Quail Lake Estates Associates v. Bankfirst et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 08-41296 T
Chapter 11
QUAIL LAKE ESTATES ASSOCIATES,
L.P., etc.,
Debtor.
___________________________/
QUAIL LAKE ESTATES ASSOCIATES, 	A.P. No. 09-4292 AT
L.P.,
Plaintiff,
vs.
BANKFIRST, etc., MTC FINANCIAL
CORP., etc.,
Defendants.
____________________________/
MEMORANDUM OF DECISION RE
MOTION TO DISMISS BY THE FDIC
The 	motion 	to 	dismiss 	filed 	by 	the 	Federal 	Deposit 	Insurance
Corporation as receiver for defendant BankFirst (“BankFirst”) came on
for 	hearing 	before 	the 	above-captioned 	Court 	on 	December 	14, 	2009.
Appearances 	were 	stated 	on 	the 	record. 	At 	the 	conclusion 	of 	the
hearing, 	the 	Court 	took 	the 	motion 	under 	submission. 	Having
Signed: December 23, 2009
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
December 23, 2009
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
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26 1The Court makes no ruling with respect to the third claim for
relief which was not adequately addressed by either BankFirst or
the Debtor.
2
considered the evidence presented and the argument made, both written
and oral, the Court now concludes that BankFirst’s motion to dismiss
the 	first 	and 	second 	claims 	for 	relief 	in 	the 	complaint 	should 	be
granted and that BankFirst’s motion to dismiss the fourth and fifth
claims 	for 	relief 	should 	be 	denied. 	The 	bases 	for 	the 	Court’s
conclusions are set forth below. 1
BACKGROUND
The above-captioned bankruptcy case was filed on March 19, 2008.
At that time, the plaintiff (the “Debtor”) was the owner of certain
unimproved 	real 	property 	located 	in 	Nevada 	County, 	California 	(the
“Development Property”). 	The Development Property was encumbered by
a first deed of trust in favor of BankFirst. 	A foreclosure sale had
already 	been 	scheduled 	prior 	to 	the 	commencement 	of 	the 	bankruptcy
case. 	BankFirst 	continued 	the 	sale 	from 	time 	to 	time 	during 	the
pendency of the case.
An 	order 	confirming 	the 	Debtor’s 	reorganization 	plan 	(the
“Plan”) was entered on December 18, 2008. 	The Plan provided that the
Debtor would receive a discharge on the effective date. 	Article XI,
paragraph 	G. 	The 	effective 	date 	of 	the 	Plan 	was 	defined 	as 	the
twentieth 	business 	day 	after 	entry 	of 	the 	confirmation 	order.
Article II, paragraph A-22. 	Thus, the Plan became effective and the
Debtor received a discharge on January 20, 2009. 	The Plan required
the Debtor to meet certain benchmarks in the development process by
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certain dates. 	One of the requirements was that the Debtor pay all
pre-confirmation delinquent property taxes, penalties, and interest
encumbering the Development Property within 30 business days of the
effective date of the Plan. 	The Plan provided that, when the Debtor
had obtained sufficient funding to make the payments required to be
paid within the first 30 days of the effective date, the Plan would
be 	deemed 	to 	be 	substantially 	consummated. 	At 	that 	point, 	all
remaining 	property 	of 	the 	estate 	would 	revest 	in 	the 	Debtor, 	which
would continue in existence as a Reorganized Debtor. 	Article VIII,
paragraph C.
The Plan provided that, if the Debtor failed to make any payment
contemplated 	by 	the 	Plan, 	BankFirst 	would 	be 	“entitled 	to 	exercise
all 	remedies 	available 	under 	non-bankruptcy 	law 	to 	enforce 	its
claim....” 	The deadline for the Debtor to pay the pre-confirmation
delinquent 	property 	taxes 	was 	March 	4, 	2009. 	The 	Debtor 	failed 	to
make 	this 	payment. 	On 	March 	23, 	2009, 	BankFirst 	conducted 	a
foreclosure sale with respect to the Development Property, obtaining
title 	to 	the 	Development 	Property 	by 	virtue 	of 	a 	credit 	bid.
BankFirst did not record a new notice of sale before doing so.
