Thakkar v. Bay Point Capital Partners, LP (In re Bay Circle Props., LLC), No. 18-12536

• Decision Date: 08 April 2020
• Docket Number: No. 18-12536
• Citation: 955 F.3d 874
• Parties: IN RE: BAY CIRCLE PROPERTIES, LLC, Debtor. Chittranjan Thakkar, Plaintiff-Appellant, DCT Systems Group, LLC, Plaintiff, v. Bay Point Capital Partners, LP, Bay Point Advisors, LLC, Charles Andros, John Doe, 1, John Doe, 2, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

955 F.3d 874

IN RE: BAY CIRCLE PROPERTIES, LLC, Debtor.Chittranjan Thakkar, Plaintiff-Appellant,DCT Systems Group, LLC, Plaintiff,

v.Bay Point Capital Partners, LP, Bay Point Advisors, LLC, Charles Andros, John Doe, 1, John Doe, 2, Defendants-Appellees.

No. 18-12536

United States Court of Appeals, Eleventh Circuit.

April 8, 2020

Daniel M. Samson, Samson Appellate Law, Miami, FL, for Plaintiff-Appellant.

Lisa Wolgast, Morris Manning & Martin, LLP, Atlanta, GA, for Interested Party-Intervenor.

John Franklin Isbell, Law Offices of John F. Isbell, LLC, Garrett Nail, Thompson Hine, LLP, Atlanta, GA. for Defendants-Appellees.

Before WILSON, BRANCH, and JULIE CARNES, Circuit Judges.

WILSON, Circuit Judge:

Initially, when co-plaintiffs Chittranjan Thakkar and DCT Systems Group, LLC (DCT) jointly appealed to this court, we had no reason to doubt our jurisdiction. But then, after briefing, DCT settled and dismissed its appeal, leaving Thakkar as the sole appellant. DCT’s exit created a jurisdictional problem—Thakkar, an individual without injury, lacks standing. We thus dismiss Thakkar’s appeal.

I.

Thakkar claims to be "affiliated with" DCT. Thakkar and DCT each had loans with Wells Fargo. When DCT declared bankruptcy, Thakkar, DCT, and Wells Fargo entered into a Settlement Agreement for debt owed on the loans, securing them with two properties DCT owned and to which Thakkar asserted a "beneficial interest."¹ Thakkar alleges the properties were worth at least $8 million together. The Agreement included a deeds-in-lieu-of-foreclosure remedy for Wells Fargo: upon default, "Lender may at any time and in its discretion, without further notice to any Obligor or any other Person, record one or more of the Deeds in Lieu to effectuate a transfer of title to one or more Parcels of the Encumbered Property."

Wells Fargo sold its interest in the Agreement to Bay Point, and DCT ultimately defaulted on the loans. Thakkar alleges that, upon default, DCT owed $2.7 million on the debt, and Bay Point chose to record the properties’ deeds. Thakkar alleges that recording one deed would have satisfied the debt. The bankruptcy court overseeing DCT’s bankruptcy authorized Bay Point "to exercise (in Bay Point’s sole discretion) any and all rights and remedies," including foreclosure, and Bay Point pursued foreclosure on both properties.

Two days before the foreclosure sale, counsel for DCT purported to tender payment of the remaining debt to Bay Point, stating over email, "I can confirm to you that the sum of [$2.8 million] is in escrow to be tendered on behalf of DCT and such sum [can] be remitted to Bay Point upon receipt of written acknowledgment that it will accept this tender." Bay Point did not respond. At the sale, Thakkar appeared and read the email letter aloud, but he did not produce payment. Bay Point sold the properties for $2.85 million.

Thakkar sued Bay Point in state court and added DCT as a plaintiff in an amended complaint. In the amended complaint, Thakkar alleges that Bay Point’s foreclosure of two properties caused him to lose the collateral’s value exceeding the debt balance, and to suffer mental anguish.

Bay Point removed to bankruptcy court and moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), which the court granted and entered for Bay Point. The district court affirmed the bankruptcy court in all respects. Thakkar and DCT appealed. On July 24, 2019, we granted DCT’s motion to dismiss its appeal, following a settlement with Bay Point where DCT relinquished all claims regarding the two properties it owned. Now Thakkar alone challenges Bay Point’s decision to record both properties’ deeds instead of one and Bay Point’s failure to accept the purportedly proper "tender."

II.

Article III standing "represents a jurisdictional requirement which remains open to review at all stages of the litigation." Nat’l Org. for Women, Inc. v. Scheidler , 510 U.S. 249, 255, 114 S.Ct. 798, 127 L.Ed.2d 99 (1994). We analyze three elements for Article III standing. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The first of these is injury in fact—"an invasion of a legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical." Id. (internal quotation marks omitted) (citations omitted). A particularized injury is one that "affect[s] the plaintiff in a personal and individual way." Id. at 560 n.1, 112 S.Ct. 2130.

