Opinion
06 Civ. 2284 (SAS).
August 14, 2006
Harvey Pickering Bronx, New York, Plaintiff (pro se).
Bruce D. Mael, Esq. BERKMAN, HENOCH, PETERSON PEDDY, P.C. Garden City, New York, For Defendant.
OPINION ORDER
I. INTRODUCTION
Harvey Pickering ("Appellant" or "Pickering") appeals from the September 16, 2005 Order of U.S. Bankruptcy Judge Robert D. Drain (the "Order"), granting relief to appellee M T Mortgage Corporation ("Appellee" or "MT") from the automatic stay entered on August 12, 2005 pursuant to 11 U.S.C. § 362, which had halted foreclosure proceedings by MT against Pickering's property. For the reasons stated below, the appeal is dismissed.
II. FACTS
MT was the holder by assignment of a mortgage, dated May 24, 1989, in the original amount of $288,750.00, covering the property located at 4539 Bronx Boulevard (the "Property"). Mildred and Harvey Pickering were the owners of this property. They defaulted on the September 1, 2000 payment due under the mortgage, and on every payment due after that date. Because of this default, MT began a foreclosure action against them in the Supreme Court of New York, Bronx County.
See 7/13/06 Answer of M T Mortgage Corporation to Appellant's Designation of Items and Statement of Issues on Appeal ("Answer") ¶ 1.
See id.
See id. ¶ 2.
See id.
On March 6, 2001, Pickering filed a voluntary petition for relief with the Clerk of this Court under Chapter 13 of the Bankruptcy Code. This was the first of what would eventually total seven identical filings by Pickering, Pickering and Mildred Pickering, and Voosten Pickering, husband of and heir to the estate of Mildred Pickering. The first four filings were dismissed with prejudice for 180 days, upon the application of the Chapter 13 Trustee, based on Harvey Pickering's
fail[ure to] appear and be examined at a 341(a) meeting of creditors, [his] fail[ure to] timely file a proper plan and complete schedules, [his] fail[ure to] commence proposed plan payments to the trustee, [and his] fail[ure to] provide the required documentation, to wit, copies of income tax returns, copies of payroll stubs evidencing regular employment/operating statements, a real estate/automobile appraisal . . . and a third-party affidavit of contribution, where necessary.
See id. ¶ 3.
See id. ¶¶ 4-7, 11-12. Mildred Pickering died on or about July 2, 2003. See 8/26/05 Application of MT in Support of an Order Modifying and Terminating the Automatic Stay with In Rem Relief, Ex. M to Answer, n. 1.
See 7/7/04 Order Dismissing Chapter 13 Case for Failure to Comply with Court Order of May 5, 2004, Ex. D to Answer, at 1.
The fifth filing was submitted by Voosten Pickering six days after the fourth filing was dismissed. MT made a motion seeking relief from the automatic stay engendered by this filing, and the motion resulted in an order dated September 8, 2004, by Bankruptcy Judge Cornelius Blackshear (the "Blackshear Order"), which "based on the history of abuse" of the filing system by the Pickerings, granted in rem relief with respect to the property. Specifically, the order stated that
See Answer ¶ 7.
See id.
any subsequent bankruptcy filing by any individual or entity claiming an interest in the real property commonly known as 4539 Bronx Boulevard . . . shall not act as a stay against the lien interest of [MT] and [MT], its successors and assigns may proceed with any action to foreclose its mortgage without further intervention of the court.
9/8/04 Blackshear Order, Ex. E to Answer, at 1.
Voosten Pickering appealed the Blackshear Order on September 17, 2004, and on or about the same date, he also brought a motion in the District Court for a stay pending his appeal. After holding a hearing on September 27, 2004, I denied the motion because he "failed to demonstrate a likelihood of success on the merits of an appeal of the Bankruptcy Order." The fifth filing was dismissed on September 30, 2004, with prejudice for a 180-day period, based on Voosten Pickering's failure to appear and be examined at a creditors' meeting, his failure to pay proposed plan payments to the trustee, and his failure to provide required documentation.
Answer ¶ 8.
10/6/04 Order of Judge Shira A. Scheindlin, Ex. F to Answer, at 1-2. Mr. Pickering appealed this order to the Second Circuit Court of Appeals, which dismissed his appeal in 2005 on the grounds that he failed to file the necessary brief and appendix by the dates stated on the scheduling order. See 11/30/05 Order of the United States Court of Appeals for the Second Circuit, Ex. G to Answer, at 1.
See 9/30/04 Order of Judge Cornelius Blackshear Dismissing Chapter 13 Case for Failure to Comply with Court Order, Ex. I to Answer, at 1.
