Georgette M. Moisuc v. ( 2018 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 17-2584
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In re: GEORGETTE MOISUC,
Appellant
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On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(E.D. Pa. No. 2-15-cv-03799)
District Judge: Honorable Joel H. Slomsky
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Submitted Pursuant to Third Circuit LAR 34.1(a)
March 9, 2018
Before: SHWARTZ, KRAUSE and FISHER, Circuit Judges
(Opinion filed: March 23, 2018)
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OPINION*
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PER CURIAM
Georgette Moisuc, proceeding pro se, appeals an order of the United States
District Court for the Eastern District of Pennsylvania affirming an order of the United
States Bankruptcy Court for the Eastern District of Pennsylvania approving a settlement
agreement. For the reasons that follow, we will affirm the judgment of the District Court.
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
In 2004, Georgette Moisuc and her husband, Vladimir Moisuc, executed a
mortgage in connection with a loan by New Century Mortgage Corporation in the amount
of $660,000. Vladimir Moisuc executed the related note. In 2008, Vladimir Moisuc
passed away. On July 9, 2012, Deutsche Bank National Trust Company filed a
foreclosure action against Georgette Moisuc in the Delaware County, Pennsylvania Court
of Common Pleas alleging that it had been assigned the mortgage and that the loan was in
default as a result of a failure to pay monthly installments since January 1, 2012.1
Moisuc asserted in her answer to Deutsche Bank’s amended complaint that only
her husband had executed the mortgage, that her signatures had been forged, and that the
mortgage assignment to Deutsche Bank was fraudulent. The trial, which had apparently
begun before the forgery allegations were raised and the amended complaint was filed,
was scheduled to resume on February 3, 2015. On February 2, 2015, Moisuc filed a
Chapter 7 bankruptcy petition in Bankruptcy Court and the foreclosure action was stayed.
The Bankruptcy Court granted Deutsche Bank’s motion for relief from the
automatic stay on May 6, 2015 so that the state court trial could be completed. On May
18, 2015, however, the Trustee moved for an order approving a Stipulation of Settlement
with Deutsche Bank. Deutsche Bank had offered the Trustee $20,000 in full and final
settlement of all of Moisuc’s defenses to the foreclosure action and the stay relief motion.
1
The foreclosure action was filed by Deutsche Bank National Trust Company, as Trustee
under Pooling and Servicing Agreement dated as of January 1, 2005 Morgan Stanley
ABS Capital I Inc. Trust 2005-HE1, By Its Attorney-In-Fact Ocwen Loan Servicing,
LLC, which we will refer to as Deutsche Bank.
2
The Trustee stated in the motion that he had investigated Moisuc’s forgery and
other claims in the foreclosure action, which became the property of the bankruptcy
estate. He concluded, in an exercise of his business judgment, that it would not be in the
estate’s best interests to assert Moisuc’s defenses to the foreclosure action or the stay
relief motion. He based his conclusion upon, among other things, the time and expense
required to pursue the forgery claim and the fact that there were no funds to pay counsel
to litigate the claim, the questionable validity of the claim in light of its belated assertion,
Moisuc’s admissions at her deposition that she and her husband were present at the loan
closing and that the loan proceeds were deposited into their joint checking account, her
contradictory assertions as to whether her husband had signed the loan documents, and
the fact that she had only $14,848.21 in general unsecured debt.
The Trustee stated that the settlement would resolve the claims and bring needed
funds into the estate without the costs and risks of further litigation. Under the
Stipulation of Settlement, the Trustee agreed to settle all of Moisuc’s claims and defenses
to the foreclosure action and the stay relief motion. Because the settlement would pay all
of Moisuc’s unsecured claims, the Trustee agreed to abandon the estate’s interest in the
real property.
Moisuc then filed a motion to dismiss her bankruptcy case. She stated that her
circumstances had changed and that she could resolve her financial affairs without the
court’s aid. Moisuc also filed objections to the Trustee’s motion to approve the
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settlement. She asserted that expert reports supported her forgery claim and that her
bankruptcy case should be dismissed.
At a hearing on the motions, the Bankruptcy Court denied Moisuc’s motion to
dismiss the bankruptcy case because the proposed settlement would pay her unsecured
creditors in full and was in their best interest. In support of his motion to approve the
settlement, the Trustee stated that he had spent a lot of time reviewing the state court
pleadings, that there were conflicting expert reports as to whether the signatures were
forged, and that a notary public present at the closing of the loan supported a conclusion
that they were valid. The Trustee also stated that the Moisucs had received the benefit of
the loan because they received funds that paid off their prior mortgage and a check for
over $200,000. The Trustee said that he believed that the chances were “better than a
50/50 proposition” that Deutsche Bank would prevail. The Bankruptcy Court asked
about the effect of the settlement on the foreclosure action and counsel for Deutsche
Bank confirmed that its approval mooted that proceeding because Moisuc was left with
nothing to argue in state court.
