Omar A. Duwaik Omar A. Duwaik v. JP Morgan Chase Bank, N.A. (In re Re)
| Decision Date | 20 October 2017 |
| Docket Number | Civil Action No. 17-cv-00142-MSK |
| Parties | In Re: Omar A. Duwaik OMAR A. DUWAIK, Appellant, v. JP MORGAN CHASE BANK, N.A., Successor in Interest by purchase from the FDIC as Receiver of Washington Mutual Bank f/k/a Washington Mutual Bank FA, Appellee. |
| Court | U.S. District Court — District of Colorado |
THIS MATTER comes before the Court on the Omar A. Duwaik's2 ("Mr. Duwaik") appeal from the January 3, 2017 Order of United States Bankruptcy Court that denied his Motion to Set Aside (Bankruptcy Docket #232) a prior Order granting relief from the automatic stay (Bankruptcy Docket #210). The Court has considered the designated record, Mr. Duwaik's Opening Brief (#13), the Response Brief (#21) by JP Morgan Chase Bank ("Chase"),and Mr. Duwaik's Reply Brief (#23). Also at issue is Mr. Duwaik's "Petition for a Restraining Order and Temporary and Permenent (sic.) Injunction" (#25) and the briefing associated therewith.
This Court exercises jurisdiction pursuant to 28 U.S.C. § 158(a).
In July 2005, Mr. Duwaik executed a promissory note ("Note") in the amount of $1,500,000 in favor of Washington Mutual Bank, FA ("WAMU"). The Note was secured by a Deed of Trust on four parcels of vacant land and a house ("House"). WAMU failed, and its assets were placed into a receivership administered by the Federal Deposit Insurance Corporation, from whom Chase claims to have purchased the Note and Deed of Trust at issue here.
Until 2010, Mr. Duwaik made payments to Chase, but eventually fell into delinquency. In 2012, Chase initiated foreclosure proceedings against the House. During those proceedings, Mr. Duwaik challenged whether Chase possessed the original Note that he executed in favor of WAMU. In December 2012, Mr. Duwaik filed a voluntary Chapter 11 bankruptcy petition.
In the underlying bankruptcy case, Chase filed a Proof of Claim to which it attached a copy of the Note and Deed of Trust. Mr. Duwaik never contested the claim nor sought a determination as to the nature, extent, or priority of the lien claimed by Chase. He proposed a plan of reorganization that provided for payment to Chase. The Plan was confirmed on January 10, 2014 (Bankruptcy Docket #123).
On August 2, 2016, Chase moved for relief from the automatic stay pursuant to 11 U.S.C. Section 362(d)(1) and (2) in order to foreclose its lien against the House. (Bankruptcy Docket#197). Following a preliminary hearing, the Bankruptcy Court issued a written order in which it found that Chase had established "cause" for relief from stay. (Bankruptcy Docket #210). The Bankruptcy Court found that Chase lacked adequate protection because 1) it was owed approximately $1.9 million and the House was valued at only $350,000; 2) Mr. Duwaik had failed to pay real property taxes in 2015 and was delinquent in payment for a period of six years; 3) the nonpayment of taxes violated the terms of the confirmed Plan and eroded the value of Chase's collateral; and 4) Mr. Duwaik had made no payments to Chase since confirmation of the Plan and did not intend to do so until the property was sold, but that the property was neither listed for sale nor was there a time frame in which the property would be sold. The Bankruptcy Court found no need for a final hearing except to address one issue - Chase's standing as a "party in interest" by being the holder of the Note and beneficiary of the Deed of Trust.
At the final hearing, Chase presented the Note to the Court for inspection. Mr. Duwaik attempted to present evidence that his signature on the Note had been forged (he contended that the signature on the Note in blue ink that was purportedly his was fraudulent because he recalled signing the Note in black ink). Mr. Duwaik submitted a witness and exhibit list,3 in anticipation of the evidentiary hearing, which the Bankruptcy Court struck as untimely and irrelevant to the issues pertinent to Chase's Motion for Relief from Stay. The Bankruptcy Court reviewed the Note produced by Chase and found that Chase had produced sufficient evidence of a "colorable secured claim" to establish its standing as a party in interest. (Bankruptcy Docket ## 218, 219). The Bankruptcy Court granted Chase's Motion for Relief from Stay to proceed with foreclosure of its lien against the House. Mr. Duwaik took no appeal from the grant of relief from stay.
Some two months later, Mr. Duwaik sought to set aside the Bankruptcy Court's Relief from Stay Order. (Bankruptcy Docket #232). Premised on Fed. R. Civ. P. 60(b)(2) and(3), Mr. Duwaik alleged that he had discovered new evidence that his signature on the Note held by Chase had been forged, and therefore, Chase had obtained the Relief from Stay Order by fraud.
