United States District Court, S.D. Florida
In re JXB 84 LLC, Debtor.
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, IN TRUST FOR REGISTERED HOLDERS OF LONG BEACH MORTGAGE LOANTRUST 2005-WL2, ASSET-BACKED CERTIFICATES, SERIES 2005-WL2, Appellee. JXB 84 LLC, Appellant,
P. GAYLES UNITED STATES DISTRICT JUDGE.
CAUSE comes before the Court on Appellant JXB 84
LLC's Notice of Appeal from the Bankruptcy Court [ECF No.
1]. The Court has reviewed the parties' briefs and the
record and is otherwise fully advised. For the reasons
discussed below, the Order of the United States Bankruptcy
Court for the Southern District of Florida (the
“Bankruptcy Court”) Granting Motion for Summary
Judgment and the corresponding Summary Final Judgment is
affirmed. [ECF No. 7-3, at 763-77].
case arises out of a foreclosure in New York state court and
the underlying facts are not in dispute. In 2005, a debtor
executed a promissory note and corresponding mortgage (the
“Mortgage”) on a property located in Brooklyn
(the “Property”). The Mortgage was later assigned
to Deutsche Bank National Trust Company
(“Appellee”). At a later point, the same debtor
took out a second mortgage on the Property (the “Second
Mortgage”), which was assigned to JXB 84 LLC's
(“Appellant”) predecessor-in-interest, Mortgage
Electronic Registration Systems, Inc. (“MERS”).
After the debtor defaulted on the Mortgage, Appellee
subsequently brought a foreclosure action against the debtor
and numerous other defendants, including MERS, in the Kings
County Supreme Court (the “State Court”).
Appellee filed a Summons, Complaint, and a Notice of Pendency
with the State Court. The Complaint was timely served on all
defendants. No. response was ever filed.
year after filing the Complaint, Appellee moved for a default
judgment and an order of reference against all defendants,
including MERS. The State Court granted that motion and
“ORDERED, that a default judgment in favor of the
[Appellee] be granted as to the claim described in the
[Appellee's Foreclosure] Complaint .” [ECF No.
7-3, at 508-09, ¶ 10]. It is undisputed that Appellee
complied with all procedural post-default obligations.
by that point had succeeded MERS on the Second Mortgage-then
appeared in the State Court and moved to dismiss the
Complaint and vacate the default. Appellant's sole
argument before the State Court was that Appellee's
motion for default was not timely. The State Court denied
Appellant's motions and granted Appellee's motion for
judgment of foreclosure and sale. Appellee again complied
with its service obligations on all defendants. Appellant did
not reassert its motions or otherwise challenge the State
Court foreclosure order; nor did Appellant appeal the
foreclosure judgment. Accordingly, as of July 13, 2017, the
State Court judgment was final. On September 28, 2017, the
scheduled date for the sale of the Property, Appellant
notified Appellee that Appellant had filed for bankruptcy and
the sale was canceled.
it was Appellant's primary asset, title to the Property
was immediately disputed in the bankruptcy proceeding.
Appellant sold the Property (to itself) at a sale on October
12, 2017. Appellant then brought an adversary proceeding in
the Bankruptcy Court against Appellee on January 17, 2018. In
the Adversary Complaint, Appellant asserted three Counts: (1)
a declaratory count to determine the extent, validity, and
priority of lien (in other words, whether Appellee's
original foreclosure judgment was valid); (2) for avoidance
of Appellant's security interest because Appellee's
Mortgage did not properly attach to Appellant's claim on
the title, and; (3) to quiet title against Appellee. Each
action would have the effect of overturning the State Court
judgment of foreclosure by prioritizing Appellant's lien.
On August 31, 2018, the Bankruptcy Court granted summary
judgment in favor of Appellee and against Appellant. [ECF No.
7-3, at 763-74]. This appeal followed.
district court has jurisdiction to hear appeals from final
judgments and orders of bankruptcy courts pursuant to 28
U.S.C. § 158(a). “In reviewing bankruptcy court
judgments, a district court functions as an appellate
court.” Rush v. JLJ Inc. (In re JLJ
Inc.), 988 F.2d 1112, 1116 (11th Cir. 1993). The
district court reviews the bankruptcy court's findings of
fact for clear error and its conclusions of law de
novo, and it cannot make independent factual findings.
See Torrens v. Hood (In re Hood), 727 F.3d
1360, 1363 (11th Cir. 2013); Englander v. Mills
(In re Englander), 95 F.3d 1028, 1030 (11th Cir.
1996). In a bankruptcy appeal, “both the district court
and [the Eleventh Circuit] review a bankruptcy court's
entry of summary judgment de novo.” In re
Optical Techs., Inc., 246 F.3d 1332, 1335 (11th Cir.
2001) (collecting cases).
appeal, Appellant argues that the Bankruptcy Court erred when
it found (1) no genuine issues of material fact, (2) that
Rooker-Feldman bars entry of judgment in
Appellant's favor, and (3) that res judicata and
collateral estoppel preclude the instant suit. None hold
No. Genuine Issue of Material Fact
Court first addresses whether any genuine issues of material
fact exist here. The same standards for summary judgment
apply before this Court as they do before the Bankruptcy
Court. See Fed. R. Bankr. P. 7056. That is to say,
summary judgment, pursuant to Federal Rule of Civil Procedure
56(a), “is appropriate only if ‘the movant shows
that there is no genuine issue as to any material fact and
the movant is entitled to judgment as a matter of
law.'” Tolan v. Cotton, 134 S.Ct. 1861,
1866 (2014) (per curiam) (quoting Fed.R.Civ.P. 56(a)).
“By its very terms, this standard provides that the
mere existence of some alleged factual dispute between the
parties will not defeat an otherwise properly supported
motion for summary judgment; the requirement is that there be
no genuine issue of material fact.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986). An issue is “genuine” when a
reasonable trier of fact, viewing all of the record evidence,
could rationally find in favor of the nonmoving party in
light of his burden of proof. Harrison v. Culliver,
746 F.3d 1288, 1298 (11th Cir. 2014). And a fact is
“material” if, “under the applicable
substantive law, it might affect the outcome of the
case.” Hickson Corp. v. N. Crossarm Co., 357
F.3d 1256, 1259-60 (11th Cir. 2004). The Court must construe
the evidence in the light most favorable to the nonmoving
party and draw all reasonable inferences in that party's
favor. SEC v. Monterosso, 756 F.3d 1326, 1333 (11th
Cir. 2014). However, to prevail on a motion for summary
judgment, “the nonmoving party must offer more than a
mere scintilla of evidence for its position; indeed, the
nonmoving party must make a showing sufficient to permit the
jury to reasonably find on its behalf.”
Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1050
(11th Cir. 2015).
has failed to show that any genuine issues of material fact
exist here. First, Appellant argues that its declarations
establish a question of whether the Notice of Pendency lapsed
between property purchases, such that Appellant's
interest in the title was protected at the time of
foreclosure. Although at first blush persuasive, the proper
time to have raised this was before the State Court.
Appellant does not dispute that it was on notice of the
foreclosure action and thus could have raised this argument
there. See infra, at 6-10. But Appellant did not.
Accordingly, the potential lapse of the Notice of Pendency
does not present a bar to summary judgment. So too fail the
issues relating to ...