516 B.R. 229
Bankr. E.D.N.Y.2014Background
- Debtor Eric H. Richmond filed a Chapter 13 case shortly after the automatic stay was lifted in Lyceum’s single-asset Chapter 11 case to pursue foreclosure on 227-231 4th Ave, Brooklyn (the Property).
- P.B. #7 LLC holds a Foreclosure Judgment against Lyceum and Richmond and sought relief from stay under § 362(d)(4).
- Lyceum’s Chapter 11 stay relief had been granted before Richmond’s Chapter 13 filing, based on infeasibility and Rooker-Feldman/res judicata concerns.
- Richmond and Lyceum’s filings were timed on the eve of significant foreclosure events, suggesting an intent to hinder or delay P.B.’s foreclosure efforts.
- Debtor filed motions to reconsider and reargue the stay relief order; the court amended the stay-relief order and the Debtor then renewed challenges, which are denied.
- This decision resolves the motions to reconsider and rear-argue, reaffirming the prior grant of relief from stay under § 362(d)(4).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Richmond’s filings show a scheme under § 362(d)(4). | Richmond argues no scheme; serial filings are misinterpreted. | P.B. argues serial filings on the eve of events indicate a scheme to delay creditors. | Yes, timing supports a scheme under § 362(d)(4). |
| Whether res judicata bars collateral attack on the Foreclosure Judgment on extrinsic fraud grounds. | Richmond alleges extrinsic fraud by foreclosure action lawyer. | P.B. contends extrinsic fraud claims are insufficient; res judicata applies. | Extrinsic fraud not shown; res judicata bars collateral attack. |
| Whether the Foreclosure Judgment was a judicial act and not ministerial for Rooker-Feldman. | Richmond contends entry was ministerial. | Court held entry judicial; Rooker-Feldman applies. | Entry judicial; Rooker-Feldman applies. |
| Whether the Debtor’s injuries are those caused by the Foreclosure Judgment. | Richmond claims injuries from fraud pre-dating the judgment. | Injuries arise from the Foreclosure Judgment itself, not alleged pre-judgment fraud. | Injuries caused by the Foreclosure Judgment; Rooker-Feldman applies. |
Key Cases Cited
- In re 231 Fourth Ave. Lyceum, LLC, 506 B.R. 196 (Bankr.E.D.N.Y.2014) (timing of Lyceum’s filing supported stay relief ruling)
- In re 231 Fourth Ave. Lyceum, LLC, 513 B.R. 25 (Bankr.E.D.N.Y.2014) (reconsideration/appeal context; prior rulings on collateral attack)
- In re Richmond, 513 B.R. 34 (Bankr.E.D.N.Y.2014) (court’s third decision rejecting collateral attack arguments)
- Rexnord Holdings v. Bidermann, 21 F.3d 522 (2d Cir.1994) (judicial proceedings continue until judgment entered)
- Hoblock v. Albany County Bd. of Elections, 422 F.3d 77 (2d Cir.2005) (Rooker-Feldman four-part test)
- Marvel Characters, Inc. v. Simon, 310 F.3d 280 (2d Cir.2002) (res judicata precludes relitigation of claims that could have been raised)
- Altman v. Altman, 150 A.D.2d 304 (N.Y. App.Div.1989) (extrinsic vs intrinsic fraud considerations in collateral attacks)
- In re Slater, 200 B.R. 491 (E.D.N.Y.1996) (extrinsic fraud concept in collateral attack analysis)