Ware v. Deutsche Bank
MEMORANDUM OPINION AND ORDER: As further set out in order; Deutsche Bank's Motion to Dismiss, 5 , is GRANTED; Ware's Motion, 7 , is DENIED; his appeal is MOOT and DISMISSED with prejudice. Signed by Judge Abdul K Kallon on 03/11/13. (CVA)
2013 Mar-11 PM 02:44
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
GERALD JAMES WARE,
DEUTSCHE BANK and ANDRE
Civil Action Number
MEMORANDUM OPINION AND ORDER
Plaintiff Gerald James Ware appeals from the Bankruptcy Court’s order
lifting an automatic stay, which allowed Defendant Deutsche Bank to eject Ware
from his home, and discharging Trustee Andre Toffel. See doc. 1. Deutsche Bank
seeks to dismiss Ware’s appeal and to stay the briefing periods, doc.5, while Ware
seeks to dismiss Deutsche’s motion, doc.7. The motions are fully briefed and ripe
for review. Docs. 5, 7, 8, 9, 11. For the reasons detailed below, Deutsche Bank’s
motion is GRANTED and Ware’s motion is DENIED.
I. STANDARD OF REVIEW
The district court sits as an appellate court in reviewing bankruptcy court
decisions. 28 U.S.C. § 158(a)(3), (c)(1). Accordingly, “[d]eterminations of law
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made by [ ] the bankruptcy court [ ] are reviewed by this court de novo.” In re
Club Assocs., 956 F.2d 1065, 1069 (11th Cir. 1992); Fed. R. Bankr. P. 7052
(incorporating Fed. R. Civ. P. 52); Fed. R. Bankr. P. 8013. Additionally, the
district court may not make independent factual findings and must review the
bankruptcy court’s factual determinations under the “clearly erroneous standard.”
In re Club Associates, 956 F.2d at 1069. “If the bankruptcy court’s factual
findings are silent or ambiguous as to an outcome determinative factual question,
the district court . . . must remand the case to the bankruptcy court for the
necessary factual determination.” In re Sublett, 895 F.2d 1381, 1283-84 (11th Cir.
1990) (quoting Wegner v. Grunewaldt, 821 F.2d 1317, 1320 (8th Cir. 1987)).
II. PROCEDURAL HISTORY AND FACTUAL BACKGROUND1
Mortgage Execution and Foreclosure
Ware and his wife executed a mortgage with Option One Mortgage
Corporation (“Option One”) on July 29, 2005. Ware, 75 So. 3d at 1164-65.
Subsequently, the Wares defaulted on the mortgage loan and Option One instituted
foreclosure proceedings. Id. The foreclosure sale advertisements stated that
Since the court’s factual review is limited to the deferential “clearly erroneous”
standard, In re Club Associates, 956 F.2d at 1069, the facts are largely compiled from the
Bankruptcy Court record. See docs. 2-1 through 2-25. Additionally, where necessary, the court
references the state court opinion of Ware v. Deutsche Bank Nat. Trust Co., 75 So. 3d 1163 (Ala.
2011), since the Bankruptcy Court explicitly incorporated this opinion into its factual findings.
See doc. 2-11 at 1.
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Deutsche Bank obtained the mortgage from Option One through transfer and
assignment and that it would conduct the foreclosure sale on June 4, 2008. Id.
However, Deutsche Bank purchased the mortgaged property at the foreclosure sale
and the foreclosure deed executed that day stated that Option One was the
foreclosing entity. Id. at 1265-66.
Procedural History in State Court2
Following its purchase of the property at the foreclosure sale, Deutsche
Bank filed an ejectment action against the Wares on August 29, 2008 in the
Circuit Court of Jefferson County, Alabama. Ware, 75 So. 3d at 1166. A year
later, the court entered a default judgment against Gerald Ware and subsequently
denied Gerald Ware’s motion for post-judgment relief. Doc. 2-19 at 5.
