Opinion
6:22-bk-264-TPG
09-01-2022
In re Christine Lynne Quattry-Peacock, Debtor.
ORDER GRANTING WELLS FARGO BANK, N.A.'S MOTION TO DISMISS THE DEBTOR'S CHAPTER 13 CASE WITH TWO YEAR INJUNCTION
TIFFANY P. GEYER, UNITED STATES BANKRUPTCY JUDGE.
This case came on for hearing on July 14, 2022, at 2:00 p.m. (Doc. No. 110) upon Wells Fargo Bank, N.A.'s ("Wells Fargo") motion to dismiss the Debtor's Chapter 13 case with a two year injunction prohibiting the Debtor from filing another bankruptcy case (the "Motion") (Doc. No. 93). Creditor Educational Credit Management Corporation ("ECMC") joined in the Motion. (Doc. No. 103.) The hearing was attended by the Debtor, by Stuart Ferderer as attorney for the Chapter 13 Trustee, by Patrick Hruby on behalf of Wells Fargo Bank, and by John Eaton on behalf of ECMC. (Doc. No. 110.) Upon consideration of the arguments of the Debtor, counsel, the law, the case docket and taking judicial notice of the record and the Debtor's previous bankruptcy filings in this Court, and being otherwise advised in the premises, the Court grants the Motion; the Debtor's case is dismissed with an injunction prohibiting the Debtor from filing any further bankruptcy case under any chapter of Title 11 for two years from the date of this order.
A court may take judicial notice of its own records. ITT Rayonier Inc. v. United States, 651 F.2d 343, 345 n.2 (5th Cir. Unit B July 20, 1981). The decisions of the United States Court of Appeals for the Fifth Circuit issued on or before September 30, 1981, are binding precedent in the Eleventh Circuit. Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th Cir. 1981).
At the hearing, the Court announced that it would enter an injunction for a period of 180 days. (Doc. No. 110). However, upon further review of the docket and the history of the Debtor's filings in her several bankruptcy cases, the Court will extend this time for the full two-year period requested by Wells Fargo and ECMC. In re Parson, 2021 WL 4483124, at *9 (Bankr. N.D. Tex. Sept. 30, 2021) ("[T]he length of time for which [a] debtor is barred from refiling is committed to the discretion of the bankruptcy court."). The Court is of the opinion that a 180-day injunction is insufficient to deter the Debtor from seeking to employ Title 11 for improper purposes as she has done in the three Chapter 13 cases she has filed to date.
I. PROCEDURAL HISTORY AND FINDINGS OF FACT
The Debtor has filed three Chapter 13 bankruptcy cases. She filed her first Chapter 13 case on October 13, 2015, but the case was dismissed on February 28, 2020, for failure to make plan payments. (Case No. 6:15-bk-8657-KSJ, the "2015 Case".) During the pendency of the 2015 Case, she filed a second Chapter 13 case on November 12, 2019, which was dismissed on December 30, 2019, for failing to file certain required information (Case No. 6:19-bk-7422-LVV, Doc. No. 15, the "2019 Case".) The Debtor filed the third, instant Chapter 13 case on January 26, 2022 (the "2022 Case"). (Doc. No. 1.)
The 2019 Case was also subject to dismissal due to the pendency of the 2015 Case. Freshman v. Atkins, 269 U.S. 121, 122, 46 S.Ct. 41, 41 (1925) (the pendency of the first bankruptcy case precluded a consideration of the second bankruptcy case respecting the same debts); In re Weeks, 134 B.R. 972, 974 (Bankr. M.D. Fla. 1991) (dismissing subsequent, simultaneous Chapter 7 case filed by same debtors and including same annuity listed as an exempt asset in the first Chapter 7 case for cause under 11 U.S.C. § 707(a) because, among other reasons, "to retain the case would not serve any legitimate purpose.").
