Opinion
Civil No. 1:19-cv-228 Bankruptcy No. 18-13031-KHK BR 18-13031-KHK
2020-02-18
Syed ASKRI, Appellant, v. U.S. BANK, N.A., Appellee.
Syed Askri, Sterling, VA, pro se. Johnie Rush Muncy, Richmond, VA, for Defendant.
Syed Askri, Sterling, VA, pro se.
Johnie Rush Muncy, Richmond, VA, for Defendant.
ORDER
T. S. Ellis, III, United States District Judge Syed Askri ("Debtor"), proceeding pro se, appeals an order entered by the Bankruptcy Court on February 15, 2019, which granted U.S. Bank's motion for in rem relief from the automatic stay (the "Lift Stay Order") on the Debtor's real property located at 23367 Kerrisdale Way, Dulles, Virginia 20166 (the "Subject Property"). In other words, the Bankruptcy Court's order permitted U.S. Bank to foreclose on the Subject Property even if Debtor or his spouse file subsequent bankruptcies within two years after the date of the Lift Stay Order.
Debtor contends that the Bankruptcy Court erred in granting the Lift Stay Order. Specifically, Debtor alleges that his wife, a co-obligor on the loan, did not receive proper notice of the motion for in rem relief from the automatic stay, and that U.S. Bank lacked standing to bring the motion because U.S. Bank does not have an interest in the subject loan.
For the reasons that follow, Debtor's appeal of the Lift Stay Order must be denied.
I .
The following findings of fact are derived from the Bankruptcy Court's Order on February 15, 2019.
• On December 8, 2011, Debtor and his wife, Rizwana Askri, jointly filed Case No. 11 - 18773, requesting relief under Chapter 11 of the Bankruptcy Code, in the Eastern District of Virginia, Alexandria Division (the "First Bankruptcy"). An order converting the case to Chapter 7 was entered on May 15, 2013. On June 25, 2013, Rizwana Askri was dismissed from the case for failure to attend the scheduled meeting of creditors. On September 4, 2013, Syed Askri was discharged.
• On January 17, 2014, Rizwana Askri, Debtor's wife, filed Case No. 14-10200, requesting individual relief under Chapter 13 of the Bankruptcy Code, in the Eastern District of Virginia, Alexandria Division (the "Second Bankruptcy"). On November 18, 2014, the case was dismissed because of unreasonable delay by Ms. Askri.
• On April 15, 2015, Debtor filed Case No. 15-11267, requesting individual relief under Chapter 13 of the Bankruptcy Code, in the Eastern District of Virginia, Alexandria Division (the "Third Bankruptcy"). On November 13, 2015, the case was dismissed because Debtor failed to take action under Local Bankruptcy Rule 3015-2.
• On December 30, 2015, Rizwana Askri, Debtor's wife, filed Case No. 15-14542, requesting individual relief under Chapter 11 of the Bankruptcy Code, in the Eastern District of Virginia, Alexandria Division (the "Fourth Bankruptcy"). On June 13, 2017, the case was dismissed because of Ms. Askri's voluntary Motion to Dismiss.
• On January 25, 2017, Debtor filed Case No. 17-10257, requesting individual relief under Chapter 13 of the Bankruptcy Code, in the Eastern District of Virginia, Alexandria Division (the "Fifth Bankruptcy"). On April 25, 2017, the case was dismissed by order granting the trustee's Motion to Dismiss pursuant to 11 U.S.C. § 1307.
• On September 6, 2018, Debtor filed the instant case, Case No. 18-13031,
requesting individual relief under Chapter 11 of the Bankruptcy Code, in the Eastern District of Virginia, Alexandria Division (the "Sixth Bankruptcy").
• U.S. Bank is the holder of the subject loan and has the requisite standing to proceed in requesting in rem relief from the automatic stay based on the instruments attached to U.S. Bank's motion.
