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Asset Management Holdings, LLC v. Alelia Hernandez (In re Hernandez)

Summarizing by Lars Fuller

Nathaniel Hake v. Michael Simpson

Case Type:
Business
Case Status:
Affirmed
Citation:
18-3785 (6th Circuit, May 01,2019) Not Published
Tag(s):
Ruling:
The Court of Appeals affirmed the dismissal of plaintiff's complaint under the Rooker-Feldman doctrine, holding that while there is an exception to Rooker-Feldman for injuries caused by a defendant's actions instead of by a state court ruling, there is an additional exception when the defendant's actions are a product of the state court judgment. That was the case here, where the defendants acted pursuant to a state court order to harvest and sell the plaintiffs' crops.
Procedural context:
Plaintiffs/Debtors brought suit against lender in District Court alleging a stay violation and violation of their substantive due process rights. The District Court granted the lender's motions to dismiss and for judgment on the pleadings. The plaintiffs/debtor appealed to the Sixth Circuit.
Facts:
Mr. and Mrs. Hake and their LLC (the "Hakes") obtained 4 separate mortgages against their properties and the lender obtained a summary judgment of foreclosure in December, 2017. The Hakes were able to forestall the foreclosure for about 3 years by various legal procedures, including 7 separate bankruptcy filings, the last of which was a Chapter 12 filed in late November, 2017 by the LLC. That filing followed an October, 2017 ruling by the state court that the lender was entitled to the crops growing on the Hakes' property. After the bankruptcy filing, the state court ruled that the LLC bankruptcy did not stay the order for possession of the crops as the Chapter 12 co-debtor stay was not applicable. The lender, via the local sheriff's office, harvested and sold the crops in December, 2017. Three days later, the Hakes filed a complaint in the District Court claiming a violation of the automatic stay and substantive due process rights under the 14th Amendment. In August, 2018, the District Court granted the lender's motions to dismiss and for judgment on the pleadings.
Judge(s):
Clay, Gilman and Kethledge; Opinion by Clay

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