MEMORANDUM DECISION ON MOTION FOR RELIEF FROM THE AUTOMATIC STAY

THOMAS C. HOLMAN, Bankruptcy Judge.

A typical assignment of a promissory note secured by a mortgage or deed of trust on real property does not, by itself, confer on the assignee standing to enforce the note and deed of trust in federal court.

I. Factual Background

Before the court is the motion (Dkt. 15) of "OneWest Bank, FSB, its successors and/or assigns, as purchaser of certain assets of First Federal Bank of California from the Federal Deposit Insurance Corporation, as Receiver" ("OneWest") for relief from the automatic stay (the "Motion"). The Motion does not recite what OneWest wants to do that requires relief from the automatic stay, but the court treats the Motion as requesting relief from the automatic stay to commence and complete foreclosure proceedings under the Deed of Trust and Assignment of Rents (Dkt. 20) (the "Deed of Trust") that secures a Note Secured By Deed of Trust (Dkt. 21) (the "Note") made by the debtor in favor of First Federal Bank of California, FSB, and subsequently assigned to OneWest by a Corporate Assignment of Deed of Trust (Dkt. 18) (the "Assignment").

This chapter 7 bankruptcy case was commenced by the filing of the debtor's voluntary petition on January 3, 2011. The Motion was filed April 14, 2011. The Motion recites, inter alia, that OneWest is "the holder of a mortgage" (Dkt. 21 at 1) on the debtor's residence (the "Property"), that as of April 7, 2011, "the mortgage was delinquent" from February 1, 2011, that as of April 7, 2011, the total debt owed to One West was approximately $111,425.81 and that according to the debtor's schedules the value of the Property is $112,000.00 (Dkt. 21 at 2). The prayer of the Motion requests relief from the automatic stay for cause under 11 U.S.C. § 362(d)(1) and nullification of the 14-day stay provided in F.R. Bankr.P. 4001(a)(3).

The debtor filed written opposition on May 10, 2011 (Dkt. 25). In her opposition, the debtor asserts that OneWest does not have standing to file the Motion, and requests sanctions pursuant to Fed. R. Bankr.P. 9011, 28 U.S.C. § 1927, and the court's inherent authority.

On May 23, 2011, the court posted on the court's website a tentative ruling setting forth the substance of this memorandum. The Motion came on for hearing on May 24, 2011. Neither OneWest nor the debtor appeared at the hearing. Dkt. 29. The court made the following ruling: The debtor's opposition is sustained in part. The motion is dismissed. The debtor's countermotion for sanctions is denied. Memorandum Decision to follow. (Dkt. 30).

II. Discussion

"Under the Bankruptcy Code, a party seeking relief from stay must establish entitlement to that relief[,] ... [f]ore-closure agents and servicers do not automatically have standing." In re Jacobson, 402 B.R. 359, 367 (Bankr.W.D.Wash.2009) (citing In re Hayes, 393 B.R. 259, 266-67 (Bankr.D.Mass.2008)); In re Scott, 376 B.R. 285, 290 (Bankr.D.Idaho 2007). "For a federal court to have jurisdiction, the litigant must have constitutional standing, which requires an injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." In re Jacobson, 402 B.R. 359, 366 (Bankr.W.D.Wash.2009)(citing United Food & Commercial Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 551, 116 S.Ct. 1529, 134 L.Ed.2d 758 (1996)). Constitutional standing, which is based on the "case or controversy" requirement under Article III, § 2 of the U.S. Constitution, cannot be waived as it is "a threshold jurisdictional requirement." See id. at 367 (citing Pershing Park Villas Homeowners Ass'n v. United Pac. Ins. Co., 219 F.3d 895, 899-900 (9th Cir.2000)). The United States Supreme Court recently held that in order to meet this jurisdictional requirement, an assignee of a claim must hold legal title to the claim being asserted. Sprint Commc'ns Co. v. APCC Services, Inc., 554 U.S. 269, 128 S.Ct. 2531, 171 L.Ed.2d 424 (2008). An assignment for collection will suffice for purposes of satisfying the constitutional standing requirement. Id. at 2542.

