Hoang v. Citibank N.A.

IN RE: MINH VU HOANG and THANH HOANG

MINH VU HOANG Appellant v. CITIBANK N.A., et al. Appellee

Civil Action No. DKC 18-0443

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

March 18, 2019

MEMORANDUM OPINION

Appellant Minh Vu Hoang ("Ms. Hoang" or "Appellant"), a debtor in the underlying bankruptcy case, appeals from an order entered by United States Bankruptcy Judge Thomas J. Catliota on January 29, 2018, dismissing Adversary Case No. 17-284. Ms. Hoang also seeks to proceed in forma pauperis on her bankruptcy appeal. (ECF No. 7). Because the facts and legal arguments are adequately presented in the briefs and record, oral argument is deemed unnecessary.¹ See Fed.R.Bankr.P. 8019; Local Rule 105.6. For thereasons that follow, the in forma pauperis application will be granted, and the order of the bankruptcy court will be affirmed.

I. Background

The thorny factual background underlying this bankruptcy case was set forth in numerous prior opinions, thus only the facts relevant to the instant appeal will be included. See In re Minh Vu Hoang, No. CIV.A. DKC 14-3128, 2015 WL 2345588, at *1 (D.Md. May 14, 2015); In re Hoang, 469 B.R. 606 (D.Md. 2012).

Appellant Minh Vu Hoang and her husband Thanh Hoang began bankruptcy proceedings in 2005 and, since that time, have frequently come before this court in matters related to that bankruptcy. See, e.g., In re Minh Vu Hoang, DKC-13-2637, 2014 WL 1125371 (D.Md. Mar. 19, 2014); Hoang v. Rosen, DKC-12-1393, 2013 WL 6388611 (D.Md. Dec. 5, 2013); Hoang v. Rosen, DKC-12-1393, 2012 WL 1664071 (D.Md. May 10, 2012).² As relevant to this case, after the bankruptcy proceedings began, Appellant and her husband entered into a contract for sale of their then-residence at 9101 Clewerwall Drive, Bethesda, Maryland (the "property") to Ms. Hoang's brother Trung Vu and sister-in-law Ha Vu (the "Vus"). Thesale to the Vus did not close, and the property was foreclosed on in 2012. (ECF No. 1-1, at 2-3).

On July 10, 2017, Appellant filed Civil Action No. DKC 17-1909 against Citibank, N.A., Cindy R. Diamond, and Fay Servicing, LLC (collectively "Appellees") seeking a declaration that Appellant and her husband's sale contract with the Vus is valid and enforceable. Complaint, In re Hoang, No. DKC-17-1909 (D.Md. July 10, 2017), ECF No. 1. The complaint was referred to the United States Bankruptcy Court for the District of Maryland. Order referring Case to United States Bankruptcy Court for the District of Maryland, In re Hoang, No. DKC-17-1909 (D.Md. July 26, 2017), ECF No. 3. The bankruptcy court opened Adversary Case No. 17-00284. The Bankruptcy Court determined that Appellant and her husband's complaint was barred by res judicata and barred by the statute of limitations and entered an order dismissing the proceeding. (ECF No. 1-1). Appellant filed a notice of appeal in this court (ECF No. 1), and Appellant moved to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a)(1) (ECF No. 7).

II. Standard of Review

The district court reviews a bankruptcy court's findings of fact for clear error and conclusions of law de novo. In re Official Comm. of Unsecured Creditors for Dornier Aviation (N. Am.), Inc., 453 F.3d 225, 231 (4^th Cir. 2006); Fed.R.Bankr.P. 8013. "A finding is 'clearly erroneous' when although there is evidence to supportit, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948); In re Broyles, 55 F.3d 980, 983 (4^th Cir. 1995). "On legal issues, this [c]ourt 'must make an independent determination of the applicable law.'" In re Fabian, 475 B.R. 463, 467 (D.Md. 2012) (quoting In re Jeffrey Bigelow Design Group, Inc., 127 B.R. 580, 582 (D.Md. 1991)). With respect to the bankruptcy court's application of law to the facts, the district court reviews for abuse of discretion. Id. at 467 (citing In re Robbins, 964 F.2d 342, 345 (4^th Cir. 1992)). "[T]he decision of a bankruptcy court 'must be affirmed if the result is correct' even if the lower court relied upon 'a wrong ground or gave a wrong reason.'" Okoro v. Wells Fargo Bank, N.A., 567 B.R. 267, 271 (D.Md. 2017) (quoting SEC v. Chenery Corp., 318 U.S. 80, 88 (1943)). "Thus, this [c]ourt may 'affirm the bankruptcy court on any ground supported by the record.'" Bellinger v. Buckley, 577 B.R. 193, 195 (D.Md. 2017) (quoting LeCann v. Cobham (In re Cobham), 551 B.R. 181, 189 (E.D.N.C.), aff'd, 669 Fed.Appx. 171 (4^th Cir. 2016), reh'g denied (Nov. 29, 2016)).

