Firm Commentary:
The attached case is a strong ruling overturning a bankruptcy court's granting of a Motion for Relief of Stay where evidence exists that someone other than Bank of America owns a mortgage loan. http://xa.yimg.com/kq/groups/21961710/1110490775/name/Sardana+v+Bank+of+America.%2C+9th+Cir.+BAP.June.07.2011.pdf
As is typical, BofA attenpted to use a questionable Assignment of Deed of Trust to prove it had "standing" to appear in a homeowner's bankruptcy case as a creditor and try to lift the injunction preventing foreclosure. The BK court, as BK courts faced with large caseloads often do...granted the motion despite evidence that the loan was owned by Fannie Mae. The US Bankruptcy Appellate Panel of the Ninth Circuit [which includes California] REVERSED the decision. The logic behind this case could help a homeowner, facing a Relief of Stay motion, prevent a loan servicer from lifting the automatic stay. For details, contact the office.
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1
This disposition is not appropriate for publication.
Although it may be cited for whatever persuasive value it may
have, FRAP 32.1, it has no precedential value. See 9th Cir. BAP
Rule 8013-1.
2
Hon. Margaret M. Mann, Bankruptcy Judge for the Southern
District of California, sitting by designation.
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
In re: ) BAP No. AZ-10-1368-DMkMa
)
KIRAN SARDANA, ) Bk. No. 08-12830-CGC
)
Debtor. )
______________________________)
)
KIRAN SARDANA, )
)
Appellant, )
)
v. )
MEMORANDUM1
)
BANK OF AMERICA, N.A., )
)
Appellee. )
______________________________)
Argued and Submitted on May 13, 2011
at Phoenix, Arizona
Filed - June 7, 2011
Appeal from the United States Bankruptcy Court
for the District of Arizona
Honorable Charles G. Case, Bankruptcy Judge, Presiding
Appearances: Trucly Pham Swartz of John Joseph Volin, P.C.
argued for Appellant;
Leonard McDonald, Jr. if Tiffany & Bosco, P.A.
argued for Appellee
Before: DUNN, MARKELL and MANN,
2 Bankruptcy Judges.
FILED
JUN 07 2011
SUSAN M SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
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3
Unless otherwise specified, all chapter and section
references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
all "Rule" references are to the Federal Rules of Bankruptcy
Procedure, Rules 1001-9037. The Federal Rules of Civil Procedure
are referred to as "Civil Rules."
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Debtor and appellant Kiran Sardana ("Ms. Sardana") appeals
the bankruptcy court's order granting relief from stay to
appellee Bank of America, N.A. ("Bank of America"). We VACATE
and REMAND to the bankruptcy court to conduct an evidentiary
hearing.
FACTS
On September 23, 2008, Ms. Sardana filed her chapter 13
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bankruptcy petition. On her Schedule A - Real Property,
Ms. Sardana listed her residence in Chandler, Arizona
("Property"), as having a value of $249,000 and secured claims
against it in the amount of $342,001.12. In her Schedule D,
Ms. Sardana stated that Bank of America had undisputed claims
secured by the Property in the amounts of $288,619.18 and
$53,381.94, respectively. Based on Ms. Sardana's valuation of
the Property, Bank of America had a secured claim on its first
trust deed ("Trust Deed") in the amount of $249,000, with the
balance of $39,619.18 unsecured, and Bank of America's line of
credit second lien on the Property, in the amount of $53,381.94,
was wholly unsecured.
On April 13, 2010, Bank of America filed a motion for relief
from stay ("Motion") requesting an order granting relief from the
stay of § 362(a) to permit Bank of America to foreclose its Trust
Deed and obtain possession and control of the Property. In the
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Motion, Bank of America alleged that Ms. Sardana had signed a
promissory note ("Note") secured by the Trust Deed on the
property. Copies of the Note and Trust Deed were attached as
Exhibits "A" and "B" to the Motion. Bank of America is
identified as the "Lender" in both the Note and the Trust Deed.
In the Trust Deed, Bank of America, as "Lender," is identified as
the "beneficiary under this Security Instrument." Bank of
America alleged that it had a secured claim against Ms. Sardana
and a secured interest in the Property by virtue of the Note and
Trust Deed.
In the Motion, Bank of America further alleged that
Ms. Sardana was in default of her Note obligation in that she had
failed to pay the postpetition maintenance payments to Bank of
America for January through April, 2010, for a total postpetition
default of $6,617.02, after a setoff of funds in suspense.
