Booker v. U.S. Bank N.A. (In re Booker)

IN RE: ULISH BOOKER JR. Debtor

ULISH BOOKER JR. Objecting Party v. U.S. BANK NATIONAL ASSOCIATION AS

LEGAL TITLE TRUSTEE FOR TRUMAN 2016 SC6 TITLE TRUST Claimant

Case No.: 19-30787 (AMN)

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT NEW HAVEN DIVISION

January 30, 2020

Chapter 13

RE: ECF No. 65

MEMORANDUM OF DECISION AND ORDER OVERRULING OBJECTION TO PROOF OF CLAIM NO. 1-1

APPEARANCES

For the Objecting Party:

Ulish Booker, Jr., Pro Se Litigant

9 Sanford Street

West Haven, CT 06516

Ulish Booker, III, Pro Se Litigant

9 Sanford Street

West Haven, CT 06516

For the Claimant:

Sara M. Buchanan, Esq.

Bendett & McHugh, P.C.

270 Farmington Avenue, Suite 171

Farmington, CT 06032

INTRODUCTION

Ulish Booker, Jr. asks the bankruptcy court to reconsider matters of fact and law that were - or could have been - presented to a state court at the time it entered a pre-bankruptcy foreclosure judgment against him. For the reasons to follow, the bankruptcy court is unable to do so and must defer to the state court's judgment insofar as it determined the standing of the claimant (the bank) to enforce the note and mortgage, the amount of the debt owed, and, the value of the property securing the debt.

Before the court is Mr. Booker, Jr.'s ("Debtor") objection (the "Objection") to proof of claim no. 1-1 (the "Proof of Claim") filed by U.S. Bank National Association as Legal Title Trustee for Truman 2016 SC6 Title Trust ("U.S. Bank"). ECF No. 65.¹ After an evidentiary hearing, I conclude U.S. Bank met its burden to establish that the state court entered a final, non-appealable order determining the standing of U.S. Bank, the amount of its debt and the value of the Property, all as of the date of the judgment. I also conclude that Mr. Booker, Jr. did not produce evidence at least equal in probative force to evidence offered by U.S. Bank, which, if believed, would refute at least one of the allegations that is essential to the claim's legal sufficiency. My reasoning is explained in more detail below.

I. JURISDICTION

The United States District Court for the District of Connecticut has jurisdiction over this case by virtue of 28 U.S.C. § 1334(b). This court derives its authority to hear and determine this matter on reference from the District Court pursuant to 28 U.S.C. §§ 157(a), (b)(1), and the District Court's General Order of Reference dated September 21, 1984. This is a "core proceeding" pursuant to 28 U.S.C. §§ 157(b)(2)(A) and (B). This Memorandum of Decision sets forth the court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, applicable in thisproceeding pursuant to Rules 7052 and 9014(c) of the Federal Rules of Bankruptcy Procedure.

II. PROCEDURAL HISTORY

On May 14, 2019 (the "Petition Date"), Ulish Booker, Jr. filed a Chapter 13 bankruptcy petition.² ECF No. 1. On July 18, 2019, U.S. Bank filed the Proof of Claim, asserting a secured claim in the amount of $591,534.11 pursuant to a note and mortgage encumbering the Debtor's principal residence located at 9 Sanford Street, West Haven, Connecticut ("Property"). Proof of Claim No. 1-1. Attached to the Proof of Claim are copies of the note, the mortgage, and a payment history, among other documents. The court has taken judicial notice of the pendency of a civil foreclosure action (the "Foreclosure Case") by U.S. Bank against Mr. Booker, Jr. in which a foreclosure judgment entered in February 2019, discussed in more detail later in this Memorandum of Decision.³

On August 16, 2019, the Debtor filed the instant Objection,⁴ and U.S. Bank filed a response on September 16, 2019. ECF Nos. 65, 73. On September 27, 2019, U.S. Bank filed a motion for relief from stay ("Stay Relief Motion"), seeking an order granting relieffrom the automatic stay pursuant to 11 U.S.C. § 362(d)(1)⁵ and permitting it to enforce its foreclosure judgment entered against the Property prior to the Petition Date. ECF No. 83. At issue in both the Objection and the Stay Relief Motion is the question of U.S. Bank's standing as a holder of a note secured by a mortgage against the Property.

On November 18, 2019, the court held an evidentiary hearing⁶ on the Debtor's Objection, and both sides presented evidence.⁷

III. BURDENS OF PROOF AND APPLICABLE LAW

1. Objection to the Proof of Claim

A properly-filed proof of claim is prima facie evidence of the claim's validity and amount. Fed.R.Bankr.P. 3001(f). The term prima facie means, "[a]t first sight; on firstappearance but subject to further evidence or information." Prima facie, Black's Law Dictionary (11th ed. 2019). Upon the filing of a proof of claim and in the absence of an objection, a claim is deemed allowed. 11 U.S.C. § 502(a).