• The subject loan is delinquent and contractually due for 82 monthly payments, constituting arrears in excess of $500,000.
• The Bankruptcy Court found no evidence of fraud or forgery regarding the subject loan and found that Debtor's claim under a "doctrine of unclean hands" theory is not supported by the record.
II .
Title 28 U.S.C. § 158(a) provides jurisdiction for district courts to hear appeals from a bankruptcy court. On appeal, the district court reviews the bankruptcy court's factual findings for clear error and its legal conclusions de novo. In re Harford Sands Inc., 372 F.3d 637, 639 (4th Cir. 2004). A finding of fact is clearly erroneous when, "although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." In re Mosko , 515 F.3d 319, 324 (4th Cir. 2008) (quoting United States v. U.S. Gypsum Co. , 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948) ). On this record, Debtor has advanced no facts or reasons to conclude that the Bankruptcy Court's factual findings are clearly in error. Nor is there any reason or legal authority to conclude that the Bankruptcy Court has erred in its legal conclusions. As noted below, de novo review confirms this.
III .
The Bankruptcy Court's Lift Stay Order is firmly supported by the factual record and proper under the law. To begin with, there is no doubt that the Bankruptcy Court had legal authority to grant relief from the automatic stay. The governing statute, 11 U.S.C. § 362(d)(4), makes clear that a bankruptcy court "shall grant relief" from the automatic stay to a creditor whose claim is secured by an interest in real property if, after notice and a hearing, the court finds that the filing of the bankruptcy petition was "part of a scheme to delay, hinder, or defraud creditors that involved...multiple bankruptcy filings affecting such real property." 11 U.S.C. § 362(d)(4)(B).
Precisely this occurred here, as the record clearly confirms. Indeed, the record reflects that the Bankruptcy Court correctly concluded that the Debtor or his wife have filed five previous bankruptcy petitions since December 2011 in addition to the instant case. Moreover, appellant represented that Debtor filed four of these six bankruptcy cases within one week of a scheduled foreclosure sale on the property. Accordingly, the Bankruptcy Court properly concluded that the Debtor's actions represent part of a scheme to delay, hinder, or defraud creditors that involved multiple bankruptcy filings affecting the same real property. 11 U.S.C. § 362(d)(4)(B). Settled authority firmly confirms this result.
Vardan v. Wells Fargo Bank, N.A. , 606 B.R. 681, 685 (E.D. Va. 2019) (holding evidence of three previous bankruptcy case filings sufficient to justify bankruptcy court's granting of relief under § 362(d)(4) ); Maines v. Wilmington Sav. Fund Soc'y, 2016 WL 3661577, at *4 (W.D. Va. July 1, 2016) (same); In re Johnson, 2008 WL 183342 (Bankr. E.D. Va. Jan. 18, 2008) (finding multiple, strategically timed bankruptcy filings can be a basis for inference of debtor's intent to hinder, delay, and defraud); In re Madera , 2008 WL 351446, at *5 (Bankr. E.D. Pa. Feb. 7, 2008) (imputing conduct of debtor's wife in her prior case against debtor in finding debtor's case was filed in bad faith); In re Selinsky, 365 B.R. 260, 264 (Bankr. S.D. Fla. 2007) (finding three bankruptcies cases filed by wife and two bankruptcy cases filed by husband over five years sufficient to establish a scheme to defraud); In re Kinney, 51 B.R. 840, 845-46 (Bankr. C.D. Cal. 1985) (considering eight bankruptcies filed by five different adult family members to thwart efforts to foreclose on a jointly owned property as a ‘scheme’ of bad faith acts by one entity).
