MacIntyre v. JP Morgan Chase Bank

• Court: Court of Appeals for the Tenth Circuit
• Decided: April 1, 2021
• Docket: 20-1199
• Status: Unpublished

Opinion

FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT April 1, 2021 _________________________________ Christopher M. Wolpert Clerk of Court In re: HOLLY MACINTYRE,

Debtor.

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HOLLY MACINTYRE,

Plaintiff - Appellant,

v. No. 20-1199 (BAP No. 19-039-CO) JP MORGAN CHASE BANK, N.A., (Bankruptcy Appellate Panel)

Defendant - Appellee. _________________________________

ORDER AND JUDGMENT* _________________________________

Before HOLMES, McHUGH, and MORITZ, Circuit Judges. _________________________________

After concluding her bankruptcy case, Holly MacIntyre resisted JPMorgan

Chase Bank, N.A.’s efforts to foreclose a non-discharged lien on real property she

owned. She then reopened her bankruptcy case and filed an adversary proceeding

* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. claiming Chase violated her bankruptcy discharge injunction by seeking an award of

attorneys’ fees for defending Ms. MacIntyre’s appeal of its foreclosure judgment.

Chase never attempted to collect those fees, and according to the complaint, never

intended to collect them. The bankruptcy court dismissed Ms. MacIntyre’s complaint

for failure to state a claim in part because it concluded Chase’s alleged acts did not

violate the discharge injunction. The bankruptcy appellate panel (BAP) affirmed.

Exercising jurisdiction under 28 U.S.C. § 158(d)(1), we affirm.

I. Background

“Ms. MacIntyre owned real property in Jefferson County, Colorado. In 2003,

she executed a $100,000 promissory note secured by a deed of trust on the property.”

MacIntyre v. JP Morgan Chase Bank, N.A., 827 F. App’x 812, 814 (10th Cir. 2020).

Ms. MacIntyre filed for chapter 7 bankruptcy in 2010. The bankruptcy estate

abandoned its interest in the property back to Ms. MacIntyre, though the property

remained subject to the deed of trust. The bankruptcy court granted Ms. MacIntyre a

discharge in 2011 and closed her bankruptcy case.

“In 2014, Chase, asserting it was the note holder, sought a foreclosure

judgment in state court authorizing a sale of the property.” Id. Ms. MacIntyre fought

Chase. The trial court “rejected Ms. MacIntyre’s assertion that Chase’s note was

forged, concluded Chase was the note holder, and issued a judgment of judicial

foreclosure.” Id.

“Ms. MacIntyre appealed to the Colorado Court of Appeals (CCA) and filed

three motions to stay execution of the judgment—one in the trial court and two in the

2 CCA. All three were denied . . . .” Id. In its answer brief filed with the CCA, Chase

sought attorneys’ fees incurred in connection with the appeal. But it did not specify

whether the fees should be awarded in rem or as a personal obligation of

Ms. MacIntyre. After Chase filed its brief but before the CCA ruled on Chase’s

request for attorneys’ fees, “the property was sold at a sheriff’s sale,” id. The CCA

then affirmed the foreclosure judgment, awarded attorneys’ fees to Chase, and

remanded for the trial court to determine the amount of fees to be awarded to Chase.

The CCA did not specify whether the attorneys’ fees award should be a personal

obligation of Ms. MacIntyre. On remand, Chase notified the trial court that it would

“not seek the recovery of its awarded appellate attorneys’ fees and costs in this

action.” Aplt. App. at 154 (internal quotation marks omitted).

Ms. MacIntyre then reopened her bankruptcy case and filed an adversary

proceeding pro se seeking to hold Chase in contempt for violating her discharge

injunction via its answer brief filed in the CCA that sought attorneys’ fees.1 The

bankruptcy court dismissed Ms. MacIntyre’s complaint under Federal Rule of

Bankruptcy Procedure 7012 and Federal Rule of Civil Procedure 12(b)(6). The BAP

affirmed.

1 Ms. MacIntyre also filed a civil action against Chase, alleging Chase engaged in fraud during the foreclosure proceedings. We affirmed the district court’s dismissal of that action. MacIntyre, 827 F. App’x at 814.

3 II. Discussion

“Although this is an appeal from a BAP decision, we review only the

[b]ankruptcy [c]ourt’s decision.” Rebein v. Cornerstone Creek Partners, LLC (In re

Expert S. Tulsa, LLC), 842 F.3d 1293, 1296 (10th Cir. 2016) (citation and internal

quotation marks omitted). We review the bankruptcy court’s ruling on a “motion

to dismiss in an adversary proceeding de novo.” Rajala v. Spencer Fane LLP (In re

Generation Res. Holding Co.), 964 F.3d 958, 965 (10th Cir. 2020). “In ruling on a

motion to dismiss for failure to state a claim, all well-pleaded facts, as distinguished

from conclusory allegations, must be taken as true, and the court must liberally

construe the pleadings and make all reasonable inferences in favor of the non-moving

party.” Id. (brackets and internal quotation marks omitted). Because Ms. MacIntyre

appears pro se, we construe her filings liberally but do not serve as her advocate. See

Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th Cir. 2005).

