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United States v. Staton

United States District Court, D. Hawaii

February 16, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
RONALD B. STATON, BRENDA STATON, NAVY FEDERAL CREDIT UNION, CAPSTEAD MORTGAGE CORPORATION, and STATE OF HAWAII, Defendants.

          ORDER FINDING DEFENDANT BRENDA STATON'S CLAIM THAT THE FORECLOSURE SALE FAILS TO PROTECT HER INTEREST IN THE PROPERTY TO BE WITHOUT MERIT

          Alan C. Kay Sr. United States District Judge.

         For the reasons set forth below, the Court FINDS Defendant Brenda Staton's claim that the foreclosure sale fails to protect her interest in the property to be without merit.

         BACKGROUND

         For the purposes of this Order, the Court will not recount this case's lengthy procedural history beginning in 2012. The Court only discusses those facts of specific relevance to Defendant Brenda Staton's (“Mrs. Staton”) claim.

         On August 31, 2015, the Court granted Plaintiff's Motion for Summary Judgment on the Third Claim in the Complaint and issued an Order of Foreclosure and Judicial Sale (“Foreclosure Order”) of the Staton's home (the “Property”). ECF Nos. 157, 158. On September 1, 2015, Defendant Ronald Staton (“Mr. Staton”) filed a petition for relief under 11 U.S.C. § 301 in the United States Bankruptcy Court for the District of Hawaii. ECF No. 160-1. In view of Mr. Staton's bankruptcy petition, the Court stayed the instant case. ECF No. 161. On December 7, 2015, the court reinstated the Foreclosure Order in response to the Bankruptcy Court's Order Granting United States' Motion for Relief from Automatic Stay. ECF No. 168.

         On November 16, 2016, Mr. Staton filed a second petition for relief under 11 U.S.C. § 301 in the United States Bankruptcy Court for the District of Hawaii. ECF No. 208. In view of Mr. Staton's bankruptcy petition, the Court again stayed the instant case. ECF No. 209. After Mr. Staton's second petition for relief under 11 U.S.C. § 301 was dismissed, the Court, on April 24, 2017, reinstated its Foreclosure Order and directed the parties to proceed in accordance therewith. ECF No. 212.

         On June 20, 2017, the day before the scheduled foreclosure sale auction, Defendant Mrs. Staton filed a petition for relief under 11 U.S.C. § 301 in the United States Bankruptcy Court for the District of Hawaii. ECF No. 214. In light of Mrs. Staton's bankruptcy petition, the Court, again, stayed the case. ECF No. 215.

         On August 7, 2017, Plaintiff filed a Motion for Relief from Automatic Stay in the Bankruptcy Court. On October 6, 2017, the Bankruptcy Court entered an order granting Plaintiff's Motion for Relief from Automatic Stay. In light of the Bankruptcy Court's ruling, the Court again unstayed the case and reinstated its Foreclosure Order and directed the parties to proceed in accordance therewith. ECF No. 219.

         On December 8, 2017, Defendant Ronald B. Staton filed an Emergency Motion to Strike Notice of Lis Pendens (NOPA), ECF. No. 226, together with a Supplement to the Emergency Motion, ECF No. 227. Defendant Staton represented that he obtained financing in the amount of $1, 032, 000 to pay off all liens on the property with a closing date set for December 8, 2017. The foreclosure sale of the Property was set for December 20, 2017. ECF No. 230. On December 11, 2017, the Court held a hearing on this matter and ordered the parties to have a settlement conference with Magistrate Judge Chang. ECF No. 234.

         On December 18, 2017, a settlement conference was held and was ended by Magistrate Judge Chang because the Statons could not produce a loan commitment letter from the lender for the previously described financing. ECF No. 244. Later that day, the Statons filed an Emergency Motion Regarding Foreclosure and Request for a Hearing and Stay Pending Hearing. ECF No. 241. The Court held a hearing that same day and concluded that the foreclosure of the property will proceed on December 20, 2017. ECF No. 243.

         On December 19, 2017, the Statons filed a Notice Re: Conditional Loan Approval Letter and requested a stay of the foreclosure sale. ECF No. 245. The Court held a hearing the morning of December 20, 2017 regarding the Notice. ECF No. 251. The Court denied the request for a stay and ordered the foreclosure sale to proceed. Id. The foreclosure sale proceeded on December 20, 2017 around 12:00pm on the steps of the U.S. District Court for the District of Hawaii.

         On December 21, 2017, the Commissioner filed a Notice of Sale, informing the Court that the subject property was sold at foreclosure sale on December 20, 2017 to a third-party bidder for $1, 135, 000.00 subject to confirmation by the Court. ECF No. 254.

         On December 21, 2017, the United States filed Notice of Defendant Ronald Staton's Bankruptcy Case, stating that on December 20, 2017, Defendant Ronald Staton filed a new bankruptcy case, and that the United States seeks to intend a lifting of the stay on that bankruptcy case so that the Commissioner's sale can be confirmed. ECF No. 253.

         On December 22, 2017, Defendant Brenda Staton filed a Notice of Pendency of Action, asserting that she is contesting the validity of the foreclosure sale as having been filed in violation of Mr. Staton's bankruptcy, which she asserts was filed at 11:54am, and that the aforementioned sale ...


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