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Bromfield v. U.S. Bank, N.A.

United States District Court, D. Connecticut

March 4, 2019

LENORA BROMFIELD, Appellant-Debtor,
v.
U.S. BANK, NATIONAL ASSOCIATION et al., Appellees-Creditors.

          ORDER AFFIRMING DECISION OF BANKRUPTCY COURT

          Jeffrey Alker Meyer United States District Judge.

         Appellant-debtor Lenora Bromfield has filed a pro se appeal from an order of the United States Bankruptcy Court, see Doc. #9 to Bromfield v. U.S. Bank, N.A., No. 17-05036 (Bankr. D. Conn. 2018) (Manning, C.J.), dismissing her adversary proceeding against several creditors seeking to foreclose on her home in state court. Doc. #1; Doc. #1-1; see also Doc. #18 at 6 (explaining state court proceedings). For the reasons stated herein, I will affirm the Bankruptcy Court's order.

         Background

         Lenora Bromfield took out a mortgage on her home in Bridgeport, Connecticut, in early 2008. Doc. #18-1 at 2-13. Since that time, the mortgage has been assigned among various lenders, id. at 14-18, but importantly for this appeal, became subject to foreclosure proceedings in Connecticut Superior Court in 2012, id. at 19. The Superior Court entered a judgment of foreclosure in 2015, id. at 24, and after several extensions of the law day in state court, [1] id. at 21-22, 64-67, Bromfield filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court on April 24, 2017. See Doc. #1 to In re Bromfield, No. 17-50451 (Bankr. D. Conn. 2017). After filing this first case, Bromfield then filed a second adversary proceeding against Appellees in the same court on November 17, 2017. See Doc. #1 to Bromfield v. U.S. Bank, N.A., 17-05036 (Bankr. D. Conn. 2017).

         Events primarily continued to transpire in the Chapter 13 proceeding. On December 12, 2017, the Trustee moved to dismiss the Chapter 13 case on the ground that Bromfield had filed for bankruptcy in bad faith. Doc. #48 to In re Bromfield, No. 17-50451 (Bankr. D. Conn. 2017). Bromfield opposed the motion, Doc. #61 to id., and then in January of 2018 filed another motion, Doc. #63 to id., that claimed to be an “In Camera Mandatory Judicial Notice of Law” and asserted that the claims against Bromfield and her bankruptcy estate were “eligible for set-off or exoneration pursuant to Legal Subrogation, ” Doc. #11 at 7.

         The Bankruptcy Court construed this as a motion to file under seal, which it granted. Doc. #64 to In re Bromfield, No. 17-50451 (Bankr. D. Conn. 2018). Later that month, the Bankruptcy Court granted the Trustee's motion to dismiss, and in doing so instructed the Clerk of Court to close “any pending adversary proceedings.” Doc. #66 to id. The Bankruptcy Court then entered an order dismissing the adversary proceeding on January 25, 2018, Doc. #9 to Bromfield v. U.S. Bank, N.A., No. 17-05036 (Bankr. D. Conn. 2018), from which Bromfield appealed, Doc. #1.

         On appeal, Bromfield initially raised numerous issues in the statement she filed alongside her designation of the record. Doc. #10 at 2-5 (¶¶ 4-22). Bromfield's briefing, however, appears to focus principally on the Bankruptcy Court's decision to grant what it took to be Bromfield's motion to seal and not to take up any issue of subrogation. See Doc. #16 at 1-2, 4-6; Doc. #19 at 3-4.

         Discussion

         A district court has appellate jurisdiction over a final judgment or order of a bankruptcy court. See 28 U.S.C. § 158(a)(1). The standards governing the Court's exercise of that jurisdiction are well-established. The Court reviews the Bankruptcy Court's findings of fact for clear error and legal conclusions de novo. In re Lehman Bros. Holdings Inc., 594 B.R. 564, 567 (S.D.N.Y. 2018). The Bankruptcy Court's decision whether to retain jurisdiction over an adversary proceeding after termination of the underlying Chapter 13 proceeding is reviewed for abuse of discretion. See Jamaica Shipping Co. Ltd. v. Orient Shipping Rotterdam, B.V. (In re Millenium Seacarriers, Inc.), 458 F.3d 92, 95-96 (2d Cir. 2006) (per curiam). Even if the Bankruptcy Court did err on any of those standards, “harmless error, meaning an error not inconsistent with substantial justice or that does not affect the parties' substantial rights, is not grounds for reversal.” McNerney v. ResCap Borrower Cls. Tr. (In re Residential Capital, LLC), 563 B.R. 477, 485 (S.D.N.Y. 2016).

