Hardy v. Ross (In re Hardy)
| Decision Date | 11 September 2018 |
| Docket Number | 18-434 (EGS),Civil Action Nos. 16-1968 (EGS),16-1969 (EGS),16-1970 (EGS),17-1316 (EGS),17-1017 (EGS) |
| Citation | 589 B.R. 217 (Mem) |
| Parties | IN RE: LaTricia L. HARDY, Debtor. LaTricia L. Hardy, Appellant, v. Bryan S. Ross, and All Credit Considered Mortgage, Inc., Appellees. |
| Court | U.S. District Court — District of Columbia |
LaTricia Hardy, Washington, DC, pro se.
Patrick John Kearney, Selzer Gurvitch Rabin Wetheimer Polott & Obecny, Bethesda, MD, for Appellant.
Michael A. Ostroff, Montero Law Group, LLC, Silver Spring, MD, for Appellees.
On May 31, 2016, Ms. LaTricia Hardy filed a pro se , voluntary bankruptcy petition in the United States Bankruptcy Court for the District of Columbia ("Bankruptcy Court"). After two years of litigation, Ms. Hardy appeals six of the Bankruptcy Court's orders. Proceeding pro se , Ms. Hardy appeals the following: (1) the order granting the Trustee's motion to "turnover" her commercial real estate property, see ECF No. 1 (Civ. No. 16-1968); (2) the order "clarifying" that the Bankruptcy Court's turnover order was not stayed, see ECF No. 1 (Civ. No. 16-1969); (3) the order denying Ms. Hardy's request to "terminat[e] [ ] conversion to Chapter 7," see ECF No. 1 (Civ. No. 16-1970); (4) the order holding Ms. Hardy in contempt and denying her motion to dismiss the Chapter 7 Trustee's claims, see ECF No. 1 (Civ. No. 17-1017); (5) the order granting All Credit Considered Mortgage, Inc.'s ("ACC") motion for summary judgment, see ECF No. 1 (Civ. No. 17-1316); and (6) the order granting the Chapter 7 Trustee's motion to approve a compromise with ACC, see ECF No. 1 (Civ. No. 18-434).1 Also pending are the Chapter 7 Trustee's two motions to dismiss: (1) motion to dismiss as equitably moot Ms. Hardy's appeal as to the turnover order, see ECF No. 18 (Civ. No. 16-1968); and (2) motion to dismiss as time-barred Ms. Hardy's appeal of the compromise order, see ECF No. 21 (Civ. No. 16-1968).
The Court has considered all of the appeals and motions, the responses and replies thereto, the voluminous record, and the applicable law, and hereby AFFIRMS the Bankruptcy Court's six orders, GRANTS the Chapter 7 Trustee's motion to dismiss as equitably moot, and DENIES the Chapter 7 Trustee's motion to dismiss as time-barred.
On May 31, 2016, Ms. Hardy filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code. See A.R., ECF No. 29-1 at 5(Civ. No. 16-1698).2 Ms. Hardy and her mother, Patricia White, owned a commercial real estate property located at 1414-1416 Pennsylvania Avenue in Southeast, District of Columbia. See A.R., ECF No. 27 at 5 (Civ. No. 16-1968). After the Chapter 13 Trustee moved to dismiss the case, Ms. Hardy filed a motion to convert her case to Chapter 11. A.R., ECF No. 12-1 at 26-27 (Civ. No. 16-1968). On June 24, 2016, ACC–a creditor with a purported lien on the property–filed a motion to dismiss with prejudice or, in the alternative, to convert the case from Chapter 11 to Chapter 7. Id. at 28-45. On July 25, 2016, following a hearing, the Bankruptcy Court converted Ms. Hardy's Chapter 13 case to Chapter 7 and appointed Bryan Ross as the Chapter 7 Trustee ("the Trustee"). See Docket, ECF No. 29-1 at 10 (Civ. No. 16-1968). On August 30, 2016, Ms. Hardy filed a "motion requesting termination of conversion to Chapter 7 liquidation." A.R., ECF No. 12-1 at 152 (Civ. No. 16-1968). The Bankruptcy Court denied the motion. Id. at 159. On September 22, 2016, Ms. Hardy noticed her appeal of that order in this Court. ECF No. 1 (Civ. No. 16-1970).
On August 17, 2016, the Trustee filed a motion for an order approving the turnover of Ms. Hardy's co-owned commercial real estate property. A.R., ECF No. 12-1 at 129-134 (Civ. No. 16-1968). The Bankruptcy Court granted the turnover motion on September 9, 2016, ordering Ms. Hardy to "immediately turnover" her property and authorizing the Trustee to "take possession and control." Id. at 154-55. On September 22, 2016, Ms. Hardy noticed her appeal of that order in this Court. ECF No. 1 (Civ. No. 16-1968).
On September 19, 2016, the Bankruptcy Court also issued an order "clarifying that no stay of the Court's turnover order is in place pending disposition of the motion for a stay" that Ms. Hardy had filed. A.R., ECF No. 12-1 at 160 (Civ. No. 16-1968); see also A.R., ECF No. 29-1 at 14 (Civ. No. 16-1968). In so doing, the Bankruptcy Court emphasized that "the turnover order has not been stayed by the filing of a motion to stay" and that Ms. Hardy "remains obligated to comply with it." A.R., ECF No. 12-1 at 160 (Civ. No. 16-1968)(emphasis in original). The Bankruptcy Court subsequently denied Ms. Hardy's motion for a stay of the turnover order. See A.R., ECF No. 29-1 at 16 (Civ. No. 16-1968). On September 22, 2016, Ms. Hardy noticed an appeal in this Court of the clarifying order, but not the denial of her motion to stay. ECF No. 1, (Civ. No. 16-1969).
