STEFAN R. UNDERHILL, District Judge.
This ruling concerns pro se appellant Hermann Vaneck a/k/a Jan Van Eck's lengthy efforts to avoid foreclosure via the bankruptcy process. Van Eck has appealed twice from an order of the Bankruptcy Court that was vacated and then renewed, which grants appellee, DLJ Mortgage Capital, Inc. ("DLJ"), relief from the automatic stay in order to proceed with its Summary Process action in state court to evict Van Eck from its property. See 3:15-cv-343 [hereinafter referred to as the "first appeal," with citations to the "343" docket] (343, doc. 1); 3:15-cv-757 [hereinafter referred to as the "second appeal," with citations to the "757" docket] (757, doc. 1). DLJ has moved to dismiss both appeals on the grounds that Van Eck lacks standing to bring either appeal, and that he has failed to state a claim. (343, doc. 10; 757, doc. 10)
For the following reasons, DLJ's motions are both
The party who seeks to invoke a court's jurisdiction bears the burden of establishing that jurisdiction. Thompson v. Cnty. of Franklin, 15 F.3d 245, 249 (2d Cir. 1994) (citing Warth v. Seldin, 422 U.S. 490, 518 (1975)). To survive a motion brought under Rule 12(b)(1), a plaintiff must allege facts demonstrating that the plaintiff is a proper party to seek judicial resolution of the dispute. Id.
A motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) is designed "merely to assess the legal feasibility of a complaint, not to assay the weight of evidence which might be offered in support thereof." Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984) (quoting Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980)).
When deciding a motion to dismiss pursuant to Rule 12(b)(6), the court must accept the material facts alleged in the complaint as true, draw all reasonable inferences in favor of the plaintiffs, and decide whether it is plausible that plaintiffs have a valid claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996).
Under Twombly, "[f]actual allegations must be enough to raise a right to relief above the speculative level," and assert a cause of action with enough heft to show entitlement to relief and "enough facts to state a claim to relief that is plausible on its face." 550 U.S. at 555, 570; see also Iqbal, 556 U.S. at 679 ("While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations."). The plausibility standard set forth in Twombly and Iqbal obligates the plaintiff to "provide the grounds of his entitlement to relief" through more than "labels and conclusions, and a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555 (quotation marks omitted). Plausibility at the pleading stage is nonetheless distinct from probability, and "a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of [the claims] is improbable, and . . . recovery is very remote and unlikely." Id. at 556 (quotation marks omitted).
This dispute turns on the validity of DLJ's interest in a mortgage on Van Eck's home at 24 Ebony Lane, Essex, CT. DLJ states that it is both the owner of the mortgage, and because it successfully foreclosed on the house three years before the current bankruptcy proceedings, the owner of the property. Van Eck asserts that there is no mortgage, and moreover that DLJ is a shell company that has not shown any interest or ownership in such a mortgage, if one does exist.
In re Van Eck, 425 B.R. 54, 61-63 (Bankr. D. Conn. 2010). The bankruptcy court then held that Van Eck's further attempt to relitigate those same issues through bankruptcy constituted an abuse of the Chapter 11 process. It accordingly dismissed the case with prejudice and issued a two-year bar on new bankruptcy filings.
Because the court dismissed the case, it explicitly declined to rule on DLJ's then-pending motion to be substituted for GRP as the current holder of the mortgage. Id. at 57 n.4. On March 25, 2010, however, DLJ was substituted as the plaintiff in the foreclosure action. See Banker's Trust Co. v. Van Eck, No. MMX-CV-02-0097949-S (doc. 290.00). On July 1, 2010, the Connecticut state court issued a judgment of strict foreclosure in favor of DLJ in the foreclosure action. See id. at (doc. 299.00).
On June 4, 2013, DLJ filed a summary process action before the Connecticut Superior Court, seeking to evict Van Eck, as well as some additional tenants, from the premises (the "summary process action"). DLJ Mortgage Capital, Inc. v. Van Eck, No. MMX-CV-13-4017150-S (Conn. Sup. Ct.). Van Eck himself failed to appear in the case. In his stead, co-defendant Linda Lounsbury, who appears to be Van Eck's wife, moved to dismiss the summary process action, claiming that DLJ did not own the property because Van Eck had quitclaimed it to a Trust before the foreclosure judgment had entered, and that Trust had subsequently filed for bankruptcy. See DLJ Mortgage Capital, Inc. v. Van Eck, No. MMX-CV13-4017150-S, 2014 WL 3714925, at *1 (Conn. Sup. Ct. June 16, 2014). The Connecticut court rejected that argument, stating: "Based on facts as found by this court, the court finds that the plaintiff [DLJ] was the owner of the premises at the time the summary process commenced." Id. at *4.
On December 10, 2014, DLJ entered a second motion for default against Van Eck for failure to appear. On January 1, 2015, Van Eck filed the instant bankruptcy petition. In re Van Eck, No. 15-30014 (Bankr. D. Conn.) [hereinafter, citations will be to the "Bankr." Docket]. Notably, Van Eck's bankruptcy petition lists only a "future" interest in what is presumably the property at issue, but the nature of that future interest is nowhere explained. (343, doc. 9) at Ex. 4.
On February 11, 2015, the bankruptcy court granted DLJ's motion for a relief from the automatic stay in order to pursue its summary process action.