III. Analysis

Appellant's documents are rife with conclusory allegations unsupported by any facts or record citations, see Fed.R.Bankr.P. 8010(1)(E) (requiring, inter alia, that an appellate brief contain"citations to the authorities, statutes and parts of the record relied on"), and they advance a number of arguments that were never presented before the bankruptcy court, see Levy v. Kindred, 854 F.2d 682, 685 (4^th Cir. 1988) ("[a]bsent exceptional circumstances, an appellate court will not consider an issue raised for the first time on appeal"). In distilling the cognizable appellate arguments with respect to the order denying Appellant's declaratory judgment motion (ECF No. 1-1), the court focuses on the arguments specifically addressed by the bankruptcy court.

As a threshold matter, Appellant's form application for leave to proceed in forma pauperis (ECF No. 7) demonstrates that she is impecunious. Accordingly, the application will be granted. Appellant's motion to allow for late filing due to financial concerns will thus be granted. (ECF No. 8).

Appellant's contention that it is an "error to dismiss an adversary proceeding by treating a motion to dismiss as a summary judgment [motion] without giving appellant an opportunity to present the case" is misguided. (ECF No. 9, at 2-3). Judge Catliota did not convert the motion to dismiss into a motion for summary judgment. Instead, it appears that Appellant is referring to Judge Catliota taking judicial notice of Appellant's prior foreclosure cases. (ECF No. 1-1, at 4). "[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss,in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). A court may take judicial notice of a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot be reasonably questioned. Fed.R.Ev. 201; Md. Rule 5-201(b). Judge Catliota took judicial notice of prior proceedings found within the public record. The accuracy of these judicial records cannot be reasonably questioned. See Andrews v. Daw, 201 F.3d 521, 524 n.1 (4^th Cir. 2000) ("when entertaining a motion to dismiss on the ground of res judicata, a court may take judicial notice of facts from a prior judicial proceeding when the res judicata defense raises no disputed issue of fact").

It must be remembered that the action filed by Appellant was a declaratory judgment action, in which she sought to have the court declare that a contract of sale was valid. The contract issue was relevant only as it might affect the foreclosure sale of the home. The foreclosure sale had been the subject of numerous prior proceedings and its validity long upheld. Under the circumstances, it was entirely appropriate for the bankruptcy court to dismiss the action:

"[D]istrict courts possess discretion in determining whether and when to entertain anaction under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional prerequisites." Wilton v. Seven Falls Co., 515 U.S. 277, 282 . . . (1995). The Declaratory Judgment Act expressly states that district courts "may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201(a). In light of this "nonobligatory" language, the Supreme Court has explained that "[i]n the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration." Wilton, 515 U.S. at 288[.]

A district court may decline to entertain a declaratory judgment claim when it has "good reason" to do so. Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 594 (4^th Cir. 2004). In determining whether to exercise declaratory jurisdiction, this Court must consider whether declaratory relief would "serve a useful purpose in clarifying and settling the legal relations in issue," and whether the judgment would "terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding." Id. (citation omitted). Because the requested declaratory judgment serves neither of these objectives, the Court will dismiss Count VI of the Complaint.

Hardnett v. M&T Bank, 204 F.Supp.3d 851, 862 (E.D.Va. 2016), aff'd sub nom. Hardnett v. M & T Bank, 699 F.App'x 242 (4^th Cir. 2017).

In a similar circumstance, where a foreclosure had already occurred, the court found the declaratory judgment action inappropriate:

The Court grants the U.S. Bank Defendants' Motion to Dismiss as to Count I because declaratory relief is inappropriate as the foreclosure has already occurred and becausethe Amended Complaint fails to set forth facts establishing plausible grounds for declaratory relief. Federal Rule of Civil Procedure 57 provides that the federal rules "govern the procedure for obtaining a declaratory judgment under 28 U.S.C. § 2201." FED.R.CIV.P. 57. Under the Declaratory Judgment Act, 28 U.S.C. § 2201(a), "any court of the United States . . . may declare the rights and other legal relations of any interested party seeking

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