Terio v. Great Western Bank, 93 Civ. 4377 (VLB).
| Decision Date | 11 April 1994 |
| Docket Number | No. 93 Civ. 4377 (VLB).,93 Civ. 4377 (VLB). |
| Citation | 166 BR 213 |
| Parties | Vincent R. TERIO, Plaintiff, v. GREAT WESTERN BANK, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Vincent R. Terio, pro se.
Jules A. Epstein, Philip Irwin Aaron, P.C., Syosset, NY, for defendant.
This lawsuit was brought by plaintiff pro se seeking to invalidate under various provisions of the Bankruptcy Code, 11 U.S.C. § 101 et seq., an action in New York State Supreme Court, Putnam County, by the defendant bank to foreclose on plaintiff's residential property. Plaintiff filed for Chapter 7 bankruptcy in October 1990 and was discharged from bankruptcy on January 29, 1991.
By order dated December 17, 1993, this case was referred to United States Magistrate Judge Mark D. Fox for pretrial purposes, 28 U.S.C. § 636(b)(1)(A), and for a Report and Recommendation on all motions filed in the action, 28 U.S.C. § 636(b)(1)(B), including defendant's motion to dismiss under Fed.R.Civ.P. 12(b). Judge Fox issued a Report and Recommendation dated March 22, 1994 to which plaintiff has submitted numerous objections, Dkt. # 26.
After considering plaintiff's objections pursuant to 28 U.S.C. § 636(b)(1)(C), I approve Judge Fox's carefully prepared report, which is attached to and made part of this memorandum order, and adopt his recommendation that defendant's motion to dismiss the complaint for failure to state a claim be granted and that plaintiff's various motions be denied.
The complaint being now dismissed, the reference to Judge Fox for pretrial purposes is moot. All proceedings previously scheduled in this case are cancelled.
Although it is understandable that plaintiff as a non-lawyer might be led by the intricacies of the Bankruptcy Code to believe that he has a claim against the defendant bank, it is the duty of the court to examine the complaint and dismiss it where it is evident after careful scrutiny that the claims asserted lack merit. Plaintiff's objections have been considered and do not provide a basis in law for any contrary result.
The only appropriate relief at this time concerning plaintiff's propensity for repetitive litigation, as noted in the Magistrate Judge's Report and Recommendation at 14, is a clear warning that my order dated July 23, 1993 remains in effect with reference to both this case and to other complaints recently filed by plaintiff in this court. In the July 23, 1993 order I directed plaintiff "to present a copy of this order to the Pro Se Clerk or any judicial officer in the Southern District of New York any time he should seek to file any other complaints or papers related to these cases or to claims connected in any way to his 1990 Bankruptcy Petition." Id. at 5. That ruling is reaffirmed and modified to the extent that a copy of this memorandum order is to be supplied as well.
Should plaintiff seek to revisit any of the issues decided in this memorandum order by the filing of new complaints in this district court in connection with his 1990 Bankruptcy Petition, one or more of the following events could occur:
(1) Further submissions or complaints may be filed but not docketed and treated as not requiring a response from defendant(s) unless the court finds they set forth a cognizable non-repetitious claim, see Schoolfield v. New York City Dep't of Corrections, 1992 WL 296691, 1992 U.S. Dist. LEXIS 17590 (S.D.N.Y. Oct. 21, 1992).
(2) Monetary sanctions may be considered under Fed.R.Civ.P. 11, which the court may initiate on its own motion. Enforcement of any monetary sanctions may be appropriate inasmuch as the bankruptcy case has been terminated.
(3) Prohibition of any filing by plaintiff without prior permission may be considered. See generally In re Sassower, 20 F.3d 42 (2d Cir.1994); Safir v. United States Lines, Inc., 792 F.2d 19 (2d Cir.1986), cert. denied 479 U.S. 1099, 107 S.Ct. 1323, 94 L.Ed.2d 175 (1987).
Any federal stay now in effect with respect to this case is now vacated. In the interest of comity, an application to vacate any state court stay of the mortgage foreclosure proceeding at issue here should be addressed to the appropriate state court.
SO ORDERED.
REPORT AND RECOMMENDATION
This matter is before the Court on Plaintiff's various motions and Defendant's cross motion to dismiss the complaint in response to and in opposition to Plaintiff's motions. The pro se complaint, which is divided into three (3) causes of action, is entitled, "COMPLAINT FOR MALICIOUS PROSECUTION AND ABUSE OF PROCESS PURSUANT SY 11 U.S.C. 362(a)-362(d)-524(a)(2) and C.P.L.R. 3217 DISCONTINUE ACTION TO FORECLOSE IN STATE SUPREME COURT, PUTNAM COUNTY & RULE 33 NOTICE OF CLAIM OF UNCONSTITUTIONALITY OF THE CIVIL RULES" and seeks compensatory and punitive damages and "legal fees".1
Because the complaint is disjointed and reflects Plaintiff's lack of knowledge of the law, the facts will not be related in the order in which they appear. The basic facts are not in dispute. The only issues are whether the facts entitle him to any relief from this Court.
