Boyce et al v. Citibank, N.A, as Trustee for the MLMI Trust Series 2006-HES
Filing
6
MEMORANDUM AND OPINION. For the reasons set forth herein, reviewing for abuse of discretion, appellants' appeal of the Bankruptcy Court's denial of their motion to reopen the Adversary Proceeding is denied. The Court affirms the rulings of the Bankruptcy Court in all respects. The Clerk of the Court shall enter judgment accordingly and close the case. SO ORDERED. Ordered by Judge Joseph F. Bianco on 1/10/2017. (Zbrozek, Alex)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
№ 15-CV-07408 (JFB)
SHERWOOD L. BOYCE AND
HEATHER BOYCE,
Appellants,
VERSUS
CITIBANK, N.A., AS
TRUSTEE FOR MLMI
TRUST SERIES 2006-HES,
Appellee.
MEMORANDUM AND ORDER
January 10, 2017
JOSEPH F. BIANCO, District Judge:
Sherwood L. Boyce and Heather Boyce
(collectively, “appellants”) appeal from an
order entered by the United States
Bankruptcy Court for the Eastern District of
New York (the “Bankruptcy Court”). In an
opinion dated December 15, 2015 (the
“December 15 Order” or “Bankr.Ct. Op.”),
the Honorable Alan S. Trust denied
appellants’ motion to reopen an adversary
proceeding against Citibank, N.A., as
Trustee for MLMI Trust Series 2006-HES, 1
1
Appellee contends that the correct name of the trust is
“MLMI Trust Series 2006-HE5.” (Appellee’s Br. at 1
n.1.) (alteration in original) The Clerk of the Court is
directed to amend the caption accordingly.
(“appellee”) after appellants unsuccessfully
litigated a foreclosure action in New York
state court. As the December 15 Order
explained, the Bankruptcy Court lacked
jurisdiction, and appellants failed to show
cause to reopen the adversary proceeding.
On appeal, appellants argue that the
December 15 Order should be reversed.
They claim that (i) the Bankruptcy Court
had jurisdiction to reopen the adversary
proceeding; and (ii) good cause was also
shown. (Appellants’ Br. at 10–21.) If this
Court reverses the December 15 Order,
appellants request that the Court issue an
order staying the state court foreclosure
action. (Appellants’ Br. at 22–24.)
For the reasons that follow, the Court
finds appellants’ arguments to be
unpersuasive and affirms the Bankruptcy
Court’s December 15 Order in all respects.
I.
In July 2010, Mr. Boyce commenced an
adversary proceeding against appellee to
challenge its purported mortgage lien on the
Property (the “Adversary Proceeding”). 6 In
March 2012, appellee filed a third-party
complaint to add Mrs. Boyce to the
litigation.
BACKGROUND
A. Procedural History
B. Bankruptcy Court’s Abstention
Order
The following facts are taken from the
Bankruptcy Record (“BR”) 2 and the
December 15 Order. 3
In April 2012, the Bankruptcy Court
entered an order in the Bankruptcy Case
scheduling an estimation hearing, which
took place on May 24, 2012. 7 Of relevance
to this appeal, the Bankruptcy Court’s
scheduling order required the parties to
submit affidavits for any proposed witnesses
by a certain date. Appellants failed to
comply, and thus their expert witness was
precluded from testifying. (T8.) 8
In May 2008, appellee filed an action
seeking to foreclose the mortgage on
appellants’ residence (the “Property”) in
Suffolk County Supreme Court (the “State
Court”) because appellants defaulted in their
payment obligations (the “Foreclosure
Action”). 4 In lieu of answering the
complaint, appellants entered into two
stipulations, which waived their right to
assert a claim or a defense in the Foreclosure
Action in exchange for appellee’s
forbearance. (BR at 719–24.)
The purpose of the estimation hearing
was to determine whether appellee had an in
rem claim against the Chapter 13 estate that
needed to be addressed in the plan.
