First American Title Insurance v. Stevenson (In re Stevenson)
First American Title Insurance v. Stevenson (In re Stevenson)
Opinion of the Court
MEMORANDUM OPINION
These two cases arise out of a common bankruptcy proceeding, and they come before this Court challenging two different decisions by the United States Bankruptcy Court for the District of Columbia (“the Bankruptcy Court”). In December 2005, Fremont Investment & Loan (“Fremont”) extended a loan (“the Fremont Loan”) to debtor Debra Stevenson, who used it to refinance a preexisting loan secured by real property jointly owned by Stevenson and her son, Eugene Smith (collectively “appellants”). First American Title Insurance Company (“First American”) served as Fremont’s title insurer. In February 2007, First American filed a two-count complaint against appellants, seeking (1) a declaration that, although Smith was not a party to the Fremont Loan, he was nevertheless a borrower on it, accompanied by an injunction requiring him to take any steps necessary to document his interest in the loan, see Compl. to Determine Applicability of Status of Liens Against Debtor’s Property (“Compl.”) at 9 [Dkt. # l],
On January 4, 2013, the Bankruptcy Court issued a pair of rulings. In the first, the court held that appellants had forfeited their affirmative defenses challenging the validity of the Fremont Loan under federal and state lending laws, and any defenses not forfeited failed on their merits as a matter of law. See J. Dismissing Defs.’ Claims Challenging Validity of Fremont Loan Based on Alleged Violations of Fed. & State Lending Laws (“Judgment of Dismissal”) [Dkt. #240]. In the second, the Bankruptcy Court issued proposed findings of fact and conclusions of law in support of a recommendation that this Court grant summary judgment in First American’s favor. See Mem. Decision Submitting Proposed Findings of Fact & Conclusions of Law Recommending Dist. Ct. Grant Summ. J. in Favor of Pis. on Their Claim for Equitable Subrogation (“Mem. Recommending Summ. J.”) [Dkt. # 241], Appellants now appeal the first decision and seek de novo review of the second. I find that the Bankruptcy Court’s judgment and recommendation are both sound, so I will affirm the former, adopt the latter, and enter judgment to that effect.
First, the Bankruptcy Court’s Judgment of Dismissal is amply supported by a well-reasoned, thorough, 36-page memorandum decision. See Mem. Decision Re Claims Raised by Defs. in Their Second Mot. for Summ. J. & Re Pis.’ Mot. to Strike Those Claims (“Dismissal Mem.”) [Dkt. # 239]. At the outset, I agree with the Bankruptcy Court’s determination that
Furthermore, I find that the Bankruptcy Court did not abuse its discretion in its handling of appellants’ belatedly-asserted affirmative defenses. Appellants concede that they “did not file an answer to the Complaint within the time required by the Fed. R. Bankr. P. 7012(a).” Defs.’ Appeal of Bankr.Ct’s Dismissal Mem. at 5 [Civ. Case 13-258 Dkt. #8].
Moving onto the Bankruptcy Court’s recommendation to grant summary judgment in plaintiffs’ favor, I have reviewed the Memorandum Recommending Summary Judgment, as well as the parties’ pleadings in opposition to, and in support of, that recommendation. See Defs.’ Objections to Mem. Recommending Summ. J. [Dkt. #250]; Pis.’ Opp’n to Exceptions [Dkt. # 259]; Defs.’ Reply to Pis.’ Opp’n to Defs.’ Objections [Dkt. #263]. I agree with the Bankruptcy Court’s analysis and have nothing to add to its comprehensive 38-page opinion. I therefore adopt its proposed findings of fact and conclusions of law and will enter judgment accordingly-
An appropriate judgment shall accompany this Memorandum Opinion.
. For ease of reference in both cases, unless otherwise noted, docket cites are to the underlying Bankruptcy Court case, Adversary Proceeding No. 07-10005.
. In a subsequent Amended Complaint, HSBC Bank USA and Wells Fargo Bank joined First American as plaintiffs. See Am. Compl. to Determine Applicability of Status of Liens Against Debtor's Property [Dkt. # 122]. I will refer to all three of the plaintiffs collectively as "plaintiffs."
. See also Interconnect Tel. Servs., Inc. v. Farren, 59 B.R. 397, 401 n. 2 (S.D.N.Y. 1986); 1 William L. Norton, Jr.. Bankruptcy Law & Practice § 4:69 (3ded. 2011).
. Even if I disagreed with the Bankruptcy. Court on this point, the only practical consequence is that I would be required to treat its judgment as a recommendation and review its factual findings de novo. 28 U.S.C. § 157(c)(1). Because my view of the record comports with the Bankruptcy Court’s, I would adopt its findings and accept its recommendations in full.
. In their 'brief to this court, appellants now argue that they missed the deadline because the clerk's office sent a scheduling order to the wrong address. See id. Appellants do not appear to have raised this argument before the Bankruptcy Court, and they have not cited any evidence that the Bankruptcy Court considered it. See Defs.' Opp'n to Pis.' Mot. to Strike Affirmative Defenses at 5 [Dkt. # 53] (arguing they in fact complied with the court's rules, and citing scheduling order without mentioning that it was mismailed and never received). The argument is therefore waived. See In re Sokolik, 635 F.3d 261, 268 (7th Cir. 2011) (''[W]hen an issue was not raised in the bankruptcy court, a finding that the issue is waved at ,the district court level is the correct result, since to find otherwise would permit a litigant simply to bypass the bankruptcy court.” (internal • quotation marks omitted)). The same is true of appellants’ new argument, not raised below, that their defenses were "general,” not “affirmative.” See, e.g., Tr. of March 31, 2008 Hearing at 19, 46, 66, 68, 76 [Dkt. # 266] (appellants referring to their "affirmative defenses”).
. See, e.g., Miller v. District of Columbia, 891 F.Supp.2d 8, 12 (D.D.C. 2012) (whether to extend time to file notice of appeal); In re Douglas, 477 B.R. 274, 275 (D.D.C. 2012) (same); Hope 7 Monroe St. Ltd. P'ship v. RIASO L.L.C., 473 B.R. 1, 6-7 (D.D.C. 2012) (whether to approve settlement); Akl v. Va.
. The record before me so completely supports the Bankruptcy Court’s approach and decisions that I would uphold them under any standard of review, including de novo.
. I need not decide whether the Bankruptcy Court erred when it found that Smith lacked standing to attack the Fremont Loan, as the outcome of the case would be the same either way.
Reference
- Full Case Name
- IN RE Debra M. STEVENSON, Debtor. First American Title Insurance Company v. Debra M. Stevenson
- Cited By
- 2 cases
- Status
- Published