In re Reddy
| Decision Date | 18 March 2019 |
| Docket Number | No. 3:17-cv-1067 (VAB),3:17-cv-1067 (VAB) |
| Court | U.S. District Court — District of Connecticut |
| Parties | In re: WALTER B. REDDY |
Walter B. Reddy ("Appellant"), pro se, appeals three orders of the United States Bankruptcy Court ("Bankruptcy Court"), Notice of Appeal, ECF No. 1; Mem. and Order on Obj. to Claim 3 and Second Am. Mot. for Relief from Automatic Stay ("Bankruptcy Court Order on Claim 3 and Automatic Stay"), In re Reddy, 16-bk-50689 (JAM), Dkt. 130; Order Denying Mot. for Stay Pending Appeal, id., Dkt. 152; Order Granting Trustee's Mot. to Dismiss with a One Year Bar to Filing a Case, id., Dkt. 161.
Mr. Reddy alleges that the Bankruptcy Court erred in: (1) allowing three attorneys, Patricia Davis, Bruce Bennett, and Benjamin Staskiewicz, to file documents and appear in the case before filing a formal Appearance on the docket; (2) refusing to consider the affidavit of an expert, Michael Porzio; (3) granting relief from the automatic stay to Deutsche Bank; (4) granting the Chapter 13 trustee's motion to dismiss the case; and (5) denying a stay pending his appeal. Statement of Issues to be Presented, ECF No. 8.
For the reasons set forth below, the Court AFFIRMS the Bankruptcy Court's orders.
On July 15, 2005, Mr. Reddy obtained a home mortgage for $542,400.00. Mot. to Reconsider Scheduling of Trial ("Mot. Reconsider"), In re Reddy, 16-bk-50689 (JAM), Dkt. 52 ¶ 1. Four years later, Deutsche Bank1 initiated a foreclosure action in Connecticut Superior Court. Mot. Reconsider ¶ 2.
After nearly seven years of litigation,2 the Superior Court issued a strict foreclosure judgment in favor of Deutsche Bank in the amount of $873,748.17. Mot. Reconsider, Ex. B [Order of the Superior Court for the Judicial District of Stamford, J. Povodator ("Superior Court Order" April 11, 2016)], id., Dkt. 52-2, Ex. B.
Six weeks later, on May 26, 2016, Mr. Reddy filed a voluntary petition for Chapter 13 bankruptcy. Petition, In re Reddy, 16-bk-50689 (JAM), Dkt. 1. In that petition, Mr. Reddy estimated his liabilities to be $100,001-500,000 and his assets to be $500,001-1,000,000. Id. at 6.
On August 25, 2016, Mr. Reddy agreed to make payments of $100 per month to his creditors. Debtor's Chapter 13 Plan, id., Dkt. 22 at 1. He also disputed an "obligation claimed by the Creditor Deutsche Bank National Trust Company, As Trustee, for Morgan Stanley Mortgage Loan Trust 2005-10." Id.
On November 1, 2018, Patricia Davis, counsel for Specialized Loan Servicing LLC, the servicer for Deutsche Bank National Trust Company,3 filed an objection to Mr. Reddy's Chapter 13 plan on the grounds that Deutsche Bank has a "valid secured claim and deserves proper treatment in the Plan." Objection to Plan, id., Dkt. 32, at 1.
Shortly thereafter, the Bankruptcy Court scheduled a hearing on Deutsche Bank's claim for December 20, 2016. Notice of Hearing, id., Dkt. 36.
On November 23, 3016, Ms. Davis filed a motion for relief from a stay on the foreclosure of Mr. Reddy's home, asserting that Deutsche Bank had a valid interest in the property and that the property was "not necessary for an effective reorganization." Mot. for Relief from Stay, id., Dkt. 40.
On December 7, 2016, Mr. Reddy objected, explaining that he had "contested the underlying foreclosure matter vigorously" and did not believe that Deutsche Bank had a rightful claim to the property, and that Deutsche Bank was not entitled to relief from the automatic stay. Debtor's Obj. to Deutsche Bank Nat'l. Trust Co. as Trustee Mot. For Relief from Automatic Stay, id., Dkt. 42.
On December 20, 2016, the Bankruptcy Court held a hearing at which Mr. Reddy asserted that the note and mortgage submitted by Deutsche Bank was a fraud. Audio Recording of Hearing, id., Dkt. 51. He requested an evidentiary hearing and permission to bring an authentication expert. Id. The Court granted Mr. Reddy's request and scheduled a follow-up hearing for January 12, 2017. Id.
On December 23, 2016, Ms. Davis filed a motion to reconsider, arguing that Deutsche Bank had already produced the note and mortgage to the Superior Court during the foreclosure action, and proved that [Deutsche Bank] was "entitled to enforce said documents." Mot. Reconsider, id., Dkt. 52 ¶ 3-4.
On January 12, 2017, Ms. Davis filed a Notice of Appearance for herself and another attorney, Bruce Bennett. Notice of Appearance and Request for Notice, id., Dkt. 60.
Later that day, the Bankruptcy Court held another hearing. Audio Recording of Hearing, id., Dkt. 62. Mr. Reddy alleged that his expert was unavailable to attend the hearing. Id. The Court instructed both parties to file amended briefs related to the disputed stay. Id.
