Brown v. JP Morgan Chase Bank, N.A.

526 B.R. 882, 2013 WL 6923070, 2013 U.S. Dist. LEXIS 183185
CourtDistrict Court, M.D. Florida
DecidedNovember 15, 2013
DocketCase No: 5:13-cv-191-Oc-22; Bankr. Case No: 6:12-bk-1140-KSJ; Adv. Pro. No: 6:12-ap-174-KSJ
StatusPublished
Cited by1 cases

This text of 526 B.R. 882 (Brown v. JP Morgan Chase Bank, N.A.) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. JP Morgan Chase Bank, N.A., 526 B.R. 882, 2013 WL 6923070, 2013 U.S. Dist. LEXIS 183185 (M.D. Fla. 2013).

Opinion

ORDER

ANNE C. CONWAY, United States District Judge

This appeal is before the Court on the following:

1. Appellants Joseph P. Brown and Terri Lynn Brown’s (“Appellants”) Brief (Doc. No. 38), filed July 11, 2013;
2. Appellee JP Morgan Chase Bank’s (“JP Morgan”) Brief (Doc. No. 42), filed August 19, 2013; and
3. Appellants’ Reply Brief (Doc. No. 43), filed August 26, 2013.

Appellants request this Court to reverse two orders of the bankruptcy court: (1) an Order Denying Motion for Reconsideration of the Order Denying Defendant’s Motion to Dismiss and Granting Defendant’s Motion to Abstain in the bankruptcy adversary case1 between Appellants and JP Morgan (the “Reconsideration Order”); and (2) an Order Dismissing Case (the “Dismissal Order”) in the adjacent main bankruptcy case.2 Upon carefully considering the parties’ submissions and the ap[884]*884pellate record, the Court affirms the decisions of the bankruptcy court.

I. BACKGROUND AND PROCEDURAL HISTORY3

Appellants own a home in Ocala, Florida secured by a mortgage with JP Morgan. After Appellants fell behind on their mortgage payments, JP Morgan initiated a foreclosure action on the property. Appellants and JP Morgan had been litigating issues arising from the foreclosure for more than three years, until January 31, 2013, when Appellants filed a Chapter 13 case. In the bankruptcy proceedings, Appellants listed JP Morgan as a creditor. JP Morgan filed a proof of claim alleging ownership in the note and mortgage secured by the property. Appellants objected, even though no other party claimed to own the note, and argued that JP Morgan did not provide sufficient evidence to prove ownership of the note. Appellants acknowledged signing a valid mortgage, but claimed JP Morgan was not entitled to enforce the note and mortgage due to defects in the chain of title.

After a failed mediation, Appellants filed an adversary proceeding in bankruptcy court along with a seven-count complaint. Each count of the complaint relied on the contention that JP Morgan lacked standing to enforce the note and mortgage. In response, JP Morgan filed a motion to dismiss the adversary proceeding, or in the alternative, a motion to abstain to allow the state court to resolve the standing issues presented more than three years prior. The’ bankruptcy court denied JP Morgan’s motion to dismiss. (Doc. No. 3-8 at pp. 3). However, the bankruptcy judge found that abstention was appropriate because the “issue of standing to foreclose a residential home primarily is a state law issue best left to the expertise of the state court that has presided over this matter for at least the past three years.” (Id.).

On January 15, 2013, Appellants requested that the bankruptcy court reconsider its decision to abstain in the adversary proceeding. (Doc. No. 3-10). After an evidentiary hearing on this and other matters (See Doc. No. 14-3), the bankruptcy judge denied the motion for reconsideration.4 (Doc. No. 3-13). After the judge indicated she was still going to abstain from hearing the adversary proceeding, Appellants consented to dismissal of the main bankruptcy case. Thus, with Appellants’ approval, the bankruptcy judge entered an order dismissing the main bankruptcy case.5 This appeal followed.

[885]*885II. DISCUSSION

The Court has jurisdiction to hear appeals from orders of the bankruptcy court pursuant to 28 U.S.C. § 158. Appellants’ Brief proposes some twenty-two issues on appeal. (See Doc. No. 38 at pp. 2-6). Some of the suggested issues do not make sense and many are duplicative. Of course, Appellants do not address every proposed issue after they are presented. After untangling the proposed issues, the Court agrees with JP Morgan that there are only two real issues in this case: (1) Whether the bankruptcy court erred when it, upon reconsideration, abstained from hearing the Appellants’ adversary proceeding; and (2) Whether the bankruptcy court erred when it subsequently dismissed the main bankruptcy case.

A. Rooker-Feldman Doctrine

Because it is a jurisdictional issue, the Court initially evaluates JP Morgan’s Rooker-Feldman argument. The Rooker-Feldman doctrine generally recognizes that federal district courts do not have jurisdiction to act as appellate courts to review final state court decisions. Nicholson v. Shafe, 558 F.3d 1266, 1272 (11th Cir.2009). The Supreme Court has held that the Rooker-Feldman doctrine is confined to cases that are “brought by state-court losers complaining of injuries caused by state-court judgments rendered before the federal district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 1521-22, 161 L.Ed.2d 454 (2005). The Eleventh Circuit has interpreted Exxon Mobil to confine the Rooker-Feldman doctrine only to instances where state court proceedings have ended at the time the federal action is filed. Nicholson, 558 F.3d at 1274. In this case, the state court action was still pending when • Appellants initiated their Chapter 13 case. Thus, the state court proceedings had not yet ended when the federal action commenced and Rooker-Feldman does not apply.

B. The Reconsideration Order

A bankruptcy court has broad discretion under 28 U.S.C. § 1334(c)(1) to abstain from a hearing or proceeding “in the interest of justice, or in the interest of comity with state courts or respect for State law.” Courts consider a number of factors to guide their decision to permissively abstain under section 1334(c).6

Decisions to abstain under 28 U.S.C. § 1334(c)(1) are reviewed under an [886]*886abuse of discretion standard. Fl. Dept. of Fin. Servs. v. Poe Fin. Group, Inc., 2008 WL 2704386, at *2 (M.D.Fla.2008) (unpublished). “A court abuses its discretion if it applies the wrong legal standard, uses improper procedures to reach its result, or makes factual findings that are clearly erroneous.” Id. (citing In re Bayshore Ford Truck Sales, Inc., 471 F.3d 1233, 1251 (11th Cir.2006)).

In the Memorandum Opinion, the bankruptcy judge found that abstention was appropriate because the issue of standing to foreclose on residential property is a state law issue best left to the state court. (Doc. No. 3-8 at p. 3). Further, the judge found the reasoning in In re Kurinsky7 persuasive as applied to the facts of the instant case:

In [Kurinsky],

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526 B.R. 882, 2013 WL 6923070, 2013 U.S. Dist. LEXIS 183185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-jp-morgan-chase-bank-na-flmd-2013.