After the dismissal of the fifth filing, MT continued its foreclosure efforts and moved for a final Judgment of Foreclosure and Sale. On March 14, 2005, Pickering filed a sixth petition for relief under Chapter 13 of the Bankruptcy Code. However, this sixth petition was dismissed at his request on April 8, 2005. Pickering stated that he requested the dismissal because "the house was going to be sold, [and] at the closing the purchaser could not get title insurance." MT thus continued with its foreclosure preparations, and on April 19, 2005, a Judgment of Foreclosure and Sale was signed, and the sale itself was scheduled for August 5, 2005. On June 13, 2005, Pickering filed a seventh petition for relief, and in a final effort to stop the foreclosure proceedings, he made an emergency ex parte motion on July 27, 2005 to enforce the automatic stay resulting from the seventh filing. Judge Drain issued an order enforcing the automatic stay and threatening to hold MT in contempt for violation of the stay, having found that "notice of the motion was served upon counsel to MT . . ., there [had been] no response to the Motion filed with the Court or otherwise," and the foreclosure sale had been continued to August 22, 2005. MT cancelled the foreclosure sale and filed an objection to the order. On August 25, 2005, Judge Drain held a hearing on the ex parte motion, and the next day, "out of an abundance of caution," MT filed a motion for relief from the automatic stay with in rem relief, based on both the Blackshear Order and on what MT describes as appellant's "bad faith" filings. Appellant opposed MT's motion, claiming that the Blackshear Order did not apply to him because
See Answer ¶ 11.
See id.
See 4/8/05 Order of Judge Robert D. Drain Dismissing Petition Without Prejudice, Ex. J to Answer, at 1.
9/6/05 Objection to Modification and Termination of Automatic Stay ("Objection"), Ex. N to Answer, at 3.
See Answer ¶ 12.
See id.
See id. ¶ 13.
8/12/05 Order of Judge Robert D. Drain Staying the Commencement or Continuation of Foreclosure, Ex. K to Answer, at 1-2.
See Answer ¶ 13.
See id. ¶ 14.
8/26/05 Motion for Order Modifying and Terminating Automatic Stay with In Rem Relief, Ex. M to Answer, ¶ 16.
[t]he language used by Judge Blackshear in his order clearly states: Any subsequent petition filed by any individual or entity "Claiming An Interest" in the real property known as 4539 Bronx Blvd., shall not act as a stay against MT Mortgage Corporation . . . The debtor, Harvey Pickering is not claiming an interest in the real property, due to the fact [that] he is now the sole owner of the property by deed and mortgage.
Objection at 2.
Based on this language, Pickering claimed that the seventh filing was not in bad faith and thus should not be dismissed.
A hearing on MT's motion was held on September 8, 2005, and on September 14, 2005, Judge Drain entered an order modifying and terminating the automatic stay with in rem relief. The court stated that having heard MT and "the debtor's oral applications opposing the relief sought," it found that "the relief requested appear[ed] reasonable, proper and warranted in fact and by law." Specifically, the Order held that the automatic stay was terminated such that MT could
See Answer ¶ 17.
See 9/14/05 Order of Judge Robert D. Drain Modifying and Terminating Automatic Stay with In Rem Relief, Ex. O to Answer, at 1.
Id. at 2.
pursue [its] rights . . . without limitation, [including] consummation of foreclosure proceedings with respect to the Premises," and that "any subsequent filing . . . within a period of one year . . . will not affect the premises and the automatic stay will be deemed annulled upon the filing with respect to [MT] thus allowing [MT] to exercise all of its rights and remedies under the Note and Mortgage . . . including, but not limited to, consummating a foreclosure sale of the Premises.
Id.
Pickering sought a stay pending his appeal of the Order, and after a hearing before Judge Sidney H. Stein of the Southern District of New York, appellant's motion for a stay was denied. The day after the denial, MT conducted a foreclosure sale of 4539 Bronx Boulevard, and the property was purchased by a third party.
See 11/15/05 Order of Judge Sidney H. Stein Denying Appellant's Motion for a Preliminary Injunction, Ex. P to Answer, at 1.
See Answer ¶ 19.
Pickering now appeals seeking reversal of the September 14, 2005 order of Judge Drain on the grounds that he "never claimed an interest in the real property located at 4539 Bronx Blvd. . . . because he is the original debtor by mortgage and the owner of the property by deed." MT opposes appellant's motion on two grounds: first, that this Court lacks subject matter jurisdiction over the appeal, and second, that the appeal is without merit.
10/31/05 Designation of Items and Statement of Issues of Harvey Pickering ("Designation") ¶ 3B.
See Answer ¶¶ 22-23.
