RELATED PARTNERS PROPERTIES, INC.

v.

PNC CORNERSTONE, INC. (IN RE RELATED PARTNERS PROPERTIES, INC.)

ARONOVITZ, District Judge.

THIS CAUSE came before the court upon Appellant, Related Partners Properties, Inc.’s Emergency Motion for Stay Pending Appeal file dated November 22, 1993. Oral Argument was heard in this matter on Tuesday, November 30, 1993. The Court has considered the Motion, Memoranda in Support and in Opposition, Oral Argument of counsel, the entire record, and the applicable law, and is otherwise fully advised in the premises. For the following reasons, Appellant’s Emergency Motion for Stay Pending Appeal is considered moot and is DENIED.

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On July²,1992, Appellanf/Debtor, Related Partners Properties, Inc. (“Related”) filed for Chapter 11. The Bankruptcy Court lifted the automatic stay to allow secured creditor, Provident National Bank, (“Provident”) to proceed with its foreclosure action by Order file dated September 8,1992. Related filed a Chapter 11 Plan of Reorganization and an accompanying Disclosure Statement on May 28, 1993. On July 12, 1993, Related filed an emergency Motion seeking to reimpose the automatic stay of the foreclosure action. The Bankruptcy Court denied that Motion for stay on July 30, 1993.

At a hearing on July 20, 1993, the Bankruptcy Court denied approval of Related’s First Disclosure Statement and granted Related thirty (30) days to amend. (Transcript at 31-35) Related filed its First Amended Disclosure Statement on August 19, 1993, and at a hearing commenced on September 7,1993 and continued on September 13,1993, the Bankruptcy Court held that the Plan could not be confirmed unless the defaults under the Reimbursement Agreements were cured. (September 13, 1993, Transcript at 68-73)

On or about August 19, 1993, the State Court entered a Judgment of Foreclosure in favor of Provident and against Related. On August 30, 1993, Related filed a second Motion to enjoin Provident from proceeding with foreclosure sale. The Bankruptcy Court by Order file dated September 14, 1993 denied this Motion.

1

Provident proceeded to foreclose the judgment sale on the subject properties and the sale was conducted on September 15, 1993. On November², 1993, Related filed an Amended Chapter 11 Plan of Reorganization and Second Amended Disclosure Statement. It should be noted that no Plan had been confirmed as of the time this Court heard oral arguments on the present Emergency Motion.

Related filed a fifth Motion for Relief from Stay on November 11, 1993 in that Certificates of Title on the subject properties had not yet been issued. On November 17, 1993, Judge Mark held a telephonic hearing and thereupon issued an Order that same day Granting in Part Debtor Related’s Motion to Reimpose the Stay subject to specific conditions set forth in the Order. In particular, Judge Mark held that PNC-Cornerstone, Inc. and PNC-Sutton Place, Inc. (“PNC”, successors to Provident) are enjoined from accepting from the Clerk of the Circuit Court for the Ninth Judicial Circuit in and for Orange County, Florida, a Certificate of Title to the Cornerstone Apartments and/or Sutton Place Apartments (“Properties”) prior to²:00 p.m. on November 22, 1993.

Judge Mark further ordered that said injunction shall continue through December³, 1993, if, and only if, specific conditions were met.

2

Counsel for Appellant/Debtor admitted at Oral Argument that the conditions necessary for continuance of the injunction through December³,1993, had not been met and the record supports this critical fact. On November 24, 1993, the Ninth Circuit Court directed the Clerk to issue the two

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Certificates of Title and they were issued.

3

Appellant/Debtor, Related filed the Emergency Motion for Stay Pending Appeal in this Court on November 22, 1993. In that Counsel for the Appellant/Debtor admitted at Oral Argument that the conditions required for extending the injunction through December³, 1993 had not been met as required by Judge Mark in his November 17,1993 Order, (the record also supports this critical fact) the injunction thereby expired at 2:00 p.m. on November 22, 1993. Thereafter, PNC was free to request the Judge in the State Court Action to Order the Clerk to issue the Certificates of Title since the injunction was no longer in effect. That Order was obtained on November 24,1993 and the Certificates were properly issued. Accordingly, this Court finds that the relief sought by Appel-lani/Debtor in its Emergency Motion for Stay Pending Appeal cannot be granted as it is too late and the issue presented is moot based on the aforementioned circumstances of this case and the following ease law.