Although 	BankFirst 	advised 	the 	Debtor 	of 	the 	default 	and 	of
pendency of the sale, it did not expressly advise the Debtor that it
intended 	to 	proceed 	with 	the 	sale 	on 	March 	23, 	2009. 	The 	Debtor
responded that it had been unable to raise the funds to make the tax
payment 	due 	to 	questions 	recently 	raised 	by 	the 	Nevada 	County
planning 	authorities 	about 	the 	Debtor’s 	plans 	for 	dealing 	with 	the
project’s wastewater. 	The Debtor stated that it expected to resolve
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2The third claim for relief alleges that the foreclosure sale
was an unauthorized post-petition transfer pursuant to 11 U.S.C. §
549 and asks the Court to avoid the transfer on that basis.
BankFirst moves to dismiss this claim as well on the ground that
there was no more automatic stay at the time of the foreclosure
sale. 	Its discussion does not acknowledge that the claim is based
on an entirely different bankruptcy provision. 	In its opposition,
the Debtor does not focus on this claim either. 	As a result, the
Court will make no ruling with respect to the third claim for
relief.
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those questions within ten days at which point it expected to be in
a 	position 	to 	cure 	the 	default. 	There 	was 	apparently 	no 	further
communication 	between 	the 	parties 	prior 	to 	the 	foreclosure 	sale.
BankFirst did not respond to the letter.
DISCUSSION
The complaint alleges that, at the time of the foreclosure sale,
the 	Development 	Property 	was 	still 	property 	of 	the 	Debtor’s
bankruptcy 	estate 	and 	that 	the 	foreclosure 	sale 	violated 	the
automatic stay of 11 U.S.C. § 362. 	The first two claims for relief
seek 	damages 	for 	willful 	violation 	of 	the 	automatic 	stay 	and 	a
declaration 	that 	the 	foreclosure 	sale 	was 	void. 2 	This 	issue 	is
discussed in Section A below.
The complaint also alleges that the Plan modified the terms of
the 	BankFirst 	note 	and 	deed 	of 	trust 	and 	discharged 	the 	old
obligation. 	As a result, the Debtor’s default under the Plan was a
new 	default 	under 	a 	new 	obligation. 	For 	that 	reason, 	even 	if 	the
automatic 	stay 	had 	been 	vacated, 	BankFirst 	was 	not 	entitled 	to
proceed 	with 	its 	foreclosure 	sale 	without 	first 	recording 	a 	new
notice of default and new notice of sale. 	Therefore, the foreclosure
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sale 	conducted 	by 	BankFirst 	on 	March 	23, 	2009 	was 	improper 	under
state law. 	This issue is discussed in Section B below.
A. 	DID THE FORECLOSURE SALE VIOLATE THE AUTOMATIC STAY?
The filing of a bankruptcy petition gives rise to an automatic
stay of all actions by creditors to collect their pre-petition debts
from 	the 	debtor 	and 	to 	enforce 	liens 	securing 	those 	debts 	against
property 	of 	the 	bankruptcy 	estate. 	11 	U.S.C. 	§ 	362(a). 	The
automatic 	stay 	terminates 	with 	respect 	to 	acts 	to 	enforce 	liens
against the debtor’s property when the property is no longer property
of 	the 	debtor’s 	bankruptcy 	estate. 	11 	U.S.C. 	§ 	362(c)(1). 	It
terminates with respect to acts against the debtor when the case is
closed or dismissed or the debtor is granted or denied a discharge.
11 U.S.C. § 362(c)(2)(A)-(C).
BankFirst contends that, on the effective date of the Plan, the
bankruptcy estate was terminated so that the Development Property was
no longer property of a bankruptcy estate. 	Therefore, the automatic
stay did not bar BankFirst from proceeding with its foreclosure sale.
In support of this contention, it cites 11 U.S.C. § 1141(b) and three
bankruptcy cases: 	In re Ernst, 45 B.R. 700 (Bankr. D. Minn. 1985),
In re Balogun, 56 B.R. 117 (Bankr. M.D. Ala. 1985), and In re Smith
and Kourian, 216 B.R. 686 (Bankr. 1st Cir. 1997).
Section 1141(b) states, in pertinent part, that:
(b) 	Except as otherwise provided in the plan or
the 	order 	confirming 	the 	plan, 	the
confirmation 	of 	a 	plan 	vests 	all 	of 	the
property of the estate in the debtor.
...
