Lee v. Anasti (In re Lee)
| Decision Date | 06 January 2012 |
| Docket Number | No. 10-1772,No. 10-1774,10-1772,10-1774 |
| Parties | In re: GINA ANASTI LEE, Debtor. GINA ANASTI LEE, on behalf of the bankruptcy estate, Plaintiff - Appellant, v. JAMES ANASTI, Defendant - Appellee, and WILLIAM K. STEPHENSON, JR., Trustee. In re: GINA ANASTI LEE, Debtor. GINA ANASTI LEE, on behalf of the bankruptcy estate, Plaintiff - Appellant, v. JAMES ANASTI, Defendant - Appellee, and WILLIAM K. STEPHENSON, JR., Trustee. |
| Court | U.S. Court of Appeals — Fourth Circuit |
UNPUBLISHED
Appeals from the United States District Court for the District of South Carolina, at Columbia. Joseph F. Anderson, Jr., District Judge. (3:10-cv-00626-JFA; 3:10-cv-00196-JFA)
Before SHEDD and DUNCAN, Circuit Judges, and William L. OSTEEN, Jr., United States District Judge for the Middle District of North Carolina, sitting by designation.
Affirmed in part; dismissed in part by unpublished per curiam opinion.
Tony R. Megna, Columbia, South Carolina, for Appellant. Steven B. Licata, LAW OFFICE OF STEVEN B. LICATA, PC, Columbia, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
Gina Anasti Lee ("Lee") appeals the orders of the district court affirming two separate orders issued by the United States Bankruptcy Court for the District of South Carolina. Both orders arise from the same bankruptcy case, In re Lee, Ch. 13 Case No. 09-02854 (Bankr. D.S.C. filed Apr. 16, 2009), but were addressed by the district court in two separate appeals from the bankruptcy court: (1) In re Lee, No. 3:10CV00196, 2010 U.S. Dist. LEXIS 44693 (hereinafter "196 Case") and (2) In re Lee, No. 3:10CV00626, 432 B.R. 212 (D.S.C. 2010) (hereinafter "626 Case"). In the 196 Case, Lee appeals the district court's order affirming the bankruptcy court's decision to grant appellee, James Anasti ("Anasti"), relief from the stay imposed by 11 U.S.C. § 362. In the 626 Case, Lee appeals the district court's order affirming the bankruptcy court's dismissal of Lee's adversary complaint in which Anasti was named as a defendant. These two related appeals have been consolidated before this court. For the reasons set forth below, we affirm the grant of relief from the stay, affirm the dismissal of Lee's avoidance action, and dismiss the remainder of the appeal.
This appeal arises from what originally began as a real property dispute in South Carolina state court between a sister (Lee) and brother (Anasti) over real property located at 2325 Two Notch Road in Columbia, South Carolina ("the Property"). In 1978, the then-owner of the Property, Laura Corvi, deeded the Property to Anasti and the parties' father, Albert Anasti, as tenants in common with right of survivorship. J.A. 56.
Although James Anasti held an interest in the Property by virtue of his right of survivorship, Albert Anasti devised the Property to Lee in his will. J.A. 62. Albert Anasti died in 1995, and, subsequently, a South Carolina probate court found Lee to have inherited the Property in accordance with Albert Anasti's will. Id.
In 2000, Lee sold the Property to Lance Wilson and Willis Goodwin1 "by way of 'owner financing.'" J.A. 57. A title dispute then arose between Lee and the purchasers; Anasti was not a party to that action. Following this dispute, and as a result of a related condemnation proceeding (see J.A. 55), Anasti filed a state court action in 2007 to quiet title to the Property. See Anasti v. Wilson, 2007-CP-40-0576 (S.C. Ct.Common Pleas Oct. 26, 2007) (the "state court action") (order granting partial summary judgment) (J.A. 55); J.A. 182. In this state court action, Anasti asserted his interest to the Property through the original deed from Corvasi, while Lee claimed to have acquired superior title to the Property through adverse possession under color of title. J.A. 56, 59. The state trial court granted summary judgment in favor of Anasti on October 26, 2007, finding that Lee had not acquired title through adverse possession and that the Property is "the exclusive real property of [Anasti]." J.A. 64.
In January 2008, Lee appealed the trial court's decision to the South Carolina Court of Appeals, which remanded the case to the trial court for a determination of whether Lee's appeal was timely filed. See Anasti v. Wilson, 2011 S.C. App. Unpub. LEXIS 204, at *1 (S.C. Ct. App. Apr. 28, 2011). The state trial court conducted an evidentiary hearing and thereafter held that Lee's appeal was not timely filed. Id. Before the South Carolina Court of Appeals issued its final ruling, however, Lee filed for bankruptcy under Chapter 7. J.A. 190-91. After initially dismissing and then reinstating the appeal, the South Carolina Court of Appeals "issued an order holding the appeal in abeyance pending a final decision in the bankruptcy proceedings." J.A. 191.
