Williams v. Gerstenfeld

• Decision Date: 10 September 1986
• Docket Number: No. 84-1031.,84-1031.
• Citation: 514 A.2d 1172
• Parties: Arthur WILLIAMS, et ux., Appellants, v. Roger GERSTENFELD, et al., Appellees.
• Court: D.C. Court of Appeals

514 A.2d 1172

Arthur WILLIAMS, et ux., Appellants, v. Roger GERSTENFELD, et al., Appellees.

No. 84-1031.

District of Columbia Court of Appeals.

Argued September 17, 1985.

Decided September 10, 1986.

Melvin A. Marshall, Washington, D.C., for appellants.

Thomas Hylden, Washington, D.C., for appellees.

Before MACK, ROGERS and STEADMAN, Associate Judges.

ROGERS, Associate Judge:

Appellants appeal the granting of summary judgment to appellees on appellants' complaint for injunctive and other relief relating to the foreclosure of their home. Their principal contention is that appellees were precluded from foreclosing by the automatic stay provision of the United States Bankruptcy Act, 11 U.S.C. § 362 (1982), which took effect when Mr. Williams filed a second petition in bankruptcy. We hold the filing of the second petition in bankruptcy did not bar appellees from foreclosing because the petition was filed under circumstances which did not entitle the petitioner to the benefit of the automatic stay. We find appellants' other contentions unpersuasive. Having failed to contest with specificity appellees' statement of undisputed facts in support of the motion for summary judgment, appellants cannot prevail on the ground the trial court erred in accepting appellees' verified version of the facts as admitted. In addition, appellants are barred by res judicata as a result of the bankruptcy court proceedings based on the first petition in bankruptcy from litigating issues relating to their indebtedness to appellees; although appellant Mrs. Williams was not a party to the bankruptcy proceedings, she nevertheless is barred by res judicata because appellants owned their home as tenants by the entirety. Accordingly, we affirm.

I

On May 1, 1980, appellees¹ loaned appellants—Mr. and Mrs. Williams—$38,500.00. The loan was secured by a second deed of trust on the Williams' home. The Williams signed a promissory note and a deed of trust, with monthly payments on the loan and repayment of the loan by May 1, 1981. When they defaulted on the monthly payments, Gerstenfeld scheduled foreclosure proceedings for January 16, 1981, unless the amounts due were immediately paid.

The day before foreclosure, Mr. Williams filed a petition for a wage earner's voluntary debt reorganization under Chapter 13 of the Bankruptcy Act in the United States Bankruptcy Court for the District of Columbia. In Re Arthur B. Williams, No. 81-0017 (Bankr.D.C. January 15, 1981). The filing automatically stayed the foreclosure proceedings pursuant to 11 U.S.C. § 362 (1982).² Gerstenfeld filed a complaint to modify the stay on the ground he would suffer irreparable harm if not permitted to foreclose on his deed of trust. Mr. Williams answered, claiming he expected to obtain refinancing by May 1, 1981, and to propose a Chapter 13 plan for consideration of the bankruptcy court. He also maintained the bankruptcy court should not exercise its equitable powers to permit foreclosure while his contentions that the loan was unconscionable remained unresolved.

Judge Whelan of the bankruptcy court scheduled a hearing on Gerstenfeld's complaint to modify the stay and a trial on the merits. Prior to the hearing on the complaint, the parties reached agreement. On March 16, 1981, Judge Whelan issued a consent order which recited that he had considered "the entire record of this adversary proceeding," and the parties had agreed Gerstenfeld would not commence foreclosure proceedings before May 1, 1981, if Mr. Williams timely paid $1,155.00 due on the note. The order provided the automatic stay under the Bankruptcy Act would terminate on May 1, 1981, if the entire balance due on the note was not then paid and Gerstenfeld would be allowed to foreclose without further action of the bankruptcy court. On April 29, 1981, Mr. Williams moved to dismiss the Chapter 13 proceeding,³ and the bankruptcy court entered an order granting his motion for voluntary dismissal without prejudice.

The following day, Mr. and Mrs. Williams filed the instant case in the Superior Court of the District of Columbia. They sought to enjoin foreclosure or other enforcement of the promissory note and deed of trust, and money damages for violation of federal and District of Columbia laws,⁴ intentional infliction of distress and unconscionability. The next day Gerstenfeld filed a motion in the bankruptcy court for reconsideration of the April 29 dismissal of the Chapter 13 proceeding or entry of protective order, arguing the bankruptcy proceeding should have been converted to an involuntary proceeding and the consent order should control the subsequent litigation in Superior Court. On May 1, 1981, Judge Whelan issued an order that Mr. Williams was precluded from seeking injunctive relief to stop foreclosure as a condition of the dismissal of the Chapter 13 proceedings. On the same date the Superior Court granted a temporary restraining order in the instant case, but subsequently denied a preliminary injunction, on the ground that the Williams' claims were barred by res judicata as a result of the bankruptcy court proceedings; the denial was without prejudice to renewal if the bankruptcy court's May 1 order was reversed on appeal.