A bankruptcy discharge order “operates as an injunction against the

commencement or continuation of an action, the employment of process, or an act, to

collect, recover or offset any [discharged] debt as a personal liability of the debtor.”

11 U.S.C. § 524(a)(2) (emphasis added). But the discharge injunction “does not

preclude in rem actions by secured creditors,” and “valid liens may be enforced.”

Chandler Bank of Lyons v. Ray, 804 F.2d 577, 579 (10th Cir. 1986) (per curiam); see

also Johnson v. Home State Bank, 501 U.S. 78, 83–84 (1991) (“[A] creditor’s right to

foreclose on [a] mortgage survives or passes through the bankruptcy. . . . [A]

bankruptcy discharge extinguishes only one mode of enforcing a claim—namely, an

4 action against the debtor in personam—while leaving intact another—namely, an

action against the debtor in rem.”).

“Under 11 U.S.C. § 105(a), bankruptcy courts have the equitable power to

enforce and remedy violations of substantive provisions of the Bankruptcy Code,

including in particular the discharge injunction in § 524(a)(2).” Paul v. Iglehart

(In re Paul), 534 F.3d 1303, 1306 (10th Cir. 2008). But a court may hold a creditor

in contempt only “if there is no fair ground of doubt” as to whether the creditor’s

conduct violated the discharge injunction. Taggart v. Lorenzen, 139 S. Ct. 1795,

1799 (2019).

The complaint’s factual allegations leave fair ground to doubt whether Chase

sought or obtained an award of attorneys’ fees “as a personal liability” of

Ms. MacIntyre in violation of § 524(a)(2). The complaint acknowledges the

judgment on appeal to the CCA was “purely in rem.” Aplt. App. at 151. And it does

not allege Chase sought an award of fees as a personal liability of Ms. MacIntyre or

that the CCA’s award of fees was a personal liability of Ms. MacIntyre. It instead

posits Chase only sought an award of attorneys’ fees on appeal “to keep the

otherwise moot appeal artificially alive,” id. at 152, and that “Chase never intended

to collect the award [of attorneys’ fees] it sought and won,” id. at 154.2 The

2 In Ms. MacIntyre’s view, if the appeal had become moot, Chase’s foreclosure judgment would have been vacated. The complaint alleges Chase requested attorneys’ fees as part of a “scheme to avoid mootness” so it could proceed with foreclosure. Aplt. App. at 153. But the complaint does not allege Chase’s effort to avoid mootness aided its effort to collect a discharged debt. We therefore need not consider the propriety of Chase’s alleged scheme. See, e.g., In re Paul, 534 F.3d 5 complaint further acknowledges Chase did “not seek the recovery of its awarded

appellate attorneys’ fees.” Id. (emphasis and internal quotation marks omitted).

Ms. MacIntyre attempts to bolster the complaint’s allegations by arguing that

because Chase “made a pre-foreclosure-sale request for a post-foreclosure-sale award

of attorney’s fees[,] . . . [t]he award would . . . have to be in personam.” Aplt.

Opening Br. at 14 (emphasis omitted). She cites no authority for this proposition yet

reasons it must be true “because the bid to which the in rem fees would have been

added was gone forever as of the sale date.” Aplt. Reply Br. at 14. But her

complaint alleges Chase “knew, when [it] requested the award . . . that it would not

be collectable following the foreclosure sale,” Aplt. App. at 154, and “remembered

not to tell the [CCA] that the attorney’s fees would be uncollectable after the

foreclosure sale,” id. at 153. The foreclosure sale would only render the award of

attorneys’ fees uncollectable if the award were in rem. And Ms. “MacIntyre

concedes that if the appeal [to the CCA] had been resolved before the [foreclosure]

sale, the appellate fees could have been collected as part of the in rem judgment.”

Aplt. Reply Br. at 14 (quoting Aplee. Br. at 20). The allegations in the complaint

therefore leave a “fair ground of doubt,” Taggart, 139 S. Ct. at 1799, as to whether

Chase sought or obtained its award of fees “as a personal liability,” 11 U.S.C.

at 1308 (“[T]he presence of some other procedural impropriety or error in connection with the creditor’s action will not give rise to a violation of the discharge injunction if the objective effect is not to coerce payment of a discharged debt.”). 6 § 524(a)(2), of Ms. MacIntyre. So the complaint fails to state a claim upon which

relief can be granted.

Because we hold Ms. MacIntyre failed to state a claim, we need not consider

whether the bankruptcy court correctly concluded that it lacked subject matter

jurisdiction to grant her requested remedy of “[s]triking the illicit award from the

[CCA’s] Opinion as void,” Aplt. App. at 155. See Griffin v. Davies, 929 F.2d 550, 554

(10th Cir. 1991) (“We will not undertake to decide issues that do not affect the outcome

of a dispute.”). And our disposition of this appeal renders moot Ms. MacIntyre’s

arguments that the BAP abused its discretion by denying her motion for a rehearing

because “[t]his court treats the BAP as a subordinate appellate tribunal whose rulings

may be persuasive but are not entitled to deference.” Peters v. Clark (In re Bryan),

857 F.3d 1078, 1081 (10th Cir. 2017) (brackets and internal quotation marks

omitted).

III. Conclusion

The BAP’s judgment is affirmed.

Entered for the Court

Jerome A. Holmes Circuit Judge