In re Greenstein
| Decision Date | 14 August 2018 |
| Docket Number | 2:17-cv-08919-ODW,Bankruptcy Case Nos. 1:12-bk-15099-MB,Lead Case No. 2:17-cv-08371-ODW,C/w : 2:17-cv-08373-ODW,2:17-cv-08923-ODW,2:17-cv-08899-ODW,Adversary Case Nos. 1:15-ap-01220-MB |
| Citation | 589 B.R. 854 |
| Court | U.S. District Court — Central District of California |
| Parties | IN RE Laurel GREENSTEIN, Debtor. And Consolidated Appeals |
Laurel Greenstein, Van Nuys, CA, pro se.
Robert A. Bailey, Anglin Flewelling Rasmussen Campbell and Trytten LLP, Pasadena, CA, Gerald N. Sims, Pyle Sims Duncan and Stevenson APC, San Diego, CA, for Debtor.
Appellant Laurel Greenstein appeals from several orders issued by the bankruptcy court, relating to her Chapter 7 bankruptcy, and related adversary proceedings. She contends that her home (the "Property") was wrongfully foreclosed on by Wells Fargo Bank, N.A., and several corporate representatives,1 (collectively, "Wells Fargo") in violation of the automatic stay in her case.
In a 63-page Amended Consolidated Memorandum of Decision, the bankruptcy court denied Greenstein's Motion to Set Aside Foreclosure Sale in violation of Automatic Stay ("Set Aside Motion"), and granted Motions to Dismiss Adversary Proceedings with Prejudice as to All Defendants. (Appellant's Appendix of Evidence ("AA") vol. I, 135-99, ECF No. 27.2 ) While Greenstein sets forth seven issues on appeal, the substance of her appeal focuses on the validity of an in rem order (the "In Rem Order") issued by another bankruptcy court in an action involving debtor Roger Lipkis (the "Lipkis Action"). Among other things, Greenstein claims the In Rem Order was invalid because a fraudulent deed was presented in the Lipkis Action, which purported to transfer ownership rights in the Property from Greenstein to Lipkis.
Marty A. Duran, Patricia M. Duran, and The Duran Family Trust (collectively, the "Duran Defendants") purchased the Property from Wells Fargo two years after the foreclosure sale. (Duran Defendants' Appendix of Evidence ("DER") 8, ECF No. 30-1, 30-2.) Greenstein filed adversary proceedings against the Duran Defendants as part of her Chapter 7 bankruptcy.
Greenstein's Opening Brief and excerpts of record are riddled with procedural defects. She fails to adequately cite to the record, which makes it difficult for the Court, much less her opponents, to sort through her arguments. In any event, for the reasons explained below, the Court AFFIRMS the bankruptcy court with respect to all of Greenstein's consolidated appeals.3
This case arises from several bankruptcies, adversary proceedings, and related civil actions. This convoluted procedural history arises from Wells Fargo foreclosing on Greenstein's home after she defaulted on her payments.
On October 13, 2011, Greenstein filed an action in California state court, wherein she challenged, among other things, Wells Fargo's standing to foreclose on her home (the "First Civil Action"). At a hearing on February 10, 2012, Wells Fargo's counsel informed the court and Greenstein that it obtained a grant deed, which purported to transfer title of the Property from Greenstein to Roger Lipkis (the "Lipkis Deed"). The Lipkis Deed, on its face, appears to have been signed by Greenstein, notarized by a notary public, and recorded with the Los Angeles County Recorder's Office on November 10, 2011. (AA vol. II, 367.) The court ultimately sustained Wells Fargo's demurrer, and dismissed the First Civil Action with prejudice. .
On November 18, 2011, Roger Lipkis filed a Chapter 13 bankruptcy. (DER 220). As it turns out, the reasons that he filed for bankruptcy are not germane to the Court's analysis, but the Lipkis Deed is.
The origin of the Lipkis Deed is murky. At one time, Greenstein claimed that she "strongly believe[d] [she knew] who set this fake Grant Deed up and why, but [she couldn't] prove it." (AA vol. II, 373.) Now, she simply maintains that it was a fraud.
After Wells Fargo learned of the Lipkis Deed in the First Civil Action, it sought a stipulation to exclude the Property from the Lipkis bankruptcy estate. It needed to do this so that it could foreclose on the Property, which was purportedly part of the Lipkis estate by virtue of the Lipkis Deed. (AA vol. II, 412-16.) On March 19, 2012, the court accepted Wells Fargo and Lipkis's stipulation for relief from the automatic stay in the Lipkis Action, pursuant to 11 U.S.C. § 362(d)(4),5 and entered an order reflecting the same (as defined above, the "In Rem Order").