Within six weeks, the parties filed their amended pleadings. Mot. for Relief from Stay, id., Dkt. 72; Debtor's Obj. to Mot. for Relief from Stay, id., Dkt. 80.
On March 2, 2017, the Bankruptcy Court held another hearing. Audio Recording of Hearing, id., Dkt. 86-87. At that hearing, the Court permitted Mr. Reddy's alleged expert to testify. Id. Mr. Reddy also produced a 2009 assignment of the mortgage to Deutsche Bank. Id. Deutsche Bank suggested that another attorney, Benjamin Staskiewicz, might have additional relevant information about the assignment. Id. The Court ordered Deutsche Bank to file the Superior Court foreclosure documents on the docket. Audio Recording of Hearing. The next day, the Court ordered Mr. Staskiewicz to appear and testify at an evidentiary hearing regarding the 2009 assignment. Scheduling Order, id., Dkt. 88 at 3.
On April 4, 2017, Deutsche Bank submitted a 285-page filing, including the alleged note, title documents, and exhibits submitted to the Superior Court. Second Am. Mot. for Relief from Stay, id., Dkt. 94.
On May 2, 2017, the Bankruptcy Court held a status conference. Audio Recording of Conference, id., Dkt. 107.
On May 31, 2017, the Bankruptcy Court held another hearing. Audio Recording of Hearing, id., Dkt. 124-26.
On June 8, 2017, the Bankruptcy Court issued an order overruling Mr. Reddy's objection to Deutsche Bank's claim. Bankruptcy Court Order on Claim 3 and Automatic Stay at 10. The Court also waived the automatic stay. Id.
Later that day, Molly Whiton, the Bankruptcy Trustee, moved to dismiss Mr. Reddy's case. Mot. to Dismiss Chapter 13 Case, id., Dkt. 129. She alleged that Mr. Reddy's debt schedules showed a net income of -$1,970.00, rendering him unable to "make all payments under the Plan within the meaning of 11 U.S.C. 1325(a)(6)." Id.
The Court held two hearings on the motion to dismiss. Audio Recording of Hearing, id., Dkt. 151, 155.
On January 24, 2018, the Bankruptcy Court dismissed Mr. Reddy's case, with prejudice because of "unreasonable delay." Order, id., Dkt. 161; see also 11 U.S.C. § 1307(c).
On June 22, 2017, Mr. Reddy filed his notice of appeal. Notice of Appeal.
On August 23, 2017, the Bankruptcy Court denied Mr. Reddy's request for a stay pending his appeal to this Court. Order Denying Mot. for Stay Pending Appeal, id., Dkt. 152.
On February 20, 2018, the Court ordered Mr. Reddy to submit a "designation of the items to be included in the record on appeal" by March 9, 2018. Order, ECF No. 7; see also FED. R. BANKR. P. 8009.
On March 9, 2018, Mr. Reddy submitted his statement of issues. Statement of Issues to be Presented.
On November 26, 2018, Deutsche Bank National Trust Company filed a motion to dismiss Mr. Reddy's appeal. Mot. to Dismiss Appeal, ECF No. 9.
Under 28 U.S.C. § 158(a)(1), district courts have jurisdiction to hear appeals "from final judgments, orders, and decrees" of United States bankruptcy courts. 28 U.S.C. § 158(a)(1). "[I]n bankruptcy appeals, the district court reviews the bankruptcy court's factual findings for clear error and its conclusions of law de novo." In re Charter Commc'ns, Inc., 691 F.3d 476, 482-83 (2d Cir. 2012), cert. denied, 133 S.Ct. 2021 (2013); see also Papadopoulos v. Gazes, No. 14-CIV-3713 (KPF), 2014 WL 3928940, at *4 (S.D.N.Y. Aug. 12, 2014) .
The Court construes pro se filings "liberally" and interprets them "to raise the strongest arguments that they suggest." Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006); see also Ruotolo v. I.R.S., 28 F.3d 6, 8 (2d Cir. 1994) ().
Mr. Reddy has asked the Court to review five Bankruptcy Court actions or orders: (1) allowing three attorneys, Ms. Davis, Mr. Bennett, and Mr. Staskiewicz, to file documents and appear in the case before filing a formal Appearance on the docket; (2) refusing to consider the affidavit of an expert, Michael Porzio; (3) granting relief from the automatic stay to Deutsche Bank; (4) granting the Chapter 13 trustee's motion to dismiss the case; and (5) denying a stay pending appeal. Statement of Issues to be Presented.
A party appears in court when it "takes any action, other than objecting to personal jurisdiction, that recognizes the case is pending in court." 4 AM. JUR. 2d Appearance § 1.
"Appearances in federal court are governed by 28 U.S.C. § 1654, which provides '[i]n all courts of the United States the parties may plead and conduct their own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct such causes therein.'" In re Ideal Mortg. Bankers, Ltd., 539 B.R. 409, 422 (Bankr. E.D.N.Y. 2015), aff'd sub nom. Holzer v. Barnard, No. 15-CV-6277 (JFB), 2016 WL 4046767 (E.D.N.Y. July 27, 2016), citing 28 U.S.C. § 1654. The statute does not prescribe punishments for failure to meet local appearance rules. 28 U.S.C. § 1654 (...
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