Question What if a stay pending appeal is not granted, and your house is sold?

[medievalmagg]

So, worst case scenario, the bankruptcy judge AND BAP both deny your pro se request for a stay pending appeal and the house gets sold (how likely is this, considering the "likely to prevail on appeal codicil" anyway? I mean, really... if you were likely to prevail in the first place, would you have realistically LOST??). Is there a third option? Am I right in that the new owners must go through the eviction process to remove you?

This house is mortgage free, except for the lien placed due to a judgment owed for attorneys fees only. It's also exempt homestead, but this is in contention. What is this classified as (with respect to type of sale) for some kind of later possible action for right to redemption in the case that the party prevails on appeal if the house was already sold?

Thanks!

[despritfreya]

Med,

You are unlikely to obtain a Stay Pending Appeal. I know the Judge is not going to grant it and I doubt the BAP will (not even sure if you are within the time frame to request one). The homestead was denied and the stay was lifted. The property is not an asset of the bk. Lastly, a Motion to Dismiss is pending (now I realize why you asked about the Moratorium). The sheriff’s sale is probably about to be completed - maybe it already has been. Once the property is sold or the bk is dismissed the appeal will most likely be dismissed as "moot".

Once the sale is completed your friend will be a "holdover tenant" and I must assume the new owners will have to take steps to file the forcible entry and detainer action. Typically it will take between 30 and 45 days before the sheriff will have the Order to remove the occupant. Your friend really needs to take steps to find other accommodations now.

Des.

[medievalmagg]

The trustee offered the remedy of a moratorium; it didn't seem like it would be a problem pending the appeal. Even if the house gets sold, he'll continue the appeal. The judge told him his case was over in open court, but was wrong. But, because she'd let his lawyer with draw, told him it was all over, etc. and he was without counsel, he didn't realize that he was supposed to still make the payment as set up on the plan. Why? The creditors were set to sell the house and supposedly recover their claim from the sale.

He's going to appeal the FT judgment as a groundless case while the bankruptcy appeal is also pending; I don't think he can possibly win otherwise. At least he should be able to have more of the story admitted for review that way if it's also under appeal. Otherwise, the review stops short at the FT judgment and goes no further, right? As it stands, he's been portrayed as just some con by all the filings that have come in, deliberately worded that way and gone unchallenged by his lawyer previously. Nothing in the record allowed has been to stand about the Alzheimers, or anything else since my amicus brief was stricken. And, the move to strike was for documents that I had signed for him as power of attorney. (It is so hard to get them back and forth for his signature in time, and he can ecf because he's pro se).

They were challenged because the creditors claimed I was a third party non attorney trying to act as his own "de facto" attorney, when in fact I was only signing documents for him as his POA. I've prepared his pro se filings for the last 12 years, and they have never once during that time challenged anything he filed trying to say I (his legal secretary/paralegal basically) was representing him pro se. None of the case law they cited even applied. ARS 14-5501(A) says the holder of a power of atty is authorized to sign documents for the principal; doing so for a pro se litigant does not in turn imply that the poa holder IS the pro se litigant. In any case, the judge did NOT strike those documents, but instead struck the amicus brief I'd asked leave to file and submitted almost 3 months previously and stood in the record until their objection. Meaning that the court, which has discretion to accept amicus briefs or not, apparently did. It was also in the list of 6 things the atty wanted stricken but with no authorities to support why an amicus brief should be stricken.

My friend may have memory issues, and it may be easier for me to do some research because he doesn't have a computer, but anything that is filed is HIS. We go over and over it, correct it change it, do it again and then start from the top again. He knows what is being filed when he takes it in. He may have to be refreshed and/or reminded a few days later, but at the time, he knows what he's doing. He knows what he wants to accomplish with this, and I'm trying to help as best as I can.