On June 22, 2009, the Chapter 7 trustee filed a "Report of No Distribution" in which she found that no property was available for distribution from the estate. J.A. 90. Lee then converted the bankruptcy case to Chapter 13. J.A. 45-46. Thereafter, Anasti moved the bankruptcy court pursuant to 11 U.S.C. § 362(d)(1) to lift the automatic stay to permit the state appeals process to continue. J.A. 48. Concurrently, Lee filed an adversary proceeding under 11 U.S.C. §§ 1303 and 1306, seeking to recover the Property. See Compl., Lee v. Anasti, No. 09-02854 (Bankr. D.S.C. Aug. 20, 2009) (J.A. 111). The claims set forth in Lee's adversary complaint were similar to those asserted in the state court action; both cases were grounded in theories of adverse possession or related claims. See generally Order Granting Partial Summ. J. (J.A. 55-64); Compl., Lee v. Anasti, No. 09-02854 (Bankr. D.S.C. Aug. 20, 2009) (J.A. 124-28). Specifically, in her adversary complaint, Lee requested that the bankruptcy court declare that she held title to the Property based on claims of adverse possession, laches, estoppel, and staleness. J.A. 124-28. The complaint also included an avoidance action brought pursuant to 11 U.S.C. § 544(a). J.A. 129.
After Anasti filed his motion seeking relief from the stay and Lee filed her adversary complaint, the bankruptcy courtissued the two separate orders that are the subject of this appeal. The first order granted Anasti's motion for relief from the stay (J.A. 196); that order was appealed to the district court in the 196 case. The second order dismissed Lee's adversary complaint (J.A. 228); that order was appealed to the district court in the 626 case.2 The district court affirmed both of the bankruptcy court's orders. J.A. 185, 217.
After the stay was lifted, the state court appeals process continued, and on April 28, 2011, the South Carolina Court of Appeals dismissed Lee's appeal as untimely. Anasti v. Wilson, 2011 S.C. App. Unpub. LEXIS 204, at *2 (S.C. Ct. App. Apr. 28, 2011). The Supreme Court of South Carolina then denied Lee's petition for writ of certiorari. Anasti v. Wilson, 2011 S.C. LEXIS 338, at *1 (S.C. Oct. 5, 2011). The state court litigation concluded while this appeal was pending; both parties acknowledged in supplemental pleadings the final order of the Supreme Court of South Carolina denying certiorari. See Supp. Br. of Appellant at 2; Supp. Br. of Appellee at 1.
In this appeal, Lee argues that the district court erred in affirming both the bankruptcy court's decision to grant relief from the stay and its decision to dismiss her adversarycomplaint. We first address the issue of whether the district court erred in affirming the bankruptcy court's decision to grant relief from the stay.
We have jurisdiction to hear this appeal pursuant to 28 U.S.C. § 158(d), which "allows us to review 'final decisions' by the district court when it acts in its bankruptcy appellate capacity." Safety-Kleen, Inc. v. Wyche, 274 F.3d 846, 864 n.4 (4th Cir. 2001). An order granting or denying relief from the automatic stay is final and appealable. See id. at 864 (); Nat'l Envtl. Waste Corp. v. City of Riverside (In re Nat'l Envtl. Waste Corp.), 129 F.3d 1052, 1054 (9th Cir. 1997) (); In re Sonnax Indus., 907 F.2d 1280, 1283 (2d Cir. 1990) ().
"We review the judgment of a district court sitting in review of a bankruptcy court de novo, applying the same standards of review that were applied in the district court." Logan v. JKV Real Estate Servs. (In re Bogdan), 414 F.3d 507,510 (4th Cir. 2005) ). "Specifically, 'we review the bankruptcy court's factual findings for clear error, while we review questions of law de novo.'" Id. ).
In this case, the district court, employing the same reasoning as the bankruptcy court below, found that the automatic stay was properly lifted under 11 U.S.C. § 362(d)(1). "A decision to lift the automatic stay under section 362 of the Code is within the discretion of the bankruptcy judge and this decision may be overturned on appeal only for abuse of discretion." In re Robbins, 964 F.2d 342, 345 (4th Cir. 1992).
11 U.S.C. § 362(d)(1) provides that a court shall grant relief from the stay "for cause, including the lack of adequate protection of an interest in property of such party in interest." Because the statute does not define cause, "courts must determine when discretionary relief is appropriate on a case-by-case basis." In re Robbins, 964 F.2d at 345.
The court must balance potential prejudice to the bankruptcy debtor's estate against the hardships that will be incurred by the person seeking relief from the automatic stay if relief is denied . . . . The factors that courts...
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