Ms. Sardana filed a response ("Response") to the Motion on
or about April 27, 2010. In her Response, Ms. Sardana did not
dispute that she was in postpetition default of her payment
obligations under the Note and Trust Deed. Her sole defense was
her argument that Bank of America did not hold the original Note
and thus was not a real party in interest, lacking standing to
file the Motion. Ms. Sardana alleged that, as opposed to being
the current "owner and holder" of the Note, "Bank of America is
only a servicer, a sub-servicer or a default servicer of the debt
pursuant to a pooling and servicing agreement with the actual
holder. . . ."
The bankruptcy court held a preliminary hearing
("Preliminary Hearing") on the Motion on May 27, 2010. At the
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Preliminary Hearing, counsel for Ms. Sardana advised the
bankruptcy court that based on a preliminary investigation, it
appeared that the Note had been assigned to Fannie Mae, and
counsel assumed that Bank of America just retained servicing
rights. Counsel for Ms. Sardana requested about 60 days to
investigate the situation further and offered that Ms. Sardana
was prepared to make an adequate protection payment to Bank of
America.
The bankruptcy court noted that,
There are a number of cases from the Arizona - from the
District of Arizona - district judges who say Arizona
is not a quote, "Show me the note state." A conclusion
with which I happen to agree.
May 27, 2010 Hrg. Tr. at 10: 17-20. However, the bankruptcy
court further stated its willingness to grant a short continuance
based upon Ms. Sardana making adequate protection payments. The
bankruptcy court also stated that during the time before a final
hearing, the ownership of the Note could be explored, but its
greater concern was who was the beneficiary under the Trust Deed.
Ms. Sardana submitted discovery requests to Bank of America,
Fannie Mae and the chapter 13 trustee. In the Appendix to
Appellant's Reply Brief, Ms. Sardana included a copy of a Motion
to Compel Discovery ("Motion to Compel") and attached exhibits
prepared and served on or about August 20, 2010, alleging that
Bank of America had not responded to Ms. Sardana's
Interrogatories and Requests for Production of Documents.
Nothing in the record on appeal informs us of the disposition of
the Motion to Compel.
A further hearing ("Final Hearing") on the Motion was held
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In Appellant's Opening Brief, Ms. Sardana states that,
"In compliance with the court's order, Appellant made the
required adequate payment to Appellee." Appellant's Opening
(continued...)
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on September 14, 2010. At the Final Hearing, counsel for Bank of
America argued that Bank of America was the originator of the
Note and Trust Deed and that they had not been transferred. Bank
of America's counsel further reported that Ms. Sardana had made
some discovery requests "demanding to see the original note and
deed of trust." Bank of America had refused to provide access to
the original Note and Trust Deed but had provided copies on three
separate occasions. Counsel for Bank of America confirmed that
the Trust Deed had been recorded. Bank of America's counsel
concluded, "Again, they're parked in this 13 and not making
payments. And we'd like relief from stay." September 14, 2010
Hrg. Tr. at 3: 12-13.
Counsel for Ms. Sardana confirmed that Ms. Sardana did not
dispute that Bank of America was the original holder of the Note,
but argued there was conflicting evidence as to whether Bank of
America or Fannie Mae was the current holder of the Note.
However, counsel for Ms. Sardana confirmed that there was no
record of transfer of the Trust Deed. Ultimately, counsel for
Ms. Sardana offered to present evidence that Fannie Mae was the
current owner of the Note. The bankruptcy court did not receive
that evidence because, "It doesn't sound like there's any dispute
as to that." September 14, 2010 Hrg. Tr. at 4: 13-14. Counsel
for Ms. Sardana did not dispute that she was behind on her
payments for the Property postpetition.
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(...continued)
Brief at 6. However, there is no evidence in the record before
us of any payment(s) made by Ms. Sardana postpetition, except for
one payment that Ms. Sardana's husband advised the bankruptcy
court at the Preliminary Hearing had been made to Bank of
America's counsel. Bank of America's counsel confirmed receipt
of one payment in the amount of $1,938.50.
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After hearing the arguments of counsel, the bankruptcy court
stated its findings and conclusions orally on the record. After
noting that a motion for relief from stay is an "interim
proceeding," the bankruptcy court stated that the beneficiary
under a recorded deed of trust is entitled to proceed with
foreclosure under Arizona state law.