III. APPLICABLE LAW
A. Jurisdiction
Rule 8002(a) of the Federal Rules of Bankruptcy Procedure, which sets the time for filing a notice of appeal, states that "[t]he notice of appeal shall be filed with the clerk within 10 days of the date of the entry of the judgment, order, or decree appealed from." It has recently been settled by the Second Circuit that this rule is jurisdictional. The Court of Appeals stated that it "ha[d] not previously determined whether the time limit imposed by Rule 8002(a) is in fact jurisdictional," but that courts in the Second Circuit "regularly treat it as such." The court also noted that "[o]ther courts of appeals that have addressed the question have also held the ten-day time limit in Rule 8002(a) to be jurisdictional." Finally, the court observed that "[t]he advisory committee's note to Rule 8002(a) states that the rule is an adaptation of Rule 4(a) of the Federal Rules of Appellate Procedure. . . . It is of course well established that the time limit prescribed by Fed.R.App.P. 4(a) is `mandatory and jurisdictional.'"
See In re Siemon, 421 F.3d 167, 169 (2d Cir. 2005) ("We therefore follow our sister circuits in holding that the time limit contained in Rule 8002(a) is jurisdictional, and that, in the absence of a timely notice of appeal in the district court, the district court is without jurisdiction to consider the appeal, regardless of whether the appellant can demonstrate excusable neglect.").
Id. Accord Minhlong Enters. v. New York Int'l Hostel, 194 B.R. 313, 316 (S.D.N.Y. 1996); Sellitti v. R.H. Macy Co., 173 B.R. 301, 301-02 (S.D.N.Y. 1994); Twins Roller Corp. v. Roxy Roller Rink Joint Venture, 70 B.R. 308, 310 (S.D.N.Y. 1987).
In re Siemon, 421 F.3d at 169.
Id. (quoting Browder v. Director, Dep't of Corr. of Ill., 434 U.S. 257, 264 (1978)).
B. Relief from an Automatic Stay
The standard of review for Bankruptcy Court orders is set forth in Rule 8013 of the Federal Rules of Bankruptcy Procedure:
On an appeal, the district court or the bankruptcy appellate panel may affirm, modify, or reverse a bankruptcy judgment, order, or decree, or remand with instructions for further proceedings. Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the Bankruptcy Court to judge the credibility of witnesses.
Thus, "[t]he bankruptcy court's findings of fact are reviewed for clear error," and "[c]onclusions of law are reviewed de novo."
In re Bennett Funding Group, 146 F.3d 136, 138 (2d Cir. 1998).
Section 362(d)(1) of the Bankruptcy Code states that a court shall grant relief from a stay imposed by Section 362(a) "for cause." This section also gives the court the ability to "terminate, annul, modify or condition the stay." "Because neither the Code nor the legislative history provides a specific definition of what constitutes cause under § 362(d), courts must determine whether relief is appropriate on a case by case basis, taking into consideration the interests of the debtor, the claimants and the estate." "The decision of whether to lift [a] stay is committed to the sound discretion of the bankruptcy judge and may be overturned only upon a showing of abuse of discretion."
Id.
In re MacInnis, 235 B.R. 255, 259 (S.D.N.Y. 1998). Accord In re Keene Corp., 171 B.R. 180, 183 (S.D.N.Y. 1994).
Manhattan King David Rest. v. Levine, 163 B.R. 36, 40 (S.D.N.Y. 1993) (citing In re Sonnax Indus., 907 F.2d 1280, 1287 (2d Cir. 1990)).
It is "well established that a debtor's lack of good faith in filing a petition for bankruptcy constitutes sufficient cause to lift the stay." However, "[b]ad faith has both an objective and subjective element; the proponent of bad faith must show `both objective evidence of a fundamentally unfair result and subjective evidence that a debtor filed a petition for a fundamentally unfair purpose that was not in line with the spirit of the Bankruptcy Code.'" "[N]umerous courts" have found bad faith where "a debtor possessing a single asset has no realistic chance for rehabilitation of any ongoing business and files a bankruptcy petition in the hopes of gaining relief from another action that essentially involves the resolution of a two-party dispute." Other courts have found that bad faith exists under section 362 where "a single asset debtor or a non-going concern filed with the intent to gain relief from a state court action." "Serial filings are evidence of bad faith, as are petitions filed to forestall creditors . . . that offer no legitimate prospect of reorganization."
Id. (citing Sonnax, 907 F.2d at 1287; In re RCM Global Long Term Capital Appreciation Fund, Ltd., 200 B.R. 514, 520 (S.D.N.Y. 1996) (explaining that bankruptcy courts have dismissed petitions filed in bad faith on the theory that such filings constitute an abuse of the judicial process or of the jurisdiction of the bankruptcy court)).
In re Eatman, 182 B.R. 386, 392 (S.D.N.Y. 1995) (quoting In re Love, 957 F.2d 1350, 1357 (7th Cir. 1992)).
