United States District Court, D. Connecticut
RULING RE: DEBTOR'S APPEAL
C. Hall United States District Judge.
J. Toor (“Toor”) filed this Appeal (Doc. No. 1)
from an Order of the United States Bankruptcy Court for the
District of Connecticut (“Bankr. Order”). The
Order granted appellee Eastern Savings Bank, FSB's
(“ESB”) Motion for Clarification of the
Bankruptcy Court's prior Order, which prior Order granted
relief from the automatic stay as to the property at 8-10
Sunshine Avenue, Greenwich Connecticut (“the
Property”). Order Granting Motion for Clarification,
In re Toor (Bankr. D. Conn. Oct 12, 2016) (No.
15-51292) (Doc. No. 75). Toor argues that the Bankruptcy
Court gave the Connecticut Superior Court too much latitude
in permitting it to determine his debt as to the foreclosure
case without reference to the bankruptcy proceedings. Brief
of Appellant (“Appellant's Br.”) (Doc. No.
10) at 5.
reasons discussed below, the Order of the Bankruptcy Court is
the dispute before the court ultimately concerns the granting
of in rem relief to the Property based on the
Bankruptcy Court's finding that the Debtor's Petition
was part of a scheme to delay, hinder, or defraud creditors,
it is necessary to lay out Toor's bankruptcy history.
See 11 U.S.C. §362(d)(4). In July 2007, Toor
executed a mortgage granting ESB a security interest in the
Property. Brief of Appellee (“Appellee's
Br.”) (Doc. No. 11) at 4. The loan has been in default
since September 2008. Id. On November 21, 2008, ESB
commenced foreclosure proceedings in the Superior Court for
the Judicial District of Stamford. Id.
December 23, 2009, Toor's wife Shagufta Toor (“Mrs.
Toor”) filed for bankruptcy. Id. On March 1,
2010, ESB received relief from the automatic stay.
Id. This bankruptcy was discharged on April 22,
2010. Id. Mrs. Toor filed for bankruptcy again on
July 25, 2010. Id. ESB again moved for relief from
the automatic stay on October 19, 2010, but the matter was
dismissed due to Mrs. Toor's failure to have a plan
confirmed before the Motion for Relief was ruled upon.
Id. at 4-5.
February 27, 2011, Mrs. Toor filed her third bankruptcy
petition. Id. Mrs. Toor filed a Motion to Dismiss
that matter after determining that she was not the owner of
the equity of redemption in the Property, and therefore could
not possibly reorganize under Chapter 11. Id. The
Motion to Dismiss was granted on June 13, 2011. Id.
Mrs. Toor then filed her fourth bankruptcy petition on July
8, 2011, two days before the impending law day on the
Property. Id. Because Mrs. Toor had filed two
bankruptcies that were dismissed within a twelve-month
period, Mrs. Toor filed a Motion to Impose the Automatic
Stay, which was granted. Id. ESB, however, was
ultimately granted relief from that stay because Mrs. Toor
could not confirm a plan of reorganization. Id. The
fourth bankruptcy matter was ultimately dismissed on December
19, 2012. Id.
the fourth bankruptcy matter had closed, the parties returned
to Connecticut Superior Court to litigate the foreclosure.
Id. On August 17, 2015, the Superior Court entered a
Judgment of Strict Foreclosure, and scheduled the law day for
September 15, 2015. Id. at 5-6. On September 14,
2015, Toor filed the bankruptcy matter underlying this
appeal. Id. On June 13, 2016, the Bankruptcy Court
granted ESB in rem relief on the Property, finding
that Toor had engaged in a “scheme to hinder, delay, or
defraud” ESB's foreclosure efforts, and that
therefore the property should not be subject to the automatic
stay in this or any other bankruptcy proceeding for the next
two years. Order Granting Motion for Relief from Stay
Pursuant to 11 U.S.C. § 362(d)(4), In re: Toor
(Bankr. D. Conn. June 13, 2016) (No. 15-51292) (Doc. No. 70).
That order was not appealed. See Docket, In re Toor,
No. (Bankr. D. Conn.) (No. 15-51292).
the stay was lifted with regard to the Property, ESB returned
to the Connecticut Superior Court to resume the foreclosure
procedure. Appellee's Br. at 7. Toor responded to
ESB's Motion to Open Judgment with a Response that asked
the Superior Court to restrict itself based on the existence
of the bankruptcy petition. Id. This Response led
the Superior Court to request that ESB return to the
Bankruptcy Court to seek clarification of the Order granting
in rem relief. Appellee's Br. at 6. ESB did so
move, and Toor objected. Id. The Bankruptcy Court
ultimately issued the Order Granting the Motion for
Clarification-which is the subject of this appeal-clarifying
that the in rem relief authorized the Connecticut
Superior Court to determine the amount of the debt owed by
the debtor in the foreclosure proceeding without reference to
the bankruptcy matter. Order Granting Mot. for Clarification,
In re: Toor (Bankr. D. Conn. Oct. 12, 2016)
(15-51292) (Doc. No. 94). Toor then filed this appeal on
October 27, 2016. Notice of Appeal from Bankruptcy Court
(Doc. No. 1). He also filed a Motion for Reconsideration in
the Bankruptcy Court. In re: Toor (Bankr. D. Conn.
Nov. 18, 2016) (15-51292) (Doc. No. 114). The Bankruptcy
Court rejected the Motion for Reconsideration as a meritless
attempt to relitigate the issues presented in the Motion for
Clarification without offering any new evidence or clear
error in the original rule. Order Denying Mot. for Recons.,
In re: Toor (Bankr. D. Conn. Jan. 26, 2017)
(15-51292) (Doc. No. 129).
following reasons, the decision of the Bankruptcy Court is
STANDARD OF REVIEW
158 (a)(1) of title 28 of the United States Code provides
district courts with jurisdiction to hear appeals of final
judgments, orders, and decrees of bankruptcy judges. In a
non-bankruptcy case, a final order “is one that
conclusively determines the rights of the parties to the
litigation, leaving nothing for the district court to do but
execute the order.” In re Fugazy Exp., Inc.,
982 F.2d 769, 775 (2d Cir. 1992). However, in bankruptcy
appeals the finality inquiry is more flexible to account for
the fact that discrete claims within a bankruptcy matter may
be resolved at different times during the proceeding.
Id. Thus, an order is final for the purposes of
appeal if it “finally dispose[s] of discrete disputes
within the larger case.” Id. The district
court reviews the bankruptcy court's conclusions of law
de novo and its findings of fact for clear error.
In re Bennett Funding Grp., 146 F.3d 136, 138 (2d