Any expectation that the legal owner always has the right to enforce a claim evidenced by a promissory note is misplaced when the promissory note is a negotiable instrument.

Cal. Comm.Code § 3203, Uniform Commercial Code Comment 1 (West, Westlaw through Ch. 24 of 2011 Reg. Sess. and Ch. 2 of 2011-2012 1st Ex.Sess.).

The concept of standing involves more than constitutional standing. It involves two inquiries. See Franchise Tax Bd. v. Alcan Aluminium, 493 U.S. 331, 335, 110 S.Ct. 661, 107 L.Ed.2d 696 (1990) ("We have treated standing as consisting of two related components: the constitutional requirements of Article III and nonconstitutional prudential considerations."); Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 2204, 45 L.Ed.2d 343 (1975). In the first, as set forth above, the court must ask whether the plaintiff or moving party has suffered sufficient injury to satisfy the "case or controversy" requirement of Article III. A suit brought by a plaintiff or relief sought by a moving party without Article III standing is not a "case or controversy," and an Article III federal court therefore lacks subject matter jurisdiction over the suit. Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 101-04, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). In that event, the suit should be dismissed under Federal Rule of Civil Procedure 12(b)(1). Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1140 (9th Cir.2003); Scott v. Pasadena Unified Sch. Dist., 306 F.3d 646, 664 (9th Cir.2002).

Beyond this "irreducible constitutional minimum of standing," the court must engage in a second inquiry to determine whether the plaintiff or moving party is properly able to assert a particular claim. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Franchise Tax Bd. v. Alcan Aluminium, 493 U.S. 331, 335, 110 S.Ct. 661, 107 L.Ed.2d 696 (1990); Dunmore v. U.S., 358 F.3d 1107, 1112 (9th Cir.2004). Frequently, this inquiry requires an analysis of whether a statute under which the plaintiff or moving party asserts a claim has conferred "standing" on the plaintiff or moving party. In such cases, non-constitutional or "prudential" standing exists when "a particular plaintiff has been granted a right to sue by the specific statute under which he or she brings suit." See City of Sausalito v. O'Neill, 386 F.3d 1186, 1199 (9th Cir.2004); see also Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 474-75, 102 S.Ct. 752, 760, 70 L.Ed.2d 700 (1982) (discussing other "prudential principles" such as refraining from adjudicating "generalized grievances," and requiring the complaint to fall within "the zone of interests to be protected or regulated"). In other instances, a statute or rule of law may restrict the assertion of a claim to a certain universe of parties. This restriction includes the requirement of Federal Rule of Civil Procedure 17(a)(1) that "an action must be prosecuted in the name of the real party in interest." See In re Wilhelm, 407 B.R. 392, 398 (Bankr.D.Idaho 2009) (stating that the requirement of Rule 17 "generally falls within the prudential standing doctrine.") The restriction may also be based on state law. See Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004) (non-custodial parent who is barred under state law from suing as his or her child's "next friend" lacks prudential standing to bring a First Amendment challenge to a school board's policy requiring teacher-led recitation of the Pledge of Allegiance); 15 James Wm. Moore, et al., MOORE'S FEDERAL PRACTICE-CIVIL § 101.51[1][e](3d ed. 2011) ("State laws may operate to deprive a prospective plaintiff of prudential standing in federal court."). Generally, a party without legal rights to enforce an obligation under applicable substantive law lacks prudential standing. Doran v. 7-Eleven, Inc., 524 F.3d 1034, 1044 (9th Cir.2008). If a party has suffered sufficient injury to satisfy the jurisdictional standing requirement of Article III, but the party cannot satisfy the applicable prudential standing requirement(s), the party cannot state a claim upon which relief can be granted. Guerrero v. Gates, 357 F.3d 911, 920-21 (9th Cir.2004), In that event, the claim for relief should be dismissed under Federal Rule of Civil Procedure 12(b)(6). Id. at 920-21.