The history of the bankruptcy cases is tortured, largely because of the Debtor's continued attempts to use this forum for an improper purpose, namely, a collateral attack on a judgment obtained by Wells Fargo (the "Judgment"). The Judgment re-establishes a lost note and authorizes Wells Fargo to sell the Debtor's property at 3876 Villa Rose Lane, Orlando, FL 32808 (the "Property"). (Doc. No. 16-1.) The Judgment was entered seven years ago on August 27, 2015, by the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida (the "State Court"). (Id.) The Debtor filed the 2015 Case on the day the Property was scheduled to be sold. (Doc. No. 16-2 at 9.)
The Debtor did not include payments to Wells Fargo regarding the Judgment in her Chapter 13 plan in the 2015 Case. (Case No.: 6:15-bk-8657-KSJ, Doc. No. 18.) On this basis, Wells Fargo moved to confirm that the automatic stay was terminated and on May 18, 2017, this Court entered an order granting the motion. (Case No.: 6:15-bk-8657-KSJ, Doc. No. 118.) With no stay in place, Wells Fargo could pursue the sale of the Property and the Debtor could pursue an appeal of the Judgment, which she did. (Doc. No. 93 at ¶ 6.) However, the Florida Fifth District Court of Appeal affirmed the Judgment in Wells Fargo's favor. (Id.)
Wells Fargo again scheduled the Property for sale, on November 12, 2019. (Doc. No. 16-2 at 5.) The Debtor filed the 2019 Case that same day (while her 2015 Case was still pending), attempting to thwart the Property's sale and succeeded. (Doc. No. 16 at ¶ 8; Doc. No. 16-2 at 5.) So, the sale of the Property had now been cancelled twice.
After the 2019 Case was dismissed, the Debtor moved to reimpose the automatic stay in her 2015 Case (Case No.: 6:15-bk-8657-KSJ, Doc. No. 163), seeking to further protect the Property from sale, which the Court denied (Case No.: 6:15-bk-8657-KSJ, Doc. No. 168). Ultimately, as stated above, the Debtor's 2015 Case was dismissed on February 28, 2020, because the Debtor failed to make plan payments. (Case No.: 6:15-bk-8657-KSJ, Doc. No. 166.) Wells Fargo rescheduled the foreclosure sale for a third time, on February 2, 2022, but the About a month into the 2022 Case, on February 28, 2022, Wells Fargo filed a "Motion for Relief from the Automatic Stay and Request for Order Granting a Two-Year Bar under §362(d)(4)(B)" (the "Stay Relief Motion"). (Doc. No. 16.) In the Stay Relief Motion, Wells Fargo argued that the Debtor filed each of her three bankruptcy cases to delay, hinder, and defraud Wells Fargo, noting that the foreclosure sale of the Property had been cancelled three times because of the Debtor's cases. (Id. at ¶¶ 4, 6-10.) Indeed, Wells Fargo's unsatisfied Judgment is now seven years old, and the Debtor has made little to no effort to pay the Judgment here. On April 28, 2022, following a hearing, this Court entered an order granting the Stay Relief Motion (the "Stay Relief Order"), in which it found "that the Debtor's three bankruptcy filings . . . were part of a scheme intended to delay, hinder and defraud Secured Creditor by filing multiple cases affecting the Property." (Doc. No. 37 at 1-2.) The Court terminated the automatic stay regarding the Property and permitted Wells Fargo to pursue in rem relief including "through judgment, sale, certificate of title, and possession, a foreclosure against the Property . . . ." (Id. at 2.) In addition, the Debtor was
The hearing was conducted by the Honorable Lori V. Vaughan. (Doc. No. 31.) On May 3, 2022, the instant case was reassigned to the Honorable Tiffany Geyer.
Each reference to "Secured Creditor" in this order refers to Wells Fargo.
further enjoined from seeking a bankruptcy stay on the above-referenced property for a period of two years from the entry of this Order. This Order shall be binding in any other case under this title purporting to affect said property filed not later than two years after the date of the entry of such order. Any attempt by the Debtor, non-filing Co-Debtor or any other party to invoke the Automatic Stay provisions of 11 U.S.C. §362 on the above-referenced property is hereby annulled until two years from the date of entry of this Order.(Id. at 2-3.) On May 25, 2022, the Debtor filed an amended motion to set aside the Stay Relief Order (Doc. No. 67), which the Court denied on July 6, 2022, after a hearing (Doc. Nos. 89, 101).
