2014 - BAP Published - Foreclosed Property Owner still has a Property Right Protection for Purposes of the Automatic Stay

Where a real property nonjudicial foreclosure was completed and the deed recorded prepetition, the debtor has neither legal nor equitable title to the property at the time the bankruptcy petition is filed. Although the debtor may still be in possession of the premises, his or her status is essentially that of a “squatter.” The mortgagee (or purchaser at the foreclosure sale) is entitled to the property and thus relief from the stay should be granted.

However, if you attempt to remove the squatter during the bankruptcy case without lifting the stay...you violated the stay...(at least under California Law).  Conversely, if the buyer of the foreclosed home was instead a “landlord,” it would have been exempted from the automatic stay by 11 USC §362(b)(22)


The moral of the story....get relief from the stay if there is a possibility that the Debtor has "any type" of interest.


In re Perl 13-1328 (9th Cir. BAP 2014) 

9th Cir. BAP (2014 )- Unpublished - Examining California Claim Preclusion

The 9th Cir. BAP rendered an unpublished order which examined a claim preclusion argument under California Law. 

The preclusive effect of a prior state court judgment may serve as the basis for granting summary judgment. In re Imperial Corp. of Am., 92 F.3d 1503 (9th Cir. 1996); Khaligh v. Hadaegh (In re Khaligh), 338 B.R. 817, 832 (9th Cir. BAP 2006)

Under California law, “claim preclusion precludes the relitigation of a cause of action that previously was adjudicated in another proceeding between the same parties or parties in privity with them.” Mycogen Corp. v. Monsanto Co. 28 Cal.4th 888, 896 (Cal. 2002). For claim preclusion to apply,

three requirements must be satisfied: (1) the second lawsuit must involve the same “cause of action” as the first lawsuit;(2) the first lawsuit must have resulted in a final judgment on the merits; and (3) the party to be precluded must have been a party, or in privity with a party, to the first lawsuit. San Diego Police Officers’ Ass’n v. San Diego City Emps.’ Ret. Sys., 568 F.3d 725, 734 (9th Cir. 2008) (SDPOA v. SDCERS); Bullock v. Philip Morris USA, Inc., 198 Cal.App.4th 543, 557 (Cal. Ct. App. 2011). On occasion, California courts have inquired into fairness and public policy before applying the doctrine of claim preclusion, but unlike issue preclusion, the inquiry is not mandatory. See Kopp v. Fair Pol. Practices Com., 11 Cal.4th 607, 620–622 (Cal. 1995) (public policy considerations may warrant an exception to the claim preclusion aspect of res judicata, at least where the issue is a question of law rather than of fact).

In re Andrews (9th Cir. BAP 2014)