The Sprint case, cited above, involved constitutional standing as applied to causes of action. As discussed above, constitutional standing is only the first step in the standing analysis. In the context of this motion for relief from automatic stay, the court must also determine whether the movant has prudential standing by determining whether under applicable substantive law the movant has a legal right to enforce the obligation on which its claim is based.

Where a negotiable instrument represents the obligation to be enforced, as here, the issue whether the movant has a legal right to enforce the obligation, and, thus, whether the movant has prudential standing, is determined by the Commercial Code. According to a recent draft report by the Permanent Editorial Board for the Uniform Commercial Code,

PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, DRAFT REPORT OF THE PEB ON THE UCC RULES APPLICABLE TO THE ASSIGNMENT OF MORTGAGE NOTES AND TO THE OWNERSHIP AND ENFORCEMENT OF THOSE NOTES AND THE MORTGAGE SECURING THEM, 3-6 (March 29, 2011) (http://extranet.ali. org/directory/files/PEB_Report_on_Mortgage_Notes-Circulation_Draft.pdf) (footnotes omitted).

OneWest submitted the Note and Deed of Trust as evidence in support of the Motion (Dkts. 20 and 21). OneWest also submitted the Assignment in support of the Motion.

The court finds that the Assignment is sufficient to show that OneWest is the owner of the Note and has constitutional standing to bring the motion. The Assignment "does convey, grant, sell, assign, transfer and set over the described Deed of Trust together with the certain note(s) described therein ... together with all right, title and interest secured thereby, all liens, and any rights due or to become due thereon to OneWest Bank, FSB ..."

However, the court finds that the record before the court fails to demonstrate that OneWest is the "person entitled to enforce" the note under the Commercial Code, and the court therefore concludes that OneWest has not shown that it has prudential standing to bring the Motion.

The court finds that OneWest has not shown that it is the "holder" of the Note [the first alternative above] because: (1) there is no evidence in the record that the Note has been indorsed to OneWest or to bearer; and (2) there is no evidence in the record that OneWest is in possession of the Note. The court finds that OneWest has not shown that it is a "nonholder in possession of the note who has the rights of a holder" [the second alternative above] because there is no evidence in the record that OneWest is in possession of the Note. The court finds that OneWest has not shown that it is a "nonholder not in possession of the note who has the rights of a holder" [the third alternative above] because there is no evidence in the record that OneWest cannot reasonably obtain possession of the Note because the Note was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

As to the debtor's countermotion for sanctions, although this request was made on less than twenty-eight days' notice and should be construed as a motion filed pursuant to Local Bankruptcy Rule 9014-1(f)(2), the motion cannot be granted. Pursuant to Federal Rule of Bankruptcy Procedure. 9011(c)(1)(A), "[a] motion for sanctions under this rule shall be made separately from other motions or requests[.]..." The debtor failed to comply with this requirement. Pursuant to Federal Rule of Bankruptcy Procedure 9011(c)(1)(A), a motion for sanctions "may not be filed with or presented to the court unless, within [twenty-one] days after service of the motion ... the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected[.] ..." The debtor has failed to comply with this requirement. The countermotion for sanctions was filed on May 10, 2011 (Dkt. 25), providing the creditor with only fourteen (14), instead of twenty-one (21), days to withdraw or amend their motion for relief from the automatic stay. The requests for sanctions under 28 U.S.C. § 1927 and the court's inherent authority are not granted because the debtor refers to inherent authority only in the title of section 2 of the opposition and countermotion and refers to 28 U.S.C. § 1927 only by stating that One-West's "inaccurate representations... may warrant sanctions under 28 U.S.C. § 1927." The debtor provides no other authority or analysis to support these requests. With respect to 28 U.S.C. § 1927, the debtor has failed to address Perroton v. Gray (In re Perroton), 958 F.2d 889 (9th Cir.1992), which holds that a bankruptcy court is not a "court of the United States" as defined in 28 U.S.C. § 451.