Now, Wells Fargo moves to dismiss the Debtor's 2022 Case and to enjoin the Debtor from filing any other case for two years, arguing that the Stay Relief Order "alone will likely be insufficient to complete a sale in the [State Court] and does not prevent Debtor from continuing to raise the same baseless arguments over and over again in this Court, just in different formats, causing Secured Creditor to continue to incur additional costs and wasting judicial resources." (Doc. No. 93 at ¶ 17.) Wells Fargo further correctly notes that in the Debtor's 2015 Case, this Court found that the Debtor confirmed no plan or even filed a plan that could be confirmed. (Case No.: 6:15-bk-8657-KSJ, Doc. No. 172.) A review of the Debtor's current Chapter 13 plan shows that the Debtor has proposed to pay little to creditors. (Doc. No. 4.) Creditor ECMC joins in Wells Fargo's arguments for dismissal of the Debtor's case with a two year injunction prohibiting the Debtor from filing future bankruptcy cases. (Doc. No. 103.) As detailed in a separate order entered contemporaneously with this order (Doc. No. 117), ECMC has a claim against the Debtor for federal student loans.
II. ANALYSIS AND CONCLUSIONS OF LAW
The Court considers these factors in determining whether an injunction against future filings is necessary: (1) the debtor's litigation history, specifically "whether it entailed vexatious, harassing, or duplicative lawsuits;" (2) the debtor's motive in pursuing the litigation; (3) whether the debtor is proceeding pro se; "(4) whether the [debtor] has caused needless expense to other parties or has posed an unnecessary burden on the court and its personnel; and (5) whether other sanctions would be adequate to protect the courts and other parties." In re Diaz, No. 8:14-BK-01237-CPM, 2014 WL 12936894, at *2 (Bankr. M.D. Fla. July 25, 2014) (citing Martin-Trigona v. Shaw, 986 F.2d 1384, 1386-87 (11th Cir. 1993)). An analysis of each factor supports the dismissal of the Debtor's case with an injunction against future filings. In lifting the automatic stay to permit Wells Fargo to pursue in rem relief against the Property, this Court previously concluded that the Debtor's three bankruptcy cases were filed as part of a scheme intended to delay, hinder, and defraud Wells Fargo. (Doc. No. 37 at 1-2.) But lifting the stay ultimately was not sufficient to permit Wells Fargo to conduct a sale of the Property; each time a sale was set to occur, the Debtor filed another Chapter 13 case resulting in the cancellation of the sale and renewed improper attempts to attack the underlying Judgment. The only action that can prevent this from happening again is the injunction Wells Fargo seeks preventing the Debtor from filing another bankruptcy case.
The Debtor's motives in filing her successive Chapter 13 cases are improper. Certainly, a debtor is welcome to challenge creditor claims in a Chapter 13 case, but here, the Debtor repeatedly brings challenges this Court is powerless to address (Wells Fargo) or which are devoid of merit (ECMC). See Doc. No. 117. Regarding Wells Fargo, the Debtor has repeatedly tried to attack the Judgment in this Court, and this Court has repeatedly advised the Debtor that the Rooker-Feldman doctrine prevents it from altering or undoing the Judgment. (Doc. Nos. 64, 67, 88, 101.) The Debtor has ignored the Court's admonishments and has continued to file materials in this Court seeking to attack the Judgment. For example, at the hearing on June 22, 2022, the Debtor tendered for this Court's review a USB drive containing 1,796 pages of materials (Doc. No. 91; Doc. No. 116) relating to the Judgment, including hundreds of pages of transcripts from a hearing conducted by the State Court in 2015 leading up to the entry of the Judgment. (Doc. No. 116, Files 1-33). But, as explained to the Debtor during several hearings, this Court cannot look behind the Judgment. See also fn.6, supra. None of the materials supplied by the Debtor provide any basis for her to attack the Judgment here.