However, appellants’ counsel indicated that
appellee had no such claim. (T14.) At that
point, the Court suggested that the parties
should address the matter in State Court, as
illustrated by the following colloquy with
appellants’ counsel:
After a default judgment was entered
against appellants, Mr. Boyce filed a
voluntary petition for relief under
Chapter 13 in June 2010 (the “Bankruptcy
Case”). 5 Of note, appellee never filed a
proof of claim in the Bankruptcy Case and,
thus, could not assert a personal liability
claim.
THE COURT: Then why
don’t we just short circuit this
and I’ll lift the stay and send
you all to state court? I’ll
2
The Bankruptcy Record is available at Docket
Entries 2-1 (pp. 1–749) and 2-2 (pp. 750–1339).
6
The Adversary Proceeding is designated as Case
No. 10-08307.
3
See Boyce v. Citibank, N.A. (In re Boyce), No. 10–
75049–ast, 2015 WL 9126085 (Bankr. E.D.N.Y.
Dec. 15, 2015).
7
“T__” refers to the transcript for the May 24, 2012
hearing before the Bankruptcy Court. The transcript is
available at Bankr.Ct. Docket Entry 85.
4
The Foreclosure Action is designated as Index
No. 021014/2008.
8
However, the Bankruptcy Court permitted appellants
to make a proffer of the expert’s testimony in the event
of review on appeal. (T9–10.)
5
The Bankruptcy Case is designated as Case No. 1075049.
2
hearing
the
adversary
proceeding, authorizing either
party to transmit to the state
court any and all pleadings
filed
in
the
adversary
proceeding --
abstain from the adversary
proceeding, and you all can
proceed on a Chapter 13 plan
that does not address the
Citibank claim, and they’ll
have all their rights under state
law against the debtor whether
it ultimately precludes the
debtor from performing their
Chapter 13 plan or not, but
you’re not going to have it
both ways.
A:
That would be fine.
THE COURT: -- or orders
entered in the adversary
proceeding, but I can’t direct
the state court to take any
specific actions. I’m at that
point sending the matter to the
state court to [] conclude the
litigation.
A:
Your Honor, we’re
willing to do that and have the
state court determine the
issues provided the full file of
the Court is sent over to the
state court because as of the
commencement
of
the
bankruptcy case Citibank
already had filed a motion for
default and the appointment of
a referee to compute, plus
unless the entire file gets
transferred to the state court
everything that we’ve already
done in this case goes to
naught.
(T14–15, 17–18.) The parties agreed with
the Bankruptcy Court’s suggestion, so on
June 5, 2012, the Bankruptcy Court entered
an order that, among other things: (i) lifted
an automatic stay so the Foreclosure Action
could continue; (ii) provided that any
Chapter 13 plan would not affect appellee’s
rights with respect to the Property and “any
other matters other than with respect to a
personal liability claim against the Debtor in
the Chapter 13 bankruptcy case”; and (iii)
indicated that the Bankruptcy Court would
abstain from hearing the Adversary
Proceeding and transfer the matter to the
State Court (the “Abstention Order”). (BR
at 1160–63.) Soon after, the Bankruptcy
Court entered an order administratively
closing the Adversary Proceeding but
authorizing either party to seek to reopen for
cause. Subsequently, the Bankruptcy Case
was closed after it had been fully
administered.
So as far as the debtor, we
have no problem with that,
with the Court’s abstention
provided the entire file in the
adversary
proceeding
is
transferred to the state court,
and not just a file that says the
name only, so to speak.