The Bankruptcy Court approved the settlement. The Bankruptcy Court explained
that, absent evidence that the Trustee failed to exercise business judgment or that his
judgment was faulty, motions to approve compromises are routinely granted. The
Bankruptcy Court stated that the settlement was fairly compelling because it provided for
payment in full of all of Moisuc’s unsecured claims. The Bankruptcy Court noted that it
was difficult for Moisuc to show faulty business judgment by the Trustee where he
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reviewed the state court matter, concluded that the Bank would prevail, and concluded
that Moisuc’s position was hard to sustain because she got the benefit of the bargain
whether or not she or her husband signed the documents. The Bankruptcy Court stated
that Moisuc had provided nothing that undermined the Trustee’s judgment, that she
received the benefit of the loan, and that she had admitted at the hearing that her husband
had signed the mortgage.
Moisuc appealed to District Court. The District Court applied the test for
evaluating the settlement of a claim set forth in In re Martin, 91 F.3d 389, 393 (3d Cir.
1996), under which a bankruptcy court considers (1) the probability of success in
litigation; (2) the likely difficulties in collection; (3) the complexity of the litigation, and
its attending expense, inconvenience, and delay; and (4) the paramount interest of the
creditors.
The District Court concluded that the Bankruptcy Court did not abuse its
discretion in relying on the Trustee’s judgment that Deutsche Bank would likely prevail
in state court, where the Trustee had reviewed the state court record and found
undisputed evidence that the Moisucs had received the benefit of the loan, and Moisuc
did not show that his judgment was faulty. The District Court also ruled that the
Bankruptcy Court properly considered the likely difficulties in collection when it denied
Moisuc’s motion to dismiss the bankruptcy case and stated that the settlement allowed
her creditors to be paid in full immediately, which Moisuc admitted she could not do.
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The District Court also found no error in the Bankruptcy Court’s reliance on the
Trustee’s judgment as to the complexity of the litigation and its time and expense. The
District Court noted that the Trustee had stated in his motion that success on the forgery
claim would inevitably result in an appeal, which would entail additional expense and
delay disposition of the bankruptcy case, and that the foreclosure action would involve a
battle of experts. In addition, the District Court found no abuse of discretion as to the
consideration of the paramount interest of the creditors, which, as noted above, would be
paid in full. The District Court affirmed the Bankruptcy Court’s approval of the
settlement and rejected Moisuc’s other arguments on appeal, which included defenses to
the foreclosure action. This appeal followed.
We have jurisdiction pursuant to 28 U.S.C. § 158(d). We review the Bankruptcy
Court’s approval of the Stipulation of Settlement for abuse of discretion. Martin, 91 F.3d
at 391.
Moisuc argues on appeal that the trust for which Deutsche Bank serves as trustee
does not exist. She asserts that documents and court orders have been filed that refer to
Deutsche Bank, as Trustee for “Morgan Stanley ABS Capital I Inc. Trust 2005-HEL,”
and that this trust is not in the Securities and Exchange Commission’s public database.
Deutsche Bank states that the correct name of the trust is “Morgan Stanley ABS Capital I
Inc. Trust 2005-HE1” and that the discrepancies are typographical errors. The record
reflects that there have been court filings using both names and that the trust is referred to
as Morgan Stanley ABS Capital I Inc. Trust 2005-HE1 in the foreclosure action, the
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Stipulation of Settlement, and the order approving the settlement. Moisuc has not shown
that relief is due based on the apparent errors in other filings.
Moisuc also raises arguments she made in District Court related to the foreclosure
action, including that the signatures on the mortgage and assignment are forged. To the
extent these arguments relate to Moisuc’s probability of success in the foreclosure action
under Martin, Moisuc did not show in Bankruptcy Court that the Trustee’s conclusion in
this regard was faulty. Moisuc also contends that Deutsche Bank has no standing in
federal court, but we agree with the District Court that Deutsche Bank has standing as it
is a party to the settlement agreement that is the subject of Moisuc’s appeal. Moisuc also
argues that the mortgage assignment to Deutsche Bank violated provisions of the
Bankruptcy Code. Moisuc, however, did not raise these arguments in opposing the
motion to approve the settlement and they are not properly before us.
Finally, Moisuc has reproduced in the Statement of the Case section of her brief a
motion for relief pursuant to Federal Rule of Civil Procedure 60(b). The District Court
has denied Moisuc’s motion. To the extent Moisuc seeks review of the post-judgment
order, a separate appeal is required. We do not consider her arguments in this regard.
Accordingly, we will affirm the judgment of the District Court.2
2
Moisuc’s “Motion to Postpone February 9, 2018 Calendar Date . . . and Leave to Submit
an Amended Complaint . . .,” which seeks leave pursuant to Federal Rule of Appellate
Procedure 28(j) to submit an amended appeal brief and supporting documents, is denied.
See Beazer East, Inc. v. Mead Corp., 525 F.3d 255, 264 (3d Cir. 2008) (Rule 28(j) letter
cannot be used to present additional arguments). Deutsche Bank’s motion to suppress
Moisuc’s motion is denied.
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