United States District Court, D. Utah
BANNER BANK, successor by merger of American West Bank which formerly did business in Utah as Far West Bank, Plaintiff,
REAL ESTATE INVESTOR EDUCATION, LLC, a Nevada limited liability company; REAL ESTATE INVESTOR SUPPORT, LLC, a dissolved Nevada limited liability company; JAMES M. SMITH, a Utah resident, JMS MARKETING L.L.C., a Utah limited liability company; LOREE C. SMITH, an individual and JOHN DOES 1-10, Defendants. JAMES M. SMITH Counterclaimant,
BANNER BANK, Counterclaim Defendant. LOREE C. SMITH, Counterclaimant
BANNER BANK, Counterclaim Defendant.
MEMORANDUM DECISION & ORDER
WADDOUPS, UNITED STATES DISTRICT COURT JUDGE.
the court is Loree Smith's Motion for Reinstatement
Pursuant to Order Granting Motion for Relief from the
Automatic Stay. (Motion, ECF No. 269.) Banner Bank opposes
Ms. Smith's Motion. (Opposition, ECF No. 272.) No. party
has requested oral argument, and the court concludes it is
unnecessary. Having fully considered the parties'
briefing and otherwise being fully informed, and for the
reasons stated herein, the court GRANTS Ms. Smith's
2012, Americanwest Bank, Banner Bank's predecessor in
interest, sued James and Loree Smith along with three LLCs
with which the Smiths were associated. (Complaint, ECF No.
2.) The Complaint sought declaratory judgment against all
Defendants to “determine the interrelationship between
[the] Note and Loan Agreement” that the LLC Defendants
had entered and that James Smith had Guaranteed.
(Id. ¶¶ 63-67.) It also sought declaratory
relief to determine that Loree Smith “does not hold any
interest in any of the property [the Bank] is seeking to
foreclose including the real property and personal property
in South Carolina, the real property in Oregon, except for
her undivided interest in Unit 7, and any interest in JMS
Marketing.” (Id. ¶ 68.) After a series of
settlement discussions, Banner Bank eventually
“voluntarily reconvey[ed] and release[d] the Oregon
Trust Deed as it pertains to the Condominium, ” which
the parties agreed was the only property to which Ms. Smith
had a claim. (Status Report, ECF No. 191.)
Smith raised several counterclaims in her answer, including a
claim for breach of contract. (Loree Smith Answer, ECF No.
75.) In her claim for breach of contract, Ms. Smith alleged
that the Bank “breached its duty to release and
discharge [her] as agreed by recording an erroneous deed of
trust; by perpetuating claims, controversies and disputes
regarding [the Condominium] and; by filing and maintaining an
action against [her] notwithstanding knowledge of its own
contractual duty and its fraudulent, illegal and coercive
acts and conduct.” (Loree Smith Answer ¶ 28, ECF
No. 75.) After considering motions for summary judgment, the
court dismissed all claims other than the Bank's claim
against James Smith for declaratory judgment and Loree
Smith's claim against the Bank for breach of contract.
(Order on Summary Judgment, ECF No. 196; Memorandum Decision
and Order Denying Summary Judgment, ECF No. 198; Memorandum
Decision and Order on Denying Motion to Alter Judgment, ECF
court held a bench trial on the remaining two issues on June
5 through June 7, 2017. (Minute Entries, ECF Nos. 239-41.)
After the presentation of evidence concluded, the court set a
briefing schedule (Minute Entry, ECF No. 241) and scheduled
closing arguments for October 12, 2017 (Notice of Hearing,
ECF No. 264). But before closing arguments could occur, James
Smith filed for Chapter 7 Bankruptcy in the United States
Bankruptcy Court for the Middle District of Florida.
(Bankruptcy Notice, ECF No. 265.) This court accordingly
stayed this action.
months later, on January 17, 2018, Loree Smith filed a Notice
of Order Granting Motion for Relief from the Automatic Stay.
(Notice of Stay Relief, ECF No. 266.) The Notice represented
that the Florida bankruptcy court had “entered an Order
directing the lifting of the automatic stay as provided in 11
U.S.C. § 362(a) to allow the Utah Action to proceed to
conclusion.” (Id.) But the bankruptcy
court's order also stated:
1. The Motion is granted.
2. The automatic stay provided in 11 U.S.C. § 362(a) is
lifting to allow the Movant to proceed with the Utah Action
3. The relief granted herein permits the Movant to seek and
obtain in rem relief only and does not permit the
Movant to seek or obtain in personam relief against
(Bankruptcy Order, ECF No. 266-1.)
Bank objected to Ms. Smith's notice. (Objection, ECF No.
267.) And the court, after reviewing all documents,
determined the order did not pertain to this action because
the only relief the bankruptcy court granted was for Ms.
Smith to bring an in rem claim against Mr. Smith,
but Ms. Smith has no such claim in this action. Therefore,
the court determined there were no claims that could proceed
in this court under the bankruptcy judge's order and the
stay served the goal of judicial economy because of the close
relationship to the Bank's claim against James Smith. And
because there was no motion before the court, the court took
no action. Then four months later on April 12, 2018, Ms.
Smith filed her Motion to Withdraw Bankruptcy Reference.
(Motion, ECF No. 269.)
August 2018, the parties filed status reports updating the
court of the proceedings in bankruptcy court. (ECF Nos. 276
& 277.) The reports notified the court that bankruptcy
proceedings were ongoing but that the Trustee had filed a
“Report & Notice of Trustee's Intention to
Abandon Property of the Estate, ” including the
properties at issue in this action. (Loree Smith's Status
Report 2, ECF No. 276.) Banner Bank's report indicated
that no objections had been filed and it appeared that ...