* * *
THE COURT: I don’t have
the authority to direct the state
court to do A, B, or C, but I
would certainly enter an order
that I’m abstaining from
C. State Court’s Ruling
Between June 2012 and August 2015,
appellants attempted to vacate the default
judgment that had been entered against them
3
Porges), 44 F.3d 159 (2d Cir. 1995), in
which the Second Circuit articulated
equitable factors for bankruptcy courts to
consider when determining whether they
should continue to exercise jurisdiction over
adversary proceedings. (Id.) As the
Bankruptcy Court observed, the Adversary
Proceeding did not affect the bankruptcy
estate, and appellants merely attempted to
re-litigate issues that the State Court had
already decided. (Id.) Thus, the Bankruptcy
Court prohibited appellants from using its
jurisdiction
“to
circumvent
those
determinations.” (Id.) 9
in the Foreclosure Action. In June 2013, the
State Court denied appellants’ motion to
vacate their default. (Id. at 1277–79.)
Essentially, appellants had stipulated that
they waived any claims or defenses in the
Foreclosure Action, and they otherwise did
not offer any excuse for their default. (Id. at
1279.) In light of this ruling, the Supreme
Court never reached the substantive issues in
the Adversary Proceeding—namely, whether
appellee had a valid and enforceable
mortgage on the Property.
In August 2015, the Second Department
of the New York Appellate Division
affirmed the Supreme Court’s ruling. (Id.
at 1269–70.)
Because the Adversary Proceeding was
not reopened, the Bankruptcy Court did not
reach appellants’ request for a stay. (Id.
at *5.)
D. Bankruptcy Court’s December 15
Order
E. Appeal
On September 2, 2015, appellants filed a
motion to reopen the Adversary Proceeding.
They also requested that the Bankruptcy
Court stay the Foreclosure Action and any
other related proceedings.
Appellants filed a notice of appeal of the
December 15 Order on December 29, 2015,
which was docketed in this Court on
December 30, 2015. Appellants filed their
brief on March 21, 2016. Appellee filed its
brief on April 15, 2016. Appellants filed
their reply on May 4, 2016. The Court has
fully considered the parties’ submissions.
On December 15, 2015, the Bankruptcy
Court denied appellants’ motion. (Bankr.Ct.
Op. at *5.) The Bankruptcy Court found that
appellants’ request was a “transparent
attempt” to seek “to overrule the orders of
the state trial and appellate courts.” (Id.
at *3.) Moreover, as the Bankruptcy Court
explained, the Abstention Order provided
that any Chapter 13 plan would not affect
appellee’s rights on the Property.
Accordingly, the Bankruptcy Court lacked
“related to” jurisdiction for the Adversary
Proceeding. (Id. at *4.) The Bankruptcy
Court also held that, even if “related to”
jurisdiction were available, it would have
declined to reopen the Adversary Proceeding
because equity favored dismissal. (Id.) The
Bankruptcy Court reached this conclusion
based on Porges v. Gruntal & Co. (In re
II.
STANDARD OF REVIEW
This Court has jurisdiction to hear
appeals from bankruptcy courts under 28
U.S.C. § 158, which provides that “[t]he
district courts of the United States shall have
jurisdiction to hear appeals . . . from final
judgments, orders, and decrees; . . . [and]
with leave of the court, from other
interlocutory orders and decrees . . . of
9
The Bankruptcy Court noted that appellants did not
file a motion to reopen the Bankruptcy Case.
(Bankr.Ct. Op. at *4.) In any event, the Bankruptcy
Court stated that “reopening the main case would be
futile and a waste of judicial resources.” (Id.)
4
bankruptcy judges.” 28 U.S.C. § 158(a)(1),
(3).
Therefore, the Court finds that a
bankruptcy court’s denial of a motion to
reopen an adversary proceeding is reviewed
under the “deferential abuse-of-discretion
standard.” See Statek Corp. v. Dev.
Specialists, Inc. (In re Coudert Bros. LLP),
673 F.3d 180, 186 (2d Cir. 2012). A
bankruptcy court abuses its discretion only if
it reaches a decision that (i) rests “on an
error of law or clearly erroneous factual
findings” or (ii) “‘cannot be located within
the range of permissible decisions.’” In re
Sapphire Development, LLC, 523 B.R. 1, 5
(D. Conn. 2014) (quoting Zervos v. Verizon
New York, Inc., 252 F.3d 163, 169 (2d
Cir. 2001)). 10
As an initial matter, the parties dispute
the applicable standard of review.