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In 	Ernst, 	a 	bankruptcy 	court 	dismissed 	as 	moot 	a 	post-confirmation
motion 	for 	relief 	by 	a 	secured 	creditor. 	The 	court 	noted 	that,
pursuant to 11 U.S.C. § 1141(b), in the absence of a plan provision
stating 	otherwise, 	all 	estate 	property 	is 	vested 	in 	the 	debtor 	on
confirmation and the estate ceases to exist. 	The Ernst court found
that 	the 	plan 	did 	not 	contain 	any 	contrary 	provision. 	The 	debtor
argued 	that, 	because 	the 	plan 	provided 	that 	the 	court 	would 	retain
jurisdiction over case related disputes, the automatic stay remained
in 	place. 	The 	Ernst 	court 	rejected 	this 	argument. 	Id. 	at 	702-3.
Balogun follows Ernst under similar factual circumstances. 	Balogun,
56 B.R. at 118-19.
In Smith, the issue was not whether the debtor’s real property
was 	still 	property 	of 	the 	estate 	after 	confirmation. 	Rather, 	the
issue 	was 	whether 	the 	confirmed 	plan 	had 	extinguished 	the 	secured
creditor’s lien by failing to expressly provide for its continuation.
The 	bankruptcy 	court 	concluded 	that 	the 	lien 	was 	not 	extinguished
because 	the 	plan 	“unambiguously” 	provided 	for 	the 	real 	property 	to
revest 	in 	the 	debtor 	subject 	to 	all 	existing 	mortgages. 	The
Bankruptcy Appellate Panel affirmed. 	Smith, 216 B.R. at 689-90.
As 	in 	Ernst, 	BankFirst 	contends 	that 	neither 	the 	Plan 	nor 	the
order confirming the Plan provides that the Development Property will
remain property of the Debtor’s bankruptcy estate until the Plan is
substantially 	consummated. 	It 	concedes 	that 	Article 	VIII 	provides
that, 	when 	the 	Plan 	is 	substantially 	consummated, 	“all 	remaining
property” 	will 	revest 	in 	the 	Debtor. 	However, 	it 	contends 	that,
because 	“all 	remaining 	property” 	should 	be 	read 	to 	exclude 	the
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Development Property because, elsewhere in the Plan, the Development
Property is referred to as the QLE Property.
The 	Court 	finds 	this 	argument 	unpersuasive. 	Article 	VIII,
paragraph C of the Plan provides, in pertinent part, as follows:
The 	Plan 	shall 	be 	deemed 	to 	be 	substantially
consummated 	(“Substantial 	Consummation”) 	when
the 	Debtor 	has 	obtained 	funding 	of 	the 	New 	IMC
Loan 	in 	sufficient 	amount 	to 	satisfy 	the 	cash
outlays provided for under this Plan coming due
within 	the 	first 	30 	days 	after 	the 	Effective
Date.
As 	of 	such 	Substantial 	Consummation, 	all
remaining property of the Estate shall revest in
the Debtor which shall continue in existence as
the 	Reorganized 	Debtor. 	As 	of 	such 	Substantial
Consummation, 	the 	Reorganized 	Debtor 	will 	be
vested 	with 	all 	property 	of 	the 	Estate,
including without limitation and free and clear
of all Claims.... [Emphasis added.]
Even 	if 	“all 	remaining 	property” 	could 	arguably 	be 	read 	to 	exclude
the 	Development 	Property, 	“all 	property 	of 	the 	Estate” 	in 	the 	next
sentence cannot be. 	Thus, this argument fails.
Alternatively, 	BankFirst 	contends 	that 	it 	was 	not 	required 	to
seek 	relief 	from 	the 	automatic 	stay 	because 	the 	Plan 	provided 	that
BankFirst could exercise its nonbankruptcy rights in the event of a
default. 	It did not require BankFirst to first seek relief from the
automatic 	stay 	in 	the 	event 	substantial 	consummation 	had 	not 	yet
occurred.
In the complaint, the Debtor alleges that it informed BankFirst
prior to the foreclosure sale that it intended to promptly cure the
March 4, 2009 tax payment default. 	BankFirst contends that the Plan
did not give the Debtor the right to cure this default. 	Its argument
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turns on the placement of a comma in Article VI, paragraph A-1(i) of
the Plan:
If 	the 	Reorganized 	Debtor 	fails 	to 	make 	any
payment 	contemplated 	by 	this 	Plan, 	fails 	to
satisfy 	any 	of 	the 	Benchmarks 	provided 	for
herein, or otherwise defaults under the terms of
the 	applicable 	note 	and 	deed 	of 	trust 	as
modified by this Plan and fails to promptly cure
any 	such 	default, 	the 	holder 	of 	the 	Class 	A-1
Claim 	[i.e., 	BankFirst] 	shall 	be 	entitled 	to
exercise 	all 	remedies 	available 	under 	non-
bankruptcy law to enforce its claim as modified
hereby.
