Walk v. Thurman

• Decision Date: 10 August 2012
• Docket Number: Civil No. 2:12-CV-00511 BSJ
• Parties: In re: MARTIN WALK, SHANA WALK, RYAN HALL, JODI HALL, and JOSE HUERTA, Petitioners, v. Honorable U.S. Bankruptcy Judge WILLIAM T. THURMAN, Respondent.
• Court: U.S. District Court — District of Utah

In re: MARTIN WALK, SHANA WALK, RYAN HALL, JODI HALL, and JOSE HUERTA, Petitioners,

v.Honorable U.S. Bankruptcy Judge WILLIAM T. THURMAN, Respondent.

Civil No. 2:12-CV-00511 BSJ

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

Dated: August 10, 2012

MEMORANDUM OPINION &

ORDER RE: PETITION FOR A

WRIT OF MANDAMUS

(28 U.S.C. § 1651)

On May 29, 2012, the petitioners filed their "Petition for a Writ of Mandamus to Compel Compliance of U.S. Bankruptcy Court Judge William T. Thurman with Mandate of Carroll v. Key Bank, U.S. District Court Case No. 2:10-CV-1055-CW for Strip Off of Wholly Unsecured Junior Mortgage Liens," (CM/ECF No. 1) ("Writ Pet."). The next day, the petitioners filed a "Motion to Transfer Case and Reassign Judge" in Riley Carroll and Jennifer Carroll v. Key Bank, Case No. 2:10-cv-01055-CW (D. Utah),¹ seeking to have the above-captioned proceeding transferred and reassigned to the district judge who presided over the Carroll case. Two days later, this court issued a notice of hearing for a status conference and order to show cause why the motion for transfer should not be denied and why the case should not be dismissed, schedulingthat hearing for June 18, 2012.²

On June 4, 2012, the petitioners filed their response to the order to show cause,³ a copy of which was also filed in the Carroll case.⁴ On June 15, 2012, Judge Waddoups entered an order in the Carroll case denying the petitioners' motion to transfer this case.⁵

At the June 18, 2012 hearing, the court considered the arguments of counsel concerning the relief sought by the petitioners, and ruled that the Petition should be dismissed.⁶ In entering an order reflecting that ruling, the court has chosen to elaborate upon the reasons therefor as follows.

RELIEF SOUGHT BY THE PETITION

Each of the petitioners is currently a debtor in a Chapter 13 bankruptcy proceeding pending in this District before United States Bankruptcy Judge William Thurman,⁷ and they collectively seek a writ of mandamus requiring Judge Thurman to enter default judgments against certain creditors who are junior lienholders on the petitioners' residential properties, declaring that their liens are void because the diminished market value of the subject property (as of the date of filing of their Chapter 13 proceedings) has left the underlying loan obligations wholly unsecured. Petitioners' counsel submits that where the diminished market value of a debtor's residence leaves a junior lien with no collateral value vis-a-vis a senior lien, the bankruptcy court may determine that the junior lienholder's claim is not an "allowed secured claim"⁸ and thus its lien is void under 11 U.S.C. § 506(d) (2006 ed.), and may be "stripped off" the debtors' property prior to discharge.⁹ In the bankruptcy appeal in Carroll v. Key Bank, counsel persuaded Judge Waddoups to reach the same conclusion: "The equity value of theCarrolls' property does not exceed the secured claims of the CitiMortgage and Citibank loans," and therefore, Key Bank's claim as a junior lienholder "is wholly unsecured under section 506(a). Because the claim is wholly unsecured, Key Bank's [lien] is void under section 506(d) and should be 'stripped off.'"¹⁰

Petitioners were not parties to the Carroll litigation, but now seek to obtain the same result in their own pending Chapter 13 proceedings by requiring Judge Thurman to enter default judgments that immediately "strip off" existing junior liens on the petitioners' residences. They complain that Judge Thurman will likely include language in their requested default judgments providing that "'the lien is extinguished only upon discharge, that the lender shall retain the lien if the case is dismissed or converted, and that the recording of the judgment along with a discharge has the effect of a full reconveyance of the lien.'"¹¹ Petitioners insist that this court should grant a writ of mandamus compelling Judge Thurman to enter the requested default judgments without including any "lien retention until discharge" language, consistent with the "mandate" of Judge Waddoups' ruling in the Carroll v. Key Bank case—ostensibly the most recent decision by this district court in a bankruptcy appeal on this issue.¹²

In so arguing, petitioners' counsel misapprehends the import of the term "mandate," the nature and function of the writ of mandamus in the judicial context, and the operation of the doctrine of stare decisis at the federal district court level.

Law of the Case and the Mandate Rule

As the court of appeals has explained,

The law of the case "doctrine posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Arizona v. California, 460 U.S. 605, 618, 103 S. Ct. 1382, 75 L. Ed. 2d 318 (1983). The doctrine has particular relevance following a remand order issued by an appellate court. "[W]hen a case is appealed and remanded, the decision of the appellate court establishes the law of the case and ordinarily will be followed by both the trial court on remand and the appellate court in any subsequent appeal." Rohrbaugh v. Celotex Corp., 53 F.3d 1181, 1183 (10th Cir. 1995). The law of the case doctrine is intended to prevent "continued re-argument of issues already decided," Gage v. Gen. Motors Corp., 796 F.2d 345, 349 (10th Cir. 1986), and to preserve scarce court resources—to avoid "in short, Dickens's Jarndyce v. Jarndyce syndrome." McIlravy v. Kerr-McGee Coal Corp., 204 F.3d 1031, 1035 (10th Cir. 2000).

