United States District Court, N.D. New York
DECISION AND ORDER
Lawrence E. Kahn U.S. District Judge
Green Oak Stockade View Apartments, LLC appeals a decision by
the Honorable Robert E. Littlefield, Jr., U.S. Bankruptcy
Judge, granting appellee National Bank of Coxsackie's
motion for relief from an automatic bankruptcy stay pursuant
to 11 U.S.C. § 362(d). Dkt. Nos. 1
(“Appeal”), 2 (“Record Volume 1”), 8
(“Record Volume 2”), 9 (“Record Volume
3”). Presently before the Court is National Bank's
motion to dismiss the Appeal for lack of subject matter
jurisdiction. Dkt. Nos. 10 (“Motion”), 11-6
(“Memorandum”). For the reasons that follow, the
Motion is granted.
Oak is a single asset real estate company which previously
owned the Stockade View Apartments in Schenectady, New York.
Dkt. No. 8-1 at 1. In March 2014, National Bank issued a
mortgage loan to Green Oak, which was secured, in part, by
the Apartments. Id. at 2. National Bank eventually
commenced a foreclosure proceeding against Green Oak in New
York State Supreme Court, Schenectady County in March 2016.
November 30, 2016, Green Oak filed a voluntary petition for
Chapter 11 bankruptcy in this District. R. vol. 1 at 1. As a
result, the state foreclosure proceeding was automatically
stayed pursuant to § 362(a). Id. at 11. On
March 1, 2017, National Bank moved for relief from the
automatic stay pursuant to § 362(d), id., which
Judge Littlefield granted on May 18, 2017, id. at
11-12 (“Order”). Green Oak filed a timely notice
of appeal of Judge Littlefield's Order on June 6, 2017,
Appeal, but did not seek a stay of the Order pending its
appeal, Mem. at 1.National Bank sold the Apartments at a
foreclosure auction to a good faith purchaser on June 22,
2017, Id.; Dkt. No. 14 (“Opposition”) at
1-2,  and now argues that the Appeal should be
dismissed as moot. Mem. at 3-5.
fundamental predicate to judgment in the federal courts is
the existence of subject matter jurisdiction.
“Dismissal of a case for lack of subject matter
jurisdiction . . . is proper ‘when the district court
lacks the statutory or constitutional power to adjudicate
it.'” Ford v. D.C. 37 Union Local 1549,
579 F.3d 187, 188 (2d Cir. 2009) (per curiam) (quoting
Makarova v. United States, 201 F.3d 110, 113 (2d
Cir. 2000)). A lack of subject matter jurisdiction cannot be
waived, and may be raised by motion or sua sponte at any
time. Transatlantic Marine Claims Agency, Inc. v. Ace
Shipping Corp., 109 F.3d 105, 107-08 (2d Cir. 1997).
“Under Article III of the U.S. Constitution,
‘[w]hen a case becomes moot, the federal courts lack
subject matter jurisdiction over the action.'”
Doyle v. Midland Credit Mgmt., Inc., 722 F.3d 78, 80
(2d Cir. 2013) (alterations in original) (quoting Fox v.
Bd. of Trs. of State Univ. of N.Y., 42 F.3d 135, 140 (2d
Bank argues that the Appeal is moot because the Apartments
have been sold to a good faith buyer and thus the Court
“is unable to grant [Green Oak] the relief
sought.” Mem. at 2. Even if the Court were to reverse
the Order, National Bank argues, reinstating the automatic
stay as to the Apartments would have no effect because Green
Oak's interest in the property has been extinguished.
Id. at 2-3. Green Oak urges the Court to deny the
Motion because it “is presently moving to vacate the
judicial sale in State Court due to [National Bank's]
failure to deliver proper service of the notice of sale as
provided under relevant state law.” Opp'n at 3.
reply, National Bank argues that the Court should disregard
Green Oak's Opposition because it is untimely. Dkt. No.
