Mark Fornesa v. Fifth Third Mortgage Compan
Opinion
Mark Fornesa and his father, Ricardo Fornesa, Jr., sued Fifth Third Bank for foreclosing on a property in violation of the automatic stay imposed during Ricardo's Chapter 13 bankruptcy.
See
BACKGROUND
In February 2010, Mark Fornesa obtained a secured loan from Fifth Third to purchase a piece of real property. Mark subsequently entered an equity sharing agreement with his father. This agreement gave Ricardo an equitable interest in the property and required Ricardo to make payments for three years. Ricardo voluntarily made payments to Fifth Third pursuant to Mark's loan. Mark and Ricardo did not record the equitable interest or inform Fifth Third.
In 2012, Ricardo sought Chapter 13 bankruptcy. In his 2012 bankruptcy schedules, Ricardo listed an "[e]quity sharing agreement in son's house," but he did not list the property's address or list Fifth Third as a creditor. By its own terms, the equity sharing agreement expired in February 2013.
In January 2014, Ricardo surrendered his own homestead in the bankruptcy and moved into his son's house. In November 2014, Mark and Ricardo stopped making payments on the Fifth Third loan. Then, in January 2015, Mark signed a quitclaim deed, conveying the property to Ricardo. This deed was recorded, but Ricardo did not amend his bankruptcy schedules. Nor did anyone inform Fifth Third about the transfer.
Fifth Third gave notice of default and intent to accelerate the loan in March 2015. The loan was accelerated and posted for foreclosure on April 6, 2015. Ricardo claims that on April 28 he sent Fifth Third a check for the delinquent loan payments along with a package containing his bankruptcy papers, the quitclaim deed, and the equity sharing agreement. Fifth Third disputes that it received the bankruptcy documents. Fifth Third returned the check because, as of May 1, the check constituted only a partial payment and could not bring the loan current. On May 4, Ricardo again allegedly sent a package containing his bankruptcy papers to Fifth Third. This package would not have been received before May 5. The property was sold at a foreclosure sale that afternoon. After the sale, Fifth Third contacted Mark, indicating that he had two weeks to redeem the property. Mark declined.
Instead, Mark and Ricardo brought a pro se lawsuit against Fifth Third for wrongful foreclosure, violation of the Emergency Stabilization Act, and violation of the automatic stay under
The plaintiffs timely appealed.
STANDARD OF REVIEW
We review a district court's determination of judicial estoppel for abuse of discretion.
Love v. Tyson Foods, Inc.
,
DISCUSSION
"The doctrine of judicial estoppel is equitable in nature and can be invoked by a court to prevent a party from asserting a position in a legal proceeding that is inconsistent with a position taken in a previous proceeding."
Love
,
The first and second elements of judicial estoppel are satisfied by Ricardo's failure to amend his bankruptcy schedules to disclose the quitclaim deed or his putative claims against Fifth Third. Chapter 13 debtors have a continuing obligation to amend financial schedules to disclose assets acquired post-petition.
See
Allen
,
Establishing the defense of inadvertence would require Ricardo to prove (1) that he did not know about the inconsistency or (2) that he lacked a motive for concealment.
See
Allen
,
In sum, the district court did not abuse its discretion in holding that Ricardo was judicially estopped from claiming Fifth Third violated the automatic stay. For the same reason, the district court did not abuse its discretion in denying the plaintiffs' motion for a new trial.
Nor have the plaintiffs shown that the district court abused its discretion in excluding several of their exhibits. These exhibits were (1) a third-party expert's appraisal of the property at issue, (2) documents pertaining to an eviction proceeding against the plaintiffs that was eventually non-suited, (3) several of Fifth Third's responses to interrogatories, (4) mailing receipts indicating when Fifth Third received the package containing Ricardo's bankruptcy documents, and (5) Ricardo's real estate license and his own appraisal of the property.
The plaintiffs' briefing on the evidentiary rulings fails to explain any legal or factual errors made by the district court. Fifth Third objected to the third-party's appraisal and Ricardo's appraisal because they were not adequately disclosed during discovery. The plaintiffs' briefing on these exclusions does not address their tardy designation of the evidence. 2 Likewise, the plaintiffs have not countered Fifth Third's objections that some exhibits were inadmissible for lack of authentication or were irrelevant to the disputed claims. None of the excluded evidence, moreover, bears on the merits of Fifth Third's judicial estoppel defense.
For these reasons, we AFFIRM the judgment of the district court.
The plaintiffs have waived their claims for wrongful foreclosure and for violation of the Emergency Stabilization Act by failing to argue them in their appellate briefing.
See
N.W. Enterprises, Inc. v. City of Houston
,
Instead, the plaintiffs merely cite Federal Rules of Evidence 703 and 705 regarding the permissible basis for expert opinion. These arguments are inapposite.
Reference
- Full Case Name
- Mark Anthony FORNESA; Ricardo Fornesa, Jr., Plaintiffs-Appellants v. FIFTH THIRD MORTGAGE COMPANY, Also Known as Fifth Third Bank, Defendant-Appellee Mark Anthony Fornesa; Ricardo Fornesa, Jr., Plaintiffs-Appellants v. Fifth Third Mortgage Company, Defendant-Appellee
- Cited By
- 24 cases
- Status
- Published