It is my view that the production of the original note
is not necessary. Even if the note has been
transferred the right to foreclose the deed of trust,
among other people, remains with the beneficiary of
record.
September 14, 2010 Hrg. Tr. at 5: 13-16. Since Bank of America
was "indisputably the beneficiary of record it seems to me that
they are entitled to bring this motion for relief from stay."
Id. at 5: 17-19. Accordingly, the bankruptcy court overruled
Ms. Sardana's argument that Bank of America was not the real
party in interest and lacked standing to prosecute the Motion.
The bankruptcy court then determined that since there was no
dispute that Ms. Sardana was behind on her postpetition payments
under the Trust Deed obligation, there was "cause" to grant
relief from stay. The bankruptcy court concluded by ordering
that the stay was lifted.
An order ("Order") granting the Motion was entered by the
bankruptcy court on September 20, 2010. Ms. Sardana timely
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Ms. Sardana's argument that because Bank of America has
no standing to prosecute the Motion, the bankruptcy court has no
jurisdiction to consider the Motion, is derived from
Ms. Sardana's base argument that Bank of America has no standing
to begin with.
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appealed the Order.
JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C.
§§ 1334 and 157(b)(2)(A) and (G). We have jurisdiction under
28 U.S.C. § 158.
ISSUE
Did the bankruptcy court err when it determined that Bank of
America had standing to pursue the Motion?
STANDARDS OF REVIEW
Standing is a legal issue that we review de novo. Loyd v.
Paine Webber, Inc., 208 F.3d 755, 758 (9th Cir. 2000); Kronemyer
v. Am. Contractors Indem. Co. (In re Kronemyer), 405 B.R. 915,
919 (9th Cir. BAP 2009). De novo review requires that we
consider a matter anew, as if it had not been heard before, and
as if no decision had been rendered previously. United States v.
Silverman, 861 F.2d 571, 576 (9th Cir. 1988); B-Real, LLC v.
Chaussee (In re Chaussee), 399 B.R. 225, 229 (9th Cir. BAP 2008).
DISCUSSION
Although Ms. Sardana divides her argument into two parts,
the only issue before us in this appeal is whether Bank of
America has standing to file and prosecute the Motion.
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I. General Standing Principles
Standing considerations involve both "constitutional
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limitations on federal court jurisdiction and prudential
limitations on its exercise." Warth v. Seldin, 422 U.S. 490, 498
(1975). Constitutional standing concerns whether a claimant's
stake in a matter is sufficient to create a "case or controversy"
to which the federal judicial power under Article III of the
Constitution may extend. Id. at 498-99; Pershing Park Villas
Homeowners Assoc. v. Unified Pac. Ins. Co., 219 F.3d 895, 899
(9th Cir. 2000); Lujan v. Defenders of Wildlife, 504 U.S. 555,
559-60 (1992).
In Appellant's Opening Brief, Ms. Sardana admits that Bank
of America has constitutional standing because the Note "is
payable to Appellee," and Ms. Sardana was in default of her
postpetition payment obligations under the Note when the Motion
was filed. Appellant's Opening Brief at 10.
However, Ms. Sardana asserts that Bank of America does not
have prudential standing because it is not the "real party in
interest" to prosecute the Motion. In analyzing prudential
standing requirements, the Supreme Court has held:
"[T]he plaintiff generally must assert his own legal
rights and interests, and cannot rest his claim to
relief on the legal rights or interests of third
parties." Warth v. Seldin, 422 U.S. [at 499].
Valley Forge Christian College v. Americans United for Separation
of Church and State, Inc., 454 U.S. 464, 474 (1982). Ms. Sardana
argues that "[t]he real party in interest in a Motion for Relief
is a party entitled to enforce the right being asserted under
applicable substantive law." Appellant's Opening Brief at 11.
The moving party bears the burden of proof to establish its
standing to prosecute a motion for relief from stay. See In re
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Wilhelm, 407 B.R. 392, 399-400 (Bankr. D. Id. 2009), citing Lujan
v. Defenders of Wildlife, 504 U.S. at 561.
II. Standing to File a Motion for Relief from Stay
When a bankruptcy petition is filed, § 362(a) automatically
imposes a very broad injunction, the "automatic stay," on
collection and enforcement activities against the debtor, the
debtor's property, and property of the estate. § 362(a)(3)
specifically stays "any act to obtain possession of property of
the estate or of property from the estate or to exercise control
over property of the estate."