Ideally, we wanted to find an attorney... and I have exhausted every avenue I can think of. I've even tried KGUN on your side for heaven's sake! (And, other similar things). I guess situations like his are at epidemic, crisis levels. I'm not naive enough to believe he's the only one who's been unjustly treated and who needs help. I do think its particularly disgusting that it's being inflicted on someone so disabled that when they are face to face in court they get so upset they lose what they want to say, and before they have a chance to "find their place" the opposing side is abetted by the judge and it's all over. I also think it's beyond belief that the atty has been legally allowed with no actual review other than a hearing (no review of their accounting, for example) to have turned an original $15K judment into over $119K claim. If it had been remotely possible for my friend to work up a confirmable plan even on their originally inflated claim as presented at the beginning of the case ($45K), their strategy was to object to ANY confirmation so that eventually added costs and fees would make it impossible ultimately for any plan to be confirmed because he couldn't pay. It's just plain fraud. Wow, you have a debtor who wants to pay your claim through the bankruptcy court? The heck with that! Hire a bankruptcy specialist to oppose it on any grounds possible til the fees add up to the point where your debtor could never make the payments he eventually owes now, thanks to your extra costs and your hired ringers. Sure, it would only work in the case of someone who could only borderline make a confirmable plan, but I'm sure it happens an awful lot. Otherwise, what is the possible justification for calling in a bankruptcy specialist at a cost of over $50K, in addition to the extra fees you are charging, to defeat a bankruptcy plan for an original judgment of $15k that you have already worked up to over $45k you your presentation to the bankruptcy court with interest and "post judgment" costs and fees?

It's simply not rational. The most I can see them getting out of the sale on that house is $35K... where does he think he is going to get the rest from? Why didn't he just agree to the original plan? I don't get it. Does he think that my friend has some secret stash of gems because he's a "mineralogist"? He's a ROCK collector, not a gemologist.

Anyway, back to your original point... you believe that neither the judge or BAP with approve a stay? YIKES! Assuming all that does happen, back to my question... is there a right to redemption here if he continues to appeal anyway and by some freak chance wins?

[despritfreya]

In response:

“The trustee offered the remedy of a moratorium;”

The Motion that she filed is a simply form. The same form is filed in all cases where an MTD is appropriate due to missed Plan payments.

“Even if the house gets sold, he'll continue the appeal.”

That will be up to the BAP. Once the property is sold the Creditor will most likely file a Motion to Dismiss the appeal as “moot”. If the Bk Court dismisses the case, a notice will be sent to the BAP and then the BAP, on it own, may dismiss the appeal as “moot” or lack of jurisdiction. Or, it may allow it to proceed.

“He's going to appeal the FT judgment as a groundless”

Where? In State Court? The judgment is from 2007. My guess is that the State court will do nothing.

“They were challenged because the creditors claimed I was a third party non attorney trying to act as his own "de facto" attorney, when in fact I was only signing documents for him as his POA. I've prepared his pro se filings for the last 12 years. . .”

It appears, at least in the end, you were attempting to speak for him, which is not something you are allowed to do. If your friend is/was incompetent, you should have taken steps under Arizona law, in the Superior Court, to have a guardian or conservator appointed. I did not say this to you on the other Forum, but I am going to say it now. . . I have represented “incompetent” debtors. In each case either a private or public fiduciary was appointed before the bk was filed. The direction the cases took was based upon what this State Court appointed representative directed. This meant that there was accountability, not only to the Bk Court and the creditors but also to the Debtor as the Superior Court contiuned to monitor what was going on.

“Wow, you have a debtor who wants to pay your claim through the bankruptcy court?. . .Why didn't he just agree to the original plan? I don't get it.”

Hold on a moment. Look at the original Plan. It’s total funding was a mere $6,844.00. It was filed in 4/09. The first objection raised by the creditor was in 5/09. The 1st Amended Plan was not filed until 12/09. The 1st Amended Plan attempted to pay the claim (some $45k) but was all over the place with the payment structure. The 2nd Amended Plan filed in 8/10 actually reduced Plan funding and only carved out $21k to the creditor. It too lacked cohesive feasability.

As I said before, your friend lost the Judge from day one. Trying to win her back by filing Plans that were not feasible in an attempt to “pay the claim” some 7 plus months after the first objection arose was not going to win her back. If your friend wanted to pay the claim the original Plan should have so provided.

“It's simply not rational. The most I can see them getting out of the sale on that house is $35K”

And that is approximately $20k more than what they would have gotten if your friend hadn’t transferred the property back in 2007.

Remember, the original claim was about $15k and there was sufficient equity in the property (after the homestead) to pay it. If your friend did not have access to the cash he could have simply taken out a $15k or so loan against the home. Now he has lost the home and any claim to a homestead - but, there is nothing like 20/20 hindsight unless you were of the mind set that you were not going to allow the creditor to win - at any cost.

