Enrique Hernandez v. Federal National Mortgage Association , 701 F. App'x 848 ( 2017 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 15-14451
Non-Argument Calendar
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D.C. Docket Nos. 6:14-cv-01451-CEM; 6:13-bkc-14645-CCJ
IN RE: ENRIQUE HERNANDEZ,
Debtor.
_________________________________
ENRIQUE HERNANDEZ,
Plaintiff - Appellant,
versus
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
Defendant - Appellee.
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Appeal from the United States District Court
for the Middle District of Florida
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(July 12, 2017)
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Before HULL, WILSON, and JILL PRYOR, Circuit Judges.
PER CURIAM:
Enrique Hernandez appeals the bankruptcy court’s grant of Federal National
Mortgage Association’s (Fannie Mae) third party motion for relief from the
automatic stay imposed on its efforts to obtain possession of the property where
Hernandez resides, which Fannie Mae purchased from the mortgage lender in a
foreclosure sale. Hernandez challenges the merits of the bankruptcy court’s ruling,
Fannie Mae’s standing to file the motion, and the bankruptcy court’s failure to
afford him due process in deciding the motion. After careful review, we affirm.
I. BACKGROUND
Hernandez resides in a house at 816 Rolling Green Drive, Apopka, Florida
(“the property”). On December 2, 2013, Hernandez filed for Chapter 13
bankruptcy protection in the United States Bankruptcy Court for the Middle
District of Florida. This filing resulted in an automatic stay on “any act to obtain
possession of property of the [bankruptcy] estate or of property from the estate or
to exercise control over property of the estate.” 11 U.S.C. § 362(a)(3).
Hernandez subsequently filed in the bankruptcy court a motion for sanctions
and damages alleging that Fannie Mae violated the automatic stay by sending him
a letter seeking to take possession of the property and threatening state court
action. Hernandez attached to the motion a Certificate of Title indicating that the
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property had been sold to Fannie Mae by the lender on September 7, 2012. The
Certificate of Title noted that a Certificate of Sale had been executed on that day.
Hernandez also attached to the motion documentation showing that he had
unsuccessfully attempted to set aside the Certificate of Sale in Florida state court.
The documents included the Florida Ninth Judicial Circuit Court’s denial of
Hernandez’s motion to set aside the sale and the Florida Fifth District Court of
Appeals’s summary affirmance of that decision. In addition, Hernandez provided
the court with a state court order staying Fannie Mae’s writ of possession on the
property and Fannie Mae’s subsequent state court motion to lift the stay. The latter
noted that the state court had previously entered a final judgment of foreclosure
against Hernandez as to the property and that Fannie Mae was the successful
bidder on the property at a foreclosure sale.
The bankruptcy court noticed a preliminary hearing on the motion for
sanctions. At the hearing, Fannie Mae orally made a motion seeking relief from
the automatic stay to pursue its efforts to obtain possession of the property. Fannie
Mae asserted that it was entitled to relief because it obtained a certificate of title to
the property before Hernandez petitioned for bankruptcy, meaning the property
never became part of the bankruptcy estate. Without affording Hernandez an
opportunity to respond, the bankruptcy court orally granted Fannie Mae’s motion.
Hernandez protested that he wanted an evidentiary hearing before the automatic
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stay was lifted. The court responded that it had already made its decision with
regard to the stay and subsequently entered a written order granting the motion for
relief. The court nevertheless gave Hernandez 30 days to find another place to
live.
Hernandez appealed the bankruptcy court’s decision to grant Fannie Mae
relief from the automatic stay to the district court, which affirmed on the ground
that it lacked jurisdiction to upset a state court judgment. 1 Hernandez now appeals
to this Court.
II. STANDARD OF REVIEW
“We review the district court’s decision to affirm the bankruptcy court de
novo, which allows us to assess the bankruptcy court’s judgment anew, employing
the same standard of review the district court itself used.” In re Globe Mfg. Corp.,
567 F.3d 1291, 1296 (11th Cir. 2009). We review the bankruptcy court’s decision
to grant relief from the automatic stay imposed by 11 U.S.C. § 362 for an abuse of
discretion. In re Dixie Broad., Inc., 871 F.2d 1023, 1026 (11th Cir. 1989).
