Unpublished Disposition, 843 F.2d 501 (9th Cir. 1988)

MEMORANDUM^* 

Richard Charlton filed for bankruptcy under Chapter 11 of the Bankruptcy Act. Western Savings and Loan held a note from Charlton for approximately $161,000, which was secured by a deed of trust. Enterprise Leasing Corporation also had a deed of trust, a security junior to Western Saving's first security position. After Charlton defaulted on both loans, his house was sold to Enterprise at a trustee's sale. Charlton claimed that the sale did not follow required procedures, and that the profits Enterprise made when it resold the home should be set off against Charlton's debt to Enterprise. The bankruptcy court and the district court granted Enterprise summary judgment. We affirm.

Arizona law requires that a trustee's sale occur no earlier than ninety days after the recording of the notice of the sale. A.R.S. Sec. 33-807(C). In this case, though the sale took place more than a year after the recording of the notice, Charlton argues that this provision was violated. Charlton's claim is based on his argument that the running of the ninety days is tolled by the automatic stay provision of the Bankruptcy Act, former Bankruptcy Rule 401. We disagree. The automatic stay applies to legal actions affecting property rights, not to waiting periods. See, e.g., In re Pridham, 31 B.R. 497, 498-99 (Bankr.E.D. Cal. 1983).

Charlton challenges the trustee sale on a second ground. When the sale was noticed Jeffrey Gage was the trustee, and the notice listed Mr. Gage's place of business as the location of the sale. The sale did take place there; however, on the day before the sale, William Piatt replaced Mr. Gage as trustee. Charlton argues that the sale was void because it did not take place at the place of business of the new trustee. We disagree. Gage was the trustee when the sale was noticed in compliance with Ariz.Rev.Stat.Ann. Sec. 33-810(A). The sale was held, as noticed, at his office. We hold that Gage was the trustee for the purpose of satisfying Ariz.Rev.Stat.Ann. Sec. 33-808(B) because he was the trustee at the time the sale was noticed, although he was replaced as trustee by Piatt before the actual sale. The last issue is the issue of "set-off". Prior to the trustee sale, Western Savings assigned to Enterprise all of its interest in its note and deed of trust. Enterprise thus held both deeds of trust on Charlton's home. Enterprise made the only bid for the home at the trustee sale, $161,000, the full amount then due on Western's note. It subsequently resold the home to a third party for approximately $90,000 more than it had paid for it at the sale. At an earlier stage of the proceeding than the judgment at issue here, Charlton claimed that Enterprise's two deeds of trust on the home "merged" and that the effect of the trustee's sale was to extinguish the two obligations secured by the deeds. The bankruptcy court denied this claim, granting Enterprise partial summary judgment on that issue. The court stated: "Enterprise's rights pursuant to the note and the deed of trust it acquired from Western are entirely independent from its rights pursuant to the equipment lease and the original deed of trust Charlton provided as security. Thus, Enterprise's foreclosure of its first lien interest did not extinguish the second obligation, even though both obligations were secured by trust deeds to the Rockridge property." Charlton did not appeal the judgment and does not contend that it is now before us.

In the proceeding we review here, Charlton claims that the profits Enterprise received from its resale of the home should be set off against Enterprise's claim on "the second obligation". The bankruptcy court rejected this contention, holding it precluded by its earlier holding on merger. On appeal, the district court affirmed. Whatever the merits of the preclusion ruling, we are required to reject Charlton's claim. Charlton gives no legal reason or authority supporting his contention that the profits Enterprise obtained by reselling a house it had bought in a foreclosure sale should be offset against the debt he owes to Enterprise on the note--and we are aware of none.

For the reasons given above, we affirm the district court's judgment.