Under § 362(d), a "party in interest" may request relief
from the automatic stay. Section 362(d)(1) authorizes relief
from stay "for cause, including the lack of adequate protection
of an interest in property of such party in interest."
Because the term "party in interest" is not defined in the
Bankruptcy Code, whether a moving party, such as Bank of America,
has the status of a party in interest under § 362(d) is a fact
intensive matter to be determined on a case-by-case basis, taking
into account the claimed interest and the impact of the stay on
that interest. In re Kronemyer, 405 B.R. at 919. A "party in
interest" can include any party that has a pecuniary interest in
the case, a practical stake in the resolution of the matter, or
is impacted by the stay." Brown v. Sobczak (In re Sobczak),
369 B.R. 512, 517-18 (9th Cir. BAP 2007).
Motions for relief from the stay are contested matters. See
Rules 4001(a) and 9014(a). Rule 9014(c) provides that Rule 7017
is applicable in contested matters. Rule 7017, in turn,
incorporates Civil Rule 17. Civil Rule 17(a) provides that "[a]n
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action must be prosecuted in the name of the real party in
interest. . . ." Given the application of these various rules,
proceedings to decide motions for relief from stay are
nonetheless very circumscribed matters.
Given the limited grounds for obtaining a motion for
relief from stay, read in conjunction with the
expedited schedule for a hearing on the motion, most
courts hold that motion for relief from stay hearings
should not involve an adjudication on the merits of
claims, defenses, or counterclaims, but simply
determine whether the creditor has a colorable claim to
the property of the estate.
Biggs v. Stovin (In re Luz Int'l), 219 B.R. 837, 842 (9th Cir.
BAP 1998) (emphasis added). See, e.g., Johnson v. Righetti
(In re Johnson), 756 F.2d 738, 740-41 (9th Cir. 1985).
Cornell University Law School's Legal Information Institute
defines a "colorable claim" in a straightforward manner as:
A plausible legal claim. In other words, a claim
strong enough to have a reasonable chance of being
valid if the legal basis is generally correct and the
facts can be proven in court. The claim need not
actually result in a win.
http://topics.law.cornell.edu/wex/colorable_claim.
Resolving a motion for relief from stay involves
consideration of the specific grounds for granting relief from
stay set forth in § 362(d), i.e., generally whether "cause,"
including a lack of adequate protection of the moving party's
interest, is established; whether the debtor has any equity in
the subject property; and/or whether the subject property is
necessary to an effective reorganization of the debtor's affairs.
It generally is not an appropriate context for a definitive
ruling on the merits of the underlying claims between the
parties. In re Johnson, 756 F.2d at 740-41 ("Hearings on relief
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from the automatic stay are . . . handled in a summary fashion.
[citation omitted] The validity of the claim or contract
underlying the claim is not litigated during the hearing.").
[I]t is analogous to a preliminary injunction hearing,
requiring a speedy and necessarily cursory
determination of the reasonable likelihood that a
creditor has a legitimate claim or lien as to a
debtor's property. If a court finds that likelihood to
exist, this is not a determination of the validity of
those claims, but merely a grant of permission from the
court allowing that creditor to litigate its
substantive claims elsewhere without violating the
automatic stay.
Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26, 33-34 (1st Cir.
1994). See In re Vitreous Steel Prod. Co., 911 F.2d 1223, 1234
(7th Cir. 1990) ("Questions of the validity of liens are not
generally at issue in a § 362 hearing, but only whether there is
a colorable claim of a lien on property of the estate.")
(Emphasis in original.)
The Eleventh Circuit has concluded that "[a] servicer is a
party in interest in proceedings involving loans which it
services." Greer v. O'Dell (In re O'Dell), 305 F.3d 1297, 1302
(11th Cir. 2002). In her Reply Brief, Ms. Sardana agrees that in
some circumstances, loan servicers may have standing to prosecute
a motion for relief from stay. Appellant's Reply Brief at 5-6.
III. The Record Before the Bankruptcy Court
In this case, Ms. Sardana raised questions as to Bank of
America's ownership of the Note, and indeed established to the
bankruptcy court's satisfaction that Fannie Mae owned the Note.
