Semadeni v. Aurora Loan Services, LLC (In re Semadeni)

489 B.R. 576, 2013 WL 1332605, 2013 Bankr. LEXIS 1233
CourtUnited States Bankruptcy Court, D. Colorado
DecidedMarch 29, 2013
DocketBankruptcy No. 12-17567 ABC; Adversary No. 12-1678 ABC
StatusPublished
Cited by2 cases

This text of 489 B.R. 576 (Semadeni v. Aurora Loan Services, LLC (In re Semadeni)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Semadeni v. Aurora Loan Services, LLC (In re Semadeni), 489 B.R. 576, 2013 WL 1332605, 2013 Bankr. LEXIS 1233 (Colo. 2013).

Opinion

ORDER GRANTING MOTION TO DISMISS FILED BY DEFENDANTS AURORA LOAN SERVICES, AURORA BANK, FSB AND WELLS FARGO

A. BRUCE CAMPBELL, Bankruptcy Judge.

This matter comes before the Court on the Motion to Dismiss (“Motion”) filed by Defendants Aurora Loan Services, (“ALS”), Aurora Bank, FSB (“Aurora Bank”) and Wells Fargo Bank, N.A. as trustee for Structured Adjustable Rate Mortgage Loan Trust Mortgage Pass Through Certificates, Series 2007-3 (“Wells”) (collectively “Defendants”), and the Response filed by Plaintiff/Debtor Anthony Semadeni (“Debtor”). The Court, having reviewed the foregoing and being otherwise advised in the premises, finds as follows.

I. The Complaint

A. Background and Relevant Facts

Debtor’s complaint is based primarily on Defendants’ actions in connection with a public trustee’s foreclosure sale of Debt- [580]*580or’s residence. For the most part, Debt- or’s claims are based on discrepancies in copies of the evidence of debt that were filed with the public trustee and in related court proceedings. The following summary of events is drawn from the allegations of the complaint, documents attached to and incorporated in the complaint, undisputed copies of documents attached to the Motion, and the Court’s file.1

In October, 2009, a public trustee’s foreclosure was commenced by ALS against Debtor’s residence (“Property”). ALS asserted that it was the “owner” of a note (“Note”) secured by a deed of trust on the Property. The copy of the Note submitted to the public trustee was payable to First Magnus Financial Corporation (“First Magnus”), and it had no endorsement purporting to transfer ownership of the note to ALS.2 This foreclosure sale was withdrawn and a second foreclosure sale was commenced by ALS in February, 2011. In this proceeding, ALS represented to the public trustee that it was the “holder” of the Note, but again, the copy of the Note provided to the public trustee had no endorsements.

In connection with the second foreclosure sale, ALS filed a proceeding under Colo. R. Civ. P. 120 to obtain an order authorizing the public trustee’s sale. The Rule 120 motion was filed in El Paso County District Court (“State Court”). Again ALS represented itself as the “holder” of the Note and submitted a copy of the Note with no endorsements. An order authorizing sale was entered by the State Court.

On June 6, 2011, prior to the foreclosure sale of the Property, Debtor filed a Chapter 7 bankruptcy petition, which was assigned Case No. 11-23615 ABC (“First Chapter 7 Case”). In his schedules, Debt- or listed ALS as a secured creditor with a lien on the Property.

ALS filed a motion for relief from stay in Debtor’s First Chapter 7 Case, seeking an order from this Court which would allow it to continue with the pending public trustee’s foreclosure. The copy of the Note attached to the ALS’ motion for relief from stay had two endorsements, one from First Magnus to Lehman Brothers, and a second from Lehman Brothers to ALS. Neither Debtor or his Chapter 7 bankruptcy trustee opposed the motion, and, on July 29, 2011, this Court entered an order granting ALS relief from the automatic stay, “to foreclose on and/or take possession and control of [the Property]” (“Lift Stay Order”). On August 24, 2011, the public trustee’s sale was held, and ALS was the high bidder. On September 19, 2011, after receiving a confirmation deed from the public trustee, ALS commenced a forcible entry and detainer action to evict Debtor from the Property.

On October 6, 2011, Debtor filed a quiet title action against ALS, Wells, Mortgage Electronic Registry Systems, Inc., and the El Paso County Public Trustee in State [581]*581Court. Debtor’s quiet title complaint alleged that ALS was not the owner or holder of the Note, that ALS did not have standing to institute foreclosure proceedings, and that ALS deliberately misled the Public Trustee and the State Court in the Rule 120 action. Debtor requested a determination that the State Court’s order authorizing the Public Trustee to conduct the foreclosure sale of the Property was void and that ALS had no interest in the Property.

On December 2, 2011, Debtor’s First Chapter 7 Case was closed without entry of discharge because Debtor failed to file the requisite certificate of having completed a course in personal financial management.

On December 14, 2011, ALS filed a motion to dismiss Debtor’s quiet title action. Attached to this motion was yet a different copy of the Note, which contained a blank endorsement from the original payee, First Magnus.3 On February 1, 2012, the State Court granted ALS’ motion to dismiss the quiet title action. The State Court found that in the schedules filed by Debtor in his First Chapter 7 Case, Debtor failed to disclose any claims against ALS, and he listed ALS as a secured creditor with a lien on the Property. It ruled that Debtor was judicially estopped to claim that ALS was not a secured creditor in the quiet title suit and that Debtor lacked standing to bring any claims against ALS because they were property of his bankruptcy estate.

On April 17, 2012, Debtor filed another Chapter 7 bankruptcy case, Case No. 12-17567 ABC (“Second Chapter 7 Case”). On April 28, 2012, in his Second Chapter 7 Case, Debtor filed a motion to extend the automatic stay in order to prevent ALS from taking action to recover possession of the Property. ALS opposed Debtor’s motion to extend the stay, saying it was the holder of the Note, and that it was in possession of the original note with a blank endorsement from First Magnus. Debt- or’s motion to extend stay was granted, and ALS has, to date, not sought relief from the stay in the Second Chapter 7 Case.

B. Debtor’s Claims for Relief

Debtor’s complaint in this adversary proceeding is challenging to comprehend. The Court has endeavored to glean the substance of Debtor’s claims for relief by construing the allegations in a light most supportive to the claims alleged. The following is the Court’s best construction of the nature and bases for the six claims for relief contained in Debtor’s complaint.

First, Debtor seeks declaratory relief. Debtor requests the Court to determine that its July 29, 2011 Lift Stay Order is void because Defendants have committed “evident fraud,” on the Court. Debtor claims to be the owner of the Property, seeming to allege that if the Lift Stay Order is void, the public trustee’s sale was in violation of the automatic stay, and the foreclosure sale and the confirmation deed issued to ALS by the Public Trustee are also void. Debtor requests the Court to “make the determination as to the validity, nature and extent of Defendants [sic] interest in the Property so that Debtor may set off Defendants [sic] claims through Debtors [sic] damage claims set forth herein and as may be determined at trial.” Complaint, ¶ 103.

Debtor’s Second Claim for Relief is for breach of contract against ALS and Wells. Debtor alleges that First Magnus did not loan any money to Debtor and that ALS [582]*582and/or Wells are liable for First Magnus’ breach of the loan contract as successors in interest to First Magnus. Debtor claims unspecified damages resulting from the breach of contract by ALS and Wells.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
489 B.R. 576, 2013 WL 1332605, 2013 Bankr. LEXIS 1233, Counsel Stack Legal Research, https://law.counselstack.com/opinion/semadeni-v-aurora-loan-services-llc-in-re-semadeni-cob-2013.