Mimicking verbatim Section 362(d)(4), the In Rem Order explained:
If recorded in compliance with applicable State laws governing notices of interests or liens in real property, an order entered under paragraph (4) shall be binding in any other case under this title purporting to affect such real property filed not later than 2 years after the date of the entry of such order by the court, except that a debtor in a subsequent case under this title may move for relief from such order based upon changed circumstances or for good cause shown, after notice and a hearing . Any Federal, State, or local governmental unit that accepts notices of interests or liens in real property shall accept any certified copy of an order described in this subsection for indexing and recording.
(AA vol. II, 391 (emphasis added).) The In Rem Order also found that (AA vol. II, 392.) Greenstein did not appeal the In Rem Order.
On March 12, 2012, Wells Fargo recorded the In Rem Order at the County Recorder's Office. (AA vol. II, 388; DER 114-21.) Greenstein was not initially served with the In Rem Order, but admittedly learned of it on May 31, 2012, and received a copy of it on June 1, 2012. (AA vol. I, 143 (citing Greenstein's own admissions that she received a copy of the In Rem Order), 169-70.) Greenstein did not seek modification of the In Rem Order after receiving a copy of it.
On May 14, 2012, the trustee recorded a new Notice of Sale. (SA vol. III, 707.) On May 31, 2012, Greenstein filed her Chapter 7 bankruptcy. On July 11, 2012, the Property was sold by foreclosure to Wells Fargo. (AA vol. I, 34-35.) The Duran Defendants purchased the property a few years later. (DER 8.)
Greenstein attempted on several occasions to invalidate the In Rem Order through the filing of adversary proceedings in her Chapter 7 case, and the filing of a second state court action. The bankruptcy court discharged Greenstein's debt on September 29, 2015. (SA vol. I, 201.)
In her first adversary case against Wells Fargo, the court granted Wells Fargo's motion to dismiss, and dismissed the adversary proceeding based on Greenstein's lack of standing.
Greenstein filed a second adversary proceeding against Wells Fargo, but voluntarily dismissed it before the hearing.
On January 2, 2013, Greenstein filed another state court action against Wells Fargo, and various attorneys for Wells Fargo and Lipkis (the "Second Civil Action"). She asserted claims for intentional infliction of emotional distress, fraud, conspiracy, breach of contract, and slander of title. (Id. ) She based these claims on the same challenges she asserted to the In Rem Order in her bankruptcy case, and related adversary proceedings. The state court ultimately sustained Wells Fargo's demurrer to Greenstein's amended complaint without leave to amend. (SA vol. III, 748-51.) Greenstein has not appealed, and the state court's judgement is final. (AA vol. I, 149.)
On December 27, 2013, Greenstein filed a Motion to Set Aside Sale of Property Made in Violation of Automatic Stay ("Set Aside Motion") in her main bankruptcy action, which challenged the In Rem Order on several grounds. (AA vol. I, 13.) The Bankruptcy Court denied her motion on claim preclusion principles. Greenstein appealed to the Ninth Circuit Bankruptcy Appellate Panel ("BAP"), and the BAP reversed and remanded. (AA vol. I, 112, 128.) The BAP requested additional findings by the bankruptcy court explaining its application of collateral estoppel and/or res judicata. (AA vol. I, 127-32.)
On remand, the bankruptcy court declined to apply collateral estoppel or res judicata, but denied Greenstein's Set Aside Motion because: 1) the bankruptcy court in the Lipkis Action had jurisdiction to issue the In Rem Order, and Greenstein could not collaterally attack that final order through her Set Aside Motion (AA vol. I, 158-64); 2) Greenstein was afforded due process, despite not originally receiving notice of the In Rem Order, because she could have challenged it prior to the sale of the Property, but chose not to for two months; (AA vol. I, 165-71); and 3) to the extent Greenstein challenged the In Rem Order as being improperly granted, as opposed to void, she could not do so via collateral attack. (AA vol. I, 172.) Greenstein now appeals the bankruptcy court's Order on her Set Aside Motion.
On October 6, 2015, Greenstein filed her third adversary proceeding against Wells Fargo. (SA vol. II, 241.) She alleged violations of various bankruptcy rules, fraud, fraud on ...
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