III. DISCUSSION
The bankruptcy court did not abuse its discretion in granting Fannie Mae
relief from the automatic stay. Under 11 U.S.C. § 362(d)(1), a bankruptcy court
“shall grant relief from the stay . . . for cause.” Here, the bankruptcy court had
1
The bankruptcy court stayed its order granting Fannie Mae relief from the automatic
stay pending the outcome of Hernandez’s appeal to the district court.
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good cause to grant the motion for relief. Hernandez attached to his motion for
sanctions a Certificate of Title, which was issued by the county clerk and recorded
with the county, indicating that a Certificate of Sale had been executed transferring
title of the property to Fannie Mae over a year before Hernandez filed for
bankruptcy. The sale to Fannie Mae was confirmed by the Florida state courts
through a legal process that terminated before the bankruptcy filing. And the
record before the bankruptcy court contained no other evidence suggesting that
Fannie Mae failed to take valid title to the property before Hernandez filed his
bankruptcy petition.2 Thus, the bankruptcy court properly granted Fannie Mae
relief from the automatic stay as the property never became part of the bankruptcy
estate.3
To the extent Hernandez asks us to conclude otherwise, we are barred from
doing so by the Rooker-Feldman doctrine, which prohibits federal court review of
state court final judgments. See Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir.
2009). Under the doctrine, a federal court may not review a claim that is
2
Hernandez argues on appeal that the bankruptcy judge failed to afford him due process
by denying him notice and an opportunity to respond to Fannie Mae’s motion for relief. To the
extent the bankruptcy court erred, the error was harmless because the documents Hernandez
attached to his motion for sanctions sufficed to show that the property never became part of the
bankruptcy estate, and Hernandez has failed to identify any evidence to the contrary. See Fed. R.
Bankr. P. 9005 (incorporating Fed. R. Civ. P. 61 into the bankruptcy rules); Fed. R. Civ. P. 61
(“Unless justice requires otherwise, no . . . error by the court . . . is ground for . . . disturbing a
judgment or order.”).
3
For the same reasons, we reject as meritless Hernandez’s argument that Fannie Mae
lacked standing to seek relief from the automatic stay. Fannie Mae had standing as a third party
purchaser and putative owner of the property.
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“inextricably intertwined” with a state court judgment. 4 Id. A claim is
inextricably intertwined if it “succeeds only to the extent that the state court
wrongly decided the issues.” Id. (internal quotation marks omitted). Here, to
decide that Fannie Mae was not entitled to relief on Hernandez’s asserted grounds,
a federal court would have to determine that the sale of the property to Fannie Mae
was invalid or did not take place. Doing so would require the Court to conclude
that the Florida state courts erred in declining to set aside the Certificate of Sale
granting the property to Fannie Mae. Under the Rooker-Feldman doctrine, we may
not do so.5
IV. CONCLUSION
We affirm the bankruptcy court’s grant of relief from automatic stay to
Fannie Mae.
AFFIRMED.
4
Hernandez argues that the Rooker-Feldman doctrine does not apply to this case because
Fannie Mae was not a party to the state court action. But for the doctrine to apply, only the party
seeking to upset a state court judgment had to have been a party to the state court action. See
Johnson v. De Grandy, 512 U.S. 997, 1005-06 (1994). Indeed, the doctrine applies to issues
raised “by state-court losers complaining of injuries caused by state-court judgments rendered
before the [federal] court proceedings commenced and inviting [federal] court review and
rejection of those judgments.” Nicholson v. Shafe, 558 F.3d 1266, 1273 (11th Cir. 2009)
(internal quotation marks omitted). It is therefore of no significance that Fannie Mae was not a
party to the state court proceedings.
5
Fannie Mae also argues that this appeal is moot because Hernandez has been discharged
from bankruptcy. We reject this argument for the reasons explained in this court’s January 9,
2017 denial of Fannie Mae’s motion to dismiss the appeal as moot.
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