At the pleading stage, "plaintiff[s] must clearly allege facts demonstrating each element" of standing. Spokeo, Inc. v. Robins , 578 U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (alteration adopted) (internal quotation marks omitted). "[L]abels," "conclusions," or "naked assertions devoid of further factual enhancement" will not suffice. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (alteration adopted) (internal quotation marks omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

Important too is that "standing is not dispensed in gross." Town of Chester v. Laroe Estates, Inc. , 581 U.S. ––––, 137 S. Ct. 1645, 1650, 198 L.Ed.2d 64 (2017). An appellate court must examine its jurisdiction if the sole party with standing in the lower court is absent as an appellant. See Diamond v. Charles , 476 U.S. 54, 61, 106 S.Ct. 1697, 90 L.Ed.2d 48 (1986). The ability of a party without its own standing to "piggyback" on another party’s standing "exists only if the [party with standing] is in fact an appellant ... ; in the absence of the [party with standing] in that capacity, there is no case." Id. at 64, 106 S.Ct. 1697.

To start, DCT undoubtedly had standing, but now its "absence as an appellant requires that we examine our jurisdiction to entertain this appeal." See id. at 61, 106 S.Ct. 1697. Thakkar can no longer piggyback on DCT’s standing because DCT relinquished all claims to the properties in its settlement with Bay Point. He must have sufficiently alleged facts in the operative complaint to establish his own standing independent of any interest in DCT.

He did not. Thakkar failed to allege an actual injury personal to him. In the operative complaint, Thakkar alleges that Bay Point’s foreclosure on DCT’s two properties caused him to lose the collateral’s value exceeding the debt balance, and to suffer mental anguish. But he also alleges that DCT —not he—was the properties’ owner, and he otherwise fails to elaborate on the nature of his "beneficial interest" in DCT and its properties. Without more, we cannot say that any alleged loss Thakkar suffered as an individual is more than speculative. His "naked assertions devoid of further factual enhancement" will not suffice. See Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (alteration adopted) (internal quotation marks omitted).

As for mental anguish, Thakkar asserted that, "[i]n a wrongful foreclosure action, an injured party may seek damages for mental anguish in addition to cancellation of the foreclosure," quoting Blanton v. Duru , 247 Ga.App. 175, 543 S.E.2d 448, 452 (2000). But, unlike the injured party in Blanton , Thakkar has not demonstrated that he owned the foreclosed properties here. See id. at 449–50. On the contrary, he alleges DCT owned them. Blanton did not hold that a nonowner may seek damages for mental anguish, so Blanton does not benefit Thakkar.

To the extent Thakkar asserts other injuries, none amount to an injury in fact. He asserts on appeal that (1) he personally guaranteed the loans at issue; and (2) the property could satisfy or decrease his personal liability stemming from judgments that two creditors have against him individually. First, the foreclosures satisfied the Settlement Agreement debt, so even assuming that he truly did personally guarantee the loans, it is unclear why any personal guaranty matters. And more importantly, we see no reference in his complaint to such a personal guaranty. Second, it is unclear how DCT’s recovery of any lost property value would pay off Thakkar’s alleged personal liability on creditors’ judgments against him individually; he is neither a debtor nor creditor in the original bankruptcy proceedings. Indeed, in his supplemental brief, he says that he or the bankruptcy estate could get the property, and he offers no basis for concluding that the property would likely become his. And, anyway, the complaint contained no allegations about Thakkar’s personal liability to these two creditors. All in all, because Thakkar failed to allege a particularized, actual injury for Article III standing, we have no jurisdiction over this appeal.

III.

Beyond Article III standing, "we have adopted the person aggrieved doctrine as our standard for determining whether a party can appeal a bankruptcy court’s order." Atkinson v. Ernie Haire Ford, Inc. (In re Ernie Haire Ford, Inc.) , 764 F.3d 1321, 1325 (11th Cir. 2014). That "standard does not speak to a court’s subject-matter jurisdiction. Rather, it tells us which parties may appeal from a bankruptcy court order." Id. at 1325 n.3. The "doctrine restricts standing more than Article III standing." Heatherwood Holdings, LLC v. HGC, Inc. (In re Heatherwood Holdings, LLC) , 746 F.3d 1206, 1216 (11th Cir. 2014). It "limits the right to appeal a bankruptcy court order to those parties having a direct and substantial interest in the question being appealed," i.e., those whom a bankruptcy court’s order "directly, adversely, and pecuniarily" affects by "diminish[ing] their property, increas[ing] their burdens, or impair[ing] their rights." Ernie Haire Ford , 764 F.3d at 1325 (internal quotation mark omitted).

Based on that doctrine, we also dismiss this appeal because Thakkar certainly cannot clear the higher hurdle of showing that he is a person aggrieved. Assuming the bankruptcy-court order injured Thakkar...