Ibrahim v. Bankowski (In re Ibrahim)

ANWAR M. IBRAHIM, Debtor.

ANWAR M. IBRAHIM, Appellant, v. CAROLYN A. BANKOWSKI, Chapter 13 Trustee, Appellee.

ANWAR M. IBRAHIM, Debtor.

ANWAR M. IBRAHIM, Appellant, v. GOSHEN MORTGAGE REO, LLC, Appellee.

BAP NO. MB 18-020

Bankruptcy Case No. 16-13549-FJB

BAP NO. MB 18-037

UNITED STATES BANKRUPTCY APPELLATE PANEL FOR THE FIRST CIRCUIT

August 28, 2019

NOT FOR PUBLICATION

Appeals from the United States Bankruptcy Court for the District of Massachusetts

(Hon. Joan N. Feeney, U.S. Bankruptcy Judge)

Before Tester, Cabán, and Fagone, United States Bankruptcy Appellate Panel Judges.

Anwar M. Ibrahim, Pro Se, on brief for Appellant.

Carolyn A. Bankowski, Esq., and Patricia A. Remer, Esq., on brief for Appellee, Carolyn A. Bankowski, Chapter 13 Trustee.

Edward M. Gainor, Esq., on brief for Appellee, Goshen Mortgage REO, LLC.

Per Curiam.

Anwar M. Ibrahim (the "Debtor") appeals from the following bankruptcy court orders: (1) the order denying his motion to vacate the dismissal of his case; (2) the order denying his motion to file an amended plan as moot in light of the dismissal of his case; and (3) the order denying reconsideration of the denial of his request for sanctions against Goshen Mortgage REO, LLC ("Goshen") for alleged violations of the automatic stay.¹ For the reasons set forth below, we AFFIRM all three orders.

BACKGROUND²

I. Pre-Bankruptcy Events

In 2008, the Debtor purchased a two-family dwelling in Malden, Massachusetts (the "Property"), which he financed with a mortgage loan from Guidance Residential, LLC ("Guidance").

In October 2008, the Property was converted into two condominiums. The Debtor retained Unit 2 as his personal residence, and he sold Unit 1 to his sister, Muna Ibrahim. A few years later, JPMorgan Chase Bank ("JPMorgan"), which held a mortgage on Unit 1, conducted a foreclosure sale of Unit 1 and executed a foreclosure deed in favor of Federal National Mortgage Association ("Fannie Mae"). Thereafter, Fannie Mae commenced a summary process action inthe state court seeking to evict Muna Ibrahim and the Debtor as the occupants of Unit 1. The state court entered a judgment of possession and an execution in Fannie Mae's favor, and the contents of Unit 1 were removed from the premises. Thereafter, in August 2015, JPMorgan sold Unit 1 to Goshen.

In late 2010, Guidance conducted a foreclosure sale of Unit 2, and executed a foreclosure deed in favor of Federal Home Loan Mortgage Corporation. Thereafter, Goshen purchased Unit 2 and commenced eviction proceedings against the Debtor. In June 2015, the state court awarded a judgment of possession and an execution with respect to Unit 2 in favor of Goshen.

What transpired thereafter with respect to Unit 2 is unclear, but it appears that Goshen commenced another state court eviction proceeding and the state court entered a judgment of possession in Goshen's favor in September 2016. Between November 2016 and March 2017, while the Debtor's bankruptcy case was pending, the state court held at least five "status review" hearings in the eviction proceedings. The Debtor later claimed, in his bankruptcy case, that those hearings violated the automatic stay.

II. Bankruptcy Proceedings

A. Bankruptcy Filing

The Debtor filed a chapter 13 petition in September 2016. Notwithstanding the foreclosure sales and eviction proceedings, the Debtor listed the Property as his current address on his petition. He also indicated on his bankruptcy schedules that he was the sole owner of the Property, and he claimed a Massachusetts homestead exemption with respect to the Property. He listed Goshen as holding a claim in the amount of $0.00 secured by the Property.³

B. Debtor's First Chapter 13 Plan, Trustee's Objection, and Denial of Confirmation

In his initial chapter 13 plan, the Debtor proposed to make monthly payments of $249 through the plan for 36 months, and to pay a 5% dividend to unsecured creditors. The plan did not provide for the payment of any secured claims. The chapter 13 trustee (the "Trustee") objected to confirmation of the plan arguing, among other things, that it failed to provide any treatment for secured claims. On November 29, 2016, the bankruptcy court entered an order sustaining the Trustee's objection to confirmation and ordering the Debtor to file an amended plan within 30 days.