"Under Rooker-Feldman, a losing party in state court is barred from seeking what in substance would be appellate review of the state court judgment in a United States district court, based on the losing party's claim that the state judgment itself violates the loser's federal rights." In re Hazan, 10 F.4th 1244, 1250 (11th Cir. 2021); Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir. 2009) (explaining the Rooker-Feldman doctrine that "federal district courts cannot review state court final judgments because that task is reserved for state appellate courts or, as a last resort, the United States Supreme Court."); In Re Bertram, 746 Fed.Appx. 943, 948 (11th Cir. 2018) (affirming bankruptcy court's decision abstaining from reviewing issues raised in state court proceeding resulting in final judgment of foreclosure as "a federal district court may not review and reverse a state court civil judgment, because only the United States Supreme Court has appellate jurisdiction over judgments of state courts in civil cases."). In the Eleventh Circuit, "Unpublished opinions are not considered binding precedent, but they may be cited as persuasive authority." 11th Cir. R. 36-2.
The Court carefully reviewed the full contents of the USB drive in order to determine whether the documents tended to demonstrate any basis that this Court should reconsider its rulings with respect to Wells Fargo, or its decision to dismiss the Debtor's 2022 Case. The Court's review of the documents only further demonstrated that the Court's orders and decisions are appropriate; the documents supplied cannot be used by the Debtor to attack Wells Fargo's claim in this case because the claim is based on the Judgment.
The Debtor's repeated filings, raising the same issues and asking the Court to reconsider every ruling, have placed a significant burden on Wells Fargo, ECMC, this Court, its personnel, and the other parties in interest including the office of the Chapter 13 Trustee. Nothing short of prohibiting the Debtor from filing yet another bankruptcy case would deter her. Insofar as this Court has previously entered the Stay Relief Order awarding Wells Fargo relief from stay prospectively for two years, the Court will now also dismiss this case with an injunction prohibiting the Debtor from filing another bankruptcy case for two years, which should afford Wells Fargo the time needed to pursue a sale of the Property without concern about the Debtor attempting to again thwart the sale before it can occur.
In the 2022 Case alone, the Debtor filed a 208 page Motion to Set Aside Order on Motion for Relief from Stay of Wells Fargo and to Reinstate the Automatic Stay (Doc. No. 64), which she then amended (Doc. No. 67), a 23 page motion for reconsideration of the order overruling her objection to ECMC's claim (Doc. No. 96), which she then also amended (Doc. No. 107). Each was denied. (Doc. Nos. 65, 101, 110.) On July 14, 2022, the Debtor filed an 88 page motion for reconsideration of the order overruling her objection to Wells Fargo's claim. (Doc. No. 109.) Following the July 14 hearing, and before the instant order even issued, the Debtor filed a Motion for Reconsideration of Dismissal and Renewed Amended Motion for Reconsideration of Objection to Overruled WFB Proof of Claim 1 and 4 (Doc. No. 112) with 39 pages of exhibits (Doc. No. 113).
III. CONCLUSION
Accordingly, it is ORDERED that the Motion (Doc. No. 93) is GRANTED as follows:
1. This case is DISMISSED WITH PREJUDICE;
2. Under 11 U.S.C. §§ 105(a) and 1307(c)(1), and Federal Rule of Bankruptcy Procedure 1017, the Debtor is ENJOINED, BARRED, and PROHIBITED from commencing any bankruptcy case petition in this Court for TWO YEARS FROM THE DATE OF THIS ORDER. No stay shall go into effect under 11 U.S.C. §§ 362(a), 1201, or 1301 in any bankruptcy case filed by the Debtor during the above stated prohibited period. No stay shall go into effect under 11 U.S.C. §§ 362(a), 1201, or 1301, in any bankruptcy case filed by any transferee of the Debtor during the above stated prohibited period as to any action upon or against property transferred by the Debtor; and
3. The Clerk of the Bankruptcy Court is directed not to accept any future filings from the Debtor before the expiration of the two year period commencing on the date of the entry of this order.
The Clerk is directed to serve a copy of this order on all interested parties.