Bankruptcy Adversary No.: 10-216 Bankruptcy Case No.: 10-14152
The opinion of the court was delivered by: Richard D. Bennett United States District Judge
This case is before this Court on appeal of two orders of the United States Bankruptcy Court for the District of Maryland (the "Bankruptcy Court"): (1) the Bankruptcy Court's Memorandum Order of September 30, 2011, granting motions to dismiss the adversary proceeding initiated by Appellant Barbara Dang ("Appellant") for failure to state claims upon which relief can be granted; and (2) the Bankruptcy's Court subsequent Order Denying Motion to Amend or Vacate the September 30, 2011, order of dismissal. These orders resulted in the dismissal of the Appellant's adversary proceeding against Appellees Bank of America, N.A., BAC Home Loans Servicing L.P., and CIG HIF 1st Lien Mortgage (collectively, "Bank of America"), as well as Northwest Trustee Services ("Northwest;" together with Bank of America, "Appellees"). The Appellant, proceeding pro se, now challenges the Bankruptcy Court's dismissal on three grounds: (1) that the Bankruptcy Court erred in assuming jurisdiction over the adversary proceeding; (2) that the Bankruptcy Court lacked authority to rule on the adversary proceeding; and (3) that the Bankruptcy Court erred in granting relief to CIG HFI 1st Lien Mortgage.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 158(a)(1), which extends jurisdiction to the United States District Courts to hear appeals from the final judgments, orders, and decrees of the United States Bankruptcy Courts. The parties have fully briefed the issues, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2011). For the reasons stated below, this Court treats the Bankruptcy Court's order of dismissal as proposed findings of fact and conclusions of law, and ADOPTS those findings and conclusions. Accordingly, this Court GRANTS the Appellees' motions to dismiss the Appellant's adversary proceeding.
BACKGROUND AND PROCEDURAL HISTORY
This pro se Appellant is no stranger to the Bankruptcy Court. Indeed, between May 8, 2009, and March 1, 2010, she filed for bankruptcy three separate times in the District of Maryland. The following statement of facts begins with a summary of the Appellant's history in the Bankruptcy Court. It then focuses on the adversary proceeding at issue in this appeal.
I.The Appellant's Chapter 7 and Chapter 13 Petitions
On September 20, 2006, the Appellant Barbara Dang ("Appellant") executed a promissory note and deed of trust in the amount of $240,000. The deed of trust is secured by a property known as 718 Lassen Street, Tulare, California 93275 ("the Tulare Property").*fn1
The promissory note and deed of trust were executed in favor of Bank of America N.A. ("Bank of America") and serviced by BAC Home Loans Servicing L.P. ("BAC"). On December 8, 2008, after both the note and deed of trust had fallen into default, Bank of America appointed Northwest Trustee Services ("Northwest") as substitute trustee to conduct a foreclosure sale pursuant to the deed of trust.
The Appellant initiated her first of several bankruptcy proceedings on
May 8, 2009, thereby receiving the protection of bankruptcy's
automatic stay, which halted the foreclosure proceeding.*fn2
The Appellant filed a voluntary petition under Chapter 7 of
the Bankruptcy Code, 11 U.S.C. §§ 701, et seq.*fn3 On
May 28, 2009, the Appellant filed a summary of schedules and
declaration, in which she identified Bank of America as a secured
creditor regarding the Tulare Property and confirmed that she did not
dispute the debt owed to Bank of America. Summary of Schedules,
Bankruptcy No. 09-18291, ECF No. 21. In a Chapter 7 Statement of
Intention, the Appellant confirmed that she would retain the Tulare
Property and reaffirm the debt. Statement of Intention, Bankruptcy No.
09-18291, ECF No. 30.
On August 31, 2009, the Bankruptcy Court issued an order to lift the automatic stay imposed by 11 U.S.C. § 362(a) so as to enable Bank of America "to exercise its rights under state law as to" the Tulare Property. See Order Lifting Automatic Stay, Bankruptcy No. 09-18291, ECF No. 53. On that same day, the Appellant was granted a discharge. See Discharge of Debtor, Bankruptcy No. 09-18291, ECF No. 54. Notably, the discharge did not affect Bank of America's secured interest in the Tulare Property. This fact is evident from the Bankruptcy Court's lift-stay order, which permitted Bank of America to exercise its state law rights, including the right to foreclose, as to the Tulare Property, see Order Lifting Automatic Stay.
The Appellant's next foray into bankruptcy came on October 16, 2009, when she filed a voluntary petition under Chapter 13 of the Bankruptcy Code.*fn4 The Appellant's Chapter 13 petition resulted in a second stay of any foreclosure proceedings. On November 3 and 10, 2009, the Appellant filed her summary of schedules, noting in Schedules A and D that Bank of America was a secured creditor regarding the Tulare Property and that she did not dispute the debt. See Schedules A-J & Amended Summary of Schedules, Bankruptcy No. 09-29846, ECF Nos. 19, 30. On January 22, 2010, the Bankruptcy Court dismissed the Chapter 13 petition because the Appellant had failed to make payments to the Chapter 13 Trustee, in violation of section 1326 of the Bankruptcy Code. See Order Granting Motion to Dismiss Case, Bankruptcy No. 09-29846, ECF No. 55. It is worth noting here, too, that the Appellant was granted no discharge relating to Bank of America's secured interest in the Tulare Property. Rather, the Chapter 13 case was dismissed.
