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Dick v. Colorado Housing Enterprises, L.L.C.

United States Court of Appeals, Fifth Circuit

October 4, 2017

AUDREY DICK, Plaintiff-Appellant

         Appeal from the United States District Court for the Northern District of Texas USDC No. 3:17-CV-533

          Before BENAVIDES, SOUTHWICK, and COSTA, Circuit Judges.

          PER CURIAM.

         This interlocutory appeal is from an order denying a motion for a preliminary injunction to stop a foreclosure sale.[1] We DISMISS the appeal as MOOT.


         In 2014, Plaintiff Audrey Dick ("Plaintiff") and her husband borrowed $100, 000 from Colorado Housing Enterprises, L.L.C. and Community Resources and Housing Development Corporation ("Defendants"). The loan was secured with a deed of trust that granted the Defendants a lien on certain real property owned by Plaintiff. In 2015, Plaintiff defaulted on the loan payments.

         Over the course of the year in 2016, Plaintiff obtained the stay of three, separately scheduled foreclosure sales by filing for bankruptcy three different times (either for herself or on behalf of her husband). All three bankruptcy proceedings were dismissed, and the last bankruptcy proceeding was dismissed with prejudice for two years.

         In January of 2017, Plaintiff was notified that a foreclosure sale was scheduled for February 7. In response, Plaintiff filed suit in Texas state court on February 2. Plaintiff sought an ex parte temporary restraining order, which the state court granted. Defendants removed the case to federal district court on February 23. In a letter dated March 1, Defendants gave notice that a foreclosure sale was scheduled for April 4. On March 23, Plaintiff filed a motion seeking a temporary restraining order and preliminary injunction to stop the sale. On March 30, Defendants filed a response to the motion. The next day, the district court denied the motion. On April 2, Plaintiff filed a notice of interlocutory appeal from the order denying the motion for a preliminary injunction.

         On April 3, Plaintiff-Appellant filed in this court an opposed emergency motion for stay of foreclosure proceedings pending appeal. On April 4, the trustee accepted a successful bid for the property at the foreclosure sale. Approximately two hours later, this court issued an order granting the motion to stay foreclosure proceedings pending appeal.

         II. MOOTNESS

         In their brief on appeal, the Defendants-Appellees argue that this appeal from the denial of the preliminary injunction is moot because the subject property was sold at the April 4 foreclosure sale. "Ordinarily, an appeal will be moot when the property underlying the dispute has been sold at a foreclosure sale because this court cannot fashion adequate relief, i.e., cannot reverse the transaction." Christopher Village, Ltd. P'ship v. Retsinas, 190 F.3d 310, 314 (5th Cir. 1999). See also NCNB Tex. Nat'l Bank v. Southwold Assocs., 909 F.2d 128, 129 (5th Cir. 1990) (explaining that because the lien on the property had been foreclosed, the propriety of the preliminary injunction was rendered moot).

         Plaintiff-Appellant acknowledges the above precedent. Nonetheless, Plaintiff-Appellant asserts that because the Defendants-Appellees were the successful bidders at the foreclosure sale, this court can order them to cancel or rescind the foreclosure sale. Relying on Knoles v. Wells Fargo Bank, N.A., Plaintiff-Appellant contends that this appeal is not moot. 513 Fed.Appx. 414 (5th Cir. 2013). In Knoles, the plaintiff's residence had been sold at a foreclosure sale to Wells Fargo Bank. Id. However, the plaintiff did not vacate the property, and Wells Fargo brought a successful forcible detainer action. Id. That judgment was not appealed. Id. Thereafter, plaintiff brought suit against Wells Fargo in state court, challenging the foreclosure. Id. Wells Fargo removed the case to federal court, and the plaintiff moved for a temporary restraining order to prevent his eviction. Id. The district court denied the motion, and the plaintiff took an interlocutory appeal to this court. Id. Wells Fargo argued that the appeal was moot because the plaintiff had already been evicted. Id. at 415. We recognized the rule that "a request for injunctive relief generally becomes moot upon the happening of the event sought to be enjoined." Id. (internal quotation marks and citation omitted). Nevertheless, we rejected the mootness argument, opining that "an order of this court that Knoles be restored to possession would constitute relief even if belated." Id. We further opined that the "parties have not presented other arguments regarding mootness, such as the possible effect of a sale of the premises to an alleged bona fide purchaser." Id. Thus, because the evicted tenant and the purchaser of the property were before it on appeal, this court rejected the claim that the appeal was moot.

         We decline to apply the reasoning in Knoles to the instant appeal. Knoles is an unpublished opinion and thus does not constitute controlling precedent. See 5th Cir. R. 47.5.4. Moreover, as explained below, we have controlling precedent that would conflict with our extending the reasoning in Knoles to the case at bar. "It is a well-settled Fifth Circuit rule of orderliness that one panel of our court may not overturn another panel's decision, absent an intervening change in the law, such as by a statutory amendment, or the Supreme Court, or our en banc court." Jacobs v. Nat'l Drug Intelligence Ctr., 548 F.3d 375, 378 (5th Cir. 2008).

         In Matter of Sullivan Cent. Plaza, I, Ltd., the debtor failed to make payments on a construction loan secured by a high rise tower, and the bank scheduled the tower for foreclosure. 914 F.2d 731, 732 (5th Cir. 1990), on rehearing,935 F.2d 723 (5th Cir. 1991). The debtor then filed for bankruptcy, which automatically stayed the foreclosure sale. Id. Subsequently, the bankruptcy court lifted the stay because, among other things, the plan for reorganization could not be confirmed. Id. The debtor filed a second amended plan for reorganization and requested an emergency injunction. Id. at 733. The court granted a temporary injunction but conditioned the relief by requiring the debtor to meet certain requirements. Id. After the debtor failed to meet the requirements, the court withdrew ...

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