In reviewing applicable case law, this Court follows

In re Glenn,

760 F. 2d 1428 (6th Cir.1985),

cert. denied,

474 U.S. 849, 106 S.Ct. 144, 88 L.Ed.2d 119 (1985), which has been followed in this District.

In re Glenn

involved a consolidation of appeals of three separate actions by Chapter 13 debtors who raised similar questions about the point in the foreclosure process at which a Chapter 13 debtor loses the right to cure a default on a real estate mortgage on his principal residence. The Court in

In re Glenn

stated:

In summary, we hold that under 11 U.S.C. § 1322(b) a Chapter 13 debtor may cure a default on a mortgage on his principal residence even when the debt has been accelerated and a judgment of foreclosure has been entered

provided that no foreclosure sale has taken place. Once the property has been sold, the right to cure the default and reinstate the terms of the mortgage under section 1322(b) ceases. (Emphasis added) Id.

at 1442.

The date of foreclosure sale is defined in

In re Campbell,

In re Glenn.

The Court in

In re Campbell

stated:

The term “sale” ordinarily denotes the auction event, not the ultimate judicial approval of the sale or the subsequent formal passage of title. The Florida statute recognizes this distinction by providing a certificate of sale immediately following the auction, and a certificate of title after all objections are finally resolved and the right of redemption has expired.

Id.

at 615.

In re Campbell

further held that the debtor’s right of redemption will not expire unless objections to the sale are finally overruled and a certificate of title is issued. Similarly, Appellant Related’s right of redemption expired upon issuance of the Certificates of Title by the Clerk, after the State Court overruled Related’s objections to Foreclosure sale and ordered the Clerk to issue the Certificates of Title.

See also, Valente v. Savings Bank of Rockville,

34 B.R. 362, 365-66 (D.C.Conn.1983) (debtors, under Connecticut law, can exercise the curative provisions of Chapter 11 after a final state court judgment but

not

after a sale takes place and is confirmed/ratified by the court);

In re Telson,

121 B.R. 662, 664 (Bkrtcy.S.D.Fla.1990) (once the property has been sold in a valid state court foreclosure sale, the right to cure the default in Chapter 13 by deaecelerating and reinstating the mortgage ceases).

This court further recognizes Judge Marcus’ very enlightened Order file dated August 31,1993, which addressed the issue of whether, where the purchaser at a foreclosure sale is the mortgagee and not a third party, can the debtor still exercise a § 1322(b) right to cure the default and reinstate the mortgage when the petition is filed

after

foreclosure sale, but

before

the Clerk of Court issues the certificate of title (thereby transferring legal title).

In re Outten,

Case No. 91-1047-Civ-Marcus. Obviously, this

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did not exist in the case at bar. The Certificates of Title were properly issued by the Clerk in this case pursuant to a State Court Order entered (1) after the injunction expired at 2:00 p.m. on November 22,1993, due to the AppellanVDebtor’s failure to comply with the conditions of Judge Mark’s Order, and (2) after Appellant’s objections to Foreclosure sale were overruled.

4

In re Outten,

supports a finding of mootness in this case in that the Clerk in this case already properly issued Certificates of Title and Judge Marcus noted that the expiration of the Florida redemption period is accomplished only when the Clerk files a certificate of title and serves a copy of it on each party not in default.

In re Outten

at pg. 12,

citing,

Fla.Stat. § 45.031(4);

Allstate Mortgage Corporation of Florida v. Strasser,

286 So. 2d 201 (Fla.1973).

Since the injunction in this ease expired at 2:00 p.m. on November 22,1993, when Appellant/Debtor did not comply with the conditions set forth in Judge Mark’s Order of November 17, 1993, no injunction was in effect at the time the State Court directed the Clerk to issue the Certificates of Title nor was there an injunction in effect at the time the Certificates were in fact issued.

Based upon these circumstances and upon the aforementioned case law, Related’s right of redemption expired when the Certificates of Title to the subject properties were properly issued by the Clerk, at which time Related’s right to cure the defaults ceased. As such, Related’s Emergency Motion for Stay Pending Appeal is considered moot and is DENIED.

DONE AND ORDERED.