15 (“Reply”) at 1-2. Under the Local Rules of
this District, a party opposing a dispositive motion must
file its opposition papers no less than seventeen days prior
to the return date of the motion. L.R. 7.1(b)(1). National
Bank filed its Motion on October 2, 2017, with a return date
of November 3, 2017. Mot. Thus, Green Oak's response was
due on October 17, 2017. Green Oak filed its Opposition on
October 27, 2017, ten days after its deadline. Pursuant to
Local Rule 7.1(b)(3), the Court “shall not consider any
papers . . . that are not timely filed or are otherwise not
in compliance with this Rule unless good cause is
shown.” “Where a properly filed motion is
unopposed and the Court determines that the moving party has
met its burden to demonstrate entitlement to the relief
requested therein, the non-moving party's failure to file
or serve any papers as this Rule requires shall be deemed as
consent to the granting or denial of the motion, as the case
may be, unless good cause is shown.” L.R. 7.1(b)(3).
Green Oak has neither acknowledged nor explained its
tardiness, much less shown good cause. Therefore, pursuant to
Local Rule 7.1(b)(3), the Court deems the Motion to be
Bank has demonstrated that it is entitled to dismissal
because the Court lacks subject matter jurisdiction.
“Courts have uniformly held that if a debtor fails to
obtain a stay of a sale of properties, appeal of an order
authorizing the sale is rendered moot and must be dismissed
once the sale to good faith purchasers has taken place and
has been approved.” In re Baker, 339 B.R. 298,
303 (E.D.N.Y. 2005) (collecting cases); see also In re
Gucci, 105 F.3d 837, 840 (2d Cir. 1997)
(“[R]egardless of the merit of an appellant's
challenge to a sale order, we may neither reverse nor modify
the judicially-authorized sale if the entity that purchased
or leased the property did so in good faith and if no stay
was granted.”); Tornheim v. Source One Mortg.
Servs. Corp., No. 96-5081, 1997 WL 85844, *1 (2d Cir.
Feb. 20, 1997) (“When the appellant has failed to
obtain a stay pending appeal, the foreclosure and resale of
the property renders moot any appeal from an order lifting an
automatic stay issued under 11 U.S.C. § 362(d).”).
The rule applies with equal force when a debtor's timely
motion to stay a judicially-authorized sale is denied,
Gucci, 105 F.3d at 840, or the debtor
“believes the sale has been wrongly authorized, ”
In re Baker, 339 B.R. at 303 (citing In re
Stadium Mgmt. Corp., 895 F.2d 845, 849 (1st Cir. 1990)).
Green Oak's Appeal is moot because it failed to obtain a
stay of the Order, and the Apartments have been sold to a
good faith purchaser. Therefore, the Court lacks jurisdiction
and the Appeal must be dismissed.
the Court were to consider Green Oak's Opposition, its
argument against dismissal lacks merit. Green Oak claims that
the foreclosure sale violated state law because it did not
receive proper notice of the sale. Opp'n at 3-6. It
further argues that the Court should deny the Motion because
a state court could vacate the sale. Id. It does not
appear that Green Oak has actually sought to invalidate the
sale. In the attorney affirmation submitted in opposition to
the Motion, Green Oak's counsel states that he
“intends on moving the Schenectady County
Supreme Court to set aside the judicial sale for failure to
satisfy due process” and that Green Oak has
“notified Appellee of its intention to move
for said relief.” Dkt. No. 13 (“Rock
Affirmation”) ¶¶ 14-15 (emphasis added);
see also Reply at 2 (“[Green Oak] claims that
it intends to file a motion seeking to set aside the sale in
the state-court foreclosure action; however no such motion
has been filed to date, even though the sale occured on June
22, 2017.”). Assuming the foreclosure sale did violate
state law, Green Oak points to no case to support its belief
that the Court has subject matter jurisdiction over a mooted
case if a hypothetical future state court proceeding could
revive the underlying dispute. The Court is unaware of any
authority to support Green Oak's position, which defies
the weight of mootness authority. Ultimately, even if
“the sale . . . [was] wrongly authorized, ”
In re Baker, 339 B.R. at 303, the case remains moot
and the Court lacks jurisdiction. Thus, the Appeal must be
dismissed as moot.