Lanier et al v. Branch Bank & Trust et al
ORDER RULING ON REPORT AND RECOMMENDATION adopting 34 Report and Recommendation. The court affirms Judge Waites' January 3,2012 Order dismissing Appellants' Chapter 13 bankruptcy case with prejudice. Signed by Honorable Margaret B Seymour on 3/21/2013. (asni, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
Cathy G. Lanier and Randy D. Lanier,
) C/A No. 3:12-0416-MBS
Branch Bank & Trust, Bayview Loan
This matter is before the court on appeal from the United States Bankruptcy Court for the
District of South Carolina. The court has jurisdiction pursuant to 28 U.S.C. § 158(a).
I. FACTS AND PROCEDURAL BACKGROUND
Appellees Branch Bank & Trust and Bayview Loan Servicing, LLC are holders of certain
commercial notes and mortgages executed by Appellants Cathy G. Lanier and Randy D. Lanier.
Appellees obtained judgments and decrees of foreclosure in the Court of Common Pleas for
Lexington County, South Carolina, in the fall of 2011. Appellant Randy D. Lanier filed for relief
under the United States Bankruptcy Code. However, by order dated November 7, 2011, United
States Bankruptcy Judge David R. Duncan granted a motion to dismiss Appellant Randy Lanier’s
bankruptcy case on the grounds that the amount of Appellants’ secured and unsecured debt exceeds
the limitations provided by 11 U.S.C. § 109(e), so that Appellant Randy D. Lanier was not eligible
for relief under Chapter 13 of the Bankruptcy Code. Foreclosure sales of the property were
scheduled for November 8, 2011.
On November 8, 2011, Appellants jointly filed a second bankruptcy case. On January 3,
2012, Chief Bankruptcy Judge John E. Waites issued an order dismissing the case with prejudice.
Judge Waites concluded that Appellants had filed the second bankruptcy case in bad faith and to
impede Appellees’ foreclosure sales. Judge Waites further noted that certain documents submitted
by Appellants at a hearing on November 19, 2012 had no legal effect, and that their assertion of
payment had been rejected by Judge Duncan and in state court.1 As a consequence, Appellees
obtained supplemental judgments and decrees of foreclosure. Foreclosure sales were scheduled for
March 5, 2012.
Appellants filed a notice of appeal in bankruptcy court on January 17, 2012, along with a
motion to stay the pending foreclosure sales. Appellants’ motions were denied. The notice of appeal
from the bankruptcy court was docketed in this court on February 14, 2012. Also on February 14,
2012, Appellants filed in this court a motion to stay the foreclosure sale.
In accordance with 28 U.S.C. § 636(b) and Local Rule 73.02, D.S.C., this matter was referred
to United States Magistrate Judge Shiva V. Hodges for pretrial handling. The Magistrate Judge filed
an order on February 16, 2002 directing Appellants to file their brief within fourteen days, and
further directing Appellees to file their brief within fourteen days thereafter. On February 28, 2012,
Appellants filed a second motion to stay. Also on February 28, 2012, the court issued an order
denying the stay, noting that Appellants did not meet their burden of establishing entitlement to such
Appellants filed their brief on February 29, 2012. On March 1, 2012, Appellants filed a
Appellants contend that their debts were discharged by certain “International Private Contracts” and
bonds sent to Appellees along with “explicit instructions as to how to monetize these bonds and
thereby pay off these debts to a zero balance.” ECF No. 21, 15. After no response was received
from Appellees, certain “Notices of Foreign Judgment Lien & Affidavit” were filed in the Office of
the Clerk of Court for Lexington County, South Carolina. The Notices refer to purported Uniform
Commercial Code filings were made by James Chappell Dew, Jr., “Authorized Representative for
Debtor(s),” in the states of South Carolina and Washington.
motion to reconsider, which motion was denied by order filed March 2, 2012. The court is informed
that the foreclosure sales were held and the properties sold as scheduled on March 5, 2012.
Appellees filed their brief on March 14, 2012.
On January 30, 2013, the Magistrate Judge issued a Report and Recommendation in which
she observed that Appellants’ bankruptcy schedules reveal a total secured debt of $2,884,025. She
further noted that the secured debt at issue herein is established by the following unappealed orders
Bayview Judgment of Foreclosure dated September 12, 2011
BB&T Judgment of Foreclosure dated September 30, 2011
Bayview Supplemental Judgment of Foreclosure dated January 24, 2012 for
a total debt of $935,267.53
BB&T Supplemental Judgment of Foreclosure dated January 24, 2012 for a
total debt of $856,363.33.
