Campora v. HSBC Bank United States, N.A. (In re Campora), 14-CV-5066 (JFB)
| Decision Date | 01 September 2015 |
| Docket Number | No. 14-CV-5066 (JFB),No. 14-CV-7123 (JFB),14-CV-5066 (JFB),14-CV-7123 (JFB) |
| Parties | IN RE JERRY CAMPORA, JR., Debtor, JERRY CAMPORA, JR., Appellant, v. HSBC BANK USA, N.A. AS TRUSTEE FOR HOMESTAR 2004-2, AND ALAN TRUST, UNKNOWN CLAIMANTS DOES 1-10 & MARIANNE DEROSA, Appellees. |
| Court | U.S. District Court — Eastern District of New York |
The instant case involves two separate appeals from orders in the voluntary bankruptcy proceeding of debtor Jerry Campora, Jr., (hereinafter "appellant" or "Campora"), under Chapter 13 of the Bankruptcy Code, in the United States Bankruptcy Court for the Eastern District of New York (hereinafter the "Bankruptcy Court"), against HSBC Bank USA, National Association as Trustee for Homestar Mortgage Acceptance Corp., Asset-Backed Pass-Through Certificates, Series 2004-2 (hereinafter "HSBC") and Marianne DeRosa, the Chapter 13 Trustee in Campora's bankruptcy, (hereinafter "DeRosa" or "Trustee," and together with HSBC, "appellees"). Specifically, in his first appeal, 14-CV-5066 (JFB), filed on August 26, 2014, pro se Campora appeals from an order of the Honorable Alan S. Trust dated July 3, 2014, which granted HSBC's request for relief from the automatic stay in the bankruptcy case under 11 U.S.C. § 362(d)(1). Appellant also seems to appeal Judge Trust's rulings during a June 30, 2014 hearing, where he dismissed the Chapter 13 case with prejudice for one year, assessed sanctions against the appellant in the amount of $10,000, and awarded attorney's fees and costs to HSBC, after concluding that appellant raised claims in bad faith and engaged in vexatiousconduct. In his second appeal, 14-CV-7123 (JFB), filed on December 5, 2014, appellant appeals Judge Trust's decision and order, dated October 6 2014, wherein he memorializes the rulings made at the June 30, 2014 hearing. For the reasons set forth below, the Court affirms the rulings of the Bankruptcy Court in all respects.
The following facts are taken from the record of the Bankruptcy Court in the underlying proceeding. Appellant's real property located at 1 Market Path, Setauket, New York (hereinafter "1 Market Path" or "the property") is secured by a mortgage held by HSBC in the principal amount of $513,000.000. When appellant became delinquent in his mortgage payments, HSBC commenced a foreclosure action in New York Supreme Court, Suffolk County (HSBC et al., v. Campora, Index No. 43034/09) on or about October 28, 2009, and obtained a judgment of foreclosure and sale on October 1, 2013. (Bankr. Ct. Docket No. 30, Exhibit B, hereinafter "Judgment of Foreclosure and Sale") The Judgment of Foreclosure and Sale, signed by the Honorable Joseph Farneti, Acting Supreme Court Justice, authorized the property to be sold at a foreclosure sale, scheduled for January 29, 2014, to satisfy Campora's debt to HSBC.
On January 28, 2014, appellant filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code in the Bankruptcy Court. In Re Campora, Bankruptcy Petition No. 14-70330 (AST) (E.D.N.Y.). This filing resulted in an automatic stay of the foreclosure sale of the property under 11 U.S.C. § 362. Shortly thereafter, DeRosa was appointed as Trustee.
On February 26, 2014, HSBC filed a Notice of Mortgage Payment Change under Federal Rule of Bankruptcy Procedure 3002.1(b). Plaintiff filed an Objection to that notice on March 3, 2014, asserting that HSBC lacked standing to bring any proof of claim, but did not include a Notice of Hearing filing. Accordingly, the Bankruptcy Court did not hold a hearing on the matter. Appellant later filed an order to show cause on May 1, 2014, requesting an expedited emergency hearing on his objection to the proof of claim, which was denied by the Bankruptcy Court.
On March 12, 2014, HSBC filed a timely proof of claim demonstrating a total amount due of $630,130.04, which included $221,864.70 of pre-petition arrears. On March 21, 2014, appellant filed a Chapter 13 Plan ("the Plan") that provides for the following payment schedule:
-$51.00 commencing April 10, 2014 through and including April 9, 2019;
-$63.66 commencing April 10, 2014 through and including April 9, 2019;
-$75.00 commencing April 10, 2014 through and including April 9, 2019.
(Bankr. Ct. Docket No. 23.) In the Plan, appellant states that he "knows of no secured liens," but also asserts that he intends to avoid HSBC's mortgage lien on the property in the amount of $583,000.00 under 11 U.S.C. § 544(a)(3). (Plan ¶¶ 2, 4.)