Monica Ware responded to Deutsche Bank’s complaint separately from her
husband, but failed to state any affirmative defenses or counterclaims. Ware, 75
So. 3d at 1166. Deutsche Bank then sought summary judgment by virtue of its
foreclosure deed. Id. Notably, in response to the motion, “[Monica] Ware
conceded . . . that it was undisputed that the record owner of the mortgage at the
time of foreclosure was Option One.” Id. at 1171. Accordingly, the court granted
Although the original state court action was filed against Gerald and Monica Ware, the
court differentiates between the Wares because they took differing procedural actions.
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summary judgment in Deutsche Bank’s favor on January 22, 2010. Id. at 1167.
Thereafter, Monica Ware filed a motion to alter, amend, or vacate the judgment
and requested a hearing before the court. Id. However, the court failed to issue a
ruling and the motion was deemed denied under Alabama Rule of Civil Procedure
After the court denied her post-judgment motion, Monica Ware filed an
appeal with the Supreme Court of Alabama to “challenge (1) the timing and
propriety of the summary judgment, (2) the order striking her counterclaims, and
(3) the trial court’s refusal to hold a hearing on her motion to alter, amend, or
vacate the judgment.” Ware, 75 So. 3d at 1167-68. Specifically, Monica Ware
argued that the discrepancy between the foreclosure sale notice and the foreclosure
deed rendered summary judgment inappropriate. Id. at 1170. However, the court
found that Ware’s argument was unavailing in light of her concession at the trial
court that there was no issue of fact as to the owner of the mortgage at the time of
the sale, despite the notice and deed discrepancy, and since she failed to raise the
argument before the trial court. Id. at 1171. Ultimately, on June 17, 2011, the
Supreme Court affirmed the Circuit Court’s decision. Id. at 1172.
While Monica Ware’s appeal was pending before the Alabama Supreme
Court, Gerald Ware filed a second motion with the Circuit Court to set aside the
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default judgment. Doc. 2-19 at 5-6. This second post-judgment motion alleged
that the court should vacate the default judgment because service was defective
and the foreclosure underlying the action was improper. Id. In light of Ware’s
motion, the court issued a stay on execution on December 29, 2011 to prevent
Deutsche Bank from ejecting the Wares prior to resolution of the motion. Id. at 7.
However, the court subsequently found that Gerald Ware’s claim of wrongful
foreclosure was precluded by the denial of his first post-judgment motion because
he failed to appeal that denial or the court’s final judgment. Id. at 6. The court
likewise found that Gerald Ware waived his claim regarding improper service by
failing to raise the argument in any of his prior responsive pleadings. Id.
Accordingly, the court denied Gerald Ware’s second motion for post-judgment
relief and lifted its stay on May 25, 2012. Id. at 7. Once the court lifted the stay,
Deutsche Bank proceeded to execute on the final judgment by filing a Writ of
Execution with the Jefferson County Circuit Clerk on July 10, 2012. Doc. 5 at 3.
Procedural History in Bankruptcy Court
After Deutsche Bank attempted to execute its Circuit Court judgment and
eject the Wares, Gerald Ware filed for bankruptcy under Chapter 7 on July 18,
2012. See doc. 2-1. Deutsche Bank then sought relief from the bankruptcy court’s
automatic stay, and the court granted the motion on September 17, 2012. Docs. 2Page 5 of 12
9 and 2-11. On October 2, 2012, the bankruptcy trustee filed a Report of No
Distribution stating that “there is no property available for distribution from the
estate” and “deem[ing] abandoned any and all property of the estate that was
scheduled in the petition and was unadministered as of the date of this report.”
Doc. 2-21. Thereafter, Gerald Ware filed a notice of objection to the trustee’s
report and request for discharge by arguing that the automatic stay lift was
improper and reiterating arguments he and his wife advanced before the Circuit
Court and Supreme Court of Alabama. See doc. 2-22. Gerald Ware also filed
motions for an emergency temporary restraining order against Deutsche Bank and
a motion to alter or amend the order granting relief from stay to Deutsche Bank.
