In re: Darryl M. Jones

FILED
OCT 10 2018
NOT FOR PUBLICATION
SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
In re: BAP No. CC-18-1008-LSF
DARRYL M. JONES, Bk. No. 2:17-bk-21533-WB
Debtor.
DARRYL M. JONES,
Appellant,
v. MEMORANDUM*
SORAYA MACHADO-POWELL, Agent
to Carrington Mortgage; DAVID JUDD,
Agent for Realhome Services and
Solutions, Inc.; TREVON HALL, Agent
for Realhome Services and Solutions, Inc.;
ALTISOURCE REALTORS; REALHOME
SERVICES, INC.,
Appellees.
Submitted Without Argument on September 27, 2018
Filed – October 10, 2018
*
This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
Appeal from the United States Bankruptcy Court
for the Central District of California
Honorable Julia Wagner Brand, Bankruptcy Judge, Presiding
Appearances: Darryl M. Jones, Appellant, pro se on brief; Nichole
Glowin of Wright, Finlay & Zak, LLP on brief for
Appellees.
Before: LAFFERTY, SPRAKER, and FARIS, Bankruptcy Judges.
INTRODUCTION
Darryl M. Jones appeals the bankruptcy court’s order denying his
emergency motion for damages for violation of the automatic stay. The
bankruptcy court denied the motion because it found that Mr. Jones did
not have any interest in the real property at issue when he filed his chapter
131 bankruptcy petition. Accordingly, that property was not subject to the
automatic stay, and Appellees could not be held liable for damages under
§ 362(k).
We AFFIRM.
1
Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1532, and all “Rule” references are to the Federal
Rules of Bankruptcy Procedure.
2
FACTUAL BACKGROUND
Mr. Jones claims an interest in real property located on Bradna Drive
in Los Angeles (the “Property”). Mr. Jones filed a chapter 13 petition on
September 20, 2017, listing the Property on Schedule A. In November 2017,
he filed an emergency motion for damages (the “Motion”) against
Appellees, alleging willful violation of the automatic stay and seeking
compensatory, punitive, and emotional distress damages under § 362(k).
In the Motion, Mr. Jones alleged that Appellees had, postpetition and
with knowledge of the stay, “illegally removed all debtor cash and
personal property” from the Property, changed the locks, and evicted the
occupants. Mr. Jones also alleged that Appellees had held an open house
on the Property to show it to prospective buyers and had posted a notice
on the Property that Mr. Jones would be arrested if he came onto the
Property. The Motion was not supported by a declaration, and none of the
documents attached to the Motion showed that Mr. Jones held any interest
in the Property as of the petition date.
Appellees David Judd, as agent for RealHome Services and Solutions,
Inc., and Trevon Hall, as agent for Realhome Services and Solutions, Inc.,
and Realhome Services, Inc., (collectively, “Realhome”) jointly filed an
opposition to the Motion. In its opposition, Realhome contended that
Mr. Jones had no interest in the Property as of the petition date. Realhome
attached several documents to its opposition, including:
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• Quitclaim Deed recorded August 24, 2010, conveying Stacia
Trimmer’s interest in the Property to Mr. Jones;
• Trustee’s Deed Upon Sale recorded April 7, 2011 transferring
title to the Property to U.S. Bank, National Association, Trustee
for SerVertis Fund Trust 2009-2 Grant Trust Certificates, Series
2009-2 (“USB-1“);
• Grant Deed recorded February 29, 2012 from USB-1 to U.S.
Bank, N.A., as Trustee for SerVertis REO Pass-Through Trust I
(“USB-2 “);
• Complaint for Unlawful Detainer (No. 12U01031) dated March
20, 2012, filed by USB-2 in the Superior Court of California,
County of Los Angeles against Ms. Trimmer and Mr. Jones;
• Quitclaim Deed recorded December 20, 2013 from USB-2 to
Christiana Trust, A Division of Wilmington Savings Fund
Society, FSB, Not in Its Individual Capacity but as Trustee of
ARLP Trust 2 (“Christiana”);
• Judgment After Jury Trial entered August 12, 2014, in the
unlawful detainer action against Ms. Trimmer and Mr. Jones,
granting Christiana possession of the Property and awarding
damages;
• Civil Minutes dated June 5, 2017 (“Civil Minutes”) entered in
U.S. District Court for the Central District of California Case
4
No. CV 16-6919-DMG; and
• Judgment of Dismissal with Prejudice dated June 15, 2017,
entered in District Court Case No. CV 16-6919, dismissing
Mr. Jones’ Third Amended Complaint against Christiana.
