In re Richter

MEMORANDUM DECISION ON RUSTLING OAKS, LLC’S MOTION FOR RELIEF FROM THE AUTOMATIC STAY (UNLAWFUL DE-TAINER)

Before the Court is a motion by Rustling Oaks, LLC (“Rustling Oaks”) for relief from the automatic stay to commence an unlawful detainer proceeding against the debtor Michael Lynn Richter (“Debtor”) and evict Debtor from his residence, which Rustling Oaks purchased at a prepetition foreclosure sale. The sale, however, was subject to Debtor’s postsale right of redemption under California law, which is available to the prior owners of real property sold in a nonjudicial foreclosure by a homeowners’ association on its lien for delinquent assessments. Debtor confirmed a Chapter 13 1 plan without objection that he characterizes as exercising this right. The broad issue here is whether relief from the automatic stay is warranted in light of Debtor’s purported redemption through his plan.

For the reasons set forth below, the Court will regrettably grant Rustling Oaks’ motion. The automatic stay as to the property will be annulled retroactively to validate certain actions taken by the foreclosure trustee, and Rustling Oaks will be entitled to begin its unlawful detainer proceeding…