“Jurisdiction First, Mootness Later” – The Tenth Circuit BAP’s Clarification on Stay-Relief Orders Entered Before Case Dismissal

1. Introduction

The Bankruptcy Appellate Panel (BAP) for the Tenth Circuit, in the unpublished decision of Lorenzo Luciano Lopez v. Lon A. Jenkins, Chapter 13 Trustee, & Auntie Tut Trust, has reaffirmed and refined two intertwined doctrines in bankruptcy appellate practice: (i) the primacy of a bankruptcy court’s subject-matter jurisdiction at the moment it enters a stay-relief order, and (ii) the consequent mootness of any appeal once a foreclosure sale is completed without an intervening stay pending appeal. At stake was a serial debtor’s attempt to undo a completed foreclosure sale by arguing that the bankruptcy court lost jurisdiction the instant he filed a voluntary motion to dismiss his case. The BAP disagreed, holding that because jurisdiction indisputably existed when the stay-relief order was entered, all subsequent arguments were rendered moot once the property was sold.

Key Facts at a Glance

Property: 13887 S. Lamont Lowell Circle, Herriman, Utah.
Secured Creditor: Auntie Tut Trust.
Debtor/Appellant: Lorenzo Luciano Lopez (successor in title one day before the third scheduled foreclosure).
Procedural Posture: Stay-relief order entered on January 14 2025; chapter 13 case dismissed the same day; foreclosure concluded on January 24 2025; appeal filed January 28 2025 without a stay pending appeal.
BAP Holding: Appeal dismissed as moot; bankruptcy court had jurisdiction when it entered the stay-relief order.

2. Summary of the Judgment

The Panel concluded that:

The bankruptcy court maintained core jurisdiction (28 U.S.C. § 157(b)(2)(G)) up to and including the entry of the stay-relief order.
The debtor’s subsequent motion to voluntarily dismiss—even though filed before the dismissal order—did not retroactively strip the court of that jurisdiction.
Because the debtor failed to obtain a stay pending appeal, and the creditor consummated a foreclosure sale, the appeal is constitutionally and equitably moot: the BAP could render no effective relief.
Arguments that the stay-relief order was “void” for lack of jurisdiction thus collapse; with jurisdiction established, voidness and any challenge to the foreclosure are foreclosed.

3. Analysis

3.1 Precedents Cited and Their Influence

In re Egbert Development, LLC (10th Cir. BAP 1998) – affirmed that a stay-relief appeal becomes moot after foreclosure where no stay pending appeal was obtained.
In re Coones (10th Cir. 1995) – “classic example of mootness”: property sold after failed stay; no effective appellate remedy.
In re Moore (10th Cir. BAP 2003) – actions taken in reliance on a valid stay-relief order are not void even if the order is later reversed.
In re TEC Resources, LLC (10th Cir. BAP 2003) – articulated that a judgment is void only when the issuing court lacked subject-matter jurisdiction or violated due process.
Ellis v. Consolidated Diesel (10th Cir. 1990) – reiterated that acts violating an existing stay are void, but acts pursuant to a granted stay-relief order are not.
In re Sherman (9th Cir. 2006) (persuasive) – example where lack of jurisdiction at time of order renders it void; the BAP distinguished, showing jurisdiction existed here.

These precedents collectively demonstrate two pillars: (a) the vital requirement of a stay pending appeal to preserve a property remedy, and (b) the narrow circumstances under which an order may be branded jurisdictionally void.

3.2 Court’s Legal Reasoning

Temporal Jurisdiction Test. The court asked: “Did the bankruptcy court have core jurisdiction at the instant it signed the stay-relief order?” Because the dismissal order had not yet been entered, and stay-relief motions are statutorily core matters, the answer was yes.
Effect of the Debtor’s Motion to Dismiss. Filing the motion did not auto-terminate jurisdiction. Bankruptcy Rule 1017(f)(2) requires an order of dismissal; therefore jurisdiction persisted until the order was entered later that day.
Mootness Doctrine. Once the foreclosure sale occurred and no stay was in place, the Panel applied the well-settled principle that an appellate court cannot “unsell” real property or re-impose a stay after the fact.
Voidness Analysis. Because jurisdiction was established, the debtor’s “void or void-ab initio” argument failed. Voidness requires lack of jurisdiction, not mere disagreement with the court’s sequencing of orders.

3.3 Potential Impact of the Judgment

Serial Filings Discouraged. The decision fortifies creditors’ ability to obtain effective, two-year in rem relief under § 362(d)(4) against debtors who repeatedly file to stall foreclosure.
Appellate Strategy Clarified. Debtors and counsel are now on sharp notice: obtain a stay pending appeal before the hammer falls, or face certain mootness.
Jurisdictional Clarity. The Panel distinguishes between (i) “order entered after dismissal” (potentially void) and (ii) “order entered before dismissal” (valid). The latter survives even if dismissal follows minutes later.
Title Certainty. Purchasers at foreclosure within the Tenth Circuit gain additional assurance that completed sales remain inviolate when grounded on valid stay-relief orders.

4. Complex Concepts Simplified

Automatic Stay (§ 362(a)). An immediate, statutory injunction halting most collection efforts once a bankruptcy case is filed.
Relief from Stay (§ 362(d)). A creditor’s court-granted permission to continue actions (e.g., foreclosure) that the stay would otherwise bar.
In Rem Stay Relief (§ 362(d)(4)). A special two-year “stay lift” that attaches to the property itself, binding future bankruptcy filings if the court finds abusive serial filings intended to hinder or delay creditors.
Mootness (Appellate). A doctrine holding that an appellate court lacks power to decide a case when it can grant no practical relief.
Void vs. Voidable. A “void” order is a legal nullity (e.g., issued without jurisdiction). A “voidable” order may be erroneous but remains effective until reversed. The BAP held the order here was neither void nor voidable; it was valid.

5. Conclusion

The Tenth Circuit BAP’s decision cements a straightforward but sometimes overlooked sequence: jurisdiction is measured at the moment an order is entered; if the court then had authority, the order stands, and any appeal becomes moot once the underlying controversy – here, the property – leaves the estate through foreclosure unimpeded by a stay. For creditors, the ruling supplies additional security against tactical bankruptcy filings. For debtors and practitioners, it underscores the urgency of seeking a stay pending appeal and of crafting arguments rooted in genuine jurisdictional defects, not after-the-fact timing critiques. In the broader landscape, “Jurisdiction First, Mootness Later” is now an unmistakable guidepost in Tenth Circuit bankruptcy litigation.