With these documents as backup, Realhome described the sequence
of events affecting title to the Property. Specifically, Mr. Jones obtained an
interest in the Property via the quitclaim deed executed by Ms. Trimmer
and recorded August 24, 2010. Ms. Trimmer was the obligor under a note
secured by a deed of trust encumbering the Property. In April 2011, the
Property was purchased at a nonjudicial foreclosure sale by USB-1. In
February 2012, USB-1 transferred title to the Property to USB-2. In March
2012, USB-2 filed an unlawful detainer action in the Superior Court for Los
Angeles County against Ms. Trimmer, Mr. Jones, and all other occupants of
the Property. During the pendency of the unlawful detainer action, USB-2
recorded a quitclaim deed transferring title to the Property to Christiana.
Christiana thereafter prosecuted the unlawful detainer action and, after a
jury trial, obtained a judgment against Ms. Trimmer and Mr. Jones
declaring that Christiana was entitled to immediate possession of the
Property and awarding damages.
In the meantime, Mr. Jones filed several unsuccessful lawsuits
challenging the foreclosure and seeking a determination that he was the
rightful owner of the Property. After the completion of Mr. Jones’ fifth
5
lawsuit, in June 2016, Christiana obtained a writ of possession to complete
the eviction and regain possession of the Property. In September 2016, the
Los Angeles County Sheriff’s Department executed and completed a
lockout, removing all occupants from the Property. After the eviction,
Mr. Jones broke into the Property, necessitating a second lockout to secure
the Property.
Mr. Jones thereafter filed a sixth lawsuit in the U.S. District Court for
the Central District of California, again challenging the foreclosure and
alleging that he was the rightful owner of the Property. In June 2017, the
District Court granted Christiana’s motion to dismiss the lawsuit, finding
that Mr. Jones had no interest in the Property.2 During the pendency of the
2
According to the Civil Minutes, the court dismissed Mr. Jones’ quiet title claim
because he had not alleged facts plausibly to show that he was the rightful owner of the
Property, and judicially noticed documents showed that he lacked an interest in the
Property. Specifically, the documents showed that in 2015, Mr. Jones transferred
whatever interest he may have had in the Property to the Mathews Family Trust 2014;
and to the extent Mr. Jones’ interest in the Property arose in 2010 by way of quitclaim
deed from Ms. Trimmer, that interest was subject to the Trimmer deed of trust and was
extinguished in the April 1, 2011 trustee’s sale.
The District Court also noted in its Civil Minutes that (1) in 2010, after recording
the quitclaim deed that conveyed the Property to him, Mr. Jones filed a chapter 7
proceeding to stop the foreclosure of the Property; the bankruptcy court granted relief
from stay, finding that the bankruptcy petition was part of a scheme to delay, hinder,
and defraud creditors using multiple transfers of the Property and multiple
bankruptcies; and (2) in a 2012 state court lawsuit, Mr. Jones and Ms. Trimmer were
deemed vexatious litigants and were barred from filing any new litigation in California
state courts related to wrongful foreclosure and related causes of action without leave of
(continued...)
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District Court lawsuit, Mr. Jones was provided with a Notice of Right to
Reclaim Abandoned Personal Property, informing him he had 18 days to
reclaim and remove his personal property from the Property or it would be
sold. Mr. Jones did not respond to the notice, and his personal property
was sold at auction in May 2017. Thereafter, Christiana contracted with
Appellees to aid in resale of the Property.
Mr. Jones filed an untimely reply, pointing out that in 2015 he had
transferred his interest in the Property to the Mathews Family Living Trust
2014. He also alleged that any interest U.S. Bank had in the Property was
extinguished in a wrongful foreclosure lawsuit he filed in December 2013
because the court had entered a default against U.S. Bank on February 4,
2014. Mr. Jones attached to his reply copies of the relevant grant deed and
the default entered February 4, 2014 in the 2013 state court lawsuit.3 The
bankruptcy court disregarded the reply as untimely.
At the December 7, 2017 hearing on the Motion, Mr. Jones referenced
the default he had obtained against U.S. Bank and alleged that U.S. Bank
had thereafter tried to fraudulently convey the Property. He then
2
(...continued)
court.
3
According to the Civil Minutes, that 2013 lawsuit was against U.S. Bank,
National Association–not USB-2, the entity that then owned the Trimmer deed of
trust–and although Mr. Jones obtained entry of default, there was no evidence that a
default judgment was ever entered.
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“proclaimed” and stated “under penalty of perjury” to be the owner of the
Property. After hearing argument, the bankruptcy court denied the Motion,
finding that (I) once the foreclosure had occurred and an unlawful detainer
judgment entered, under California law Mr. Jones no longer had any
interest in the Property, citing Eden Place, LLC v. Perl (In re Perl), 811 F.3d
1120 (9th Cir. 2016); (ii) the bankruptcy court could not revisit the matters
decided in state court or district court in which a final judgment had been
entered–in particular, the finding of the federal district court that Mr. Jones
had no interest in the Property; (iii) the recorded deeds indicated that
Mr. Jones had no interest in the Property; and (iv) Mr. Jones had provided
no evidence regarding the allegedly improper removal of the personal
property.