Appellants argue that the Court should apply
a de novo standard because “there are no
factual disputes.” (Appellants’ Br. at 5.) On
the other hand, appellee contends that the
Court should review for abuse of discretion.
(Appellee’s Br. at 7.) It is well-established
that a district court reviews a bankruptcy
court’s legal conclusions de novo, mixed
questions of fact and law de novo, and
factual findings for clear error. See R2 Invs.,
LDC v. Charter Commc’ns, Inc. (In re
Charter Commc’ns, Inc.), 691 F.3d 476,
482–83 (2d Cir. 2012); Denton v. Hyman (In
re Hyman), 502 F.3d 61, 65 (2d Cir. 2007);
Babitt v. Vebeliunas (In re Vebeliunas), 332
F.3d 85, 90 (2d Cir. 2003).
III.
DISCUSSION
Appellants challenge the December 15
Order on two grounds: (i) the Bankruptcy
Court had jurisdiction to reopen the
Adversary Proceeding; and (ii) good cause
was shown. Appellants also request that the
Court issue an order staying the Foreclosure
Action.
Discretionary matters, however, are
reviewed for abuse of discretion. See, e.g.,
Smith v. Silverman (In re Smith), 645 F.3d
186, 189 (2d Cir. 2011) (per curiam)
(motion to reopen a bankruptcy proceeding);
In re Emmons-Sheepshead Bay Dev. LLC,
518 B.R. 212, 219 (E.D.N.Y. 2014) (motion
for reconsideration); In re Fiorano Tile
Imports, Inc., 517 B.R. 409, 414
(E.D.N.Y. 2014)
(bankruptcy
court’s
interpretation of its own order). In particular,
“[t]he decision to reopen a case ‘invoke[s]
the exercise of a bankruptcy court’s
equitable powers, which is dependent upon
the facts and circumstances of each case.’”
In re Galloway-O’Connor, 539 B.R. 404,
407 (Bankr. E.D.N.Y. 2015) (alteration in
original) (quoting Katz v. I.A. Alliance Corp.
(In re I. Appel Corp.), 104 F. App’x 199,
200 (2d Cir. 2004) (summary order)); State
Bank of India v. Chalasani (In re
Chalasani), 92 F.3d 1300, 1307 (2d
Cir. 1996) (motion to reopen a bankruptcy
proceeding and vacate a default judgment).
A. Jurisdiction for Adversary
Proceedings
Appellants contend that the Bankruptcy
Court should have reopened the Adversary
Proceeding. However, the Court finds that
the Bankruptcy Court did not abuse its
discretion in denying appellants’ motion. 11
10
The Court notes that, even under a de novo standard
of review, the Court would reach the same conclusions
for the reasons set forth in the decision of the
Bankruptcy Court and in this Memorandum and Order.
11
In light of the conclusion below, the Court need not
address whether the Adversary Proceeding, if restored,
would be a “core” proceeding. (See Appellee’s Br.
at 8.)
5
B.R. 718, 719 (W.D. Pa. 1988) (exercising
jurisdiction to address an alleged violation of
the court’s injunction order because
automatic dismissal of the related
proceeding would allow parties “to defeat
the provisions of a preliminary injunction
and avoid contempt by stipulating to a
dismissal”); Stardust Inn, Inc. v. Doshi (In re
Stardust Inn, Inc.), 70 B.R. 888, 891 (Bankr.
E.D. Pa. 1987) (choosing to retain
jurisdiction because the matter had “already
been fully tried with all parties simply
awaiting the decision”); Auto Auction, Inc. v.
Pocklington (In re Pocklington), 21 B.R.