Approximately two weeks later, on the day before the foreclosure sale was to occur, Mr. Williams filed a second Chapter 13 petition in the bankruptcy court. Gerstenfeld foreclosed on July 14, 1981, and purchased the Williams' home. On September 22, 1981, Judge Whelan dismissed the second petition as "filed improvidently." The accompanying order noted that Mr. Williams had taken no action beyond filing the petition, had previously filed a petition requesting the same relief which had been dismissed upon his request, and the April 29 dismissal, as modified on May 1, was pending on appeal to the U.S. District Court for the District of Columbia.

The Williams filed a motion for summary judgment in the instant case following affirmance on appeal of the bankruptcy court's dismissal of the first petition in bankruptcy and after Gerstenfeld had obtained a judgment for possession against them.⁵ Their motion challenged the validity of the foreclosure sale on the ground the automatic stay under the Bankruptcy Act prevented foreclosure until the second petition in bankruptcy was dismissed on September 22, 1981. Gerstenfeld responded that the second bankruptcy petition had been filed in bad faith, solely to prevent foreclosure, and Mr. Williams should not be allowed to use the automatic stay to avoid a sale completed nine months earlier. The court denied the Williams' motion for summary judgment.

Almost two years later, Gerstenfeld filed the motion for summary judgment from which this appeal arises. Attached to the motion was a statement of points and authorities, which included, as required by Super.Ct.Civ.R. 12-I(k), a statement of facts as to which there is no genuine issue. The statement set forth the loan transaction and attendant circumstances, the default and foreclosure, and the bankruptcy court proceedings. The Williams' filed a statement of undisputed facts. See infra note 7. The court granted the motion for summary judgment, and the Williams filed this appeal.⁶

II

When reviewing the propriety of an order granting summary judgment, this court makes an independent review of the record. Holland v. Hannan, 456 A.2d 807, 814 (D.C. 1983); Scrimgeour v. Magazine, 429 A.2d 187, 188 (D.C. 1981); Dewey v. Clark, 86 U.S.App.D.C. 137, 180 F.2d 766 (1950). Thus, the standard of review on appeal is the same as the trial court's standard for initially considering the motion for summary judgment, and we will affirm a grant of summary judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Holland v. Hannan, supra, 456 A.2d at 814; Nader v. de Toledano, 408 A.2d 31, 42 (D.C. 1979); Super.Ct.Civ.R. 56(c). In determining whether an issue of fact exists, the court must examine the pleadings, depositions, and admissions on file, together with any affidavits submitted by the parties. Holland v. Hannan, supra, 456 A.2d at 815; Turner v. American Motors General Corporation, 392 A.2d 1005, 1006 (D.C. 1978). The moving party has the burden of demonstrating the absence of any genuine issue of material fact and entitlement to a judgment as a matter of law. Holland v. Hannan, supra, 456 A.2d at 815. The party opposing summary judgment is entitled to the benefit of all favorable inferences that can be drawn from the evidence. Holland v. Hannan, supra, 456 A.2d at 815; Yasuna v. Miller, 399 A.2d 68, 71 (D.C. 1979); Turner v. American Motors General Corporation, supra, 392 A.2d at 1006.

A.

In response to Gerstenfeld's motion for summary judgment, the Williams filed a "Statement of Material Facts Not in Dispute.⁷ Presumably they sought to oppose the motion and Rule 12-I(k) statement by alleging the existence of a material factual dispute for trial. However, their statement of facts was not supported by record references or affidavits. Super.Ct. Civ.R. 12-I(k) provides:

[T]he court may assume that facts as claimed by the moving party are admitted to exist without controversy except as and to the extent that such facts are asserted to be actually in good faith controverted in a statement filed in opposition to the motion. Any statement filed pursuant to this section of this Rule shall include therein references to the parts of the record relied on to support such statement and shall be a part of the record.

Further, Super.Ct.Civ.R. 56(e) provides "an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial." The failure of a party opposing summary judgment to provide supported contentions of a factual dispute will result in the court's acceptance of a movant's statement...