DUGDALE v. DITECH FINANCIAL, LLC

Filing 35

ORDER Denying 32 Motion for Reconsideration; Granting in Part and Denying in Part 34 MOTION for Leave to Appeal and Motion to Dismiss - Signed by District Judge Nancy G. Edmunds. (LBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TIMOTHY DUGDALE,
Plaintiff,
v.

No. 18-10896
Honorable Nancy G. Edmunds

DITECH FINANCIAL, LLC,
Defendant.
________________________________________/
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S
MOTION TO DISMISS AND MOTION FOR LEAVE TO APPEAL [34]
AND DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION [32]
This case has been stayed and administratively closed since March 7, 2019
due to Defendant’s bankruptcy filing. (Dkt. 26.) Despite the bankruptcy court later
confirming Defendant’s Chapter 11 plan, Plaintiff sought to reopen this case. (See
dkt. 28.) On January 7, 2020, the Court denied Plaintiff’s motion to reopen. (Dkt. 31.)
Plaintiff then filed a motion for reconsideration. (Dkt. 32.) While Plaintiff’s motion was
still pending, Defendant filed a notice informing the Court that the bankruptcy court
had entered an order on January 23, 2020, granting plan administrators’ omnibus
motion to enforce injunctive provisions of plan as to Plaintiff. (Dkt. 33.) According to
the bankruptcy court’s order, Plaintiff had fourteen days from the date of that order to
dismiss this case. (See dkt. 33-1.) Failure to do so may result in Plaintiff being held in
contempt of the bankruptcy court for violating the terms of that order and allow the
plan administrator to seek sanctions against him. (See id.) The matter is now before
the Court on Plaintiff’s motion to dismiss and motion for leave to appeal. (Dkt. 34.)

In compliance with the bankruptcy court’s order, Plaintiff seeks dismissal of this
action, and this Court grants his motion in that respect. However, Plaintiff also seeks
leave to appeal, asserting that he “feel[s] that [his] argument should be heard by a
circuit court, either the Sixth or the Second, if only to explore how Taggart applies to
situations like this.” (See dkt. 34, PgID 528.) In Taggart v. Lorenzen, 139 S. Ct. 1795,
1804 (2019), the Supreme Court held that a court may only hold a creditor in civil
contempt for violating a discharge order “where there is not a ‘fair ground of doubt’ as
to whether the creditor’s conduct might be lawful under the discharge order.” That
case has no impact on the issue of whether a discharge order applies to a particular
debt in the first place, and is therefore inapplicable to the situation here. Moreover,
the bankruptcy court has already determined that its order applies to Plaintiff’s case.
(See dkt. 33-1.) Any arguments to the contrary should have been made within
Defendant’s bankruptcy case in the bankruptcy court, not here. Plaintiff’s motion for
leave to appeal is, therefore, denied.
In sum, Plaintiff’s motion is GRANTED to the extent Plaintiff seeks dismissal of
this case and DENIED to the extent he seeks leave to appeal. His previously filed
motion for reconsideration is DENIED as moot.
SO ORDERED.

s/Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge

Dated: February 5, 2020

I hereby certify that a copy of the foregoing document was served upon counsel of
record on February 5, 2020, by electronic and/or ordinary mail.
s/Lisa Bartlett
Case Manager