Id. See also In re C-TC 9th Ave. P'ship, 113 F.3d 1304, 1311-12 (2d Cir. 1997); In re Laguna Assoc. Ltd. P'ship, 30 F.3d 734, 738 (6th Cir. 1994); Matter of Little Creek Dev. Co., 779 F.2d 1068, 1073 (5th Cir. 1986).
Manhattan King David Rest., 163 B.R. at 40 (citing Sonnax, 907 F.2d at 1287).
Eatman, 182 B.R. at 392 (citations omitted).
IV. DISCUSSION
The order that Pickering now seeks to appeal was entered on September 16, 2005. Appellant filed his notice of appeal on October 17, 2005. Thus, Pickering filed his appeal thirty-one days after the entry of the Order, well over the ten-day maximum provided by Rule 8002(a). Pickering was clearly aware of this gap — he hand-wrote the date of the Order next to his signature on the notice of appeal filed in this Court. The fact that there was a thirty-one day difference between the two dates cannot have escaped his attention. Given the Second Circuit's unequivocal decision that the time limit of Rule 8002(a) is jurisdictional, this Court lacks subject matter jurisdiction over Pickering's appeal.
See Answer ¶ 22.
See 10/17/05 Notice of Appeal of Harvey Pickering, at 1.
Even if the appeal was timely, it lacks any merit. Pickering rests his appeal on one argument: that because he was not claiming an interest in the property at issue, the Blackshear Order did not apply to him, and thus the stay of MT's foreclosure efforts was valid. Pickering states that he was not claiming an interest in the property because he was the owner of the property. However, appellant misconstrues a term of art. The legal term "to claim" is not used in the same sense that it is used in everyday English. In the legal sense, "claiming an interest" simply means asserting an interest. Thus, one who owns property claims an interest in that property, and the purpose of stating that claim is to ensure that the law recognizes that ownership.
Although appellant's mistake is understandable, it provides no grounds for granting his appeal. MT has adequately demonstrated bad faith on appellant's part such that his appeal would be denied on the merits. In the past four years, appellant or persons acting on his behalf have filed seven petitions whose only discernable aim was to prevent MT from exercising its right to foreclose on the 4539 Bronx Boulevard property. Appellant has never challenged MT's mortgage, made the required mortgage payments or submitted the documentation demanded by the Bankruptcy Court. The only defenses that he has ever raised are found in his objection and answer to MT's August 26, 2005 motion for modification and termination of the automatic stay. In those objections, he states that although MT claimed that he was "abusing this Court's legal system . . . the opposite is true," for several reasons. First, he states that "a third time" he "filed a Chapter 11 petition . . . the case was dismissed by the Court Clerk because [he] was late on paying an installment filing fee." Second, he notes that "[a]nother time a Chapter 13 petition was filed by the co-debtor Mildred Pickering (now deceased) and listed Harvey Pickering as the co-debtor. Mildred Pickering being elderly and medically restricted to appear, the case [was] dismissed." Third, appellant argues that "[a]nother time Voosten Pickering as heir to the estate of Mildred Pickering filed a Chapter 13 petition, but was dismissed for not appearing in Court, because he was in the Virgin Islands and took sick." Finally, he asserts that the sixth petition should not count against him because he withdrew it voluntarily, as the prospective purchaser of the property withdrew before the closing.
The "required documentation" demanded by the Bankruptcy Court included "copies of income tax returns, copies of payroll stubs evidencing regular employment/operating statements, [and] a real estate/automobile appraisal, if applicable." 7/7/04 Order Dismissing Chapter 13 Case for Failure to Comply with Court Order of May 5, 2004, Ex. D to Answer, at 1; 9/30/04 Order of Judge Cornelius Blackshear Dismissing Chapter 13 Case for Failure to Comply with Court Order, Ex. I to Answer, at 1.
Objection ¶ 13.
Id. ¶ 13C.
Id. ¶ 13D.
Id. ¶ 13E.
See id. ¶ 13F.
These excuses are not sufficient to overcome a finding of bad faith. Lateness and claimed illness do not excuse appellant from not filing the required documents, negotiating a payment plan, or appearing at scheduled meetings with creditors. Nor do these excuses explain his motive in filing seven successive petitions. Appellant has not shown "any realistic intention or ability to reorganize" such that he might be in a position to make the necessary payments. Instead, he has been using this Court and the Bankruptcy Court to shield himself from MT's bona fide collection efforts, which is the epitome of bad faith.
Eatman, 182 B.R. at 392.
VI. CONCLUSION
The appeal of the September 14 Order of the Bankruptcy Court is dismissed as untimely.
SO ORDERED.