Now to your question:

“is there a right to redemption” after the Sheriff completes the sale.

This, I do not know.

Des.

[medievalmagg]

"That will be up to the BAP. Once the property is sold the Creditor will most likely file a Motion to Dismiss the appeal as “moot”. If the Bk Court dismisses the case, a notice will be sent to the BAP and then the BAP, on it own, may dismiss the appeal as “moot” or lack of jurisdiction. Or, it may allow it to proceed".

This I don't understand. No, he doesn't want to lose the house, but there is way more at issue than that. Plus, the option for redemption if possible.

"Where? In State Court? The judgment is from 2007. My guess is that the State court will do nothing".

Yes. The case is still active; and the judgment was default, so res judicata does not apply. As I understand it, he would need to move to vacate the judgment. If it's denied, then he has a right to appeal it timely from that denial. As that case is related to the bankruptcy, and has been submitted into evidence, it should also be subject to review as it is being appealed.

"It appears, at least in the end, you were attempting to speak for him, which is not something you are allowed to do. If your friend is/was incompetent, you should have taken steps under Arizona law, in the Superior Court, to have a guardian or conservator appointed. I did not say this to you on the other Forum, but I am going to say it now. . . I have represented “incompetent” debtors. In each case either a private or public fiduciary was appointed before the bk was filed. The direction the cases took was based upon what this State Court appointed representative directed. This meant that there was accountability, not only to the Bk Court and the creditors but also to the Debtor as the Superior Court contiuned to monitor what was going on".

I have never spoken for him, only on his behalf in an amicus brief. Otherwise, the only thing I do for him is try to find out information, like in these forums, or do research. I prepare the filings for him as I have for the last 12 years, like I said. It's his choice and decision about what he wants to do. Incompetence is a very inadequate word to use in the case of Alzheimer's, especially in the early phases. Most agree that Alzheimer's victims are not incompetent, depending on the stage. I've just had a totally lucid and coherent conversation with him regarding this case. But, if he were in Court and the other atty came at him with a question related to a past case, chances are he wouldn't remember it to be able to answer. It doesn't make him incompetent in strict legal terms, but with respect to being able to conduct himself capably and effectively in THIS case, he definitely is handicapped due to his disablitity. But, is he incompetent? No. He was certainly not incompetent during the Superior Court case, but is not a lawyer and was not aware that the second case (FT) actually was baseless. He has simply lost the edge he once had to be able to EFFECTIVELY handle a case pro se without having his interests compromised. As such, the judge has been allowed to get away with making outrageous comments, bum rush the case and so on. His atty presented absurd plans that he had absolutely no say in, and completely disregarded his desire for me to be part of the loop so he would be clear on what was happening. These are things that never would have slipped by him 4 years ago.

"Hold on a moment. Look at the original Plan. It’s total funding was a mere $6,844.00. It was filed in 4/09. The first objection raised by the creditor was in 5/09. The 1st Amended Plan was not filed until 12/09. The 1st Amended Plan attempted to pay the claim (some $45k) but was all over the place with the payment structure. The 2nd Amended Plan filed in 8/10 actually reduced Plan funding and only carved out $21k to the creditor. It too lacked cohesive feasability".

This is precisely my point. In the first plan his atty just accepted the $45K claim as presented, which was hugely inflated and included costs related to the FT judgment that were absolutely not his. The second amended plan was denied because of the balloon payment at the end, expected to be derived from money from the sale of the house. It was a stop gap measure at the time, with the intent to find a better solution (like funding to pay the judgment, as in loan of some kind) or an upturn in the market by then so that the house could sell for a reasonable fair price, then he could pay the judgment and still end up with some money to move and make a fresh start if he had to. The $21K the second plan was based on was his original $15K judgment plus interest and she put in an objection to the atty's proof of claim at that time because by then I was in the loop and had advised her that the transferree had paid all but $976 of her $15,976 judgment, so could not understand how the claim could possibly be for $45K. Turns out the atty had insisted on wording the judgment as "partial" on account of that $976, and the interest PLUS "post judgment" costs and fees had now added up to over another $21K in less than 2 years. That all aside, the plans could have been based on projected income from social security, even thought it's exempt, with a moratorium on payments until benefits were awarded. We asked, she never did it. At least it would have been a little more feasible than what was presented; it would have proposed equal monthly payments and would have funded it so the creditors were fully repaid.

