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Christopher v. Bank of Am.

Florida Court of Appeals, Second District
Aug 4, 2021
323 So. 3d 838 (Fla. Dist. Ct. App. 2021)

Opinion

No. 2D20-198

08-04-2021

Ryan CHRISTOPHER, Appellant, v. BANK OF AMERICA, N.A., successor by merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP; Villa Vistana Homeowners Association, Inc.; and American Technology & Services, Inc., Appellees.

Liam Kelly and Amanda L. Lundergan of Lundergan Legal, LLC, Royal Palm Beach, for Appellant. Jason Joseph of Tromberg Law Group, P.A., Boca Raton, for Appellee Bank of America, N.A. Jason Hamilton Mikes and Anna Danielle Carter of Hamilton Mikes, P.A., Bonita Springs, for Appellee Villa Vistana Homeowners' Association, Inc. Mark L. Shapiro of Marc L. Shapiro, P.A., Naples, for Appellee American Technology & Services, Inc.


Liam Kelly and Amanda L. Lundergan of Lundergan Legal, LLC, Royal Palm Beach, for Appellant.

Jason Joseph of Tromberg Law Group, P.A., Boca Raton, for Appellee Bank of America, N.A.

Jason Hamilton Mikes and Anna Danielle Carter of Hamilton Mikes, P.A., Bonita Springs, for Appellee Villa Vistana Homeowners' Association, Inc.

Mark L. Shapiro of Marc L. Shapiro, P.A., Naples, for Appellee American Technology & Services, Inc.

CASANUEVA, Judge.

Ryan Christopher appeals a circuit court order declining to vacate the foreclosure sale of real property owned by him. He contends that the filing of his bankruptcy petition in the United States Bankruptcy Court for the Middle District of Florida resulted in an automatic stay that barred the sale of his real property. We conclude that the circuit court did not have jurisdiction to determine that the automatic stay did not operate to bar the sale of the real property. We therefore reverse.

I. PROCEDURAL HISTORY

In December 2012, Bank of America filed its foreclosure complaint against Mr. Christopher, and a final judgment of foreclosure was entered on February 10, 2015. However, Mr. Christopher has filed a bankruptcy petition on the eve of each scheduled foreclosure sale involving the property at issue. A notice of foreclosure sale was filed, noting that the property would be sold on March 9, 2015. On March 6, 2015, Mr. Christopher filed a notice of suggestion of bankruptcy. After the bankruptcy case was dismissed, the foreclosure sale was rescheduled for June 27, 2016. On May 18, 2016, Mr. Christopher again filed a notice of suggestion of bankruptcy. After the second bankruptcy case was dismissed, the foreclosure sale was thereafter rescheduled for February 23, 2017. On that same date, a third suggestion of bankruptcy was filed. After this bankruptcy case was dismissed, the foreclosure sale was thereafter rescheduled for August 17, 2017. On August 16, 2017, Mr. Christopher filed a fourth suggestion of bankruptcy. This fourth bankruptcy case was dismissed, the foreclosure sale was rescheduled for July 11, 2019, and the property was sold on that day. However, unbeknown to the parties, Mr. Christopher had filed a fifth bankruptcy action on July 10, 2019. After discovering the fifth bankruptcy pleading, Bank of America ("the Bank") filed a motion to vacate the foreclosure sale, requesting that the certificate of sale be set aside. In its motion, the Bank noted that, pursuant to 11 U.S.C. § 362(a)(2) (2019), an automatic stay of the proceeding was in place at the time of the foreclosure sale. Villa Vistana Homeowners Association and the third-party purchaser objected to the motion to vacate.

The Bank's motion was referred to a general magistrate, who issued a recommended order denying the Bank's motion to vacate the foreclosure sale and certificate of title. The Bank filed exceptions to the recommended order, which were denied by the circuit court. In its order, the circuit court approved the order of the general magistrate.

II. DISCUSSION

The general magistrate's recommended order states that Mr. Christopher "is ineligible to be a debtor, as a matter of law, under § 109(g)(1) since Defendant's fifth bankruptcy petition was filed 64 days after the dismissal of his fourth bankruptcy petition, and Defendant's prior bankruptcy cases were dismissed for Defendant's willful failure ... to abide by orders of the court, or to appear before the court in proper prosecution of the bankruptcy cases."

Although this conclusion may be correct, the issue is whether the trial court possessed the jurisdiction to make such a ruling. We conclude that the trial court lacked jurisdiction. Our analytical voyage will navigate several seas, including the waters of bankruptcy law, and, hopefully, will make proper landfall.

An automatic stay issues pursuant to federal statutory authority. The Bankruptcy Code provides in pertinent part as follows:

(a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, ... operates as a stay, applicable to all entities, of ––

(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;

....

(2) any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate; ....

