In re Jackson

554 B.R. 156, 2016 Bankr. LEXIS 2840, 63 Bankr. Ct. Dec. (CRR) 47, 2016 WL 4147641
CourtBankruptcy Appellate Panel of the Sixth Circuit
DecidedAugust 4, 2016
DocketNo. 15-8037
StatusPublished
Cited by10 cases

This text of 554 B.R. 156 (In re Jackson) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Jackson, 554 B.R. 156, 2016 Bankr. LEXIS 2840, 63 Bankr. Ct. Dec. (CRR) 47, 2016 WL 4147641 (bap6 2016).

Opinion

[159]*159OPINION

GUY R. HUMPHREY, Bankruptcy" Appellate Panel Judge.

This appeal concerns whether .tjhe bank?-ruptcy court abused its discretion in determining that a condominium association ,violated a debtor’s Chapter 7 discharge in re-scheduling a sheriffs sale in a prepetition foreclosure action upon issuance of the discharge and closing of the case and in assessing fees associated with the ref scheduling of the foreclosure sale. For the reasons that follow, the panel finds that the court abused its discretion in sanctioning the association for violating the debtor’s discharge. . £

STATEMENT OF ISSUES

The issues on appeal are whether the bankruptcy court abused its discretion in determining a condominium association violated the chapter 7 discharge order entered in an individual debtor’s case through the scheduling of a sheriffs sale to complete a pre-petition foreclosure, awarding monetary sanctions against the condominium association, and enjoining the condominium association from rescheduling the sheriffs sale.

JURISDICTION AND STANDARD OF REVIEW

The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for. the Northern District of Ohio has authorized appeals to the Panel, and neither party has timely elected to have these appeals heard by the district court. 28 U.S.C. § 158(b)(6), (c)(1). A bankruptcy court’s final order may be appealed as of right pursuant to 28 U.S.C, § 158(a)(1). . For purposes of appeal, an order is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Midland Asphalt: Corp. v. United States, 489 U.S. 794, 798, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (citation and quotation marks omitted). An order sanctioning a party and imposing a sum certain amount in damages is a final order. See Church Joint Venture, L.P. v. Blasingame (In re Blasingame), 525 B.R. 675, 678 (6th Cir. BAP 2015).

A bankruptcy court’s decision to sanction is reviewed for an abuse of discretion. Badovick v. Greenspan (In re Greenspan), 464 B.R. 61, 2011 WL 310703, at *1 (6th Cir. BAP Feb. 2, 2011) (table) (citing B-Line, LLC v. Wingerter (In re Wingerter), 594 F.3d 931, 936 (6th Cir.2010)). See also Mayor and City Council of Baltimore v. W. Va. (In re Eagle Picher Indus., Inc.), 285 F.3d 522, 527 (6th Cir.2002) (equitable determinations subject to an abuse of discretion standard) (citations omitted). “An abuse of discretion is defined as a ‘definite and firm conviction that the [court below] committed a clear error of judgment.’” Id. at 529 (internal citation omitted). The particular factual findings of the bankruptcy court- are reviewed for. “clear error.” Behlke v. Eisen (In re Behlke), 358 F.3d 429, 433 (6th Cir.2004) (citations omitted). Sanctions premised “upon an erroneous view of the law or an erroneous assessment of the evidence are necessarily an abuse of discretion.” In re Royal Manor Mgmt. Inc., 525 B.R. 338, 346 (6th Cir. BAP 2015) (citing Cooter & Gell v. Hartmax Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359 (1990)).

FACTS

On June 19, 2014 the debtor Byron Jackson (“Jackson”) filed, pro se, a petition for'relief under Chapter 7 of the Bankruptcy Code. On July 9, 2014 mortgagee Bank of America (“BOA”), moved for relief from stay and for abandonment of real property located at 16100 Van Aken Boule[160]*160vard #402, Shaker Heights, Ohio (the “Condominium”). The Condominium was listed on Jackson’s petition as his residence. In addition to seeking relief from the stay, BOA sought in rem relief for two years under 11 U.S.C. § 362(d)(4)(B), alleging a substantial arrearage on the mortgage loan and also noting prior bankruptcy filings, either by Jackson or one of his parents, that included the Condominium as scheduled property. Jackson’s objection to the motion was overruled and the relief was granted through an order entered on August 19, 2014. However, BOA and Jackson entered into a loan modification agreement relating to the Condominium and the court approved it.1

The Carlton House Condominium Unit Owners Association of Cuyahoga County (“Carlton House”) filed a similar motion to the BOA motion, seeking relief from the stay, abandonment, and in rem relief. The significant difference was it sought a permanent in rem order. At the hearing, Carlton House stated it was seeking in rem relief because of the multiple bankruptcy filings related to the Condominium. The bankruptcy court stated that the post-petition amounts were current “and the issue seems to be the desire to move forward with the foreclosure for the outstanding [pre-petition] approximately $5,900 is what I’m going to take into consideration .... ” September 9, 2014 Hr’g Tr. 8:20-23, ECF No. 121. After a hearing, the bankruptcy court denied Carlton House’s motion for a permanent in rem order for lack of cause. The language of the court’s order suggests that the court found the two year in rem bar sufficient: “[t]he Court previously entered a two year in rem sanction with respect to the same property....” Order, Dec. 9, 2014, ECF No. 84.

Jackson received his Chapter 7 discharge on December 9, 2014 and the case was closed. Almost immediately thereafter Carlton House filed a praecipe in the state court foreclosure action to schedule a sheriffs sale on the Condominium. This was the final step in a foreclosure action commenced in the Cuyahoga County Court of Common Pleas in January 2008 by Countrywide Home Loans, BOA’s predecessor. Carlton House and Countrywide previously obtained a decree of foreclosure in July of 2009.2 Carlton House Condo. Unit Owners Ass’n of Cuyahoga County’s Response in Opposition to Debtor’s Motion to Reopen Bankruptcy Case at 16-20, Jan. 27, 2015, ECF No. 97. The judgment stated that “upon issuance of a Praecipe for Order of Sale by Plaintiffs attorney and/or Defendant Carlton House’s attorney, the Clerk of Court must issue an order of Sale to the Sheriff commanding him to ... sell the premises as upon execution and according to law, free and clear of the interest of all parties to this action.” Id. at 19.

[161]*161• i'sfSNjanuary 21, 2015 Jacks his bankruptcy case sons') The first was to avoid Carl Hour’s liens pursuant to "r 11 U. § 52$tf)(l)(A). The court tweeted.: rea%|jfl at the hearing on the J^ion ■ open, recognizing that Carlton House's liens were statutory under Ohio law, not judicial, and therefore could not be avoided pursuant to that section of the Bankruptcy-Code.3 The second asserted reason was that Carlton House was attempting to collect discharged debts.

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Cite This Page — Counsel Stack

Bluebook (online)
554 B.R. 156, 2016 Bankr. LEXIS 2840, 63 Bankr. Ct. Dec. (CRR) 47, 2016 WL 4147641, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-jackson-bap6-2016.