"And that is approximately $20k more than what they would have gotten if your friend hadn’t transferred the property back in 2007.
Remember, the original claim was about $15k and there was sufficient equity in the property (after the homestead) to pay it. If your friend did not have access to the cash he could have simply taken out a $15k or so loan against the home. Now he has lost the home and any claim to a homestead - but, there is nothing like 20/20 hindsight unless you were of the mind set that you were not going to allow the creditor to win - at any cost".

NO. If he hadn't transferred title, they would have gotten exactly NOTHING. His did not have over $150K of equity in the property, this is what it is critical to realize. Not only was the property not even worth that at market value, despite Zillow (you would have to realize what needed and needs to be done!), but he also had about a $10K mortgage at the time as well. As I said, when he filled out the homestead declaration when title was transfered back, he simply went brain dead when estimating the value. (That is the only item anywhere that puts his property as non exempt, and it's on a document that is attempting to declare it as homestead at the same time!). NO property anywhere near him was valued at that amount at the time; his tax assessment was $98K or something like that, which is generally about 80% to actual market value. It was CLEARLY exempt if anyone had bothered to look, and the only true accepted valuation of a property is through an appraisal because of all the factors that are specific to an individual property.

But, they didn't look, they just assumed, and brought the FT case. It was a great gamble though, because the transferree lived out of the country and likely wouldn't show up (and didn't) so they got the default judgment against her. In the end, everyone was concentrating on defending whether or not it was a fraudulent transfer... no one bothered to look at the fact it was exempt property so that a case for fraudulent transfer by definition can't even be claimed. So, his attorney brings this up LAST YEAR in pleadings, but never actually mentions it to him and it's only noticed as he's reviewing the case file (no part of which had EVER been provided until she withdrew). The judge said (when she denied his homestead exemption in her order), well, it should have been brought up during the state court case and "as such is non appealable". Okay, well that's just not true. And, had he known, he could have started working on that darned judgment LAST YEAR before this case had gone so far downhill.

I understand how complex this is, and that it does appear at first glance to be that he just wanted to evade the creditors. If that had been the case, he would never have transferred title; if he truly wanted to cheat his creditors he would have just done... nothing. He was just sick and tired of the whole thing and wanted to move, but in a time frame he could handle. It solved the matter of a debt he owed a friend, and also a friend's search for a house.

I wish you did know about the issue of redemption, because that is really what is concerning me most right now. Well, among a host of other things, lol. Certainly it seems that he must go back to the FT judgment to even begin to have a hope in the appeal. But, in the event he loses the house, he would still want to continue the appeal because of the usurious amount of the judgment now. Even though disability income is exempt, who's to say he may not end up with an inheritance from either or both of his parents who are still alive? Why let an outrageous judgment stand even if his house is lost? Especially if he may have the right to redemption?

[despritfreya]

You just don't get it. But that's ok as eventually you will. But please keep us posted.

As to the sale of the property, the following links (assuming they work. . . I'm not techno savy) may answer some of your questions:

http://www.azleg.gov/ars/12/01554.htm

http://www.azleg.gov/ars/12/01622.htm

http://www.azleg.gov/ars/12/01282.htm This specifically deals with redemption.

http://www.azleg.gov/ars/12/01285.htm This deals with the additional costs to redeem

http://www.azleg.gov/ars/12/01626.htm

There may be other provisions under Title 12 that apply but the above should get you started on your research.

Des.

[medievalmagg]

I agree, I don't get it, which is why I'm trying to use this forum. I don't get how a person can lose their home over wrong judgments.

All the ARS statutes you provide (which I very much appreciate) are predicated on the presumption of a correct and just judgment, which is not the case here. I found something that gives various proceedures for redemption but based on what type of sale it was, ie foreclosure (it's not), trustee's sale (is it?), and so on. It's a writ of special execution based on a judgment for money (attys fees only) upon which a lien was eventually correctly attached.