An "important corollary" to the law of the case doctrine, "known as the 'mandate rule,' provides that a district court must comply strictly with the mandate rendered by the reviewing court." Ute Indian Tribe v. Utah, 114 F.3d 1513, 1520-21 (10th Cir. 1997) (internal quotation omitted); see also Mason v. Texaco, Inc., 948 F.2d 1546, 1553 (10th Cir. 1991) ("Under the 'law of the case' doctrine, the district court may not deviate from the appellate court's mandate.").

Huffman v. Saul Holdings Ltd. Partnership, 262 F.3d 1128, 1132 (10th Cir. 2001). "Generally, 'once a court decides an issue, the same issue may not be relitigated in subsequent proceedings in the same case' and there must be compliance with the reviewing court's mandate." Grigsby v. Barnhart, 294 F.3d 1215, 1218 (10th Cir. 2002) (quoting Ute Indian Tribe of the Uintah & Ouray Reservation v. Utah, 114 F.3d 1513, 1520 (10th Cir. 1997)). Thus, the law of the case doctrine "requires a trial court to follow an appellate court's previous ruling on an issue in the same case. . . . This is the so-called 'mandate rule.'" United States v. Quintieri, 306 F.3d 1217, 1225 (2d Cir. 2002) (emphasis added & footnote omitted) (citing United States v. Uccio, 940 F.2d 753, 757 (2d Cir. 1991) (citing United States v. Cirami, 563 F.2d 26, 32 (2d Cir. 1977));United States v. Tenzer, 213 F.3d 34, 39-40 (2d Cir. 2000)). The "mandate rule" generally proscribes relitigation in the trial court of matters that were decided by an earlier appellate decision in the same case. United States v. Matthews, 643 F.3d 9, 13 (1st Cir. 2011).¹³

In this circuit, "[t]he mandate consists of our instructions to the district court at the conclusion of the opinion, and the entire opinion that preceded those instructions." Procter & Gamble Co. v. Haugen, 317 F.3d 1121, 1126 (10th Cir. 2003); cf. Quintieri, 306 F.3d at 1225 n.5 ("Technically, the 'mandate' of this Court consists of a 'certified copy of [our] judgment, a copy of the opinion, and any direction as to costs.'" (quoting United States v. Reyes, 49 F.3d 63, 66 (2d Cir. 1995)).

Bankruptcy courts are subject to the mandate rule. See Jamaica Shipping Co. v. OrientShipping Rotterdam, B.V. (In re Millenium Seacarriers, Inc.), 458 F.3d 92, 97 (2d Cir. 2006) (citing Quintieri, 306 F.3d at 1225). That is to say, a bankruptcy court is bound to follow an appellate court's prior ruling—including a district court's ruling on appeal—on a specific issue in the same case.

In this context, the mandate rule would require Judge Mosier of the bankruptcy court to follow Judge Waddoups' memorandum decision in Carroll v. Key Bank—the appellate court mandate in that case—after remand of the Carroll case to the bankruptcy court.¹⁴ But the law of the case doctrine and its corollary "mandate rule" do not extend the preclusive effect of the memorandum decision in Carroll v. Key Bank beyond the boundaries of that particular case.

The Writ of Mandamus

A writ of mandamus can be used to "assure that a lower court complies with the spirit as well as the letter of the mandate issued to that court by a higher court," In re Cont'l Ill. Sec. Lit., 985 F.2d 867, 869 (7th Cir. 1993), but here, no appellate mandate has yet been issued to Judge Thurman in connection with the petitioners' pending Chapter 13 proceedings. As explained above, Judge Waddoups' memorandum decision in Carroll v. Key Bank does not serve as an appellate court "mandate" for purposes of any bankruptcy proceeding other than the Carroll case itself.

The question before this court on the order to show cause is whether the petitioners are entitled to obtain a writ of mandamus any other ground.

"It is well established and oft repeated that "mandamus is an extraordinary writ, and therequirements for its issuance are strict.'" Dalton v. United States (In re Dalton), 733 F.2d 710, 716 (10th Cir. 1984) (quoting United States v. Winner, 641 F.2d 825, 830-31 (10th Cir. 1981)). "The Supreme Court has made it clear that mandamus is a 'drastic' remedy that is 'to be invoked only in extraordinary situations.'" In re Antrobus, 519 F.3d 1123, 1124 (10th Cir. 2008) (quoting Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 34 (1980) (per curiam)).

In the federal courts, writs of mandamus are governed by two statutes:

The first, more general statute, is the All Writs Act, 28 U.S.C. § 1651. That Act states:

The Supreme Court and all courts established by Act of Congress may issue

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