856 F. Supp. 2d 273
D. Mass.2012Background
- Ibanez acquired 20 Crosby Street in Springfield by quitclaim deed in 2005 and granted a mortgage to Rose Mortgage, later assigned to Option One; Sand Canyon is Option One’s successor.
- Foreclosure sale occurred on July 5, 2007, before a formal assignment to U.S. Bank as Trustee, rendering the sale void under Ibanez (Mass. decision).
- Ibanez filed for Chapter 7 bankruptcy on July 26, 2007 and was discharged on October 24, 2007; bankruptcy case terminated October 31, 2007.
- Ibanez listed Crosby Street debt in bankruptcy schedules and surrendered interests in several properties; he did not include claims related to the foreclosure in Schedule B.
- In 2011 Ibanez filed suit in state court; defendants removed to federal court, and defendants moved for judgment on the pleadings under Rule 12(c).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the claims belong to the bankruptcy estate. | Ibanez argues the injury arose personally and not as part of the estate. | Defendants contend the claims are the property of the bankruptcy estate and not Ibanez's personally. | Claims belong to the bankruptcy estate; dismissal proper. |
| Whether judicial estoppel bars Ibanez's claims. | Ibanez asserts the estoppel does not apply because the injury occurred post-bankruptcy. | Defendants urge judicial estoppel due to inconsistent positions regarding the foreclosure and bankruptcy surrender. | Judicial estoppel could apply; plaintiff's positions inconsistent with prior bankruptcy posture. |
| Whether the injury occurred after surrender of the property in bankruptcy, defeating claims. | Ibanez claims injury from the void foreclosure. | Injury occurred after surrender, thus no cognizable claim against defendants. | Injury deemed to have occurred after surrender; claims fail. |
| Whether the bankruptcy trustee has representation or intervention rights to pursue the claims. | Trustee indicated he would not intervene; Ibanez argued personal action. | Trustee remains the proper representative of the estate's claims. | Estate claims not viable for Ibanez; trustee's non-intervention weighs against standing. |
Key Cases Cited
- U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637 (Mass. 2011) (mortgage holder failed to prove title; foreclosure void)
- In re Pratt, 462 F.3d 14 (1st Cir. 2006) (surrender connotes debtor ceding collateral in Chapter 7)
- Curran v. Cousins, 509 F.3d 36 (1st Cir. 2007) (documents may be considered on Rule 12(c) review)
- Perry v. Blum, 629 F.3d 1 (1st Cir. 2010) (judicial estoppel protects integrity of judicial process)
- InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003) (estoppel principles apply to inconsistent litigation positions)
- Gulf Coast Bank & Trust Co. v. Reder, 355 F.3d 35 (1st Cir. 2004) (12(c) standard; view pleadings favorably to nonmovant)