- Case No. 14-1421, United States Court of Appeals for the 10th Circuit
- Dismissal affirmed. Applying de novo review, the 10th Circuit concluded that Debtor's claims for injunctive relief were moot because Bank was no longer pursuing its non-judicial Rule 120 procedure, and Debtor's claims for money damages were property of her bankruptcy estate pursuant to 11 U.S.C. s. 541. Therefore, pursuant to Fed. R. Civ. P. 17(a)(1) and the prudential standing doctrine, Debtor was not the real party in interest and could not pursue these claims. The 10th Circuit took judicial notice of a settlement between the bankruptcy trustee and Bank concerning the claims, and concluded that the trustee no longer had any interest in litigating the claims on behalf of the estate. The 10th Circuit rejected Debtor's argument that the claims accrued post-bankruptcy because that's when she filed her federal complaint. She had asserted the same or similar claims prior to filing her bankruptcy case. And, since she didn't list them in her schedules, they remained property of her bankruptcy estate despite the fact that the trustee neither administered nor abandoned them at the close of the case. 11 U.S.C. ss. 521(a)(1) and 554(d).
- Procedural context:
- Appeal of the Colorado District Court's Order of Dismissal to the 10th Circuit Court of Appeals.
- Bank commenced a non-judicial foreclosure against property owned by Debtor under Colo. R. Civ. P. 120. Debtor filed bankruptcy and received a discharge. The Rule 120 proceeding remained pending during the bankruptcy case. Later, Debtor file a federal lawsuit in the District of Colorado, challenging the Rule 120 procedure as violating due process because it limits a state court to deciding only two issues: (1) whether a default occurred; and (2) whether an order authorizing sale is proper under the Service Members Civil Relief Act. Debtor also challenged a separate Colorado statute allowing the holder of a debt to seek foreclosure without producing original evidence of the debt or an original deed of trust, asserted additional tort claims against various parties, and sought a preliminary injunction to prevent the sale from occurring. Defendants moved to dismiss. Just before the sale occurred, the district court enjoined the sale for 14 days to conduct a preliminary injunction hearing. Bank responded by moving to dismiss the Rule 120 proceeding, and consented to a permanent injunction preventing it from using the Rule 120 proceeding against Debtor's property. The district court construed this as a confession of Debtor's motion for preliminary injunction, and entered a preliminary injunction for the duration of the federal action. Bank proceeded with a judicial foreclosure in state court. The district court dismissed Debtor's federal complaint without prejudice because she had no redressable injury: the withdrawal of the Rule 120 proceeding mooted Debtor's remaining claims for injunctive relief, and the bankruptcy estate owned the remaining claims. Debtor appealed.
- Matheson, Bacharach, and Moritz, Circuit Judges.
IN RE: JOHN FLISS
Summarizing by Jaden Banks
In re: ASSET ENHANCEMENT, INC.,
Summarizing by Amir Shachmurove
November Commercial Chapter 11 Filings Increase 141 Percent over 2022 Propelled by WeWork Bankruptcy
3585 in the system
10 Being Processed