Debtor Lupi Edwards (“Edwards”) appeals the bankruptcy court’s order granting relief from the automatic stay to appellee Wells Fargo Bank, as trustee for certain mortgage-backed securities (“Wells Fargo”).
The issue before the Panel was whether the bankruptcy court abused its discretion in granting Wells Fargo’s motion for relief from the automatic stay.
Wells Fargo satisfied the threshold showing of a colorable claim to an ownership interest in the Property, as well as enforceable rights to the Property thereunder. In turn, this established Wells Fargo’s status as a real party in interest, as it is clear that Wells Fargo is asserting its own legal rights. Therefore, Wells Fargo had standing to seek relief from the automatic stay.
Section 362(d)(1) of the Bankruptcy Code provides that, “[o]n request of a party in interest and after notice and a hearing, the court shall grant relief from the stay . . . (1) for cause, including the lack of adequate protection of an interest in property of such party in interest.” The bankruptcy court found that cause existed based on Wells Fargo’s pre-petition Foreclosure Sale, and the subsequent Unlawful Detainer Judgment and Writ of Possession.
Edwards further claimed that the bankruptcy court erred in granting relief from stay because she had commenced an adversary proceeding against Wells Fargo challenging its title. The crux of Edwards’ complaint was that the Foreclosure Sale, Unlawful Detainer Action, subsequent Unlawful Detainer Judgment and Writ of Possession were improper, fraudulent, illegal and invalid. The State Court rendered judgment in favor of Wells Fargo in the Unlawful Detainer Action. Edwards was therefore precluded from continuing to assert that the Foreclosure Sale was improper, fraudulent, illegal and invalid in her bankruptcy case. It could not have been an abuse of discretion in these circumstances to grant relief from stay.
The Panel found that the bankruptcy court did not abuse its discretion.
Affirmed.