The Bankruptcy Court denied Mr. Duwaik's motion. (Bankruptcy Docket #240). In its written order, it found that no relief was proper under Rule 60(b)(2) because 1) Mr. Duwaik's proffered evidence with regard to the Note was essentially the same as that proffered at the final hearing on Chase's Motion for Relief from Stay, and thus it was neither new nor newly discovered; 2) Mr. Duwaik had not acted diligently because he did not review the Note at the time of final hearing when he would have seen the "blue ink" that Mr. Duwaik contended evidenced a forgery; 3) Mr. Duwaik's proffered evidence was largely duplicative of that proffered at the final hearing; 4) the evidence proffered was not relevant to Chase's standing to proceed on its Relief from Stay Motion; and 5) if taken as true, Mr. Duwaik's evidence creates a dispute as to the validity of Chase's lien, which dispute fell outside the narrow scope of the relief from stay determination and could be addressed in state court. As to Mr. Duwaik's argument under Rule 60(b)(3), the Bankruptcy Court found that because its order was not a final judgment as to the validity of the Note and that Mr. Duwaik could address such issue in state court as part of the foreclosure process, there had been no interference with Mr. Duwaik's rights.4
In this appeal, Mr. Duwaik contends that the Bankruptcy Court erred in denying his Motion to Set Aside the stay relief order. He enumerates several alleged errors in his Statementof Issues: 1) the Bankruptcy Court abused its discretion when it did not find that newly discovered evidence proves that Chase does not own or possess the Note; 2) the Bankruptcy Court abused its discretion when it did not find that Chase perpetuated a fraud on the Bankruptcy Court by filing forged documents purporting to be the Note; 3) the Bankruptcy Court erred when it found that his Rule 60(b) motion was ghostwritten by an attorney; 4) the Bankruptcy Court failed to apply the correct legal standard to his Rule 60(b) motion; and 5) the Bankruptcy Court erred when it struck his Amended Witness and Exhibit List as untimely in conjunction with the final relief from stay hearing. However, Mr. Duwaik offers argument only as to the first and second issues.
The Court declines to consider Mr. Duwaik's third, fourth, and fifth alleged errors. Fed. R. Bankr. P. 8014(a)(8), which applies to appeals from orders of the Bankruptcy Court, requires that an appellant's brief "must contain the appellant's contentions and the reasons for them with citations to the authorities and parts of the record on which the appellant relies." Arguments that fail to comply with this requirement are inadequately briefed and deemed waived. See In re Taylor, 737 F.3d 670, 682 n.9 (10th Cir. 2013).
The two briefed issues are:
However, as noted in the discussion below, because the Bankruptcy Court used the same reasoning in addressing Mr. Duwaik's contentions under both the Rule 60(b)(2) and (b)(3), the issues collapse into a single question: Did the Bankruptcy Court err in determining that Mr.Duwaik's contention that his signature on the Note had been forged was immaterial in determining whether the creditor was entitled to relief from stay pursuant to 11 U.S.C. §362(d)?
During the course of this appeal, Mr. Duwaik has moved for an injunction (#25) to prevent Chase from foreclosing on the subject property. Chase has objected (#26).
Generally, this Court reviews issues of law de novo, and findings of fact for clear error. See C.O.P Coal Dev. Co. v. C.W. Mining Co. (In re C.W. Mining Co.) 641 F.3d 1235, 1240 (10th Cir. 2011). The Bankruptcy Court's denial of Mr. Duwaik's motion to set aside the Relief from Stay Order pursuant to Federal Rule of Civil Procedure 60(b) is reviewed for abuse of discretion. See Greenwood Explorations, Ltd. v. Merit Gas & Oil Corp., 837 F.2d 423, 426 (10th Cir. 1988); In re Am. Freight Sys., Inc., 126 B.R. 800, 801 (D. Kan. 1991). A judicial decision is an abuse of discretion if it is arbitrary, capricious, whimsical, based on an error of law, based on clearly erroneous findings of fact, not supported by the record, or is manifestly unreasonable. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990); U.S. v. Ramirez, 304 F.3d 1033, 1035 (10th Cir. 2002); U.S. v. Wright, 826 F.2d 938, 943 (10th Cir. 1987).
Mr. Duwaik's argument both before the Bankruptcy Court and this Court5 is straight-forward and simple. He concedes that he is indebted under the Note (and the associated Deed ofTrust)6, but he contends that Chase is not entitled to relief from stay because his signature on the Note that Chase holds was forged.7
In granting Chase's Motion for...
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