ROBERT H. JACOBVITZ, United States Bankruptcy Judge
THIS MATTER is before the Court on the Motion for Relief from Stay (Docket No. 6) (the "Motion") filed by BOKF, N.A. ("BOKF"). For the reasons explained below, the Court finds that BOKF has standing to seek relief from the automatic stay and that cause exists to lift the automatic stay. BOKF obtained a default judgment for foreclosure of real property in state court, purchased the property at a foreclosure sale, received a special master's deed for the property, and obtained an order confirming the special master's sale. Neither the default judgment for foreclosure nor the order confirming special master's sale has been set aside in the state court action. Accordingly, it is appropriate to grant stay relief so that BOKF can return to state court to continue its eviction proceedings against the Debtor and any other non-debtor occupants of the property.
Debtor filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code on May 7, 2016. See Docket No. 1. BOKF filed the Motion on May 12, 2016. Debtor filed a response to the Motion on June 1, 2016, representing that she had made an offer to turnover the property that is the subject of BOKF's Motion as of July 1, 2016, but requesting an additional 30 days until August 1, 2016 because of her
The Stipulated Order Concerning Admitted Facts ("Stipulated Order") "stipulated that the exhibits filed by the parties are agreed to as the stipulated facts for the purposes of the Motion for Relief from Stay." See Docket No. 67. Because the Stipulated Order was not entered until September 21, 2016, the parties also submitted a Stipulated Order Nunc Pro Tunc on Stipulated Facts providing that the stipulated facts are deemed filed as of August 5, 2016. See Docket No. 66. The parties did not attach any exhibits to the Stipulated Order. It appears from the record that BOKF filed a witness and exhibit list for the anticipated final hearing on the Motion which included copies of the exhibits. See Docket No. 24. Debtor filed over 180 pages of exhibits in opposition to the Motion. See Docket Nos. 35 and 36. Based on the Stipulated Order, the Court will treat the exhibits found at Docket Nos. 24, 35, and 36 as stipulated facts for purposes of ruling on the Motion.
BOKF filed a judicial foreclosure action in the Second Judicial District Court, Bernalillo County, State of New Mexico, on July 26, 2012 against Roy A. Metzgar, and others, as Case No. D-202-CV-2012-06863 (the "State Court Action"), seeking to foreclose a mortgage against real property located at 3101 Florida Street, NE, Albuquerque, New Mexico 87110 (the "Property"). BOKF obtained a default judgment in the State Court Action on November 29, 2012 foreclosing the mortgage and authorizing a special master to sell the Property. See Default Judgment of Foreclosure, Decree of Foreclosure, Order of Sale and Appointment of Special Master ("Default Judgment"). BOKF purchased the Property at the special master's sale held January 16, 2013. The state court approved the sale and authorized the Special Master to deliver a deed to the Property to BOKF. See Order Approving Special Master's Report and Confirming Foreclosure Sale ("Order Confirming Sale") entered in the State Court Action on July 9, 2013. A Special Master's Deed conveying the Property to BOKF was recorded in the real property records of Bernalillo County, New Mexico on July 17, 2013, as Document No. 2013079862. Roy Metzgar unsuccessfully sought to set aside the sale of the Property and to declare the Default Judgment void. See Order Denying Motion to Vacate Sale and Declare Judgment Void entered in the State Court Action on February 23, 2016.
On May 12, 2015, Roy Metzgar purported to transfer the Property to the Molinar Financial 1976 Trust (the "Molinar Trust") by Warranty Deed recorded in the real
As of May 7, 2016, the date Debtor filed her bankruptcy case, Debtor occupied the Property. Mr. Gilmore unsuccessfully sought to intervene in the State Court Action as "tenant in possession"; he failed to appear at the hearing in the State Court Action to plead his motion to intervene. See Order Denying Motion to Intervene entered in the State Court Action on May 10, 2016. BOKF is the record title holder and owner of the Property. See Special Master's Deed dated January 31, 2013, recorded in the real property records of Bernalillo County, New Mexico on July 17, 2013 as Document Number 2013079862.
BOKF seeks relief from the automatic stay so it may return to the state court to seek a writ of assistance to obtain possession of the Property in the State Court Action. A party requesting relief from the automatic stay must first establish that it has standing to seek relief from the stay as a "party in interest."
The Bankruptcy Code does not define "party in interest" under 11 U.S.C. § 362(d). Id. To establish standing for purposes of 11 U.S.C. § 362(d), a party generally "must be either a creditor or a debtor of the bankruptcy estate." Miller, 666 F.3d
Notwithstanding Debtor's suggestion that the foreclosure process in the State Court Action was flawed, the Default Judgment, the Order Confirming Sale Order and the recorded Special Master's Deed establish that BOKF acquired title to the Property pre-petition. Based on these documents, BOKF has demonstrated that it has statutory standing to seek relief from the automatic stay as a party in interest. Under New Mexico law, a judgment for foreclosure is final with respect to the rights of the parties in the property, and interlocutory with respect to the manner and terms of the foreclosure sale.
This case is unlike the Tenth Circuit's decision in Miller. In Miller, the Tenth Circuit determined the creditor could not rely on a state court order authorizing sale to establish its standing as a party in interest to seek relief from the automatic stay because the order was not a final order under Colorado law. Miller, 666 F.3d
As the owner and record title holder of the Property following the foreclosure sale, BOKF may seek to dispossess the occupants of the Property. See N.M.S.A. 1978 § 35-10-1(A)(4) (providing for a civil action for forcible entry or unlawful detainer based on a defendant's continued possession of the property after a foreclosure sale). BOKF, therefore, holds a sufficient interest in the Property to confer statutory standing to seek relief from the automatic stay as to permit it to exercise its right to dispossess Debtor from the Property.
Having determined that BOKF has standing to seek relief from the automatic stay, the Court will determine whether such relief should be granted. Relief from the automatic stay under 11 U.S.C. § 362(d)(1) may be granted upon a showing of "cause." See 11 U.S.C. § 362(d)(1) (relief from the stay shall be granted "for cause, including the lack of adequate protection of an interest in property of such party in interest."). Whether "cause" exists "is a discretionary determination made on a case by case basis." Carbaugh v. Carbaugh (In re Carbaugh), 278 B.R. 512, 525 (10th Cir. BAP 2002) (citing Pursifull v. Eakin, 814 F.2d 1501, 1506 (10th Cir. 1987)).
At the time Debtor filed her bankruptcy petition, she had a possessory interest in the Property. This interest is protected by the automatic stay.
The Court will enter a separate order consistent with this Memorandum Opinion.
BOKF has satisfied the requirements of Constitutional standing. If not granted stay relief, BOKF will suffer an injury in fact fairly traceable to Debtor's continued possession of the Property because BOKF will be deprived of the use and enjoyment of its property. Stay relief will redress the injury by permitting BOKF to seek a writ of assistance to obtain possession of the Property in which the Debtor has a possessory interest.