Opinion
NOT FOR PUBLICATION
JAMES W. MEYERS, Judge United States Bankruptcy Court
Freddie Reyno and June Reyno ("Debtors") filed three motions seeking various forms of relief against Option One Mortgage, Litton Loan Servicing Company, and Residential Funding Company, LLC. The Debtors' allegations arise from actions taken by the creditors to collect a debt secured by a house the Debtor's owned at 10169 Presley Street in San Diego ("the Property"). The creditors filed opposition to the motions, and the matters were heard by the Court on April 22, 2009, and taken under submission at the conclusion of the hearing. After review of the motions and opposition, the Court finds there are no grounds to support the relief requested by the Debtors and their motions are denied.
The Debtors have filed three petitions with this Court. The first. No. 07-02627, was filed on May 23, 2007, as a Chapter 13 petition. ("First Case"). The automatic stay created by the filing of the petition in the First Case prevented a Trustee's foreclosure sale of the Property which was scheduled to occur on May 24, 2007. The First Case was later converted to one under Chapter 7, and the Debtors received a discharge under § 727 on December 20, 2007. Litton Loan Servicing, LLP, as servicing agent for Residential Funding Company, LLC, its successors and/or assigns, ("Litton" and "Residential") filed a motion for relief from stay as to the Property in connection with the First Case. That motion was granted by an order entered on January 9, 2 008. A foreclosure sale of the Property was held on January 31, 2008, as reflected in a Trustee's Deed on Sale that was recorded with the County of San Diego on February 12, 2 008, as Doc. # 2008-0071007. The First Case is still pending, and on April 7, 2009, the Debtors filed a complaint within the First Case against Litton, Residential, Option One and their attorneys, Adv. No. 09-90151. The relief requested in that complaint is similar to that sought by the motions which are the subject of this Memorandum Decision.
After the foreclosure sale of the Property, the Debtors filed a complaint in the state court against Litton and Residential to obtain an injunction to stop their eviction from the Property. The Debtors' request for injunctive relief was denied by the state court on July 3, 2008. On July 8, 2008, the Debtors filed their second Chapter 13 petition with this Court, No. 08-06258 ("Second Case"). Litton and Residential filed a motion for relief from stay in the Second Case to pursue their state remedies as to the Property. An order granting relief from stay to Litton and Residential was entered on August 20, 2008. That order contained provisions to indicate that the order was to be binding and effective as to the Property in any other bankruptcy case filed by the Debtors within two years. The Second Case was dismissed on November 4, 2008.
The Debtors filed a third Chapter 13 petition on February 3, 2009, which was designated as No. 09-01339. Apparently recognizing that they were no longer entitled to the protection of an automatic stay with respect to the Property, the Debtors filed various pleadings to request relief, including motions to impose the automatic stay, extend the automatic stay, opposing the relief from stay obtained by Litton and Residential in the Second Case, and for sanctions against the creditors for violation of the stay and discharge injunction. The Debtors also filed a complaint as part of the Third Case, for sanctions and other relief against Option One, Litton, Residential and their attorneys.
The bankruptcy court is a court of limited jurisdiction. The Debtors have not identified any action taken by Option One that was a violation of any automatic stay or discharge injunction. Option One assigned its' interest in the note and collateral before the Debtors filed the petition in the First Case. Option One has had no involvement in the subsequent foreclosure or eviction proceedings. The Debtors have not provided a basis to obtain any form of relief as to Option One.
Litton and Residential obtained relief from the automatic stay in the First Case and in the Second Case to pursue state court remedies to recover the Property which was collateral for an unpaid debt. Those orders are final and were not appealed. These creditors have raised meritorious arguments in response to the Debtors' pending motions. The arguments presented by the Debtors concerning the creditors' possession of the original note, decisions on loan modification and the extent of the protection offered by the Bankruptcy Code have been raised and considered before in this Court and/or the California Superior Court. The Debtors are prohibited from relitigating the matters that have been or could have been decided in a prior action by the doctrines of claim preclusion and issue preclusion. See, In re George, 318 B.R. 729 (9th Cir. BAP 2004) . The Debtors have presented no basis upon which to award damages against the creditors identified in the pending motions, or to impose any stay to halt Litton or Residential from pursuing their rights to the Property in accordance with California law. The Debtors' motions are denied. The attorney for Litton & Residential is instructed to submit a proposed order denying the relief requested by the Debtors in those motions within 14 days of the entry of this Memorandum Decision.