Plaintiff filed a voluntary chapter 7 petition in the Bankruptcy Court in Poughkeepsie on October 12, 1990. Prior thereto in June 1990 Plaintiff had borrowed $251,250 from Defendant as evidenced by a thirty (30) year note payable in equal monthly installments. Defendant secured the note with a mortgage on a property Plaintiff owned in Putnam County. The property had been appraised in May 1990 at $335,000. Plaintiff defaulted on the loan payments from the outset.
The bankruptcy case went forward with notice to the creditors. Plaintiff listed Defendant as a secured creditor for $251,250 on schedule A-2. Nobody appeared at the creditors' meeting, no creditor filed any claims against the debtor and no creditor objected to the property the debtor had listed as exempt. On December 12, 1990 the chapter 7 trustee marked the case "no asset", which designation the United States Trustee approved.2 Plaintiff was discharged on January 29, 1991.
On January 16, 1991, while the automatic stay was allegedly in effect, Defendant commenced a foreclosure action in Supreme Court, Putnam County, which was assigned index no. 78/91. Plaintiff moved the Bankruptcy Court on February 25, 1991 for an order barring Defendant from pursuing the foreclosure action because Defendant had allegedly violated the automatic stay. On March 27, 1991 Plaintiff withdrew his motion because Defendant agreed to follow Judge Berk's advice to discontinue the foreclosure action. Pursuant to N.Y.Civ.Prac.L. & R. § 3217, Defendant moved to discontinue the foreclosure action by an ex parte application of May 8, 1991; however Justice Dickinson ruled that the application could not be made ex parte and denied it. Defendant then returned to the Bankruptcy Court and applied for a termination of the stay, which Judge Berk granted by order of October 2, 1991. Having removed the obstacle, Defendant commenced foreclosure proceedings anew in the state court with new attorneys. This matter was assigned index no. 1952/91. According to Defendant's counsel, when they discovered that the first foreclosure action had not been discontinued, they moved to discontinue it. Justice Hickman granted this application in a short form order dated July 27, 1992, which stated:
The Court notes that by order decided herewith, plaintiff Great Western Bank has been permitted to go forward with this action under Index No. 1952/91.
Justice Hickman reiterated this ruling in an order of February 25, 1993, which denied Plaintiff's subsequent motion to dismiss the first foreclosure action, index no. 78/91.3 Thereafter, Justice Hickman granted Defendant's application for a judgment of foreclosure and appointed a referee to sell the property. On Plaintiff's notice of appeal, the New York Court of Appeals transferred the appeal(s) to the Appellate Division in two (2) orders, both of which appear at Great Western Bank v. Terio, 82 N.Y.2d 671, 601 N.Y.S.2d 565, 619 N.E.2d 643 (1993). The sale was noticed for July 13, 1993, but Plaintiff obtained a stay from the Appellate Division, Second Department, which either dismissed the appeals from or affirmed Justice Hickman's orders in two decisions dated January 18, 1994. Great Western Bank v. Terio, 606 N.Y.S.2d 904 (2d Dep't 1994) (mem.); Great Western Bank v. Terio, 606 N.Y.S.2d 903 (2d Dep't 1994) (mem.).4
As the first cause of action, Plaintiff seems to reason that by failing to file a proof of claim in the bankruptcy, Defendant forfeited its status as a secured creditor and thereby lost the opportunity to move the Bankruptcy Court to lift the automatic stay. Defendant thereby also lost any claim it might have to the remaining asset in the debtor's estate, which allegedly consists of $83,750. Complaint ¶ 15. Plaintiff apparently arrives at this "asset" by construing the difference between the amount he borrowed, $251,250, and the amount of the appraisal, $335,000, as "equity". See Complaint ¶ 25. Plaintiff concludes the first cause of action by alleging that "G.W.B. must bring the issue before the bankruptcy Court to seek relief from said 362 Stay, which G.W.B. failed to do, in order for the bankruptcy court to secure Creditor/Great Western Bank's interest." Complaint ¶ 15.
On its face, Plaintiff's position is utter nonsense. Counsel for Defendant points out that any surplus from the sale of the property may be the subject of a dispute between Plaintiff and the other creditors of the bankrupt estate, and more significantly, that his client cannot pursue a deficiency judgment against Plaintiff under New York law because Plaintiff has obtained a discharge of that debt in the bankruptcy court. Epstein Aff. ¶ 18. Additionally, the record unequivocally discloses and Plaintiff pleads that Defendant sought and obtained a termination of the § 362...
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