United States District Court, S.D. California
STEVEN H. LUCORE, SR., JUDY L. LUCORE, Appellants,
SPECIALIZED LOAN SERVICING LLC, AS SERVICER FOR WELLS FARGO BANK, N.A. AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF THE LMT 2006-9 TRUST, Appellee.
ORDER DENYING MOTION FOR REHEARING (ECF, 16)
JANIS L. SAMMARTINO UNITED STATES DISTRICT JUDGE
before the Court is Appellants Steven H. Lucore, Jr. and Judy
L. Lucore's Amended Motion for Re-Hearing. (“MTN, ECF
No. 16). Appellee Specialized Loan Servcing LLC filed a
Response in Opposition to, (ECF No. 17), and Appellants filed
a Reply in Support of, (ECF No. 20), the
Motion. The Court vacated the hearing on the
motion and took it under submission pursuant to Civil Local
Rule 7.1(d)(1). (ECF No. 18.) Having considered
Appellants' arguments and the law, the Court rules as
Court's prior Order contains a complete and accurate
recitation of the relevant portions of the factual and
procedural histories underlying Appellants' Motion.
(See “Prior Order, ” ECF No. 12, at
1-3.) This Order incorporates by reference the
background as set forth therein. As relevant to this Order,
the Court affirmed the bankruptcy court's decision on
March 22, 2018 and the present Motion for Rehearing followed.
Rule of Bankruptcy Procedure 8022 requires a motion for
rehearing to “state with particularity each point of
law or fact that the movant believes the district court . . .
has overlooked or misapprehended and must argue in support of
the motion.” Fed.R.Bankr.P. 8022(a)(2).
“Petitions for rehearing are designed to ensure that
the appellate court properly considered all relevant
information in rendering its decision.” In re
Hessco Indus., Inc., 295 B.R. 372, 375 (B.A.P. 9th Cir.
2003) (citing Armster v. U.S. District Court, C.D.
Cal., 806 F.2d 1347, 1356 (9th Cir. 1986)). “A
petition for rehearing is not a means by which to reargue a
party's case.” Id. (citing Anderson v.
Knox, 300 F.2d 296, 297 (9th Cir. 1962)).
advance two points of law or fact that they argue this Court
overlooked or misapprehended. First, that Appellee had the
original note and second, that there was insufficient
evidence to cast serious doubt on Appellee's rights. (MTN
7.) The Court discusses each argument in turn.
argue that Appellee did not prove it held the original note
because Appellee only provided a copy of the note.
(Id.) Appellants advanced this argument for the
first time in their answering brief-not their opening brief.
The Court noted that Appellants did not include this issue in
their original appeal and therefore waived the argument.
(Prior Order 12 (citing Fed.R.Bankr.P. 8014(a); and
Eberle v. City of Anaheim, 901 F.2d 814, 818 (9th
Cir. 1990)).) Alternatively, the Court also determined that
the record contained sufficient support for the bankruptcy
court's finding that Appellee possessed the Note.
Appellants do not address the waiver issue and do not offer
an argument different from the one included in their
answering brief. (Compare MTN 7 (“Appellee did
not prove it held the original note because it only provided
a copy, and there was no original note properly authenticated
and submitted on the red [sic].”), with ECF
No. 11-1 (“There is no evidence in the record that
[Appellee] had possession of the original note.”).)
Appellants advance exactly the same argument as before and it
fails for the same reason as before. The bankruptcy court
cited In re Veal, 450 B.R. 897 (9th Cir. BAP 2011),
and determined that Appellee possessed the Note, endorsed in
blank. (Prior Order 11.)
bankruptcy court's inquiry into standing to seek relief
is limited in the context of a relief from stay motion and it
does not decide a creditor's claim or security on the
merits. In re Veal, 450 B.R. at 914 (citing
Johnson v. Righetti (In re Johnson), 756
F.2d 738, 740-41 (9th Cir. 1985)). The stay proceedings are
limited in nature because
the ultimate resolution of the parties' rights are often
reserved for proceedings under the organic law governing the
parties' specific transaction or occurrence. Stay relief
involving a mortgage, for example, is often followed by
proceedings in state court or actions under nonjudicial
foreclosure statutes to finally and definitively establish
the lender's and the debtor's rights.
Id. (footnote omitted). Thus, a party seeking a
bankruptcy stay relief need only establish that it has a
colorable claim to enforce a right against the property of
the estate. Id. at 914- 15 (citing United States
v. Gould (In re Gould), 401 B.R. 415, 425 n.14
(9th Cir. BAP 2009); and Biggs v. Stovin (In re
Luz Int'l, Ltd.), 219 B.R. 837, 842 (9th Cir. BAP
1998); and Grella v. Salem Five Cent Sav. Bank, 42
F.3d 26, 32 (1st Cir. 1994)).
California, assignees of a mortgage or deed of trust
generally have a right to commence nonjudicial foreclosure
proceedings without an explicit requirement they have an
interest in the note. See Cal. Civ. Code §
2924(a); In re Veal, 450 B.R. at 917 n.34; see
also Putkkuri v. Recontrust Co., No. 08cv1919, 2009 WL
32567 at *2 (S.D. Cal. Jan.5, 2009) (“Production of the
original note is not required to proceed with a non-judicial
foreclosure.”). The bankruptcy court stated that the
essential elements from Veal were that the note be
endorsed in blank and that the movant be in possession of the
note. (Record on ...