BankFirst notes that a comma sets of the Debtor’s obligation to make
payments under the note and deed of trust, and its right to promptly
cure any such default, from the Debtor’s other obligations under the
Plan. 	Clearly, 	it 	contends, 	the 	right 	to 	cure 	related 	only 	to
payments under the note and deed of trust. 	The Plan did not give the
Debtor 	the 	right 	to 	cure 	a 	default 	with 	respect 	to 	any 	other
obligations.
Moreover, BankFirst argues, limiting the right to cure to these
obligations made sense. 	The note and deed of trust provided precise
time 	frames 	limiting 	the 	right 	to 	cure. 	Applied 	to 	other 	types 	of
defaults, 	with 	no 	such 	provisions, 	the 	phrase 	“promptly 	cure” 	was
impracticably vague.
The 	Debtor 	contends 	that, 	because 	the 	Plan 	did 	not 	expressly
relieve BankFirst from the obligation of requesting relief from the
automatic 	stay 	after 	confirmation 	but 	before 	substantial
consummation, 	the 	Plan 	should 	be 	read 	as 	requiring 	it. 	The 	Debtor
also contends that limiting the application of the right to cure to
defaults on the note and deed of trust places too much weight on the
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placement of a comma. 	The Court disagrees. 	BankFirst’s reading of
the Plan makes sense, both grammatically and logically.
Moreover, the Court agrees with BankFirst that the Plan did not
require 	BankFirst 	to 	request 	relief 	from 	the 	automatic 	stay 	before
exercising 	its 	nonbankruptcy 	law 	rights 	in 	the 	even 	of 	a 	default,
even 	if 	the 	Plan 	had 	not 	yet 	been 	substantially 	consummated.
Paragraph A-1(i) of Article VI states as follows:
i. 	If the Reorganized Debtor fails to make any
payment 	contemplated 	by 	this 	Plan, 	fails 	to
satisfy 	any 	of 	the 	Benchmarks 	provided 	for
herein, or otherwise defaults under the terms of
the 	applicable 	note 	and 	deed 	of 	trust 	as
modified by this Plan and fails to promptly cure
any 	such 	default, 	the 	holder 	of 	the 	Class 	A-1
Claim shall be entitled to exercise all remedies
available 	under 	non-bankruptcy 	law 	to 	enforce
its claim as modified hereby.
There 	is 	no 	limitation 	on 	this 	right. 	If 	the 	Debtor 	had 	wished 	to
require 	BankFirst 	to 	request 	relief 	from 	the 	automatic 	stay 	in 	the
event of a default prior to substantial consummation, it should have
said so here. 	In essence, the Debtor stipulated that BankFirst would
have relief from the automatic stay under these circumstances. 	When
the Court confirmed the Plan, it approved the stipulation.
In sum, the Court concludes that, while the Development Property
remained 	property 	of 	the 	Debtor’s 	bankruptcy 	estate 	on 	the 	date 	of
BankFirst’s 	foreclosure 	sale, 	the 	foreclosure 	sale 	did 	not 	violate
the automatic stay.
B. 	WAS BANKFIRST REQUIRED TO COMMENCE NEW FORECLOSURE PROCEEDINGS
WHEN THE DEBTOR DEFAULTED UNDER THE PLAN?
The Debtor also contends that the foreclosure sale was invalid
under state law. 	It contends that, when the Plan became effective,
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the Debtor received a discharge of BankFirst’s pre-confirmation debt.
This debt was then replaced by a new obligation, which was created by
the 	Plan 	and 	on 	which 	the 	Debtor 	was 	current 	as 	of 	the 	effective
date. 	When the Debtor defaulted on this new obligation by failing to
pay 	the 	pre-confirmation 	delinquent 	property 	taxes, 	BankFirst 	was
required by state law to record a new notice of default and, if the
default was not cured, to record a new notice of sale. 	BankFirst was
not entitled to bypass these safeguards and proceed directly to sale,
pursuant to a notice of default based on a default on the discharged
debt. 	Based on this legal theory, the fourth claim for relief in the
complaint 	seeks 	rescission 	of 	the 	sale, 	and 	the 	fifth 	claim 	for
relief seeks damages for wrongful foreclosure.