Doc. 2-25 at 1. The court held a hearing on all three matters and subsequently
overruled the objections and denied the remaining motions on October 22, 2012.
Id. Three days later, Deutsche Bank evicted the Wares from the property. Doc. 51 at 2. On January 11, 2013, Gerald Ware filed a notice of appeal from the
Bankruptcy Court’s decision with this court. See doc. 1.
On appeal, Ware advances arguments identical to those he previously raised
before the Circuit Court of Jefferson County and the Bankruptcy Court, namely,
that Deutsche Bank lacked standing to foreclose on his property and that this
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deficiency deprived the Bankruptcy Court of proper jurisdiction to lift the
automatic stay. See doc. 4. Deutsche Bank contends that the appeal is due to be
dismissed under the mootness and Rooker-Feldman doctrines. See doc. 5. The
The Doctrine of Mootness
Under Article III of the Constitution, the jurisdiction of federal courts is
limited to hearing “cases” and “controversies.” U.S. CONST. ART. III, § 2. “The
doctrine of mootness derives directly from the case or controversy limitation
because an action that is moot cannot be characterized as an active case or
controversy.” Soliman v. U.S. ex rel. INS, 296 F.3d 1237, 1242 (11th Cir. 2002)
(internal quotation marks and citation omitted). Accordingly, mootness is a
jurisdictional question the court must resolve before proceeding with an action.
Id.; see also North Carolina v. Rice, 404 U.S. 244, 246 (1971). In order to
ascertain whether a case is moot, the court must determine whether it is capable of
providing meaningful relief. Fla. Ass’n of Rehab. Facilities, Inc. v. Fla. Dep’t of
Heath and Rehab. Servs., 225 F.3d 1208, 1216-17 (11th Cir. 2000). “Therefore, if
Ware also alleges that Deutsche Bank failed to properly serve its motion to dismiss and
subsequent filings on Ware. See doc. 11. However, assuming this allegation is true, Ware
suffered no prejudice from this defect since he timely responded to each filing. Additionally, the
bases for the motion to dismiss are jurisdictional, which the court may consider even absent a
proper motion. Barnett v. Bailey, 956 F.2d 1036, 1039 (11th Cir. 1992). Accordingly, the
motion is not due to be denied based on this argument.
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events that occur . . . deprive the court of the ability to give the plaintiff or
appellant meaningful relief, then the case is moot and must be dismissed.”
Soliman, 296 F.3d at 1241 (internal quotation marks and citation omitted).
With respect to bankruptcy appeals,
[i]t is settled law in this circuit that when the debtor fails to obtain a stay
pending appeal of the bankruptcy court’s or the district court’s order
setting aside an automatic stay and allowing a creditor to foreclose on
property, the subsequent foreclosure and sale of the property renders
moot any appeal. This rule of law, which is premised upon
considerations of finality, protection of the integrity of the foreclosure
sale process, and the court’s inability to rescind the sale and grant relief
on appeal even if the purchaser of the property is a party to the appeal,
is fully applicable to this case. Accordingly, the appeal must be
dismissed as moot.
In re Matos, 790 F.2d 864, 865-66 (11th Cir. 1986), citing Markstein v. Massey
Associates, 763 F.2d 1325 (11th Cir .1985); In re Sewanee Land, Coal & Cattle,
Inc., 735 F.2d 1294 (11th Cir. 1984). However, an appeal may not be rendered
moot if the appellant also seeks some relief other than reinstatement of an
automatic stay or rescinding of a foreclosure sale or ejectment. See e.g.,
Markstein, 763 F.2d at 1327.
The same doctrine articulated in In re Matos applies here where the
Bankruptcy Court’s order allowed Deutsche Bank to eject Ware from the property
and Ware failed to seek a stay pending his appeal, despite the fact that the
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foreclosure sale was completed prior to Ware’s bankruptcy petition. At this point,
the court is powerless to rescind Deutsche’s ejectment of Ware from the property.
