574 B.R. 771
Bankr. M.D. Fla.2017Background
- Debtor filed Chapter 13 bankruptcy on July 14, 2017. A foreclosure sale of her real property was held on July 18, 2017 (four days after the petition).
- Debtor filed a pro se Motion for Contempt and Injunctive Relief asking the bankruptcy court to hold the state court judge in contempt and to order the state judge to rescind the foreclosure sale.
- The Motion for Contempt was not served on the state judge, and no evidence showed the state judge or the foreclosure plaintiff knew of the bankruptcy at the time of the sale.
- The state court later entered an order (August 9, 2017) denying the Debtor’s motion to rescind without prejudice because the motion did not state whether the property was scheduled in bankruptcy.
- The bankruptcy court found the automatic stay under 11 U.S.C. § 362 applied to the property as of the petition date and concluded actions taken in violation of the stay are void ab initio.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the state court judge can be held in contempt or ordered to rescind the sale | Debtor asked court to hold judge in contempt and order rescission because sale violated automatic stay | Judge had judicial immunity; no evidence judge knew of bankruptcy; bankruptcy court cannot direct state court | Denied: contempt/injunctive relief against judge refused; court lacks authority to order state judge to act |
| Whether the foreclosure sale is effective despite occurring after bankruptcy petition | Sale is void because it occurred post-petition in violation of the automatic stay | Foreclosure proceeded in state court; no suggestion filed before sale; state court denied rescission for procedural deficiency | Held: Foreclosure sale is void ab initio for violating the automatic stay |
| Whether failure to list property in schedules defeats estate status | Debtor argued property was part of estate (schedules filed showing ownership) | State court denied rescission partly because motion didn’t state whether property was scheduled | Held: Schedules reflect Debtor owned property as of petition date; listing is not determinative but property is estate property under § 541 |
| Whether bankruptcy court may overrule state court under Rooker–Feldman | Debtor sought order directing state judge to rescind sale | Federal courts (other than SCOTUS) may not overrule state court decisions under Rooker–Feldman | Held: Bankruptcy court cannot direct state court to enter an order; but it can declare the sale void under bankruptcy law |
Key Cases Cited
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) (federal courts other than the Supreme Court lack jurisdiction to review state court judgments)
- D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983) (limits on federal review of state court decisions reinforced)
- Denton v. Massey, 370 B.R. 441 (Bankr. S.D. Ga. 2007) (judicial immunity bars injunctive relief against judges for official acts)
- In re Newgent Golf, Inc., 402 B.R. 424 (Bankr. M.D. Fla. 2009) (state court orders entered without knowledge of a party’s bankruptcy can be void ab initio)
- In re Post, 347 B.R. 104 (Bankr. M.D. Fla. 2006) (property interests that are not scheduled can still be property of the estate as of the petition date)