11 U.S.C. § 362 (2019).

What then is the operational impact of the automatic stay? The answer is clear: "Upon the commencement of a bankruptcy case, an automatic stay arises as a matter of law." In re Dorsey , 373 B.R. 528, 530 (Bankr. N.D. Ohio 2007) (citing 11 U.S.C. § 362(a) ). "The automatic stay operates to enjoin a creditor from attempting to possess or to exercise control over property of a bankruptcy estate once a petition has been filed." In re Striblin , 349 B.R. 301, 303 (Bankr. M.D. Fla. 2006) (citing 11 U.S.C. § 362 (2006) ). "The scope of the stay is broad and will operate to enjoin essentially any act, whether the commencement or continuation thereof, against a debtor to recover on a prepetition claim." In re Dorsey , 373 B.R. at 530 (citing In re Jones , 348 B.R. 715 (Bankr. E.D. Va. 2006) ).

Mr. Christopher, having filed a petition for bankruptcy relief pursuant to Chapter 7, asserted his entitlement to stay the pending state foreclosure sale. Now, the waters become turbulent. On appeal, Villa Vistana Homeowners Association asserts that Mr. Christopher was not entitled to the benefit of the automatic stay and the circuit court possessed sufficient jurisdiction to make that determination. To support it position, Villa Vistana advances the bankruptcy case of In re Glass and, more particularly, the dispositive ruling issued by then Chief Judge Proctor. In re Glass , 240 B.R. 782 (Bankr. M.D. Fla. 1999).

The issue before the court in that case was whether the automatic stay had been violated so as to support the imposition of sanctions upon the violator. Id. at 783. To resolve the issue, the court examined principles of bankruptcy court jurisdiction. Initially, the court noted that "[s]everal courts have held that bankruptcy courts have exclusive jurisdiction to determine questions involving the automatic stay." Id. at 786 (citing In re Rainwater , 233 B.R. 126 (Bankr. N.D. Ala. 1999), vacated on other grounds , Bryan v. Rainwater , 254 B.R. 273, 279 (N.D. Ala. 2000) ). Chief Judge Proctor agreed with the holdings of the Second and Sixth Circuits and ruled that "[t]he court in which the litigation claimed to be stayed is pending has jurisdiction to determine not only its own jurisdiction but also the more precise question whether the proceeding pending before it is subject to the automatic stay." Id. at 787 (first quoting In re Baldwin–United Corp. Litig. , 765 F.2d 343, 347 (2d Cir. 1985) ; and then quoting Nat'l Lab. Rels. Bd. v. Edward Cooper Painting, Inc. , 804 F.2d 934, 939 (6th Cir. 1986) ). To this extent, the application "of the automatic stay falls concurrently within the purview of the bankruptcy court and that of the state court." Id.

We agree with this reasoning and conclusion. Therefore, we hold that the circuit court possessed limited jurisdiction to answer a discrete inquiry—whether its pending proceeding was subject to the automatic stay. Its limited focus is upon the pending proceeding and not upon whether the debtor, as here, is legally entitled to the benefit of the automatic stay. Or to phrase the issue differently: Is the foreclosure sale order subject to the bankruptcy automatic stay?

Further support for our conclusion is found in the statutory language of 11 U.S.C. § 362(d) (2019), which provides:

On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay-- (1) for cause, including the lack of adequate protection of an interest in property of such party in interest; (2) with respect to a stay of an act against property under subsection (a) of this section, if

(A) the debtor does not have an equity in such property; and

(B) such property is not necessary to an effective reorganization; ....

This section is a clear indication that in those instances where "the automatic stay does apply to a given action, only the bankruptcy court may grant relief from its terms." In re Glass , 240 B.R. at 787 n.5.

We hold that the circuit court exceeded its limited power afforded by concurrent jurisdiction by determining that Mr. Christopher was not entitled to the protection of the automatic stay. Its reach was only to determine whether the proceeding was subject to the reach of the automatic stay. The foreclosure proceeding was subject to the stay.

Leaving the jurisdiction part, we must set course for this voyage's final port of call. An action taken in violation of the automatic stay has been determined to be "void and without effect." In re Striblin , 349 B.R. 301, 303 (Bankr. M.D. Fla. 2006) (quoting Borg-Warner Acceptance Corp. v. Hall , 685 F.2d 1306, 1308 (11th Cir. 1982). Accordingly, the circuit court should have granted the Bank's motion to vacate the foreclosure sale.

III. CONCLUSION

We reverse the trial court's order and remand for further proceedings.

NORTHCUTT and STARGEL, JJ., Concur.


Summaries of

Christopher v. Bank of Am.

Florida Court of Appeals, Second District
Aug 4, 2021
323 So. 3d 838 (Fla. Dist. Ct. App. 2021)
Case details for

Christopher v. Bank of Am.

Case Details

Full title:RYAN CHRISTOPHER, Appellant, v. BANK OF AMERICA, N.A., successor by merger…

Court:Florida Court of Appeals, Second District

Date published: Aug 4, 2021

Citations

323 So. 3d 838 (Fla. Dist. Ct. App. 2021)