However, the bankruptcy court focused on who was the beneficiary
under the Trust Deed. The Trust Deed was before the bankruptcy
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6
Unauthenticated copies of the Note and Trust Deed were
attached as exhibits to the Motion. On remand, for their
admission as evidence, copies or originals of the Note and Trust
Deed will need to be properly authenticated as required by the
Federal Rules of Evidence. See Rule 901, Federal Rules of
Evidence.
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court as an exhibit to the Motion.
6 The Trust Deed identified
Bank of America as the "Lender" and further defined the "Lender"
as the beneficiary under the Trust Deed. At the Final Hearing,
the bankruptcy court confirmed that the Trust Deed had been
recorded properly, and counsel for Ms. Sardana admitted that
there had been no change of record to the Trust Deed.
As noted by the bankruptcy court, under Arizona state law,
the beneficiary of a trust deed is entitled to proceed with
foreclosure. Arizona Revised Statutes ("A.R.S") § 33-807, in
relevant part, provides:
A. . . . At the option of the beneficiary, a trust deed
may be foreclosed in the manner provided by law for the
foreclosure of mortgages on real property in which
event chapter 6 of this title governs the proceedings.
The beneficiary or trustee shall constitute the proper
and complete party plaintiff in any action to foreclose
a deed of trust. . . .
B. The trustee or beneficiary may file and maintain an
action to foreclose a deed of trust at any time before
the trust property has been sold under the power of
sale. . . .
(Emphasis added.) Accordingly, under Arizona law, a trust deed
beneficiary, whether it is the holder of the related promissory
note or the agent for such holder, along with the trustee under
the deed of trust, is generally a party with standing to
prosecute a foreclosure action.
In addition to, and as a complement to, the statutory
authority of the Trust Deed beneficiary under A.R.S. § 33-807 to
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Section 22 of the Trust Deed provides, in relevant part,
as follows:
Acceleration; Remedies. Lender shall give notice to
Borrower prior to acceleration following Borrower's breach of any
covenant or agreement in the Security Instrument (but not prior
to acceleration under Section 18 unless Applicable Law provides
otherwise). The notice shall specify: (a) the default; (b) the
action required to cure the default; (c) the date, not less than
30 days from the date the notice is given to the Borrower, by
which the default must be cured; and (d) that failure to cure the
default on or before the date specified in the notice may result
in acceleration of the sums secured by the Security Instrument
and sale of the Property. The notice shall further inform
Borrower of the right to reinstate after acceleration and the
right to bring a court action to assert the non-existence of a
default or any other defense of Borrower to acceleration and
sale. If the default is not cured on or before the date
specified in the notice, Lender at its option may require
immediate payment in full of all sums secured by this Security
Instrument without further demand and may invoke the power of
sale and any other remedies permitted by Applicable Law. Lender
shall be entitled to collect all expenses incurred in pursuing
the remedies provided in this Section 22, including, but not
limited to, reasonable attorneys' fees and cost of title
evidence.
If Lender invokes the power of sale, Lender shall give
written notice to Trustee of the occurrence of an event of
default and of Lender's election to cause the Property to be
sold. Trustee shall record a notice of sale in each county in
which any part of the Property is located and shall mail copies
of the notice as prescribed by applicable law to Borrower and to
the other persons prescribed by Applicable Law. After the time
required by applicable law and after publication and posting of
(continued...)
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initiate a foreclosure action with respect to the Property, the
Trust Deed by its terms provides that the Lender/beneficiary has
authority to initiate a nonjudicial foreclosure sale in the event
of Ms. Sardana's default of her obligations secured by the Trust
Deed.
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(...continued)
the notice of sale, Trustee, without demand on Borrower, shall
sell the Property at public auction to the highest bidder for
cash at the time and place designated in the notice of sale.
Trustee may postpone sale of the Property by public announcement
at the time and place of any previously scheduled sale. Lender
or its designee may purchase the Property at any sale.
