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Ellis v. Roohani
Citation: 246 F. App'x 498Docket: No. 06-55000
Court: Court of Appeals for the Ninth Circuit; August 30, 2007; Federal Appellate Court
John Matthew Ellis appealed a bankruptcy court decision that retroactively annulled the automatic stay imposed upon his filing for bankruptcy. This annulment was necessary to validate a property sale to Khusrow Roohani, which occurred while the stay was in effect, and to allow Roohani to seek relief from a Nevada state court ruling that voided the sale based on the stay. The bankruptcy court applied established Ninth Circuit precedent permitting such annulments and subsequently annulled the stay, validating the sale to Roohani. Ellis did not seek a stay against the bankruptcy court's annulment. Consequently, Roohani returned to Nevada state court, obtained a judgment quieting title to the property in his favor, and sold it to a bona fide purchaser. The Bankruptcy Appellate Panel (BAP) ruled that Ellis’ failure to stay the bankruptcy court’s order allowed the Nevada court to quiet title in Roohani, effectively making Ellis’ appeal moot. The BAP dismissed the appeal, stating that the Nevada court's judgment was entitled to full faith and credit, preventing federal courts from granting Ellis any relief. Ellis has renewed his appeal in this Court, which has jurisdiction under 28 U.S.C. § 158(d). After reviewing the record, the Court affirmed the BAP’s decision to dismiss the appeal for lack of jurisdiction, referencing the mootness doctrine. During oral argument, Ellis conceded that Roohani’s sale of the property to a bona fide purchaser effectively rendered any claim he might have moot. Although Ellis briefly mentioned the bankruptcy court's failure to award him damages for violations of the automatic stay, he did not adequately brief this issue, leading to its waiver. He failed to articulate a right to damages against Roohani or to seek such damages prior to the annulment of the stay. The Court noted that the mention of compensatory damages appeared to be an afterthought and did not persuade them to reverse the BAP’s decision. The Court's disposition is non-precedential, except as permitted under Ninth Circuit Rule 36-3. The only defendant in the current appeal is Roohani, making any potential claims against other parties for stay violations irrelevant to the mootness issue. The appeal was thus affirmed.