The Trustee filed a motion to dismiss the case under 11 U.S.C. § 1307(c) on April 4, 2014, alleging that appellant failed in his duties to start making payments within the time limits specified in 11 U.S.C. § 1326(a)(1), provide a copy of his federalincome tax return as required by 11 U.S.C. § 521(e)(2)(A)(i), provide the Trustee with the required disclosure documentation required under the Local Bankruptcy Rules, and timely serve the Plan on the Trustee and all the creditors. The Trustee also objected to appellant's proposed plan, noting that it failed to meet the requirements of 11 U.S.C. §§ 1325(a)(5), 1326(a)(1), and 1322(d)(1). (Bankr. Ct. Docket No. 24.)
HSBC filed an objection to confirmation of the Plan on April 17, 2014, on the grounds that Campora failed to cure the mortgage arrears. On April 30, 2014, HSBC filed a motion seeking relief from the automatic stay of the foreclosure action against Campora. Appellant filed an opposition to the Trustee's motion to dismiss on May 1, 2014.
On May 8, 2014, Judge Trust held a hearing on the Trustee's motion to dismiss. During the hearing, Campora stated that HSBC's Judgment of Foreclosure and Sale had been vacated by an order of the Supreme Court of the State of New York, Suffolk County. Judge Trust ordered the appellant to file that order with the Bankruptcy Court by May 19, 2014. Campora did not file the order, but instead on May 16, 2014 filed a document entitled "Notice of Timely Satisfaction of Request by Judge Trust," which included a document that claimed to be an order of the Supreme Court stating that the Judgment of Foreclosure was void, which was in fact signed by the appellant himself. (Bankr. Ct. Docket No. 43.)
The Bankruptcy Court issued an Order to Show Cause on May 30, 2014 directing appellant to show cause as to why the Bankruptcy Court should not strike his filing, sanction him for acting in bad faith and attempting to mislead the court, and dismiss the case with prejudice. A hearing on the Order to Show Cause and on HSBC's motion for relief from the stay was held on June 30, 2014. During the hearing, Judge Trust struck Campora's Notice of Timely Satisfaction and sanctioned appellant in the amount of $10,000 for raising claims without color of law and acting in bad faith, making false representation to the Court, attempting to mislead the Court by filing a fabricated judgment, and disrespecting the Court. The Judge also awarded HSBC attorney's fees in the amount of $3,635, which were incurred as a consequence of Campora's vexatious conduct. Finally, the Bankruptcy Court dismissed the case with prejudice for one year. Judge Trust memorialized his decision in an order dated October 6, 2014. (Bankr. Ct. Docket No. 82.) Following the hearing, by Order dated July 3, 2014, the Bankruptcy Court granted HSBC's request for relief from the automatic stay under 11 U.S.C. § 362(d)(1). (Bankr. Ct. Docket No. 59.) At a foreclosure sale on March 25, 2015, 1 Market Path was sold to HSBC. (15-CV-5066, ECF No. 14.)
On July 10, 2014, appellant filed a notice of appeal from the Bankruptcy Court's July 3, 2014 order granting HSBC relief from the automatic stay of foreclosure proceedings and from the Bankruptcy Court's rulings during the June 30, 2014 hearing. The appeal was docketed in this Court on September 2, 2014 under 14-CV-5066 (JFB). Appellant filed his brief on September 16, 2014; HSBC responded on September 29, 2014; the Trustee responded on September 30, 2014; and appellant filed two separate replies to the oppositions on October 14, 2014.
On October 20, 2014, appellant filed a second notice of appeal to the District Court, this time appealing the Bankruptcy Court's Decision and Order dated October 6, 2014. The appeal was docketed in this Court on December 17, 2014 under 14-CV-7123 (JFB). Appellant filed his brief on December 31, 2014. HSBC responded on January 13, 2015, and the Trustee responded on January 14, 2015. Appellant did not file a reply brief.
On November 6, 2014, appellant moved to consolidate his first appeal with his second appeal under Federal Rule of Civil Procedure 42(a), given that his appeal of the June 30, 2014 rulings were memorialized in Bankruptcy Court's October 6, 2014 order. On December 12, 2014, HSBC replied in opposition to the motion to consolidate and filed a cross-motion for attorney's fees associated with the costs of the appeal in the amount of $1,312.50.1
The court has fully considered all of the submissions of the parties.
This Court has jurisdiction to hear appeals from bankruptcy courts under 28 U.S.C. § 158(a), which provides that "[t]he district courts of the United States shall have jurisdiction to hear appeals . . . from final judgments, orders, and decrees; . . . [and] with leave of the court, from other interlocutory orders and decrees . . . of bankruptcy judges." 28 U.S.C. § 158(a)(1), (3). Part VIII of the Federal Rules of Bankruptcy Procedure outlines the procedure governing such appeals. Fed. R. Bankr. P. 8001.
The Court will review the Bankruptcy Court's legal conclusions de novo and its factual findings for clear error. See Denton v. Hyman (In re Hyman), 502 F.3d 61, 65 (2d Cir. 2007); see also Lubow Machine Co., Inc. and Marksment Manufacturing, Inc., v. Bayshore Wire Products Corp. (In re Bayshore Wire Prods. Corp.), 209 F.3d 100, 103 (2d Cir. 2000) ...
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