199, 202–03 (Bankr. S.D. Cal. 1982)
(maintaining jurisdiction because dismissal
would require the court “to uproot the
lawsuit in the midst of litigation” and “to
educate another court as to the facts and
issues”); Diversified Mortg. Investors, Inc. v.
Lake Tahoe Land Co., Inc. (In re Lake
Tahoe Land Co., Inc.), 12 B.R. 479, 481
(Bankr. D. Nev. 1981) (intimating that the
court retained jurisdiction, in part, because
the statute of limitations had expired and
thus the party could not bring the action in
another court). Cf. Pal Family Credit Co.,
Inc. v. Cnty. of Albany, 425 B.R. 1, 8
(Bankr. N.D.N.Y. 2010) (affirming the
bankruptcy court’s dismissal of an adversary
proceeding, in part, because it related to
state law claims). This list is non-exhaustive,
of course, but the common thread running
through these decisions is that courts often
look for some rational or equitable reason to
retain jurisdiction. Accord Fidelity &
Deposit Co. of Md. v. Morris (In re Morris),
950 F.2d 1531, 1537–40 (11th Cir. 1992)
(Clark, J., dissenting).
1. Legal Standard
As a general rule, jurisdiction for
adversary proceedings “does not normally
survive the dismissal of the underlying
bankruptcy proceedings.” See Presidential
Gardens Assocs. v. United States ex rel.
Sec’y of Hous. & Urban Dev., 175 F.3d 132,
142 (2d Cir. 1999). While not mandatory,
this rule is favored “because the Court's
exercise of jurisdiction over the adversary
proceeding depends on its nexus with the
main case.” Johnson v. Wells Fargo Bank,
N.A. (In re Johnson), No. 09–49420, 2014
WL 4197001, at *28 (Bankr. E.D.N.Y.
Aug. 22, 2014); see also Leon v. Couri,
No. 98 CIV 5028(HB)(RLE), 1999 WL
1427724, at *2 (S.D.N.Y. May 26, 1999)
(analyzing whether the outcome of the
related proceeding “might have any
‘conceivable effect’ on the bankruptcy
estate”); In re Porges, 44 F.3d at 162
(drawing an analogy “to a district court’s
jurisdiction over pendent state claims
following dismissal of all federal claims”).
This decision is committed “to the sound
discretion of the bankruptcy court or the
district court, depending on where the
adversary proceeding is pending.” In re
Porges, 44 F.3d at 162.
Courts have retained jurisdiction in the
following circumstances: (i) to encourage
quick resolution of claims; (ii) to protect the
court’s injunctive power; and (iii) to
promote judicial economy when the parties
have invested significant resources into the
case. See, e.g., Boco Enters., Inc. v.
Saastopankkien Keskus-Osake-Pankki (In re
Boco Enters.), 204 B.R. 407, 412 (Bankr.
S.D.N.Y. 1997) (retaining jurisdiction
because the contrary result “would
discourage parties from availing themselves
of dispositive motions” when the success of
those motions would divest the bankruptcy
court of jurisdiction); Hudak v. Woods, 91
As alluded to above, the Second Circuit
has provided four factors in determining
whether bankruptcy courts should retain
jurisdiction:
(i) “judicial
economy”;
(ii) “convenience
to
the
parties”;
(iii) “fairness”; and (iv) “comity.” In re
6
Porges, 44 F.3d at 163. Although appellants
seek to reopen a closed adversary
proceeding or, in effect, open a new
adversary proceeding, the Court will apply
the same analysis.
address the merits of the Foreclosure Action;
and (ii) violated due process by
(a) scheduling an estimation hearing and
(b) preventing their expert witness from
testifying. (Appellants’ Br. at 10–17.) 12
As explained below, the Court finds no
basis to disturb the Bankruptcy Court’s
discretionary decision.
Appellants carry the burden of proof in
showing that good cause exists. Accord In re
Covelli, 550 B.R. 256, 263 (Bankr.