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But that is not all that is required under Arizona law in
this context. A.R.S. § 33-801(1) defines "Beneficiary" under a
trust deed as "the person named or otherwise designated in a
trust deed as the person for whose benefit a trust deed is given,
or the person's successor in interest." A.R.S. § 33-817 further
provides that, "The transfer of any contract or contracts secured
by a trust deed shall operate as a transfer of the security for
such contract or contracts." Accordingly, if the holder of the
beneficial interest in the Note changes, even if the named
beneficiary under the Trust Deed remains the same, the
beneficiary's right to enforce the Note obligation and foreclose
the Trust Deed must be based on some further agreement with the
new owner or holder of the Note. See Hill v. Favour, 52 Ariz
561, 568, 84 P.2d 575, 578 (1938):
The law seems to be well settled that the mortgage is a
mere incident to the debt and that its transfer or
assignment does not transfer or assign the debt or the
note. The mortgage goes with the note. If the latter
is assigned, the mortgage automatically goes along with
the assignment or transfer.
Ms. Sardana relies on Arizona UCC law, particularly on
A.R.S. § 47-3301, to argue that the "person entitled to enforce"
instruments, such as the Note, under Arizona law is the holder of
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8
Ms. Sardana's argument (see Appellant's Opening Brief at
13) that because she was prepared to present evidence that Fannie
Mae had purchased the Note, the "power of sale" may have been
exercised and the Trust Deed beneficiary changed for purposes of
§ 33-807(b), is disingenuous. No suggestion was made by either
party at the Preliminary Hearing or the Final Hearing that a
nonjudicial foreclosure sale of the Property had occurred.
Indeed, it is logical to assume from this record that Ms. Sardana
opposed the Motion in order to prevent a nonjudicial foreclosure
sale of the Property from taking place.
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the Note.
8 See Appellant's Opening Brief at 11. However, A.R.S.
§ 47-3301 provides:
"Person entitled to enforce" an instrument means the
holder of an instrument, a nonholder in possession of
the instrument who has the rights of a holder or a
person not in possession of the instrument who is
entitled to enforce the instrument pursuant to
§ 47-3309 or § 47-3418, subsection D. A person may be
a person entitled to enforce the instrument even though
the person is not the owner of the instrument or is in
wrongful possession of the instrument. (Emphasis
added.)
Accordingly, based on the highlighted language of § 47-3301
alone, the statute does not say what Ms. Sardana wants it to say:
Under Arizona law, a party entitled to enforce the Note
obligation is not necessarily required to be the "holder" of the
Note. Indeed, the Arizona district court rejected Ms. Sardana's
argument, albeit in a different context, in Mansour v. Cal-
Western Reconveyance Corp., 318 F. Supp. 2d 1178, 1181 (D. Ariz.
2009), citing A.R.S. § 47-3301. In fact, as noted by the
bankruptcy court at the Preliminary Hearing, there are a number
of decisions from federal district courts in Arizona determining
that Arizona is not a "show me the note" state. See, e.g.,
Levine v. Downey Sav. & Loan F.A., 2009 WL 4282471 (D.Ariz. Nov.
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25, 2009); Garcia v. GMAC Mortgage, LLC, 2009 WL 2782791 (Aug.
31, 2009) (unpublished); Diessner v. Mortgage Elec. Registration
Systems, 618 F. Supp. 2d 1184, 1187 and n.16 (D. Ariz. 2009)
(citing A.R.S. § 33-807); and Mansour v. Cal-Western Reconveyance
Corp., 318 F. Supp. 2d at 1181.
Even so, as counsel for Bank of America admitted at oral
argument, to be a "real party in interest" for standing purposes
to prosecute a motion for relief from stay, the moving party must
have a right to enforce the subject obligation under Arizona law.
See, e.g., BAC Home Loans Servicing, L.P. v. Zitta (In re Zitta),
2011 WL 677289 (Bankr. D. Ariz. Jan. 25, 2011); In re Weisband,
427 B.R. 13 (Bankr. D. Ariz. 2010); and In re Hill, 2009 WL
1956174 (Bankr. D. Ariz. July 6, 2009). With Ms. Sardana having
made an offer of proof, which the bankruptcy court apparently
accepted but disregarded, that the Note had been assigned to
Fannie Mae, Bank of America needed to establish that it retained
the right to enforce the Note obligation in order to establish
its standing to prosecute the Motion. It did not meet its burden
of proof to make that showing. Accordingly, we determine that it
is appropriate to vacate the Order and remand to the bankruptcy
court to conduct an evidentiary hearing on the issue of Bank of
America's standing as a real party in interest to prosecute the
Motion and on such other matters as the bankruptcy court
determines to be appropriate.
CONCLUSION
For the foregoing reasons, we VACATE the Order and REMAND to
the bankruptcy court to conduct an evidentiary hearing.
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