Camacho v. Greenpoint Mortgage Funding, Inc. (In re Camacho)

489 B.R. 837, 2013 WL 1097812, 2013 Bankr. LEXIS 1081, 57 Bankr. Ct. Dec. (CRR) 196
CourtUnited States Bankruptcy Court, E.D. California
DecidedMarch 18, 2013
DocketBankruptcy No. 12-35648-C-7; Adversary No. 12-2608
StatusPublished
Cited by2 cases

This text of 489 B.R. 837 (Camacho v. Greenpoint Mortgage Funding, Inc. (In re Camacho)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Camacho v. Greenpoint Mortgage Funding, Inc. (In re Camacho), 489 B.R. 837, 2013 WL 1097812, 2013 Bankr. LEXIS 1081, 57 Bankr. Ct. Dec. (CRR) 196 (Cal. 2013).

Opinion

OPINION

KLEIN, Bankruptcy Judge.

A husband and wife tag team who have used serial adversary proceedings to wrestle with a lender now find themselves pinned by the so-called “two dismissal rule” of Federal Rule of Civil Procedure 41(a)(1)(B). In the course of seven bankruptcy cases, they filed three adversary proceedings asserting the same claim against the same defendants, the first two of which were voluntarily dismissed by notices of dismissal under Rule 41(a)(l)(A)(i). The unilateral second dismissal operates “as an adjudication on the merits” that ends the wrestling match in this court. Hence, the third adversary proceeding is DISMISSED.

The linchpin of the rationale is that the term “same claim” in Rule 41(a)(1)(B) means “claim” as used in the Restatement (Second) of Judgments § 24. That is, “same claim” is determined under a transactional analysis to include all rights of a plaintiff to remedies against a defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose. Here, all relief sought in the complaints arises out of a common nucleus of operative facts.

Facts

J. Pedro Zarate and Maria Villarreal Camacho are spouses who own, as community property, a small commercial shopping center in the City of San Joaquin, California, with respect to which they obtained what they describe as a “refinancing purchase money loan” through Greenpoint Mortgage Funding, Inc. They contend that this loan was an instance of predatory lending.

The Greenpoint loan, which made its way into mortgage-backed securities, is the focus of the dispute being pursued by Zarate and Camacho in which they seek to obtain clear title to the real property, damages, and declaratory and injunctive relief.

The couple has chosen to use the bankruptcy court as the forum for pursuing their claim against Greenpoint and other entities involved in the loan throughout its history. Their strategy is serial filing.

Zarate has filed six chapter 13 cases in the Eastern District of California: (1) No. 08-34307, filed October 3, 2008, dismissed November 18, 2008; (2) No. 09-40590, filed September 24, 2009, dismissed November 10, 2009; (3) No. 11-40715, filed August 25, 2011, dismissed October 12, 2011; (4) No. 11-48088, filed December 1, 2011, dismissed March 28, 2012; (5) No. 12-26252, filed March 30, 2012, dismissed September 11, 2012; and (6) No. 13-22346, filed February 22, 2013, which is still pending.

Camacho filed a chapter 7 case, No. 12-35648, on August 28, 2012, and has received a chapter 7 discharge.

Three adversary proceedings have been filed by the couple thus far against Green-point and entities in privity with Green-point: (1) Zarate v. Greenpoint Mortgage Funding, Inc., et al., No. 12-02113, filed March 9, 2012, voluntarily dismissed by notice of dismissal filed under Fed. [840]*840R.Civ.P. 41(a)(1)(A)(i) March 29, 2012; (2) Zarate v. Greenpoint Mortgage Funding, Inc., et al., No. 12-02206, filed May 3, 2012, voluntarily dismissed by notice of dismissal filed under Fed.R.Civ.P. 41(a)(1)(A)(i) September 11, 2012; and (3) Camacho v. Greenpoint Mortgage Funding, Inc., et al., No. 12-02608, filed October 17, 2012.

Although the successive complaints allege additional theories of recovery, the factual allegations in each complaint reveal that the factual basis for all such theories is the Greenpoint loan. Thus, Camacho conceded orally on the record on February 26, 2013, that her adversary proceeding No. 12-02608 does not materially differ from the two complaints that were filed by her husband and voluntarily dismissed.

The voluntary dismissals of Adversary Nos. 12-02113 and 12-02206 were by Za-rate through counsel, who filed notices of dismissal before a defendant filed an answer or a motion for summary judgment as permitted by Rule 41(a)(1)(A).

Camacho filed the instant, third, adversary proceeding on October 17, 2012, following her husband’s dismissal of the second adversary proceeding on September 11, 2012.

Jurisdiction

Jurisdiction is founded on 28 U.S.C. § 1334(b). The power of a bankruptcy judge over this adversary proceeding is governed by 28 U.S.C. § 157.

The gravamen of the complaint sounds in non-core theories. All defendants expressly consented orally on the record in open court that a bankruptcy judge may hear and determine the matter in its entirety. 28 U.S.C. § 157(c)(2) (non-core); Executive Benefits Ins. Agency v. Arkison (In re Bellingham Ins. Agency, Inc., 702 F.3d 553, 567-70 (9th Cir.2012) (core)). The plaintiff likewise consented orally on the record, and also consented by conduct in two respects: by filing this lawsuit alleging that it is a core proceeding and by not subsequently questioning this court’s authority over the action. Id. Accordingly, this court has the power to “hear and determine” the adversary proceeding in its entirety, regardless of core or non-core status.

Analysis

The “two dismissal rule” in Civil Rule 41(a)(1)(B) is a basic feature of federal civil procedure that applies in bankruptcy adversary proceedings. Fed.R.Civ.P. 41(a)(1)(B), incorporated by Fed. R. Bankr.P. 7041. It limits access to the federal courts for those who file serial lawsuits.

I

The “two dismissal rule” is a limiting principle for the general rule that a plaintiff may at any time before a defendant serves an answer or motion for summary judgment voluntarily dismiss a civil action without a court order either by notice of dismissal or by stipulation by parties who have appeared.1 Fed.R.Civ.P. 41(a)(1)(A), incorporated by Fed. R. Bankr.P. 7041; Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 397-98, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) (history of rule).

[841]*841A

The effect of a unilateral dismissal depends upon whether the action previously has been dismissed. The first voluntary dismissal by notice or stipulation is presumptively without prejudice unless otherwise stated. A second notice of dismissal, however, operates as an “adjudication on the merits” if the plaintiff has previously dismissed any action in state or federal court based on or including the same claim. Fed.R.Civ.P. 41(a)(1)(B), incorporated by Fed. R.

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Cite This Page — Counsel Stack

Bluebook (online)
489 B.R. 837, 2013 WL 1097812, 2013 Bankr. LEXIS 1081, 57 Bankr. Ct. Dec. (CRR) 196, Counsel Stack Legal Research, https://law.counselstack.com/opinion/camacho-v-greenpoint-mortgage-funding-inc-in-re-camacho-caeb-2013.