S.D.N.Y. 2016). As stated in another
context, the Bankruptcy Court “will limit the
exercise of its discretion to reopen a closed
case ‘in circumstances . . . where reopening
is futile or a waste of judicial resources.” In
re Galloway-O’Connor, 539 B.R. at 407
(quoting In re Mohammed, 536 B.R. 351,
355 (Bankr. E.D.N.Y. 2015)) (motion to
reopen a bankruptcy case). Here, appellants
were not deprived of their opportunity to
address the merits of their Foreclosure
Action, including the purported validity of
appellee’s mortgage on the Property.
Instead, as the State Court reasoned, they
waived their opportunity by defaulting
without showing good cause for doing so.
Put another way, appellants’ dissatisfaction
with the State Court’s ruling does not
constitute good cause. Thus, the Bankruptcy
Court properly exercised its discretion in
declining to reopen the Adversary
Proceeding for lack of good cause.
2. Application
Considering all of the Porges factors, the
Court finds no nexus between the Adversary
Proceeding and the Bankruptcy Case.
Appellants essentially contend that “the
Bankruptcy Court’s refusal to reopen the
adversary proceeding amounts to a waste of
the resources invested by the parties.”
(Appellants’ Br. at 21.) To be sure, the
parties and the Bankruptcy Court have
invested resources into this matter, but the
State Court and the Appellate Division have
already decided the relevant issues.
Judicial economy is served because the
Abstention Order indicated that the
Adversary Proceeding would not impact the
closed Bankruptcy Case. As for the
remaining factors, the parties had agreed that
the Bankruptcy Court would abstain from
deciding the Adversary Proceeding.
Appellants should not be allowed to relitigate issues already decided by the State
Court. Accordingly, the Bankruptcy Court
did not abuse its discretion in denying
appellants’ motion to reopen the Adversary
Proceeding.
Appellants fare no better with their due
12
Appellee asserts that the due process arguments are
not properly before the Court because they were not
presented below. (Appellee’s Br. at 12.) Generally,
“issues not raised in the bankruptcy court cannot be
raised for the first time on appeal to this Court.”
Merchants Bank v. Goodyear, 228 B.R. 87, 88 (D.
Vt. 1997). However, a federal court may consider such
arguments when (i) “manifest injustice would occur”;
or (ii) “the argument is clearly presented by the
record.” Mendelsohn v. Pappas (In re Pappas), 239
B.R. 448, 454 (Bankr. E.D.N.Y. 1999). On that basis,
the Court will consider these arguments because they
are clearly presented by the record, including the May
24, 2012 hearing transcript, and no additional factfinding is needed.
B. Good Cause
Next, appellants contend that it has
provided good cause to reopen the
Adversary
Proceeding.
Specifically,
appellants claim that the Bankruptcy Court:
(i) deprived them of the opportunity to
7
Bankruptcy Court did not err in its “good
cause” analysis, nor did it violate due
process.
process arguments. As the Supreme Court
has made clear, “federal and state
adjudications are binding only when parties
are provided with sufficient notice and an
opportunity to be heard.” In re Drexel
Burnham Lambert Grp. Inc., 151 B.R. 674,
679 (Bankr. S.D.N.Y. 1993) (citing Mullane
v. Central Hanover Bank & Trust Co., 339
U.S. 306, 314 (1950)). Therefore, due
process is satisfied when notice is
“‘reasonably
calculated,
under
all
circumstances, to apprise interested parties
of the pendency of the action and afford
them an opportunity to present their
[claims].” Id. (alteration in original) (quoting
Mullane, 339 U.S. at 314). This inquiry
involves a case-by-case approach turning on
what the party knew or should have known.
DePippo v. Kmart Corp., 335 B.R. 290, 295
(Bankr. S.D.N.Y. 2005); Mullane, 339 U.S.
at 314.
