Baczkowski v. Bank of New York Mellon et al
Filing
24
Opinion and Order: The bankruptcy court's final order applied the correct legal standard regarding consent and application of LBR 7008-1. Finding no abuse of discretion, the bankruptcy judges Adversary Dismissal Order is AFFIRMED. Signed on 10/21/2016 by Judge Michael J. McShane. (cp)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
LORI DIANE BACZKOWSKI,
Appellant,
Civ. No. 6:16-cv-00150-MC
v.
OPINION AND ORDER
BANK OF NEW YORK MELLON;
QUALITY LOAN SERVICE
CORPORATION OF
WASHINGTON; and SELECT
PORTFOLIO SERVICING, INC.,
Appellees.
_____________________________
MCSHANE, Judge:
Appellant, Lori Diane Baczkowski, appeals an order of dismissal from an Adversary
Proceeding non-core to a previously dismissed Chapter 13 Proceeding. This Court has
jurisdiction on appeal pursuant to 28 U.S.C. § 158(a). See Key Bar Invs., Inc. v. Cahn (In re
Cahn), 188 B.R. 627 (B.A.P. 9th Cir. 1995).
Appellant alleges the bankruptcy court erred by (1) entering a final order in a non-core
adversarial proceeding and (2) violating due process by failing to hear appellant in a meaningful
manner and (3) issuing an inequitable order. Because the bankruptcy court’s refusal to exercise
jurisdiction over the adversary proceeding was not an abuse of discretion, this Court affirms the
bankruptcy judge’s Adversary Dismissal Order.
PROCEDURAL AND FACTUAL BACKGROUND
On August 20, 2015, the Appellant/Debtor filed a Chapter 13 Petition. Debtor scheduled
as her residential home certain real property (“Subject Property”) and identified that the Subject
1 – OPINION AND ORDER
Property was subject to a first-position mortgage held by the Trust and serviced by Select
Portfolio Servicing, Inc. (“SPS”). Def.’s Br. 3, ECF No. 13. Less than two weeks after filing her
Chapter 13 Petition, Debtor filed an Adversary Proceedings complaint challenging the
nonjudicial foreclosure being made against the Subject Property by the Trust, SPS, and Quality
Loan Service Corporation of Washington (“QLS”) (the foreclosure trustee). The defending
parties filed answers admitting that the Adversary Proceeding was non-core to the bankruptcy
and consented to entry of a final order or judgment. Pl.’s Br. 7, ECF No. 11; Def.’s Br. 3-5, ECF
No. 13.
On November 16, 2015, Debtor filed a Motion to Dismiss the Chapter 13 Case. On
November 19, 2015, the Bankruptcy Court held a pre-trial hearing in the Adversary Proceeding.
Def.’s Br. ER 35-45 (11/19/15 Hearing Transcript (“11/19 Tr.”), ECF No. 14. At that pre-trial
hearing, the Bankruptcy Court raised the issue of Debtor’s Motion to Dismiss and explained to
Debtor that if the Chapter 13 Case was dismissed, the Bankruptcy Court also intended to dismiss
the Adversary Proceeding. Def.’s Br. ER 38-39 (11/19 Tr. at 4:17-5:4), ECF No. 14. The Debtor
had an opportunity to withdraw the Motion to Dismiss in order to continue both the Chapter 13
Proceeding and the Adversary Proceeding. Def.’s Br. 3-5, ECF No. 13.
After Debtor failed to withdraw the Motion to Dismiss, the Bankruptcy Court dismissed
and administratively closed the Chapter 13 Case on December 11, 2015. Def.’s Br. ER 28
(“Chapter 13 Case Dismissal Order”), ECF No. 14. The Bankruptcy Court subsequently entered
the Dismissal Order in the Adversary Proceeding on January 12, 2016. Def.’s Br. ER 19, ECF
No. 14. Debtor did not appeal the Chapter 13 Case Dismissal Order.
///
///
2 – OPINION AND ORDER
STANDARD OF REVIEW
A bankruptcy court’s decision to decline to exercise jurisdiction over an adversary
proceeding is reviewed for an abuse of discretion. Carraher v. Morgan Elec., Inc. (In re
Carraher), 971 F.2d 327, 328 (9th Cir. 1992). A bankruptcy court abuses its discretion only if it
applies the wrong legal standard, misapplies the correct legal standard, or makes factual findings
that are illogical, implausible, or without factual support. See TrafficSchool.com, Inc. v. Edriver
Inc., 653 F.3d 820, 832 (9th Cir. 2011) (citing United States v. Hinkson, 585 F.3d 1247, 1262
(9th Cir. 2009) (en banc)).
DISCUSSION
I. Consent to Enter a Final Order
Appellant argues she did not consent, whether explicitly or implicitly, to the bankruptcy
court entering a final order of any kind. Appellant’s argument runs contrary to her Adversary
Complaint where she stated, correctly, that the Bankruptcy Court had jurisdiction under 28
U.S.C. § 1334 and 28 U.S.C. § 157. The act of filing her complaint with the bankruptcy court
while failing to object to the court’s jurisdiction is an expression of implied consent to
bankruptcy court jurisdiction. See Mann v. Alexander Dawson Inc. (In re Mann), 907 F.2d 923,
926 (9th Cir. 1990) (choosing to file adversary proceeding in the bankruptcy court, and never
objecting to the court’s jurisdiction prior to the judgment being rendered, is conduct denoting
consent to the court’s jurisdiction); Daniels-Head & Assocs. V. William M. Mercer, Inc. (In re
Daniel-Head & Assocs.), 819 F.2d 914, 918 (9th Cir. 1987) (citing cases for rule that consent in
section 157(c)(2) can be both express and implied). Oregon Local Bankruptcy Rules favor this
interpretation. Rule 7008-1 of the Oregon LBRs places the burden on the pleader to waive any
objection to the judge’s entry of final orders or judgment.
3 – OPINION AND ORDER
II. Due Process
While Appellant argues there was a violation of due process, she has not presented a
sufficient factual or legal basis in her pleadings as to how due process has been violated. A court
will not perform a litigant’s own work. E.g., Western Radio Servs. Co. v. Qwest Corp., 678 F.2d
970, 979 (9th Cir. 2012).
III. Order was not inequitable
Appellant also fails to present how the Order of Dismissal was inequitable. Appellant had
the opportunity to continue with her Chapter 13 proceeding, preserving her ability to continue
with the Adversary Proceeding. Instead, she chose to move forward with the dismissal of her
Chapter 13 case. Appellant was fully informed of the consequences of this decision and given
more than sufficient time to act in a manner that would preserve her Adversary Proceeding.
There is no evidence order to dismiss was inequitable.
CONCLUSION
The bankruptcy court's final order applied the correct legal standard regarding consent
and application of LBR 7008-1. Finding no abuse of discretion, the bankruptcy judge’s
Adversary Dismissal Order is AFFIRMED.
IT IS SO ORDERED.
DATED this 21st day of October, 2016.
____________________________
Michael J. McShane
United States District Judge
4 – OPINION AND ORDER
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