BankFirst moves to dismiss these claims for failure to state a
claim. 	BankFirst 	contends 	that 	the 	Debtor’s 	allegation 	in 	the
complaint 	that 	confirmation 	of 	the 	Plan 	discharged 	the 	old 	debt
misstates 	the 	law. 	BankFirst 	notes 	that 	the 	Plan 	specifically
provides 	for 	retention 	of 	BankFirst’s 	lien 	on 	the 	Development
Property. 	Article 	VI, 	paragraph 	A-1(a). 	As 	a 	result, 	BankFirst
contends, 	confirmation 	of 	the 	Plan 	did 	not 	cure 	the 	Debtor’s 	pre-
petition defaults. 	In support of this contention, BankFirst cites In
re Peters, 101 F.3d 618, 620 (9th Cir. 1996).
In Peters, a chapter 13 debtor contended that a secured creditor
had violated the automatic stay by merely continuing the date of the
foreclosure 	sale 	of 	the 	debtor’s 	house 	after 	confirmation 	of 	the
debtor’s plan. 	The plan provided for a cure of the arrearages on the
secured creditor’s claim. 	However, at the time the secured creditor
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continued the foreclosure sale, the arrearages had not yet been paid
in full. 	The debtor contended that confirmation constituted a cure
of the arrearages even before payment was made.
The 	Peters 	court 	held 	to 	the 	contrary, 	finding 	that 	it 	was
contrary to the plain language of 11 U.S.C. § 1322(b)(5). 	It noted
that § 1322(b)(5) provides that, when the last payment on a secured
claim 	falls 	after 	the 	end 	of 	the 	plan, 	the 	plan 	may 	provide 	for 	a
cure of the arrearages “within a reasonable time.” 	The Ninth Circuit
reasoned 	that, 	if 	the 	arrearages 	were 	“cured” 	immediately 	on
confirmation, 	§ 	1322(b)(5) 	would 	not 	have 	provided 	for 	their 	cure
“within 	a 	reasonable 	time.” 	Peters, 	101 	F.3d 	at 	619. 	BankFirst
contends 	that, 	as 	in 	Peters, 	the 	Debtor’s 	default 	on 	its 	secured
claim would not be “cured” until the past due payments were made.
As 	further 	support 	for 	its 	position, 	BankFirst 	cites 	Tully 	v.
World 	Savings 	& 	Loan 	Ass’n, 	56 	Cal. 	App. 	4th 	654, 	664 	(1997). 	In
Tully, a homeowner filed an action to set aside a foreclosure sale as
improper. 	The 	homeowner 	contended 	that, 	because 	he 	had 	filed
bankruptcy 	the 	same 	day 	the 	third 	notice 	of 	sale 	was 	recorded, 	the
lender was required to obtain relief from the automatic stay and to
publish 	a 	new 	notice 	of 	sale 	before 	proceeding 	with 	the 	sale. 	The
Tully court rejected this contention. 	It noted that the Ninth Circuit
had held that, by continuing a foreclosure sale, a lender was merely
maintaining 	the 	status 	quo 	and 	did 	not 	violate 	the 	automatic 	stay.
See Matter of Roach, 660 F.2d 1316, 1318-19 (9th Cir. 1991), cited in
Tully, 56 Cal. App. 4th at 662.
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3The only chapter 11 case cited by BankFirst is Smith, which
is discussed in Section A above. 	In Smith, the lender had filed a
judicial foreclosure action. 	The issue was not whether, after
confirmation, the lender was required to re-commence the
foreclosure process, but whether the lien had survived confirmation
of the chapter 11 plan. 	See Smith, 216 B.R. at 688-90.
12
Alternatively, 	in 	Tully, the debtor contended that, because of
the 	bankruptcy 	filing, 	the 	lender 	was 	required 	to 	give 	him 	actual
notice of the sale. 	In support of this contention, the debtor cited
In 	re 	Tome, 	113 	B.R. 	626 	(Bankr. 	C.D. 	Cal. 	1990). 	In 	Tome, 	a
bankruptcy 	court 	invalidated 	a 	foreclosure 	sale 	which 	had 	been
continued 	five 	times 	by 	announcement 	while 	the 	debtor’s 	bankruptcy
case was pending. 	Despite the fact that the lender had complied with
state 	law, 	the 	bankruptcy 	court 	found 	that 	the 	sale 	was 	invalid.