C. Trustee's Objection to Claimed Homestead Exemption

The Trustee objected to the Debtor's claimed homestead exemption on the grounds that the Debtor no longer held title to the Property and, therefore, could not claim a homestead exemption in the Property. After a hearing on December 1, 2016, the bankruptcy court entered an order ("December 2016 Order") directing the Debtor to file a response to the Trustee's objection to the homestead exemption by December 16, 2016, and to file "any adversary proceeding(s) with respect to the subject property" by January 6, 2017.⁴ The Debtor then filed a response alleging that he could claim a homestead exemption because he was the "rightful owner of the Property" as the foreclosure sales of Units 1 and 2 were "invalid." The Debtor did not, however, commence an adversary proceeding by the January 6, 2017 deadline set forth in the December 2016 Order.

D. Amended Plan, Amended Schedules, and Trustee's Objections

On January 17, 2017, the Debtor filed an amended chapter 13 plan and a Motion to File Amended Plan. Again, the proposed plan failed to provide any treatment for the secured claims listed on the Debtor's schedules. The Debtor also filed certain amended schedules, in which he continued to list an ownership interest in the Property and to claim a homestead exemption.

The Trustee filed another objection to the Debtor's claimed homestead exemption, restating the arguments previously presented in her prior objection. She also objected to the amended plan, arguing that it failed to provide any treatment for secured claims and the Debtor had failed to file an adversary proceeding "with respect to the Property and the alleged invalid foreclosure[s]" as required by the December 2016 Order. The Debtor did not file a response to either objection.

E. The February 2017 and March 2017 Orders

On February 27, 2017, the bankruptcy court entered an order sustaining the Trustee's objection to the amended plan, and ordering the Debtor to file another amended plan within 30 days, "failing which the case [would] be dismissed." The Debtor did not comply with the court's order.

After a March 17, 2017 hearing on the Trustee's objection to the claimed homestead exemption, the bankruptcy court ordered the Debtor to file a supplemental response to the objection by March 30, 2017, along with a title search for the Property. Despite receiving an extension of that deadline, the Debtor failed to comply with the court's order.

F. Stay Violation Motion and Goshen's Objection

Also in March 2017, the Debtor filed a motion entitled "Emergency [M]otion for an Injunction/ Restraining Order and [H]earing for [V]iolations" (as supplemented, the "StayViolation Motion"). In the Stay Violation Motion, the Debtor averred that Goshen had willfully violated the automatic stay by continuing, after the bankruptcy filing, state court eviction proceedings against him. According to the Debtor, the post-petition "status review" hearings held by the state court violated the automatic stay. Thus, he sought damages for emotional distress, as well as attorney's fees and punitive damages.

Goshen opposed the motion, contending that the automatic stay did not apply because the Debtor "has no legal or equitable property interest [in either Unit 1 or Unit 2] to be protected," and denied that it had taken any action in violation of the automatic stay.

G. Order Denying Stay Violation Motion

Construing the Stay Violation Motion as one for damages under 11 U.S.C. § 362(k) for violations of the automatic stay, the bankruptcy court held an evidentiary hearing on December 12, 2017. The Debtor testified at the hearing.⁵ Goshen presented two witnesses—Constable Nick Nicosia, who testified as to Debtor's post-foreclosure eviction from the Property, and Attorney Daniel Murphy, who represented JPMorgan in one of the state court eviction proceedings and testified as to various post-foreclosure proceedings against the Debtor. After the hearing, the parties submitted post-trial briefs as ordered by the court.

On February 27, 2018, the bankruptcy court entered an order denying the Stay Violation Motion (the "Order Denying Stay Violation Motion"). In an accompanying decision, the bankruptcy court set forth extensive factual findings regarding the various pre-bankruptcy foreclosure and eviction proceedings against the Debtor and/or his children in the state courtrelating to the Property. The bankruptcy court ultimately concluded that the Debtor had failed to establish a willful violation of the automatic stay by Goshen, stating:

[T]he Court finds that the Debtor did not establish a willful violation of the automatic stay by Goshen with respect to the Fourth Eviction action after the commencement of the Debtor's case as a result of the Status Review hearings that were conducted by the Malden District Court. Specifically, the Debtor failed to submit any convincing evidence that Goshen took any actions in violation of the automatic stay. He did not submit evidence that Goshen was responsible for scheduling the various hearings that took place in the Malden District Court after he commenced his Chapter 13 case; he did not submit any evidence of any actions that Goshen took or representations or arguments that Goshen through its counsel may have made at the hearings that took place in the Fourth Eviction action. In sum, he fell far short of his burden of proof under § 362(k). . . .

The Debtor complained vociferously about actions taken by Goshen prior to the commencement of his case, including the institution of criminal proceedings, and he complained about moneys that he had to expend to obtain representation. Those actions by Goshen

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