In re: DENNIS DELMAR DRAUDT v. Charles Holmes;

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: DENNIS DELMAR DRAUDT,
Debtor.
______________________________
DENNIS DELMAR DRAUDT,
Appellant,
v.
CHARLES HOLMES; et al.,
Appellees.
No. 16-56198
D.C. No. 2:16-cv-00616-MWF
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Michael W. Fitzgerald, District Judge, Presiding
Submitted March 7, 2018**
Pasadena, California
Before: GRABER, W. FLETCHER, and OWENS, Circuit Judges.
Chapter 13 debtor Dennis Delmar Draudt appeals from the district court’s
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
FILED
MAR 12 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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affirmance of the bankruptcy court’s Federal Rule of Civil Procedure 12(b)(6)
dismissal of his adversary case alleging wrongful foreclosure. We review de novo
the district court’s decision on appeal from the bankruptcy court. See Cloobeck v.
Cory (In re Cloobeck), 788 F.3d 1243, 1245 (9th Cir. 2015). We review de novo
the bankruptcy court’s decision to dismiss for failure to state a claim, and review
for an abuse of discretion its decision to deny leave to amend. See Turner v. Wells
Fargo Bank NA (In re Turner), 859 F.3d 1145, 1148 (9th Cir. 2017). As the
parties are familiar with the facts, we do not recount them here. We affirm.
The bankruptcy court properly dismissed Draudt’s wrongful foreclosure
action for failure to state a claim. The bankruptcy court’s January 7, 2015 order –
which granted Charles Holmes relief from the automatic stay, but extended until
February 17, 2015, the prohibition against conducting a foreclosure sale of the
property – was no longer effective by operation of law after Draudt voluntarily
dismissed his Chapter 13 case on January 20, 2015. See 11 U.S.C. §§ 349(b)(3)
(“Unless the court, for cause, orders otherwise, a dismissal of a case . . . revests the
property of the estate in the entity in which such property was vested immediately
before the commencement of the case under this title.”), 362(c)(1) (“[T]he
[automatic] stay of an act against property of the estate . . . continues until such
property is no longer property of the estate[.]”). Draudt’s argument that the
bankruptcy court exercised its discretion under § 349(b)(3) for the January 7 order

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to survive dismissal of his Chapter 13 case is unpersuasive because the bankruptcy
court indicated that was not the intent of its January 7 order, and Draudt cannot
identify anything in the record that suggests a different conclusion.
The bankruptcy court did not abuse its discretion by denying Draudt leave to
amend. Amendment would be futile because Draudt could not cure the defect that
his claims rested on the flawed legal premise that the automatic stay, including the
February 17 foreclosure extension, remained effective after the bankruptcy court
dismissed his Chapter 13 case. See Cervantes v. Countrywide Home Loans, Inc.,
656 F.3d 1034, 1041 (9th Cir. 2011). And, the record contradicts the assertion that
Draudt could amend to plausibly allege that Holmes’ attorney orally promised at a
hearing not to foreclose before February 17. See id. at 1040.
AFFIRMED.

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