Moreover, reversing the Bankruptcy Court’s order regarding the automatic stay
would fail to provide Ware with effective relief in light of the state court’s
findings regarding the propriety of the underlying foreclosure proceedings and
ejectment action – which the court cannot disturb. See section B, infra. In other
words, reversing the Bankruptcy Court would still leave a final judgment from the
state court finding that Deutsche Bank had the right to foreclose and eject Ware
from the premises. Accordingly, the court finds that Ware’s appeal is MOOT.
The Rooker-Feldman Doctrine
Alternatively, the Rooker-Feldman doctrine, which strictly limits federal
district courts’ authority to review state court judgments and related claims, bars
the recovery Ware seeks. See generally Exxon Mobil Corp. v. Saudi Basic Indus.
Corp., 544 U.S. 280 (2005); Dist. of Columbia Court of Appeals v. Feldman, 460
U.S. 462 (1983); Rooker v. Fid. Trust Co., 263 U.S. 413 (1923). Just as with the
mootness doctrine, the Rooker-Feldman doctrine raises a jurisdictional question
and prevents this court from considering the merits of the case. See Powell v.
Powell, 80 F.3d 464, 466-67 (11th Cir. 1996); Garry v. Geils, 82 F.3d 1362, 1365
(7th Cir. 1996).
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“The Rooker-Feldman doctrine generally recognizes that federal district
courts do not have jurisdiction to act as appellate courts and precludes them from
reviewing final state court decisions.” Ware v. Polk Cnty. Bd. of Cnty. Comm’rs,
2010 WL 3329959, at *1 (11th Cir. Aug. 25, 2010) (citation omitted). The
Supreme Court has held that the Rooker-Feldman doctrine is confined to “cases
brought by state-court losers complaining of injuries caused by state-court
judgments rendered before the district court proceedings commenced and inviting
district court review and rejection of those judgments.” Nicholson v. Shafe, 558
F.3d 1266, 1274 (11th Cir. 2009) (quoting Exxon Mobil, 544 U.S. at 284). “The
doctrine applies to both federal claims raised in the state court and to those
‘inextricably intertwined’ with the state court’s judgment.” Casale v. Tillman, 558
F.3d 1258, 1260 (11th Cir. 2009). “A claim is inextricably intertwined if it would
effectively nullify the state court judgment, or it succeeds only to the extent that
the state court wrongly decided the issues.” Id. (internal quotation marks and
Based on the record before the court, this doctrine is directly applicable to
Ware’s appeal because his claim before this court “succeeds only to the extent that
the state court wrongly decided the issues.” Id. In other words, Ware’s argument
is premised on the Circuit Court of Jefferson County having erroneously found
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that Deutsche Bank had standing to foreclose on Ware’s property and to eject
Ware from the property. See doc. 4 at 7-8 (arguing that Deutsche Bank lacked
standing to foreclose because they did not own the mortgage). Despite Ware’s
assertions to the contrary, his allegations regarding Deutsche Bank’s purported
fraud and lack of standing to foreclose do not preclude the state court’s judgment
from being considered “final” under the Rooker-Feldman doctrine. Even if Ware
is correct and the Circuit Court’s decision is wrong, “that did not make the
judgment void, but merely left it open to reversal or modification in an appropriate
and timely appellate proceeding.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,
544 U.S. 280, 284 (quoting Rooker, 263 U.S. at 415). Ware failed to appeal the
Circuit Court’s decision and instead filed two motions for post-judgment relief –
which the court denied – and this court lacks appellate jurisdiction over the state
court’s prior decision. Exxon Mobil Corp., 544 U.S. at 284-85; Rooker, 263 U.S.
at 415-16. Accordingly, the court also lacks jurisdiction to hear Ware’s appeal
under the Rooker-Feldman doctrine and Deutsche Bank’s motion to dismiss is
Based on the foregoing, Deutsche Bank’s motion is GRANTED.
Accordingly, Ware’s motion is DENIED and his appeal is MOOT and
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DISMISSED with prejudice.
DONE this 11th day of March, 2013.
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
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