The Appellant filed her third bankruptcy petition on March 1, 2010, under Chapter 13 of the Bankruptcy Code. This petition resulted in a third stay of foreclosure proceedings pursuant to 11 U.S.C. § 362(a). In the Appellant's schedules, she identified the Tulare Property, acknowledged that Bank of America had a secured claim relating to that property, and for the first time designated that claim as disputed, despite having listed it as undisputed in her previous two filings. See Summary of Schedules, Bankruptcy No. 10-14152, ECF No. 1-1. On September 15, 2010, BAC filed a proof of claim in the Chapter 13 proceeding. The Appellant objected to that proof of claim on September 20, 2010. Objection to Claim Number 5, Bankruptcy No. 10-14152, ECF No. 99.
On August 12, 2010, the Appellant's Chapter 13 Plan was confirmed. See Order Confirming Chapter 13 Plan, Bankruptcy No. 10-14152, ECF No. 81. Over one year later, on December 20, 2011, the Chapter 13 Trustee submitted a Final Report and Account, certifying that the estate had been fully administered. See Chapter 13 Trustee Final Report and Account, Bankruptcy No. 10-14152, ECF No. 120. The report identified BAC Home Loans Servicing LP ("BAC") as a secured creditor with regard to the Tulare Property and listed its claim of $242,370.23 as "allowed." See id.
II.The Appellant's Adversary Proceeding Against the Appellees
On April 2, 2010, before the Appellant's Chapter 13 plan was confirmed, the Appellant filed a complaint with ten causes of action against Bank of America, BAC, CIG HIF 1st Lien Mortgage ("CIG"), and Northwest (collectively, "Appellees"). Adversary Case 10-216, Bankruptcy No. 10-14152, ECF No. 42. The Appellant's complaint was docketed as "Adversary Proceeding 10-216" in the Bankruptcy Court, thereby initiating the adversary proceeding (the "Adversary Proceeding") at issue in this appeal.*fn5 On May 14, 2010, the Appellant filed an Amended Complaint with eight causes of action: (1) fraudulent misrepresentation; (2) fraud; (3) wrongful foreclosure; (4) bad faith and tortious breach of contract; (5) unlawful entry; (6) intentional infliction of emotional distress; (7) violation of Real Estate Settlement and Procedures Act ("RESPA"); and (8) violation of the Truth in Lending Act ("TILA"). Amended Complaint, Adversary Case 10-216, ECF No. 16. In both the original Complaint and the Amended Complaint, the Appellant included, as required under Bankruptcy Rule 7008, the following statement: "This proceeding is a core proceeding as it affects the administration of the estate of the bankruptcy case that is before this court pursuant to 28 USC 157(b)(2)(f)."*fn6
On June 10 and 11, 2010, the Appellees filed Motions to Dismiss the Adversary
Proceeding for, among other arguments, failure to set forth viable claims for relief.*fn7
Thereafter, the Appellant filed a Second Amended Complaint. The Appellant's Second Amended Complaint set forth the same eight causes of action: fraudulent misrepresentation; (2) fraud; (3) wrongful foreclosure; (4) bad faith and tortious breach of contract; (5) unlawful entry; (6) intentional infliction of emotional distress; (7) violation of RESPA; and(8) violation of TILA. Second Am. Compl., Adversary Case 10-216, ECF No. 37. For these causes of action, the Appellant sought various forms of relief, including an order enjoining the Appellees' foreclosure sale and deeming Bank of America's deed of trust void; compensatory and punitive damages; and statutory sanctions. Id. Paragraph 3 of the Second Amended Complaint, like the two previous iterations of the complaint, contained the following assertion: "This proceeding is a core proceeding as it affects the administration of the estate of the bankruptcy case that is before this court pursuant to 28 USC 157(b)(2)(f)." Id. ¶ 3.
The Bankruptcy Court held a hearing on the pending motions to dismiss the Appellant's Adversary Proceeding on August 25, 2010. During that hearing, the Appellant did not challenge the Bankruptcy Court's jurisdiction over the Adversary Proceeding or authority to decide the case. The Bankruptcy Court ultimately withheld judgment on the motions to dismiss and ordered the Appellees to respond to the Appellant's Second Amended Complaint. See Order Striking, Adversary Case 10-216, ECF No. 86. Then the Appellees, in two separate motions, moved to dismiss the Second Amended Complaint. See Northwest's Mot. to Dismiss, Adversary Case 10-216, ECF No. 91; BAC, Bank of America, and CIG's Mot. to Dismiss, Adversary Case 10-216, ECF No. 94. The Bankruptcy Court addressed the pending motions to dismiss at another hearing on October 27, 2010, during which time the Appellant did not challenge the jurisdiction or authority of the Bankruptcy Court. See ECF No. 95.
Finally, on September 30, 2011, the Bankruptcy Court entered a Memorandum Order granting the Appellees' motions to dismiss. See Mem. Order Granting Mots. to Dismiss, Adversary Case 10-216, ECF No. 129. Specifically, the Bankruptcy Court held that the Appellant failed to state claims upon which relief could be granted; that several of the Appellant's claims were barred by applicable statutes of limitation; and that all of her claims were barred by judicial estoppel, because the Appellant had not listed the causes of action as assets in her previous bankruptcy cases.*fn8
On October 11, 2011, the Appellant filed a motion to vacate the Bankruptcy Court's dismissal order. See Mot. for Vacating Order, Adversary Case 10-216, ECF No. 131. For the first time, the Appellant challenged the Bankruptcy Court's jurisdiction and authority to decide the Adversary Proceeding. The Appellant also argued that the Bankruptcy Court could not issue a judgment concerning CIG ...