         A somewhat closer question is the scope of this Court's jurisdiction. Federal Rule of Bankruptcy Procedure 8003(a)(3)(B) requires that the notice of appeal “be accompanied by the judgment, order, or decree or the part of it, being appealed.” Bromfield's notice of appeal only designates the Bankruptcy Court's order dismissing the adversary proceeding. Doc. #1 at 1; Doc. #1-1 at 1. However, pro se appeals should be read liberally, and “in the absence of prejudice to an appellee, ” courts “read a pro se appellant's appeal from an order closing the case as constituting an appeal from all prior orders.” Elliott v. City of Hartford, 823 F.3d 170, 173 (2d Cir. 2016) (per curiam). The Bankruptcy Court's order dismissing the adversary proceeding referenced and relied on the order of dismissal in the Chapter 13 proceeding, see Doc. #9 to Bromfield v. U.S. Bank, N.A., No. 17-05036 (Bankr. D. Conn. 2018) (citing Doc. #66 to In re Bromfield, No. 17-50451 (Bankr. D. Conn. 2018)). Given Bromfield's clear intent to seek review of the Bankruptcy Court's orders in the Chapter 13 proceeding, Bromfield's apparent confusion about bankruptcy procedure as found by the Bankruptcy Court, see Doc. #64 to In re Bromfield, No. 17-50451 (Bankr. D. Conn. 2018), and Appellees' ability to brief the relevant issues in the Chapter 13 proceeding, see Doc. #18 at 9-10, I conclude that Bromfield has properly noticed an appeal from the Chapter 13 proceeding over which the Court may exercise jurisdiction. See also Pu v. Grubin (In re Food Mgmt. Grp., LLC), 484 B.R. 574, 580-81 (S.D.N.Y. 2012) (construing notice of appeal in main bankruptcy case to apply to adversary proceeding).

         Still, I will affirm the order of the Bankruptcy Court. The Bankruptcy Court dismissed the Chapter 13 proceeding because it found that Bromfield had filed for bankruptcy as a bad-faith attempt to delay the foreclosure proceedings on her home in state court. See Doc. #66 to In re Bromfield, No. 17-50451 (Bankr. D. Conn. 2018). This is a finding of fact subject to review for clear error. See Casse v. Key Bank N.A. (In re Casse), 198 F.3d 327, 332-33 (2d Cir. 1999). Because Bromfield filed her Chapter 13 petition just one day before she would lose the right of redemption on her mortgage, see Doc. #18-1 at 67 (state court order extending Law Day to April 25, 2017), I am not “left with the definite and firm conviction that a mistake has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985). The Bankruptcy Court had adequate grounds to dismiss the Chapter 13 proceeding, and any error the Bankruptcy Court might have made in considering what it interpreted as Bromfield's motion to seal would not have affected her substantial rights and therefore would have been harmless. See McNerny, 563 B.R. at 485.

         The remaining issue then is whether the Bankruptcy Court erred when it dismissed the adversary proceeding. See Doc. #9 to Bromfield v. U.S. Bank, N.A., No. 17-05036 (Bankr. D. Conn. 2018). As a general rule, related cases like adversary proceedings should ordinarily be dismissed alongside an underlying bankruptcy case. See Jamaica Shipping, 458 F.3d at 95-96. Four factors govern whether a court's decision to dismiss or retain jurisdiction over a related case constitutes an abuse of discretion: “judicial economy, convenience to the parties, fairness, and comity.” Porges v. Gruntal & Co., Inc. (In re Porges), 44 F.3d 159, 163 (2d Cir. 1995). A court does not need to consider these factors explicitly, see Jamaica Shipping, 458 F.3d at 96, and I agree that the Bankruptcy Court did not abuse its discretion in dismissing the adversary proceeding for substantially the unchallenged reasons proffered by Appellees-namely, that the adversary proceeding was redundant to state court proceedings and maintaining it would harm the interests of judicial economy; that both the adversary and state court proceedings were equally convenient because they were being heard in Bridgeport; that there was nothing to indicate an unfair result would ensue from dismissal of the adversary proceeding; and that the foreclosure underlying the dispute among the parties was an issue of Connecticut law for which comity would be best served by deferring to Connecticut's courts. See Doc. #18 at 12-13. I therefore conclude that the Bankruptcy Court did not abuse its discretion in declining to retain jurisdiction over the adversary proceeding, and so will affirm its dismissal of the case.

         Conclusion

         For the reasons set forth above, the order of the Bankruptcy Court is ...


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