Debtor seeks to avoid this conclusion by arguing that U.S. Bank lacked standing to bring the motion because U.S. Bank does not have an interest in the subject loan. But the Bankruptcy Court specifically addressed and rejected this contention in the February 15, 2019 Order. In this respect, the Bankruptcy Court found that U.S. Bank is the holder of the subject loan and has the requisite standing to proceed in requesting in rem relief from the automatic stay based on the instruments attached to U.S. Bank's motion. A review of U.S. Bank's motion for in rem relief from the automatic stay confirms the Bankruptcy Court's finding. U.S. Bank attached a Notice of Assignment of Deed of Trust to its motion which transferred the Deed of Trust for the subject loan from Union Federal Bank of Indianapolis to U.S. Bank on March 29, 2005. Accordingly, U.S. Bank, as the holder of the subject loan, has standing to bring its motion for in rem relief from the automatic stay, and the Bankruptcy Court did not err in so finding.
In the § 362 stay relief context, a movant must show that it has an interest in the relevant note, that it has been injured by debtor's conduct, and that the movant has the right to enforce the note. See In re Wilhelm, 407 B.R. 392, 398 (Bankr. D. Idaho 2009). U.S. Bank has met these standing requirements via the executed documents attached to its motion, namely the subject note, the deed of trust, and the notice of assignment of the deed of trust.
See In re Askri, No. 18-13031-KHK, Dkt. 31, at 35 (Bankr. E.D. Va. Nov. 14, 2018).
Debtor also argues that his wife, a co-obligor on the subject loan, did not receive proper notice of the motion for in rem relief from the automatic stay. In this respect, Debtor's argument also fails. First, Debtor's wife was specifically named in U.S. Bank's motion as the co-obligor on the subject loan, and the certificate of service indicates that notice was mailed to Debtor's wife at the Subject Property in addition to the notice mailed to Debtor.
Moreover, § 362(d)(4) specifically provides that a court may grant in rem relief with respect to the stay of an act against real property , and the provision does not limit that relief to relief only against the debtor's interest in the subject real property. In re Montalvo , 416 B.R. 381, 387 (Bankr. E.D.N.Y. 2009). In this respect, in rem relief provides relief as to all entities claiming to hold an interest in the subject property, regardless of whether they sought bankruptcy protection. Id. To hold otherwise would eviscerate the purpose of § 362(d)(4) —namely to prevent abuse of the bankruptcy system by serial filers seeking to delay and hinder foreclosure. With respect to any due process concerns, of which there are none here, § 362(d)(4) provides for a court in a subsequent case to grant relief from a prior in rem order.
Other sections of the Bankruptcy Code, including within Section 362, speak to acts affecting the debtor as opposed to the debtor's interest in particular property. See, e.g., 11 U.S.C. § 362(c)(3)(A) (addressing a second individual or joint case filed within one year following the dismissal of a prior case); 11 U.S.C. § 1301 (addressing the stay of acts against a non-filing co-obligor). It is well-settled that when Congress intended to differentiate acts affecting the debtor from acts affecting property in which the debtor owned an interest, it did so. See Field v. Mans , 516 U.S. 59, 67, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995) ("[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion").
See 11 U.S.C. § 362(d)(4) ("If recorded in compliance with applicable State laws governing notices of interests or liens in real property, an order entered under paragraph (4) shall be binding in any other case under this title purporting to affect such real property filed not later than 2 years after the date of the entry of such order by the court, except that a debtor in a subsequent case under this title may move for relief from such order based upon changed circumstances or for good cause shown, after notice and a hearing. ") (emphasis added).
Accordingly,
It is hereby ORDERED that Debtor's appeal of the Bankruptcy Court's February 15, 2019 Order (Dkt. 1), which granted U.S. Bank's motion for in rem relief from the automatic stay on the Subject Property, is DENIED . The Bankruptcy Court's February 15, 2019 Order is AFFIRMED .
Should Debtor wish to appeal this Order, he must do so by filing a notice of appeal with the Clerk of this court within thirty (30) days after entry of this Order, pursuant to Rules 4, 5 and 6 Fed. R. App. P. Failure to file a timely notice of appeal waives the right to appeal.