The Magistrate Judge analyzed Appellants’ contentions of error, and determined that Appellants
provided no basis for reversing Judge Waites’ January 3, 2012 order dismissing Appellants’
bankruptcy case with prejudice. Appellants filed objections to the Report and Recommendation on
February 19, 2013.
II. STANDARD OF REVIEW
A bankruptcy court’s findings of fact are reviewed under the clearly erroneous standard of
review. Zack v. United States, 224 B.R. 601, 603 (Bankr. E.D. Mich. 1998). A bankruptcy court’s
conclusions of law are reviewed de novo. Id. On appeal the district court may affirm, modify, or
reverse a bankruptcy judge’s judgment, order, or decree, or remand with instructions for further
proceedings. Fed. R. Bankr. P. 8013.
Appellants raise seven issues for review:
Whether the Bankruptcy Court in granting Branch Banking and Trust
Company’s and Bayview Loan Servicing, LLC’s (the “the Banks”) Joint
Motion to Dismiss (“JMD”) abused its discretion.
Whether the Bankruptcy court committed clear error in denying Cathy G
Lanier and Randy D Lanier’s (“the Laniers”) Petition to Dismiss the Banks’
JMD and disregarding their Response and Objection to the JMD.
Whether the Bankruptcy court committed clear error in disregarding the
written testimony (via signed Schedules) of Appellants and denied them their
due process by failing to require the Banks to submit legal bases for their
Whether the Bankruptcy Court committed clear error in finding that the
Foreign Judgment Liens (Exhibits 1 and 2) were invalid.
Whether the Bankruptcy Court committed clear error in allowing lower
court’s and the Banks’ counsel’s opinions as to the discharge documents’ and
liens’ validity to be considered without providing any bases in law for those
opinions. Further, whether the Bankruptcy Court committed clear error in
failing to require the Banks to provide legal bases for their claims.
Whether the Bankruptcy Court committed clear error in giving unfair
advantage to the Banks by delaying hearing while the Banks’ counsel were
located and had an opportunity to arrive. Whether this represents a different
and biased standard of treatment of creditors vs. debtors.
Whether the Bankruptcy Court acted prematurely by dismissing Appellants’
case when further fact-finding was necessary to determine the outcome.
Whether this action has lead to subsequent actions that will cause Appellants
Appellant’s Opening Brief 3, ECF No. 21-7.
Magistrate Judge’s Report and Recommendation
The Magistrate Judge grouped Issues 1 and 2 together as alleging the Bankruptcy Court
abused its discretion in granting Appellee’s motion to dismiss and committed clear error in denying
Appellants’ petition to dismiss the motion. The Magistrate Judge concluded that these allegations
failed to provide any factual grounds or applicable legal authority, and thus provided no basis to
reverse Judge Waites’ order.
As to Issues 3, 4, and 5, the Magistrate Judge observed that Appellants allege the mortgages
at issue have been discharged. The Magistrate Judge determined that Appellants’ assertions would
require the court to attack the conclusions of the state courts regarding the validity of the underlying
mortgages, in contravention of the Rooker-Feldman doctrine. See Rooker v. Fidelity Trust Co., 263
U.S. 413 (1923), and District of Columbia Ct. of Appeals v. Feldman, 460 U.S. 462 (1983) (holding
that lower federal courts lack jurisdiction to hear “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”). The Magistrate
Judge further noted that Appellants had failed to appeal Judge Duncan’s order rejecting their
assertion that the mortgages had been paid. Judge Duncan’s ruling therefore is the law of the case.
See Shepard v. Irving, 77 F. App’x 615 (4th Cir. 2003 (citing United States v. Aramony, 166 F.3d
655, 661 (4th Cir.1999) ( “[W]hen a court decides upon a rule of law, that decision should continue
to govern the same issues in subsequent stages in the same case.”).
Regarding Issue 6, the Magistrate Judge noted that Judge Waites delayed a hearing to give
counsel for Appellees an opportunity to arrive. The Magistrate Judge also noted that there is no
record of the matter having been raised to or ruled on by Judge Waites, and thus the issue was not
preserved for appellate review. See Holland v. Big River Minerals Corp., 181 F.3d 597 (4th Cir.
1999) (citing cases). Further, the Magistrate Judge found that Judge Waites did not abuse his
discretion in granting a brief delay.
Finally, regarding Issue 7, the Magistrate Judge determined that the Rooker-Feldman doctrine
bars a collateral attack on the state court foreclosure judgments, and that no new facts can change
the state court’s rulings on the validity of Appellees’ mortgages. Accordingly, the Magistrate Judge
recommended that the court affirm Judge Waites’ January 3, 2012 order dismissing Appellants’
Chapter 13 bankruptcy case with prejudice.
