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In re Bartley

United States District Court, D. Connecticut

January 11, 2018

IN RE SANGA BARTLEY

          RULING ON MOTIONS TO DISMISS

          Michael P. Shea, U.S.D.J.

         The Bankruptcy Court for the District of Connecticut denied Sanga Bartley's “Motion to Reconsider Denials of Motion to Open and For Order to Show Cause, ” and she has now appealed that decision to this Court. Bartley has added two of the state court judges who entered orders in her previous state foreclosure case as defendants in this matter as well. Nationstar and the state court judges have moved to dismiss this appeal. For the reasons that follow, I GRANT the state court judges' motion to dismiss because new defendants cannot be added on appeal. I AFFIRM the Bankruptcy Court's decision on the Motion for Reconsideration because it was not an abuse of discretion, and I DENY Nationstar's motion to dismiss as moot.

         I. Background

         This dispute originated with a 2011 state court foreclosure action that Aurora Loan Services, LLC (now Nationstar Mortgage LLC) filed against Bartley. (ECF No. 14-1 at 1.) On October 15, 2013, Judge Robert Vacchelli entered a judgment of strict foreclosure in that case. (Id. at 5.) The appellate court affirmed his decision on May 12, 2015. (Id. at 6.) Bartley's petition for certification was denied on June 22, 2015. (Id.) On January 22, 2016, while the state court was adjudicating the foreclosure, Bartley filed a Chapter 7 bankruptcy petition in the Bankruptcy Court for the District of Connecticut. In re: Sanga A. Bartley, No. 16-20105, ECF No. 1 (D. Conn. Jan. 22, 2016). While the bankruptcy case was pending, the state foreclosure action was stayed. (ECF No. 14-1 at 7.) An order discharging debt was entered on May 4, 2016 in the bankruptcy case, and it was closed on May 18, 2016. In re: Bartley, No. 16-20105, ECF Nos. 21, 22. On May 24, 2016, Nationstar filed a notice “of relief from stay, ” in the state foreclosure action, stating that the bankruptcy action had terminated. (ECF No. 14-1 at 7.) On June 2, 2016, Superior Court Judge M. Nawaz Wahla overruled Bartley's objection to lifting the stay. (Id.) On August 8, 2016, Superior Court Judge Antonio Robaina denied Bartley's subsequent motion to open the judgment. (Id.)

         On September 16, 2016, after her unsuccessful attempt to reinstate the stay and to reopen her state court judgment, Bartley filed a motion to reopen the bankruptcy case and a motion for an order to show cause as to why Nationstar should not have been held in contempt. In re: Bartley, No. 16-20105, ECF Nos. 23, 24. In the motion to reopen, she stated that “Aurora [the predecessor to Nationstar] and its counsel engaged in actions that were in contempt of court when they continued to pursue foreclosure actions against her property at 109 Evergreen Avenue, Hartford, Connecticut, which actions were designed to collect a discharged debt and to get around the injunctions of the United States Bankruptcy Code.” In re: Bartley, No. 16-20105, ECF No. 23. Judge Tancredi denied that motion on December 28, 2016. He stated:

It is hereby ORDERED the subject Motion to Reopen is DENIED for failure to show good cause: the discharge did not prohibit the lender from in rem proceedings to foreclose the mortgage, and the Rooker Feldman doctrine, collateral estoppel and res judicata would preclude the relitigation of standing issues. As the basis for reopening is founded upon a motion for contempt for which there is no sound basis, reopening the case would only serve to needlessly multiply litigation without merit and serve to increase inconvenience, expense and delay because of the Debtor's ostensible misconception of the law.

In re: Bartley, No. 16-20105, ECF No 35.

         On January 23, 2017, Bartley then filed an Amended Motion to Reconsider Denials of Motion to Open and For Order to Show Cause, asking the bankruptcy court to reconsider its decision to deny her motion to reopen the case. In re: Sanga A. Bartley, No. 16-2105, ECF No. 41. Judge Tancredi denied that motion on March 3, 2017. In re: Sanga A. Bartley, No. 16-20105, ECF No. 47. He stated that the motion was denied: (1) because Bartley did not file it within seven days from the date of the original order, as required by Local District Court Rule 7(c) (she filed it thirteen days after the order instead); (2) because Bartley did not set forth concisely the controlling decisions or data she believed the Court had overlooked, as also required by Rule 7(c); and (3) because Bartley did not “advance[] or m[e]et” any of the grounds that Federal Rules of Civil Procedure 59(e) and 60(b)-applicable through Bankruptcy Rules 9023 and 9024-provide to alter or amend a judgment or to relieve a party or its legal representative from a final judgment. (Id.)

         Bartley appealed Judge Tancredi's denial of her motion for reconsideration to this Court on March 17, 2017. (ECF No. 1.) In this appeal, Bartley adds for the first time Judges Wahla and Robaina as defendants, even though they were not party to the bankruptcy proceedings and were never served with either the motion to reopen and for order to show cause or the motion for reconsideration. In re: Sanga A. Bartley, No. 16-2105, ECF Nos. 27, 45 (indicating that service was made on several parties, not including either Judge Robaina or Judge Wahla).

         II. Legal Standard

         Federal district courts have jurisdiction to hear appeals from final judgments, orders, and decrees of bankruptcy judges. 28 U.S.C. § 158(a); Fed.R.Bankr.P. 8013. “The standard of review for the denial of a motion to reconsider is abuse of discretion.” Matter of AMR Corp., 566 B.R. 657, 665 (S.D.N.Y. 2017). “Section 502(j) of the Bankruptcy Code provides that a claim that has been disallowed may be reconsidered for cause. Courts decide motions under Section 502(j) by applying the same analysis that [they] would [apply] to a motion under Fed.R.Bankr.P. 9023 (incorporating Fed.R.Civ.P. 59) or Fed.R.Bankr.P. 9024 (incorporating Fed.R.Civ.P. 60), depending on whether the movant . . . sought reconsideration within fourteen days after the entry of the order disallowing the claim, or did so only later.” Id. (internal quotation marks and alterations omitted). “Both Bankruptcy Rule 9023 and 9024, respectively, prevent repetitive arguments on issues that have been considered fully by the court[] and relitigating matters settled by the original judgment.” Id. at 665-66 (internal citations and quotation marks omitted).

         “To prevail on a motion under Rule 9023, the movant must show that the court overlooked controlling decisions or factual matters that might materially have influenced its earlier decision.” Id. at 666. “[A]nd the motion is granted only when the [movant] identifies ‘an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice[.]'” Id. (quoting Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 104 (2d Cir. 2013) (internal citation and quotation marks omitted). “Similarly, a motion under Rule 9024 is granted ‘only upon a showing of exceptional circumstances.'” Id. (quoting United States v. Int'l Bhd. Of Teamsters, 247 F.3d 370, 391 (2d Cir. 2001)).

         Bartley is a pro se litigant and “pleadings of a pro se plaintiff must be read liberally and should be interpreted to ‘raise the strongest arguments that they suggest.'” Graham v. Henderson, 89 F.3d 75, 79 (2d Cir. 1996) (citing Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994)).

         III. ...


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