On November 21, 2016, Ms. Hardy filed a motion for an emergency temporary restraining order in this Court, which the Court construed as a motion to stay the Bankruptcy Court's orders denying her motion to "terminate" the conversion from Chapter 13 to Chapter 7 and granting the Trustee's turnover motion pending appeal. See TRO Mot., ECF No. 10 (Civ. No. 16-1968); Mem. Op., ECF No. 17 at 2 (Civ. No. 16-1968). The Court denied Ms. Hardy's motion on December 29, 2016. See Order, ECF No. 16 (Civ. No. 16-1968). In so doing, the Court allowed the Chapter 7 bankruptcy case to proceed.
The Trustee–having been authorized to sell the property3 –filed a motion to sell. However, Ms. Hardy purportedly refused to comply with the turnover order and vacate the premises. Therefore, on April 28, 2017, the Trustee filed a motion to show cause why Ms. Hardy should not be held in contempt. SeeA.R., ECF No. 29-1 at 115-21 (Civ. No. 16-1968). The Trustee alleged that Ms. Hardy rented the property to at least two tenants and refused to leave, in violation of the turnover order. Id. at 117-20. On May 25, 2017, after a hearing, the Bankruptcy Court granted the Trustee's motion and held Ms. Hardy in contempt. A.R., ECF No. 29-2 at 5-11 (Civ. No. 16-1968). Finding that Ms. Hardy failed to comply with its turnover order, the Bankruptcy Court directed her to produce all leases and lessees' contact information and immediately cease leasing the property. Id. at 10. It also voided any leases and authorized the Trustee or the United States Marshal to evict any tenants and occupants. Id. at 11. On May 26, 2017, Ms. Hardy noticed an appeal of that order in this Court. ECF No. 1, (Civ. No. 17-1017).
A few days later, the Bankruptcy Court approved and ratified the sale of the property over Ms. Hardy's opposition. A.R., ECF No. 29-2 at 18-26 (Civ. No. 16-1968). The Bankruptcy Court ordered the Trustee to pay the liens attached to the property, including ACC's claims. Id. at 22. It also ordered the Trustee to pay Ms. White her one-half share in the remaining property. Id. The sale was finalized on July 5, 2017, when the Trustee executed the deed. A.R., ECF No. 29-3 at 20-24 (Civ. No. 16-1968).
Meanwhile, Ms. Hardy had been litigating the validity of ACC's lien in the Superior Court for the District of Columbia. See ACC v. Hardy , 2014 CA 4580; A.R., ECF No. 12-1 at 58-65 (Civ. No. 16-1968). In September 2015, Superior Court Judge Stuart Nash entered summary judgment in ACC's favor, finding that it had a valid, enforceable claim to Ms. Hardy's property. Id. at 60.4
Similarly, on April 10, 2017, Ms. Hardy objected to the validity of ACC's lien in Bankruptcy Court. A.R., ECF No. 4 at 4-9 (Civ. No. 17-1316). In response, ACC filed a motion for summary judgment, seeking to establish that it had a valid lien. A.R., ECF No. 29-3 at 25-26 (Civ. No. 16-1968). Ms. Hardy opposed that motion and filed a cross-motion for summary judgment. See id. at 37-40. On June 17, 2017, the Bankruptcy Court granted ACC's motion for summary judgment, finding that its lien was indeed valid. Id. at 50-69. On June 30, 2017, Ms. Hardy noticed an appeal of that summary judgment order in this Court. See ECF No. 1 (Civ. No. 17-1316).
Once the Bankruptcy Court found that ACC had a valid lien, a dispute arose over the amount that ACC was owed from the turnover sale. See A.R., ECF No. 29-4 at 6-11 (Civ. No. 16-1968). In order to avoid further litigation, the Trustee and ACC proposed a settlement agreement whereby ACC would accept a "short" payment–less than the amount it was allegedly owed–and, in exchange, the Trustee would release ACC of all claims against it. See id. at 9 ¶¶ 19-20. On October 23, 2017, the Bankruptcy Court approved the Trustee's proposed compromise, despite Ms. Hardy's objections. Id. at 51-56. In so doing, the Bankruptcy Court authorized the Trustee to pay ACC and Ms. White the amounts both were owed under the agreement. Id. at 54-55. On November 6, 2017, Ms. Hardy noticed an appeal of that approval order in this Court. See ECF No. 1 (Civ. No. 18-434).
All of Ms. Hardy's appeals are now ripe for review.
The Court has jurisdiction over Ms. Hardy's appeals pursuant to 28 U.S.C. § 158, which provides that: "(a) The district courts of the United States shall have jurisdiction to hear appeals (1) from final judgments, orders, and decrees ... of bankruptcy judges."
As an appellate court, this Court reviews legal questions and conclusions de novo and reviews findings of fact under a clearly erroneous standard. See In re Chreky , 450 B.R. 247, 251-52 (D.D.C. 2011) ; see also In re WPG, Inc. , 282 B.R. 66, 68 (D.D.C. 2002) (citing Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) ). "A finding [of fact] is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." In re Johnson , 236 B.R. 510, 518 (D.D.C. 19...
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