The Magistrate Judge makes only a recommendation to this court. The recommendation has
no presumptive weight. The responsibility for making a final determination remains with this court.
Mathews v. Weber, 423 U.S. 261, 270 (1976). This court may accept, reject, or modify, in whole
or in part, the findings or recommendations made by the Magistrate Judge. 28 U.S.C. § 636(b)(1).
This court may also receive further evidence or recommit the matter to the Magistrate Judge with
Appellants’ Objections to the Report and Recommendation
Appellants first take issue with the Magistrate Judge’s recitation of the facts. Appellants
argue that they did not act in bad faith in initiating a second Chapter 13 proceeding because they
wished to “do everything in their power to protect their properties and ensure justice is done.”
Objection to Report and Recommendation 2, ECF No. 37, 2. Appellants again assert that Judge
Waites’ finding related to the International Private Contracts and related documents “was done so
without due process, legal basis or proof of any sort.” Id. According to Appellants, they were denied
the right to face their creditors and dispute any claims in Bankruptcy Court.
Essentially, Appellants claim the benefit of unilateral contracts submitted to Appellees. A
unilateral contract occurs when there is only one promisor and the other party accepts, not by mutual
promise, but by actual performance. Sauner v. Pub. Serv. Auth., 582 S.E.2d 161, 165-66 (S.C.
2003). Here, there is no evidence of actual performance by Appellees. The documents relied upon
by Appellants are without legal effect. Judge Waites did not err in dismissing Appellants’ Chapter
13 proceeding when the validity of the debts had been established in state court, and Appellants
asserted no viable defense to set aside the mortgages. Appellants’ objection is without merit.
According to Appellants, Appellees “have been allowed by the courts in Lexington County
to steal the property of the Laniers without adhering to any of the basic tenets of legal proof of claim,
standing or that they have suffered any damages at the hands of the Laniers.” Id. Appellants seek
to collaterally attack the state court foreclosure judgments. Under Rooker-Feldman, the court is
without jurisdiction to consider such claims.
Appellants next assert that Rooker-Feldman does not apply to the case at bar. Appellants
contend that they were denied due process in state court, and that, if they “had been afforded their
rights to prove that nothing was owed [on] the two mortgages in question, there would have been
no issue with the debt ceiling of their [Chapter 13] filing.” ECF No. 37, 4. Appellants state that no
plaintiff in the state court foreclosure actions proved standing or injury, and that the state court
rulings were based on hearsay. Again, Appellants’ collateral attack on the state court judgments is
specifically what Rooker-Feldman prohibits. Appellants’ remedy, if they were dissatisfied with the
state court rulings, was to appeal those rulings through the state system to the South Carolina
Supreme Court or Court of Appeals. See S.C. App. Ct. R. 201. Appellants’ objection is without
Finally, Appellants assert that Judge Waites’ decision to delay proceedings to allow
Appellees time to appear was “tantamount to a ‘good old boy’s’ club where the lawyers always win,
whether they are in the right or not.” ECF No. 37, 7. Appellants contend that “[t]here appears to
be a serious denial of justice just because a filer chooses, for whatever reasons, usually financial, not
to retain an attorney to represent them.” Id. As noted herein above, Appellants raised no
contemporaneous objection to Judge Waites when he recessed the hearing. See Transcript 3, ECF
No. 30-1. Thus, the issue is not preserved for appellate review. In any event, Appellants’ allegations
of bias are without merit. The state court proceedings establishing the validity of the mortgages were
not appealed and cannot now be challenged. Judge Duncan’s finding that the amount of Appellants’
secured and unsecured debt exceeds the limitations provided by 11 U.S.C. § 109(e) was not appealed
and is the law of the case. Further, the documents purporting to satisfy Appellees’ judgments are
without legal significance. Thus, Judge Waites did not err in subsequently finding that Appellees’
judgments were valid and that Appellants’ secured and unsecured debt exceeds the limitations
provided by 11 U.S.C. § 109(e)
The court adopts the Report and Recommendation of the Magistrate Judge. For the reasons
stated herein and in the Report and Recommendation, the court affirms Judge Waites’ January 3,
2012 Order dismissing Appellants’ Chapter 13 bankruptcy case with prejudice.
IT IS SO ORDERED.
/s/ Margaret B. Seymour
Senior United States District Judge
Columbia, South Carolina
March 21, 2013.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?