The first appeal, 3:15-cv-343, which concerns the Bankruptcy Court's first order, is dismissed as moot. Rule 8002(b)(1)(D) of the Federal Rules of Bankruptcy Procedure provides that the time to file an appeal from a bankruptcy court order runs from the disposal of the last remaining motion for relief under Rule 9024. Rule 9024 in turn governs motions for reconsideration, as provided for in Rule 60 of the Federal Rules of Civil Procedure. Rule 8002(b)(2) instructs that if a notice of appeal is filed before a pending motion for reconsideration is filed, "that notice becomes effective when the order disposing of the last such remaining motion is entered."
Van Eck filed a notice of appeal at the same time that he filed a motion for reconsideration. Pursuant to Rule 8002(b)(2), that notice was not effective until the motion for reconsideration was decided. And the motion for reconsideration was decided in Van Eck's favor, thus granting the relief he sought on appeal. Moreover, Van Eck's procedural arguments to this court are doubly inappropriate because he participated willingly in the hearing on his motion for reconsideration at a hearing, and, in the transcript of that hearing, makes no reference to his pending appeal.
In the second appeal, 3:15-cv-757, like in the first, DLJ argues that the appeal should be dismissed because: (1) Van Eck does not have standing to pursue his claim; and (2) the appeal is a frivolous delay tactic because the house at issue is not the property of the bankruptcy estate. (757, doc. 10) Van Eck has not opposed DLJ's motion to dismiss the second appeal, although the time to do so has long passed and I have issued a Notice and Order on the docket instructing him to do so. (757, doc. 11) Because both the order and DLJ's motion are substantively identical in both appeals, however, I will treat Van Eck's briefing in the first appeal as a response in the second. See (343 doc. 13).
Van Eck does not have standing to appeal the order. The Second Circuit requires that an appellant must be "directly and adversely affected pecuniarily" by a bankruptcy court's decision in order to have standing to appeal. Kane v. Johns-Manville Corp., 843 F.2d 636, 641-42 (2d Cir. 1988). Van Eck has not argued, and indeed likely cannot argue, that a successful appeal of the order would have a pecuniary effect on his discharge—he admits in his opposition brief that he is not the owner of the property, Van Eck Opp'n Br. at 14, and stated in a hearing before the bankruptcy court that he does not possess a lease for the property or even pay rent on it, see (Bankr. Doc. 43) at 14-15. Moreover, the release of stay itself would not directly affect his pecuniary interests, but instead would simply allow the state court action against his possessory interests to move forward.
DLJ presents an additional argument that Van Eck does not have standing to bring this appeal—it correctly argues that, to the extent that Van Eck is attempting to relitigate the validity of the mortgage or foreclosure claim here, he has no standing to do so. Because the bankruptcy case has not yet closed, the claim, whether scheduled or unscheduled, may only be abandoned by the trustee after a notice and hearing, and Van Eck cannot even allege that such requirements are met because they appear nowhere on the bankruptcy docket. See Channer v. Loan Care Serv., No. 3:11-cv-135 (SRU), 2011 WL 5238878, at *3 (D. Conn. Nov. 1, 2011) (holding that a debtor has no standing to pursue an unscheduled cause of action regarding a pre-petition mortgage unless the trustee has abandoned the claim via notice and hearing) (citing Tilley v. Anixter Inc., 332 B.R. 501, 507 (D. Conn. 2005)).
And even if Van Eck did have standing, his appeal would be dismissed because, on its face, it raises only frivolous objections to the bankruptcy proceedings. Multiple courts have now held that DLJ is not only the rightful owner of the mortgage, but, after the foreclosure action, of the property itself as well. See, e.g., Banker's Trust Co. v. Van Eck, No. MMX-CV-02-0097949-S (doc. 299.00); DLJ Mortgage Capital, Inc. v. Van Eck, 2014 WL 3714925, at *4.Van Eck argues vociferously that DLJ does not have standing to sue because of its failure to file a proof of claim. DLJ, however, was not required to file a proof of claim form because it is not seeking monetary recovery from Van Eck and his estate, but rather is seeking the right to proceed in a legal action against him. Moreover, the order was correctly issued because it is clear from the record that Van Eck has no remaining legal interest in the property and has clearly sought to use the bankruptcy procedure merely to interfere with the summary process action. See In re Peia, 204 B.R. 310, 315 (Bankr. D. Conn. 1996) ("Manipulating the judicial process by reimposing the automatic stay through multiple filings works an unconscionable fraud on creditors. Thus, an abuse of § 362 occurs when the debtor has no intention of effectuating a realistic plan of reorganization and the bankruptcy court's self-executing injunction results in unnecessary and costly delays.") (quoting Putnam Trust Company of Greenwich v. Frenz, 142 B.R. 611, 614 (Bankr. D. Conn. 1992)).
Rule 8021(a)(1) of the Federal Rules of Bankruptcy Procedure states that "if an appeal is dismissed, costs are taxed against the appellant, unless the parties agree otherwise," and section (d) of that rule provides a procedure from obtaining said costs in the bankruptcy court. Accordingly, DLJ may, if it wishes, file a bill of costs with the Bankruptcy Court for both appeals.
DLJ's motion and dismiss the first appeal, 3:15-cv-343, is
So ordered.