To prevail on an objection to a proof of claim, the objecting party must "produce evidence at least equal in probative force" to evidence offered by the claimant, which, if believed, "would refute at least one of the allegations that is essential to the claim's legal sufficiency." In re Hampton Ventures, LLC, 599 B.R. 474, 488 (Bankr. D. Conn. 2019) (quoting In re Driscoll, 379 B.R. 415, 420 (Bankr. D. Conn. 2008)). "If the objector produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts to the claimant to prove the validity of the claim by a preponderance of the evidence. The burden of persuasion is always on the claimant." Hampton Ventures, 599 B.R. at 488 (quoting In re Vanegas, 290 B.R. 190, 193 (Bankr. D. Conn. 2003)).

2. Standing to Enforce a Note and a Mortgage

Standing "is the legal right to set judicial machinery in motion." Equity One, Inc. v. Shivers, 310 Conn. 119, 125 (Conn. 2013). State law controls the determination of property rights in a bankruptcy case and therefore governs a party's standing to enforce an instrument. In re Idicula, 484 B.R. 284, 288 (Bankr. S.D.N.Y. 2013) (citing Butner v. U.S., 440 U.S. 48, 54 (1979)). The Uniform Commercial Code confers standing to enforce a promissory note on the "holder" or someone with the rights of a holder. Conn. Gen. Stat. § 42a-3-301. Pursuant to Conn. Gen. Stat. § 42a-1-201(b)(21)(A), the entity in possession of the promissory note is the "holder" where the instrument is made payable to the bearer; however, an instrument endorsed in blank "becomes payable to bearer andmay be negotiated by transfer of possession of alone." Conn. Gen. Stat. § 42a-3-205(b); see, Equity One, 310 Conn. at 126. Consistent with long-standing common law principles, a mortgage follows the note, and accordingly, the holder of a note may foreclose on real property whether the mortgage is assigned to the holder or not. Conn. Gen. Stat. § 49-17; see, Equity One, 310 Conn. at 127 (citing Chase Home Finance, LLC v. Fequiere, 119 Conn.App. 570, 576 (Conn. App. 2010)).

3. Rooker-Feldman Doctrine

The Rooker-Feldman doctrine was recognized by the United States Supreme Court in a pair of cases from which it takes its name and has since been reaffirmed on several occasions. See, Dist. of Columbia Ct. of Appeals v. Feldman, 460 U.S. 462, 482-87 (1983); Rooker v. Fidelity Tr. Co., 263 U.S. 413, 415-16 (1923); see also, Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 283-84 (2005). Fundamentally, the Rooker-Feldman doctrine provides that a federal court lacks subject-matter jurisdiction to review the merits of final state court judgments. Exxon Mobil, 544 U.S. at 283-84.

As the United States Court of Appeals for the Second Circuit has explained, the Rooker-Feldman doctrine bars a court from granting relief to a party if the following four requirements are met:

1. A party lost in state court;

2. The party complains of injuries caused by the state court judgment;

3. The party invites federal court review of that judgment; and

4. The state court judgment was entered before the party's federal suit commenced.

McKithen v. Brown, 626 F.3d 143, 154 (2d Cir. 2010). The Rooker-Feldman requirements are indisputably met where "the federal claim would succeed only if the state courtwrongly decided the issue." Barnett v. Conn. Light & Power Co., 900 F. Supp. 2d 224, 241 (D. Conn. 2012).

4. Res Judicata or Claim Preclusion

Res judicata, "also known as claim preclusion, is the Latin term for "a matter [already] judged" and refers to either of two concepts: . . . [1] a case in which there has been a final judgment and is no longer subject to appeal; and [2] the legal doctrine meant to bar (or preclude) continued litigation of a case on same issues between the same parties." Res judicata, https://en.wikipedia.org/wiki/Res_judicata (last visited Jan. 30, 2020). In essence, the doctrine of res judicata, "holds that 'a final judgment on the merits of an action precludes the parties . . . from relitigating issues that were or could have been raised in that action,'" and prevents a party from re-litigating a cause of action that has already been decided by a court of competent jurisdiction. In re Motors Liquidation Co., 943 F.3d 125, 130 (2d Cir. 2019); see, Brown Media Corp. v. K&L Gates, LLP, 854 F.3d 150, 157 (2d Cir. 2017). Under Connecticut law, a claim is precluded under res judicata where the litigant "had an adequate opportunity to litigate the matter in the earlier proceeding." Joe's Pizza, Inc. v. Aetna Life and Cas. Co., 236 Conn. 863, 872 (Conn. 1996)(emphasis retained).

IV. FINDINGS OF FACT

On March 30, 2006, the Debtor and Linda Booker executed a note (the "Note") that obligated the Debtor and Linda Booker to repay a loan of $231,920.00 to New Century Mortgage Corporation and granted a mortgage (the "Mortgage") against the Property to secure the promise. Creditor's Exhibit Nos. 502, 503. On April 6, 2006, the Mortgage was recorded on the City of West Haven Land Records. Creditor's Exhibit No. 503. TheNote was later endorsed in blank on the reverse side of the final page, and the Mortgage was ultimately assigned to U.S. Bank. Creditor's Exhibit Nos. 502, 504.

On April 25, 2017, U.S. Bank commenced the Foreclosure Case...