In re Jepson
- Summarized by Kurt Carlson , Carlson Dash LLC
- 8 years 9 months ago
- Citation:
- In re Jepson, No. 14-2459 (7th Cir. April 15, 2016) (unpublished).
- Tag(s):
-
- Ruling:
- A motion to stay this court’s mandate pending final disposition of the litigation in the Supreme Court was denied because the movant intended to raise an issue of constitutional standing in her petition for certiorari, where prudential standing formed the basis of this court’s decision. As such, she did not present any issue upon which the Supreme Court would grant certiorari and did not persuade this court that, even if certiorari were granted, a majority of the Supreme Court would reverse this Court’s judgment.
- Procedural context:
- The Debtor filed for bankruptcy under Chapter 7, which automatically stayed the bank’s foreclosure action. The bank moved to modify the automatic stay, and the Debtor filed an adversary proceeding against the bank, claiming that (1) the bank had no interest in the mortgage because the note could not be assigned to the bank under the terms of the PSA; (2) the note was void and a non-negotiable instrument because the original lender is a fictitious entity; and (3) the bank did not have the authority to foreclose on the property because the bank is not a collection agency under Illinois law. The bankruptcy court held that the Debtor lacked standing to challenge violations of the PSA, and lifted the automatic stay. The district court affirmed. Neither the bankruptcy court nor the district court addressed the Debtor’s second and third claims. The Debtor appealed. The Appellate Court affirmed the decision of the lower court, holding that the Debtor lacked standing to raise challenges based on the PSA because she was not a third-party beneficiary under the agreement. The Appellate Court remanded the case for further proceedings regarding the two claims that had not been addressed in the lower court. Following the Appellate Court’s decision, the Debtor filed a motion for stay of the court’s mandate pending disposition of a petition for a writ of certiorari by the Supreme Court.
A party asking the court for such a stay must show a reasonable probability that at least four Justices will vote to grant certiorari and a reasonable possibility that five Justices will vote to reverse the Appellate Court’s judgment. Here, the Debtor failed to show either. Specifically, she intended to raise the issue of standing in her petition, and argued that the Circuits were split on the issue. However, the Appellate Court found that the Debtor incorrectly focused on constitutional standing, when the Appellate judgment was in fact based on prudential standing. On that issue, the court noted that there is no circuit split. Thus, the Appellate Court denied the Debtor’s motion, finding (1) no issue upon which the Supreme Court would grant certiorari, and (2) that even if certiorari were granted, a majority of the Court would not reverse the Appellate Court’s judgment.
- Facts:
- Patricia Jepson (the “Debtor”) took out a mortgage that was transferred by the lender and ultimately assigned to CWABS Trust, a residential mortgage-backed securities trust that was formed and governed by a Pooling and Service Agreement (“PSA”). Bank of New York Mellon is the trustee for the CWABS Trust and possesses the mortgage note. When the Debtor defaulted on the mortgage, the bank filed a complaint to foreclose on the mortgage.
- Judge(s):
- Ripple
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