Mr. Jones’ chapter 13 case was dismissed on December 28, 2017 for
his failure to cure his plan payment delinquency.4 On the same date, the
bankruptcy court entered its order denying the Motion; Mr. Jones timely
appealed.
4
Mr. Jones filed a new chapter 13 case on September 21, 2018. The automatic stay
in the new case is not implicated, however, because the Motion was initiated by
Mr. Jones. See Eisinger v. Way (In re Way), 229 B.R. 11, 13-14 (9th Cir. BAP 1998)
(automatic stay does not prevent a debtor or trustee from continuing to prosecute a
prepetition lawsuit, nor does it prevent a defendant from defending itself in such a
lawsuit).
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JURISDICTION
The bankruptcy court had jurisdiction pursuant to 28 U.S.C. §§ 1334and 157(b)(2)(O). We have jurisdiction under 28 U.S.C. § 158.
ISSUE
Did the bankruptcy court err in determining that the Property was
not property of the estate as of the petition date?
STANDARD OF REVIEW
Whether property is property of the estate is a question of law
reviewed de novo, Fursman v. Ulrich (In re First Protection, Inc.), 440 B.R.
821, 826 (9th Cir. BAP 2016), as is whether the automatic stay provisions of
§ 362(a) have been violated. In re Perl, 811 F.3d at 1124.
DISCUSSION
The bankruptcy court’s ruling was based primarily on the fact that
Mr. Jones had provided no evidence to show that he had an interest in the
Property as of the petition date. The documents submitted with Realhome’s
opposition supported this conclusion. The Trustee’s Deed Upon Sale
recorded April 7, 2011 transferred title to the Property to USB-1 and
extinguished any interest Mr. Jones may have had. See id. at 1128. And the
Judgment After Jury Trial entered August 12, 2014 in the unlawful detainer
action extinguished any possessory interest Mr. Jones may have had. See id.
at 1130.
The bankruptcy court also correctly found that it could not look
9
behind any of the state or federal court final judgments, to the extent
Mr. Jones was alleging that those judgments were entered erroneously. See
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)
(Rooker-Feldman doctrine is applicable only in “cases brought by state-court
losers complaining of injuries caused by state-court judgments rendered
before the district court proceedings commenced and inviting district court
review and rejection of those judgments.”); Owens v. Kaiser Found. Health
Plan, Inc., 244 F.3d 708, 713-14 (9th Cir. 2001) (res judicata bars litigation in
a subsequent action of any claims that were raised or could have been
raised in the prior federal court action); Robi v. Five Platters, Inc., 838 F.2d
318, 322 (9th Cir. 1988) (federal courts are bound by 28 U.S.C. § 1738 to give
full faith and credit to state court judgments); Worldwide Church of God v.
McNair, 805 F.2d 888, 890 (9th Cir. 1986) (Rooker-Feldman doctrine bars
bankruptcy court from reviewing a state court's final decision) (citing
Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16 (1923); District of Columbia
Court of Appeals v. Feldman, 460 U.S. 462, 476 (1983)).
On appeal, Mr. Jones merely repeats the arguments and requests for
relief he made in the bankruptcy court. In fact, his opening brief is virtually
identical to the Motion. He does not explain how he believes the
bankruptcy court erred, factually or legally, in denying the Motion. In his
Rule 8009 statement of issues, he listed twenty issues on appeal, most of
which are a variation on the theme that the bankruptcy court erred in
10
denying his Motion because he had an interest in the Property on the
petition date, purportedly based on the default he obtained against U.S.
Bank in 2014, which he alleged rendered fraudulent any subsequent
conveyances of the Property. But he points to no evidence in the record to
support his allegations.
Mr. Jones’ other purported issues on appeal are that the bankruptcy
court erred by (1) allowing Appellees to relitigate foreclosure, alleging that
Christiana has unclean hands and the “foreclosure instruments” are
fraudulent or void; (2) allowing Appellees to commit conspiracy to defraud
Mr. Jones; (3) denying Mr. Jones due process to cross-examine Appellees;
and (4) denying the Motion as to all respondents when Altisource Realtors,
Soraya Machado-Powell, and Carrington Mortgage did not file a response
or appear at the hearing on the Motion. None of these assertions point to
any error on the part of the bankruptcy court. Mr. Jones provided no
evidence to support his assertion that Christiana had unclean hands, that
the foreclosure was fraudulent or void, or that Appellees had conspired to
defraud him. Mr. Jones did not request an evidentiary hearing or otherwise
ask the court to permit him to examine any witnesses. Finally, Mr. Jones
points to no authority that a court must enter an order adverse to a party
who does not respond or appear when the moving party has provided
insufficient evidence or legal authority supporting the requested relief.
In short, Mr. Jones has failed to show that the bankruptcy court erred
11
in concluding that the automatic stay did not apply to the Property.
CONCLUSION
For these reasons, we AFFIRM.
12