I also do not understand what the final outcome has been in the courts as far as liens placed by HOA's for fees and fines (there may or may not be one) but they have billed him; I know it's been changing. Are they dischargeable on exempt property up to the date of filing? Is there any oversight AT ALL on HOA's that overrides their bylaws or CC & R's on the amount they can charge for a thing, or the interest thereon? They are subject to the Fair Credit Act for notification are they not? His HOA has not sent him one shred of paper until this new year (though they've billed for postage!) since before the FT case when the original case went to appeal. He had to write them to ask what the assessment amount was for 2007, but the never responded. Found out at the hearing in Oct. that they had been still fining and compounding interest all along without notifiying him, and now have it up to over $11k in just about 2 years. This is for VERY minor weeds and a non-working vehicle in his driveway (gone as of last March 2010). (His house was a model at the time the development units were first being sold in 1982, and the garage was halved horizontally to make into an office; you cannot park a car in it, so his car, non working or not, had to sit in the driveway). Elsewhere in the development were non working vehicles that never were fined, which is why he brought the case in the first place; selective application of the bylaws and CC & R's etc.

Anyway, this is why I have questions. And, why I just don't get it. I do appreciate the information, sincerely, and I will keep you informed.

What does a writ of mandamus do?

[tobee43]

What does a writ of mandamus do?

...hope this helps a bit....quicky google search....

"A writ of mandamus is a court order instructing an inferior court, a corporation or a person to perform some duty specified in the order.

For an example of a writ of mandamus by an appeals court compelling a lower court to hear a motion, see State ex rel. Ricco v. Biggs, Circuit Judge, 255 P.2d 1055 (1953 Ore.)

One of the oldest United States cases dealing with a writ of mandamus is Marburry v. Madison, 5 U.S. 137 (1803), a case famous for establishing the power of judicial review."

and a bit more...

"A writ or order that is issued from a court of superior jurisdiction that commands an inferior tribunal, corporation, Municipal Corporation, or individual to perform, or refrain from performing, a particular act, the performance or omission of which is required by law as an obligation.

A writ or order of mandamus is an extraordinary court order because it is made without the benefit of full judicial process, or before a case has concluded. It may be issued by a court at any time that it is appropriate, but it is usually issued in a case that has already begun."

[medievalmagg]

Thanks... just wondering if it's a possible last resort in the event both the bankruptcy court and BAP deny the motion for stay pending the appeal...

[tobee43]

Thanks... just wondering if it's a possible last resort in the event both the bankruptcy court and BAP deny the motion for stay pending the appeal...

hopefully des will be back on and be better able to answer...or if anyone knows they i'm certain will chime it...

[medievalmagg]

Bankruptcy was supposed to be the option to pay the creditor and save his house. Isn't is fraudulent to just oppose a bankruptcy until the debt has been so jacked up that it is financially impossible to present a confirmable plan?

[tobee43]

Bankruptcy was supposed to be the option to pay the creditor and save his house. Isn't is fraudulent to just oppose a bankruptcy until the debt has been so jacked up that it is financially impossible to present a confirmable plan?

one would think, but there are many creditors that try anything and just are terrible...and actually, i know for us personally it was because the creditors jacked up the debts so much that we could no longer afford to pay them...they forced our hand...we had no choice about it because of them.

[medievalmagg]

Okay, so... it's not just my imagination then. This appears to be an actual tactic that's employed on people who can borderline pay a plan, but if the other side obstructs it long enough, adding in the costs and fees to do so, inflated of course, then once that becomes added to your supposed debt, then you in the end don't have enough income per month to present a confirmable plan, is that it? Call me naive, but shouldn't there be some kind of law preventing this type of obvious fraudulent behavior? Had my friend's atty not been just such a loose cannon, and been willing to talk to me, there are a lot of options that could have been considered to make a plan workable for him. For heaven's sake, he has a 4 bedroom house... even with no income he could have rented out a couple of rooms to make the money to pay the plan, you know? I didn't understand a THING about bankrutpcy when he filed, I was just relieved that at the literal last second the house was saved from a sheriff's sale. I had assumed a competent attorney could handle the rest. I had no idea about plans, or any other such thing until he filed, and then only vaguely. I didn't realize until she withdrew, ie a couple of months ago, that they were literally the required foundation of the whole thing. Right... I know... pretty ignorant, but it wasn't my case and he was supposedly represented. She was supposed to be keeping me informed and apprised all the way through and simply refused. Wouldn't have known a thing about the other cases if I hadn't gone out of my way to tell her there was a problem with the final judgment amount claim. omg... such a convoluted, compounded mess. But, back to the first point, isn't there protection against a creditor/lawyer pulling that crap??