United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION AND ORDER
W. Grimm, United States District Judge
case is on appeal from the U.S. Bankruptcy Court for the
District of Maryland. Appellant Madhu Verma challenges a
bankruptcy court order that effectively cleared the way for
Deutsche Bank National Trust Company, the appellee here, to
attempt to take possession of her home several years after
the bank bought it in a foreclosure sale. Ms. Verma argues
that Deutsche Bank does not, in fact, hold any interest in
the property and that it lacked standing to participate in
the bankruptcy proceeding.. She also argues that the
bankruptcy court erred in lifting a stay that
' might, in theory, have barred the bank
from taking legal action against her husband as a nominal
co-owner of the property. I find neither of these arguments
convincing. The bankruptcy court's order therefore will
real property at the center of this dispute is located in
Boyds, Maryland. Ms. Vermass husband, Ravi Gogna, bought the
property in January 2006 with the benefit of a secured loan
from TBI Mortgage Co. See Deed of Trust 1, ECF No.
3-3. The deed of trust lists the street address as 18600
Black Kettle Drive. Id. The note accompanying the
deed of trust features the same address, except the word
"Drive" is scratched out, and word
"Court" is printed just above it. Note 27, ECF No.
difficulties followed, and by 2010, Mr. Gogna was defending a
foreclosure action in the Circuit Court for Montgomery
County. See Circuit Ct. Docket 8-11, ECF No. 3-6;
Am. Report of Sale 34, ECF No. 3-17. A foreclosure sale
ensued on May 30, 2012. On June 5, 2012, the substitute
trustees filed a "Report of Sale" stating that they
sold the property on May 30, 2012 to Deutsche Bank National
Trust Company ("Deutsche Bank"), as trustee of the
IndyMac INDX Mortgage Loan Trust 2006-AR7. See
Report of Sale 11, ECF No. 3-4; Circuit Ct. Docket 16. The
report misstated the propertyss street address as 18600 Black
Kettle Court. See Report of Sale 11. A subsequent
docket entry in the circuit court case noted that the report
"has an incorrect address listed. Black Kettle Court
should be Black Kettle Drive." Circuit Ct. Docket 18.
Accordingly, on April 22, 2013, the substitute trustees filed
an "Amended Report of Sale," which revised the
street address to read "18600 Black Kettle Drive."
Am. Report of Sale 34, ECF No. 3-17; see Circuit Ct. Docket
19. The circuit court judge ratified the foreclosure sale a
few months later, on November 8, 2013. Ratification Order 13,
ECF No. 3-4.
Verma filed a petition for Chapter 13 bankruptcy relief on
March 4, 2018. See Bankruptcy Ct. Docket 19, ECF No.
1-3. In taking this step, Ms. Verma availed herself of the
various protections federal bankruptcy law accords debtors.
These include an automatic stay -against
most collection activities, a form of statutory protection
that generally prevents creditors from collecting debts or
foreclosing on property. See 11 U.S.C. §
Bank, identifying itself as the indenture trustee for IndyMac
Home Equity Mortgage Loan Asset-Backed Trust, Series 2006-H2,
filed a motion for relief from the automatic stay on June 25,
2018. See First Mot. for Relief, ECF No. 3-1. The
motion sought to terminate the automatic stay "as to the
real property at 18600 Black Kettle Drive, Boyds, Maryland
20841 to permit Movant to complete the foreclosure
proceedings pending in the Circuit Court [of] Montgomery
County at Civil No. 326303V and to permit the Movant to
obtain possession of the real property after
foreclosure." Id. at 2. It asserted that Ms.
Verma "has no interest in the property because the
foreclosure sale held on May 30, 2012, prior to the filing of
this bankruptcy, divested the mortgagor of all rights of
redemption and vested equitable title in the purchaser
[Deutsche Bank] at the foreclosure sale." Id.
The bank attached a number of documents to the motion,
including, for some reason, the original Report of Sale
featuring the "Black Kettle Court" address.
See Report of Sale 11: The amended version of the
report was not included.
Vermass response to the motion zeroed in on the discrepancy
over the propertyss address. There, counsel argued that Ms.
Verma "was and is still the record owner of the property
known as 18600 Black Kettle Driver Resp. to First
Mot. 1, ECF No. 3-4 (emphasis in original). To support this
contention, counsel enclosed a copy of a deed Ms. Verma and
her husband recorded on July 24, 2013 - a few months after
the substitute trustees had filed the Amended Report of Sale
in the circuit court, but before the circuit court judge
issued the order ratifying the sale. See July 2013
Deed 6, ECF No. 3-4. The deed purported to convey the
"Black Kettle Drive" property "for no
consideraiion" to Ms. Verma and her husband as tenants
by the entiretyl Id.
bankruptcy court on September 26, 2018, denied Deutsche
Bank's motion without prejudice. See ECF No.
3-14. The bank refiled its motion five days later, urging the
court as before to terminate the automatic stay as to the
"Black Kettle Drive" property. 2d Mot. for Relief,
ECF No. 3-15. This, time, among the other documents attached
to the motion, the bank included the Amended Report of Sale,
which featured the corrected street address. Am. Report of
Sale. Ms. Vermass response to the motion noted the change but
argued "the Amended Report attached by Movant was
not ratified by the Montgomery County Circuit
Court." ECF No. 3-18 (emphasis in original). Ms. Verma
maintained that she was the owner of the property at 18600
Black Kettle Drive and that Deutsche Bank's interest was
in 18600 Black Kettle Court. See id.
bankruptcy court granted Deutsche Bank's renewed motion
following a hearing on November 5, 2018. See ECF No.
3-20. An ensuing order formally terminated the automatic stay
"as to the real property located at 18600 Black Kettle
Drive, Boyds, Maryland 20841." ECF No. 3-22. The order
referred to Ms. Verma's husband, Mr. Gogna, as a
"Non-fiiing Co-Debtor." Id.
Verma filed this appeal that same day. See ECF No.
.. Her appellate brief presented two issues:
(1) "Did the bankruptcy court err in granting
'Motion for Relief from Stay' to a party who was not
the note holder of the property 18600 Black Kettle Drive,
Boyds, Md 20841?," and (2) "Did the bankruptcy
court err in granting additional co-debtor relief under 11
U.S.C. 91301, despite not being requested in any of the
pleadings and mentioned at any of the hearings?"
Appellantss Br. 4. The briefing is now complete. See
ECF Nos. 10, 11, 12. No. hearing is necessary. See
Loc. R. 105.6; Fed.R.Bankr.P. 8019(b)(3) (stating that oral
argument is not required if, after examining the briefs, the
district court determines that "the facts and legal
arguments are adequately presented in the briefs and record,
and the decisional process would not be significantly aided
by oral argument"..
district court "sits as an appellate tribunal in
bankruptcy." In re Birmingham,846 F.3d 88, 92
(4th Cir. 2017). As such, it reviews the bankruptcy
court's findings of fact for clear error and its
conclusions of law de novo. See Id. A finding of
fact "is 'clearly erroneous' when although there
is evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that a
mistake has been committed." In re Rood, No.
DKC 12-1623, 2013 WL 55650, at *2 (D. Md. Jan. 2, 2013)
(quoting In re Fitzwater, No. 11-934, 2022 WL
4339559, at *2 (S.D.W.V. Sept. 21, ...