C. Anti-Injunction Act
Finally, appellants request that the Court
stay the Foreclosure Action until the
Adversary Proceeding has been resolved. In
light of the foregoing analysis, however, this
request is moot because appellants’ motion
to reopen is denied. However, even if the
Court reached the merits, appellants’ request
is barred by 28 U.S.C. § 2283 (the “AntiInjunction Act”).
The Anti-Injunction Act prohibits federal
courts
from
enjoining state
court
proceedings except (i) where “expressly
authorized by Act of Congress”; (ii) “where
necessary in aid of its jurisdiction”; or
(iii) where necessary “to protect or
effectuate its judgments.” 28 U.S.C. § 2283.
As the Second Circuit has recognized, “the
Anti-Injunction Act applies to state court
foreclosure proceedings.” Wenegieme v. U.S.
Bank Nat’l Ass’n, No. 16-CV-2634 (AMD),
2016 WL 3348539, at *3 (E.D.N.Y.
June 9, 2016) (citing Ungar v. Mandell, 471
F.2d 1163, 1165 (2d Cir. 1972)).
First, as for the estimation hearing,
appellants received proper notice through
the Bankruptcy Court’s April 2012 order,
and the estimation hearing did not deprive
them of any opportunity to present
arguments or evidence. Moreover, appellants
conceded that the estimation hearing would
not have been binding on any issues raised
in the Adversary Proceeding. (Appellants’
Br. at 11 (recognizing that the “estimated
claim can have no validity and enforceability
in the determination of the substantive issues
related to the adversary proceeding”).)
Contrary to appellants’ suggestion,
neither the first nor the third exceptions
apply. (Appellants’ Br. at 22–23.) First,
appellants construe the Bankruptcy Code’s
automatic stay provision, see 11 U.S.C.
§ 362(a), as an Act of Congress. However,
no bankruptcy case is pending, nor have
appellants sought to reopen the Bankruptcy
Case. Therefore, the first exception is
inapplicable.
Second, as for the expert witness, the
Bankruptcy Court precluded that witness’s
testimony because appellants failed to
produce the witness’s affidavit by the
scheduling order’s deadline. Appellants have
offered no reason to overcome this
straightforward result.
They also rely on the third exception—
that is, “to protect or effectuate [the Court’s]
judgment in [a] reopened adversary
proceeding.” (Appellants’ Br. at 23.)
In sum, having reviewed for abuse of
discretion, the Court concludes that the
8
However, this exception “does not permit a
federal court to enjoin state proceedings to
protect a judgment that the federal court may
make in the future but has not yet made.”
Attick v. Valeria Assocs., 835 F. Supp. 103,
115 (S.D.N.Y. 1992). Thus, even if the
Court reopened the Adversary Proceeding,
the Anti-Injunction Act would have barred
appellants’ request for injunctive relief to
stop the Foreclosure Action.
IV.
1290 Avenue of the Americas, New York,
New York 10104, and William Craig
Sandelands, Sandelands Eyet LLP, 1545
United States Highway 206, Suite 304,
Bedminster, New Jersey 07921.
CONCLUSION
For the foregoing reasons, reviewing for
abuse of discretion, appellants’ appeal of the
Bankruptcy Court’s denial of their motion to
reopen the Adversary Proceeding is
denied. 13 The Court affirms the rulings of
the Bankruptcy Court in all respects. The
Clerk of the Court shall enter judgment
accordingly and close the case.
SO ORDERED.
JOSEPH F. BIANCO
United States District Judge
Dated: January 10, 2017
Central Islip, New York
* * *
Appellants are represented by Edward
Zinker, Zinker & Herzberg, LLP, 300 Rabro
Drive, Suite 114, Hauppauge, New York
11788, and Jeffrey Herzberg, 278 East Main
Street, Suite C, P.O. Box 866, Smithtown,
New York 11787. Appellee is represented
by Thomas James Schell, Bryan Cave LLP,
13
As noted supra, even applying a de novo standard of
review, the Court would reach the same conclusions
for the reasons set forth in the Bankruptcy Court
decision and in this Memorandum and Order.
9
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