Zegzula v. JPMorgan Chase Bank, N.A. (In re Zegzula)

Ninth Circuit Bankruptcy Appellate Panel Case No. WW-14-1119-JuKiF (October 2, 2015)
The Ninth Circuit Bankruptcy Appellate Panel ("BAP") determined its decision was appropriate for submission without oral argument, and not for publication. The BAP affirmed the bankruptcy court's ruling dismissing Henry D. Zegzula ("Debtor") Adversary against J.P. Morgan Case Bank, N.A. ("Chase"). Dismissal of underlying administrative bankruptcy case does not automatically divest bankruptcy court of jurisdiction. The bankruptcy court must consider (a) judicial economy (b) convenience (c) fairness and (d) comity. The BAP further opined that Debtor based his quiet title action on California law when the subject real property was located in Washington; therefore, the Debtor did not state a plausible claim.
Procedural context:
The Debtor timely appealed the bankruptcy court's dismissal of his adversary seeking quiet title against Chase.
The Debtor's related Chapter 7 case was at least the Debtor's seventh bankruptcy filing since 2003. The Chapter 7 Trustee moved to dismiss the administrative case with prejudice asserting that the repeat filings were abusive and the Debtor never prosecuted any of the bankruptcy filings. The bankruptcy court dismissed the Chapter 7 case with a 2 year bar to refiling. However, prior to the administrative case being dismissed, the Debtor commenced an adversary proceeding against Chase seeking quiet title to real property. Chase filed a motion to dismiss asserting (1) the Debtor had not met his burden wherein the bankruptcy court could retain discretionary jurisdiction and (2) the Debtor's complaint filed to state a claim. The bankruptcy court held a hearing on Chase's motion to dismiss, and found that judicial economy and fairness did not support retaining jurisdiction. Moreover, the court found that Debtor failed to state a claim based on the allegation being legally incomprehensible.
JURY, KIRSCHER, and FARIS, Bankruptcy Judges.

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