Under 	the 	circumstances, 	the 	Tome 	court 	opined, 	the 	lender 	was
required 	either 	to 	publish 	a 	new 	notice 	of 	sale 	or 	give 	the 	debtor
actual notice of the sale. 	The Tully court found the Tome decision
unpersuasive and noted that it had been criticized by other bankruptcy
courts: 	e.g., 	See 	In 	re 	Jaurequi, 	197 	B.R. 	673 	(Bankr. 	E.D. 	Cal.
1996); In re Thomas, 194 B.R. 641 (Bankr. D. Ariz. 1995). 	Tully, 56
Cal. App. 4th at 663-64.
Virtually all the cases cited by BankFirst were chapter 13 	cases
in which the debtors failed to complete payments under their plans.
3 As the Debtor correctly notes, BankFirst’s citation of these cases
as authority ignores the difference between the discharge provisions
of chapter 13 and chapter 11. 	In chapter 13, a debt is not discharged
until 	the 	plan 	is 	fully 	performed, 	by 	which 	time 	all 	past 	defaults
will have been cured. 	See 11 U.S.C. § 1328(a). 	In chapter 11, debts
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are discharged on the effective date of the plan and are replaced by
the new debts created by the plan. 	See 11 U.S.C. § 1141(d)(1). 	The
Plan’s provision retaining BankFirst’s lien is not inconsistent with
this 	principle. 	A 	lien 	is 	not 	a 	debt; 	it 	is 	security 	for 	a 	debt.
Moreover, but for the lien retention provision, BankFirst’s lien would
not have continued as an encumbrance on the Development Property. 	See
11 U.S.C. § 1141(c).
BankFirst 	contends 	that 	the 	Plan 	provision 	permitting 	it 	to
exercise 	its 	state 	law 	rights 	in 	the 	event 	of 	a 	post-confirmation
default indicate that no new notice of sale was required. 	However,
the provision in question states that BankFirst’s right under these
circumstances is to enforce its claim “as modified [by the Plan].”
In 	sum, 	the 	Court 	agrees 	with 	the 	Debtor 	that 	BankFirst’s
foreclosure 	sale 	violated 	state 	law 	and 	was 	invalid. 	Therefore,
BankFirst’s motion to dismiss the fourth and fifth claims for relief
in the complaint will be denied.
CONCLUSION
BankFirst’s 	motion 	to 	dismiss 	the 	first 	and 	second 	claims 	for
relief 	will 	be 	granted. 	At 	the 	time 	the 	foreclosure 	sale 	was
conducted, 	the 	Plan 	had 	not 	yet 	been 	substantially 	consummated.
Therefore, the Development Property was still property of the Debtor’s
bankruptcy estate. 	However, the Plan provision permitting BankFirst
to exercise its state law rights in the event of a post-confirmation
default eliminated the need for BankFirst to first obtain relief from
the 	automatic 	stay. 	Moreover, 	the 	Plan 	provision 	permitting 	the
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Debtor a reasonable time to cure post-confirmation defaults related
only to defaults under the note and deed of trust.
BankFirst’s 	motion 	to 	dismiss 	the 	fourth 	and 	fifth 	claims 	for
relief 	will 	be 	denied. 	Confirmation 	of 	the 	Plan 	discharged
BankFirst’s pre-existing debt and replaced it with a new debt created
by the Plan. 	Prior to March 4, 2009, the Debtor was not in default
on 	this 	new 	debt. 	When 	the 	Debtor 	did 	default, 	state 	law 	required
BankFirst 	to 	commence 	a 	new 	foreclosure 	process, 	including 	by
recording a new notice of default.
Counsel for the Debtor is directed to submit a proposed form of
order in accordance with this decision.
END OF DOCUMENT
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COURT SERVICE LIST
James D. Wood
Law Offices of James D. Wood
3675 Mt. Diablo Blvd. #250
Lafayette, CA 94549-3775
Thomas Greco
Turner, Reynolds, Greco and O'Hara
16485 Laguna Canyon Rd., #250
Irvine, CA 92618
Joshua D. Wayser
Katten Muchin Rosenman
2029 Century Park E #2600
Los Angeles, CA 90067
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