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In re Toor

United States District Court, D. Connecticut

May 1, 2017



          Janet C. Hall United States District Judge.


         Muhammad 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.

         For the reasons discussed below, the Order of the Bankruptcy Court is AFFIRMED.


         Because 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.

         On 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.

         On 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.

         After 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).

         After 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).

         For the following reasons, the decision of the Bankruptcy Court is AFFIRMED.


         Section 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 Cir. 1998).

         IV. ...

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