In Re Bruce A. Seymour, Debtor.bruce A. Seymour, Appellant, v. American Savings; New West Federal Savings and Loanassociation, Assignee of Fslic, Appellees, 967 F.2d 590 (9th Cir. 1992)

MEMORANDUM^** 

Appellant Bruce A. Seymour ("Seymour") appeals from the Bankruptcy Appellate Panel's ("BAP") order affirming the bankruptcy court's decision granting appellee American Savings and Loan Association's ("American") Motion for Summary Judgment entered on October 16, 1989. We affirm.

Seymour had brought an action in the bankruptcy court for declaratory relief, permanent injunction, avoidance of the lien, quiet title, and recovery of a fraudulent transfer. The BAP found Seymour's claims meritless.

The real property at issue, located in Zephyr Cove, Nevada ("Property"), was owned by Seymour and his wife prior to September 27, 1982. The Property was subject to a judgment lien in favor of James D. Hunter, Inc. ("Hunter"). Seymour borrowed $450,000 from American¹  and gave American a deed of trust to the Property to secure the note. The deed was recorded after the Hunter lien. Hunter initiated foreclosure proceedings, and bought the property at an execution sale. No right of redemption was exercised in favor of American.

In January, 1984, Hunter conveyed the Property back to Seymour, who conveyed title to the Property to Land Resources Development Corporation ("Land Corporation") on February 6, 1984. Seymour owned shares in Land Corporation and was president of the corporation. Land Corporation filed bankruptcy in the Eastern District of California in April of 1988.

Seymour stopped making payments to American around November, 1982, and the Property was sold at a Trustee's Sale on June 30, 1988, to American. Seymour filed the present bankruptcy action on January 3, 1989. A complaint was filed by Seymour on February 1, 1989, in the bankruptcy court in the Northern District of California. In his complaint, Seymour sought to have the property declared free and clear of American's deed of trust. American filed a Motion for Summary Judgment which was granted by the bankruptcy court. A Motion for Reconsideration was denied, and the case was appealed by Seymour to the BAP which affirmed the decision of the bankruptcy court. Seymour's Motion for a Rehearing was denied by the BAP. Appeal to this court followed.

STANDARD OF REVIEW

Decisions of the BAP are reviewed de novo. In re Two "S" Corp., 875 F.2d 240, 242 (9th Cir. 1989). The court of appeals and the BAP review the bankruptcy court's conclusions of law de novo and its finding of facts under the clearly erroneous standard. Id.

STANDING

Rule 17(a) states that " [e]very action shall be prosecuted in the name of the real party in interest." Fed. R. Civ. P. 17(a). The existence and nature of a debtor's interest in property are determined by state law, In re Foam Systems Co., 92 B.R. 406, 409 (Bankr. 9th Cir. 1988), aff'd, Ins. Co. of the West v. Simon, 893 F.2d 1338 (9th Cir. 1990), and an essential element of Seymour's quiet title claim is that he demonstrate his title to the property in dispute. Daly v. Lahontan Mines, Co., 151 P. 514, 516 (Nev.1915), aff'd, 158 P. 285 (Nev.1916).

Seymour conceded in his complaint that he was a tenant on the property, and that title to the property was vested in Land Corporation. Seymour's interest in the property was a leasehold interest, which did not vest in Seymour the right to question the title to the property without the participation of the property owner and real party in interest, Land Corporation.

The trustee for Land Corporation would be a proper party to bring the present action, but not Seymour as a tenant.²  As Seymour is unable to challenge the title to the real property, the BAP decision is AFFIRMED.