor Society v. Heckler, 464 U.S. 67, 70
(1983). Thus, federal courts must refrain from rendering
judgments that would amount to mere “advisory
opinions.” See Williams v. Johnson, 386
F.Supp. 280, 283 (D. Md. 1974) (citing Muskrat v. United
States, 219 U.S. 346 (1911)). To survive a challenge of
mootness, a party must have suffered an actual injury that
“can be redressed by a favorable judicial
decision.” Iron Arrow Honor Society, 464 U.S.
at 70. Accordingly, an appeal must be dismissed as moot when
“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.” Church of Scientology v. United
States, 506 U.S. 9, 12 (1992).
debtor-appellant seeks to reverse a bankruptcy court in order
to reinstate a stay or prevent a foreclosure sale but the
sale has already been ratified, the appeal is moot. See
In re March, 988 F.2d 498, 499 (4th Cir. 1993) (citing
In re Sullivan Central Plaza, I, Ltd., 914 F.2d 731,
733 (5th Cir. 1990) (“If the debtor fails to obtain a
stay, and if the property is sold in the interim, the
district court will ordinarily be unable to grant any relief.
Accordingly, the appeal will be moot.”); In re
Lashley, 825 F.2d 362, 364 (11th Cir. 1987) (“When
a debtor does not obtain a stay pending appeal of a
bankruptcy court order setting aside an automatic stay and
allowing a creditor to foreclose on property the subsequent
foreclosure renders moot any appeal.”).
Enweze v. Bayview Loan Servicing, LLC, a case
decided by this Court, a debtor sought to reinstate a stay,
which a bankruptcy court lifted because the debtor's home
had been sold at a foreclosure proceeding, leading the
bankruptcy court to conclude that the property was no longer
part of the debtor's assets. No. BR 15-26859, 2017 WL
530439, at *2 (D. Md. Feb. 7, 2017). During the liftstay
period, a state court ratified the foreclosure sale, and the
debtor simultaneously appealed the bankruptcy court's
decision to this Court. Id. This Court held that
because it was undisputed that the debtor's property had
been sold at a foreclosure sale and that in the aftermath of
the bankruptcy court's decision the sale had been
ratified, the bankruptcy appeal was moot. Id.
Enweze, Noels's injury cannot be redressed by a
favorable judicial decision. Noels asks that the Bankruptcy
Court's order dismissing her Chapter 13 be reversed so
that she is “afford[ed] an opportunity to fashion a
Chapter 13 plan, reinstate the automatic stay, and prevent
the foreclosure sale of her home.” However, Noels's
Property has already been sold at a foreclosure auction and
the sale has now been ratified by the Circuit Court.
BSPLLC vs Noels, CAEF16-04126, docket (last visited
October 16, 2018).
would also like this Court to find that the Bankruptcy Court
erred by failing to rule on her Objection to the Proof of
Claim, however this is also no longer live. Because
Noels's home was sold at a foreclosure auction and the
sale was ratified by the Circuit Court, Noels no longer has
an interest in the Property and would thus no longer be able
to object to the Proof of Claim. As Appellant acknowledges,
“[o]nly an interested party can challenge the validity
of the proof of claim.” ECF No. 5 at 11 (citing 11
U.S.C. § 502). Noels no longer qualifies as such an
Noels's primary argument-that the Bankruptcy Court erred
by failing to recognize the loan modification agreement as
void-has already been adjudicated by the Circuit Court.
“The law is firmly established in Maryland that the
final ratification of the sale of property in foreclosure is
res judicata as to the validity of such sale, except
in case of fraud or illegality, and hence its regularity
cannot be attacked in collateral proceedings.”
Manigan v. Burson, 862 A.2d 1037, 1041 (Md. Ct.
Spec. App. 2004) (citation omitted). To ratify the sale, the
Circuit Court had to determine that it comported with
Maryland law, meaning it necessarily decided that the
underlying loan agreement was enforceable and not void under
Maryland law. To the extent that that Noels claims that a
Maryland state court incorrectly ratified the sale,
“federal courts lack ...