Pierre v. Aurora Commercial Corp.

• Decision Date: 24 July 2020
• Docket Number: 19-cv-11207 (JGK)
• Citation: 620 B.R. 210
• Parties: Gerard PIERRE, Appellant, v. AURORA COMMERCIAL CORP., Appellee.
• Court: U.S. District Court — Southern District of New York

620 B.R. 210

Gerard PIERRE, Appellant,

v.AURORA COMMERCIAL CORP., Appellee.

19-cv-11207 (JGK)

United States District Court, S.D. New York.

Signed July 24, 2020

Gerard M. Pierre, Denver, CO, pro se.

Albert Togut, Togut, Segal & Segal LLP, Kyle James Ortiz, Weil, Gotshal & Manges LLP, New York, NY, Michael Andrew Rollin, Reilly Pozner, L.L.P., Denver, CO, for Appellee.

MEMORANDUM OPINION AND ORDER

JOHN G. KOELTL, District Judge:

The pro se appellant, Gerard M. Pierre, appeals from an order of the United States Bankruptcy Court for the Southern District of New York (Chapman, J.) disallowing and expunging his proof of claim. In his proof of claim, Pierre alleges principally that the United States Bankruptcy Court for the District of Colorado (the "Colorado bankruptcy court") erred in several ways during a proceeding in 2009 in which Pierre had filed for Chapter 7 bankruptcy. In the action below, the Bankruptcy Court for the Southern District of New York (the "New York bankruptcy court") held that Pierre's claims that he was denied due process in the Colorado bankruptcy court and that the Colorado bankruptcy court erred when it lifted the automatic bankruptcy stay with respect to a foreclosure proceeding involving Pierre lacked merit in addition to being time barred. For the following reasons, the order of the bankruptcy court is affirmed .

I.

Pierre's claims in the New York bankruptcy court relate to a dispute first adjudicated in the Colorado bankruptcy court in connection with property located at 10176 Park Meadows Drive #2405 in Lone Tree, Colorado ("the property"). In November 2005, Pierre executed a note and a deed of trust in favor of Universal Lending Corporation. The deed of trust identified the property as the security interest and Mortgage Electronic Registration Systems, Inc. ("MERS") as the beneficiary. Darnell Decl. (Part A) ¶ 4, ECF No. 10-4. The deed of trust was recorded on January 30, 2006 in the official records of Douglas County as document 2006008173. Id. Servicing rights were then transferred from MERS to Aurora Loan Services LLC ("ALS") shortly after origination. Id. ¶ 5. ALS is a wholly owned subsidiary of the appellee in this action, Aurora Commercial Corp. ("ACC"). ECF No. 7. ACC is owned in its entirety by Lehman Brothers Bancorp, Inc. Id.

On February 3, 2009, Pierre filed for Chapter 7 bankruptcy protection in the Colorado bankruptcy court. In re Gerard Michael Pierre, No. 09-11527-HRT (Bankr. D. Colo. 2009). On February 17, 2009, ALS, as the owner of the note, filed a motion for relief from the automatic bankruptcy stay, arguing that Pierre's failure to make five monthly payments in connection with the note in addition to his lack of equity in the property entitled it to such relief under the Federal Bankruptcy Code. ECF No. 10-7, at 24-25. The Colorado bankruptcy court held a hearing on the motion on March 17, 2009, at which time ALS made an offer of proof and Pierre failed to appear. ECF No. 10-10, at 6. The Colorado bankruptcy court then entered an order granting ALS relief from stay, which provided that ALS could "exercise its rights and remedies under [Colorado] state law, including the ability to foreclose," regarding the property. Id. at 7. Pierre received a bankruptcy discharge in June 2009, and ALS subsequently foreclosed on the property in September 2009. Darnell Decl. (Part A) ¶¶ 7-8.

In June 2014, Pierre, proceeding pro se, filed a complaint against ACC, ALS, and various other entities, individuals, and public officials in the United States District Court for the District of Colorado in which he asserted fifteen claims of relief. See Pierre v. Aurora Loan Servs., LLC, No. 14-cv-01572-BNB, 2014 WL 11269955, at *2 (D. Colo. Sept. 8, 2014). After twice requesting that Pierre amend his complaint to comply with the pleading requirements of the Federal Rules of Civil Procedure, the district court dismissed the complaint sua sponte and without prejudice under Federal Rule of Civil Procedure 41(b). Id. Pierre appealed the order to the Tenth Circuit Court of Appeals, which affirmed the dismissal. See Pierre v. Aurora Loan Servs., LLC, 602 F. App'x 410, 411 (10th Cir. 2015). The Tenth Circuit Court of Appeals denied a petition for rehearing en banc in March 2015. Darnell Decl. (Part C) Ex. 10, at 141, ECF No. 10-6.

Pierre subsequently filed a motion to intervene in an unrelated action in Colorado state court involving ALS, which that court denied in September 2017. ECF No. 10-7, at 40.

