Carr v. JP Morgan Chase Bank, N.A. (In re New Century TRS Holdings, Inc.)
505 B.R. 431
Bankr. D. Del.2014Background
- Debtors filed Chapter 11 in 2007; Modified Plan confirmed 2009 creating New Century Liquidating Trust and appointing a Liquidating Trustee.
- Ms. Carr, a former borrower, alleges stay violations, avoidance actions, fraud, and California Homeowner Rights claims against JPMorgan Chase and Chase Home Finance.
- The Liquidating Trustee asserts Carr’s interest was resolved via settlements; Carr received $60,000 in 2010 in exchange for releasing claims.
- Plaintiff sought damages and injunctive relief related to real property in Dublin, California.
- Court sua sponte examines jurisdiction and standing, treating motion as facial challenge to subject-matter jurisdiction; ultimately dismisses for lack of jurisdiction.
- Post-confirmation, court finds no related-to jurisdiction over Frauds and California claims; standing absent for stay-violation and avoidance claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Carr has standing to sue for stay violations and avoidance. | Carr asserts injury as a party in interest seeking to enforce the stay. | Defendants contend Carr lacks standing as not a debtor or creditor. | Carr lacks standing to pursue both Stay Violation and Avoidance claims. |
| Whether court has subject-matter jurisdiction over the Fraud Claim. | Fraud claim arises from defendants’ post-petition filings. | Fraud claim is not a core/title-11 claim; jurisdiction questioned post-confirmation. | Court lacks jurisdiction to consider the Fraud Claim. |
| Whether court has subject-matter jurisdiction over the California Claim. | Claims relate to California Homeowner Rights violations. | claims do not arise under or relate to the bankruptcy plan. | Court lacks related-to jurisdiction; California Claim dismissed. |
Key Cases Cited
- Gould Elec. Inc. v. United States, 220 F.3d 169 (3d Cir. 2000) (facial vs. factual challenges to jurisdiction; standard guidance)
- Pacor, Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984) (test for related-to jurisdiction under Pacor)
- Celotex Corp. v. Edwards, 514 U.S. 300 (Supreme Court 1995) (related-to jurisdiction discussed in Celotex and Pacor)
- Stoe v. Flaherty, 436 F.3d 209 (3d Cir. 2006) (defines related-to jurisdiction boundaries in Third Circuit)
- In re Resorts Int’l, Inc., 372 F.3d 154 (3d Cir. 2004) (post-confirmation jurisdiction; close nexus to plan or trust)