In March 2019, ACC declared Chapter 11 bankruptcy in the New York bankruptcy court. In June 2019, Pierre filed a proof of claim for personal injury in the ACC bankruptcy proceedings, alleging fraud and malicious injury in connection with the 2009 Colorado bankruptcy court proceeding that he alleges ultimately resulted in a violation of the original automatic stay. ECF No. 10-2.

In his claim before the New York bankruptcy court, Pierre alleged that he suffered injuries as a result of alleged fraudulent practices engaged in by ALS that he asserts led to the Colorado bankruptcy court's order granting ALS relief from stay. Id. at 11-12. Pierre alleged that, between April and June of 2013, he discovered irregularities in ALS's mortgage servicing and foreclosure practices when he received notice from the Comptroller of the Currency and $300 in compensation in connection with such practices. See Tr. of 10/23/19 Hr'g, at 15, ECF No. 10-9. Pierre also alleged that, in July 2013, he came across a local news article regarding federal sanctions against Toni M.N. Dale of Medved Dale Decker & Deere, the attorney who initiated the foreclosure action against the property, in connection with another foreclosure proceeding in Colorado. See id.

The appellee objected to Pierre's proof of claim. ECF No. 10-3. In an October 2019 hearing, at which Pierre appeared telephonically, the New York bankruptcy court sustained the objection and disallowed and expunged the proof of claim in an oral ruling. ECF No. 10-10. In a written ruling issued on November 13, 2019, the New York bankruptcy court expanded on the reasons for disallowing and expunging the proof of claim. Specifically, the bankruptcy court noted that the claim was time barred by any applicable statutes of limitations and the doctrine of laches. Id. at 4. The New York bankruptcy court further held that there was no violation of the automatic stay by ALS or any denial of Pierre's due process rights in connection with the Colorado bankruptcy court proceeding. Id. at 3–4. The court cited the March 2009 stay relief order by the Colorado bankruptcy court as evidence that ALS had not violated the automatic stay when it foreclosed on the property in September 2009. Id. at 4. In addition, the court noted that because the record from the Colorado bankruptcy court indicated that Pierre received notice and the opportunity to appear at a hearing, there was no violation of his due process rights in the Colorado bankruptcy court proceeding. Id. at 3-4.¹

On December 4, 2019, Pierre filed a notice of appeal with the New York bankruptcy court and at the same time filed a motion for an extension of time to file a notice of appeal in that court. In re Aurora Commercial Corp., No. 19-11207 (S.D.N.Y. Dec. 6, 2019), ECF No. 1.

II.

This appeal is timely because the New York bankruptcy court has granted the appellant's request to extend the time to appeal.

Rule 8002(a) of the Federal Rules of Bankruptcy Procedure requires a notice of appeal to "be filed with the bankruptcy clerk within fourteen days after entry of the judgment, order, or decree being appealed." Fed. R. Bankr. P. 8002(a).² Compliance with Rule 8002(a) is jurisdictional, and "in the absence of a timely notice of appeal in the district court, the district court is without jurisdiction to consider the appeal." In re Siemon, 421 F.3d 167, 169 (2d Cir. 2005) (per curiam). An appellant may, before the time to appeal has expired, file a written motion with the bankruptcy court seeking to extend the time to file a notice of appeal, either within the specified fourteen-day period or within twenty-one days after that time if the appellant can demonstrate excusable neglect. Fed. R. Bankr. P. 8002(d)(1).

The bankruptcy court did not initially rule on Pierre's motion for an extension of time to appeal when the motion was filed on December 4, 2019. Following a limited remand from this Court for the purposes of deciding Pierre's motion for an extension of time to appeal, the bankruptcy court granted Pierre's motion for an extension of time. ECF Nos. 15, 16. The bankruptcy court found that Pierre had established excusable neglect pursuant to Bankruptcy Rule 8002(d)(1)(B), and that the time to appeal the bankruptcy court's order should therefore be extended to December 4, 2019. ECF No. 16.³ Because the bankruptcy court has now granted Pierre's motion for an extension of time to file a notice of appeal through December 4, 2019, Pierre's notice of appeal filed on December 4, 2019 is timely. Therefore, this Court has jurisdiction to hear this appeal.

III.

The Court therefore turns to the order of the bankruptcy court. This Court reviews the bankruptcy court's factual findings for clear error, and its legal conclusions de novo. See In re Residential Capital, LLC, 519 B.R. 606, 612 (S.D.N.Y. 2014).

A.

The bankruptcy court did not err in finding that Pierre's claims in relation to the 2009 stay relief order of the Colorado bankruptcy court would be time barred by "any applicable statutes of limitation and the doctrine of laches." ECF No. 10-10, at 4. Further, there is no basis for equitable tolling in this case.

It is first necessary to identify Pierre's alleged claims. In his draft complaint attached to the proof of claim, Pierre initially asserted claims based on fraud and malicious injury as an exception to discharge pursuant to the Bankruptcy Code, 11 U.S.C. § 523(a)(4), (a)(6). ECF No. 10-2. However, Pierre has abandoned any claims based on fraud and...