Jones v. First Bank (In Re Exquisite Designs by Castlerock & Co.)
664 F. App'x 382
| 5th Cir. | 2016Background
- Exquisite Designs (Chapter 11) was owned by Brad Jones; First Bank held secured promissory notes on seven properties (Mortgaged Properties).
- Bankruptcy plan (Sept 2013) preserved First Bank’s deeds of trust; case later converted to Chapter 7 and the trustee abandoned the Mortgaged Properties (Nov 2014).
- First Bank moved for relief from the automatic stay to foreclose; the bankruptcy court entered an Agreed Order lifting the stay on March 2, 2015 (signed by Jones’s special appellate counsel).
- Jones filed state litigation and lis pendens, then (Oct 5, 2015) filed in bankruptcy a motion to vacate the March 2 Order claiming lack of subject-matter jurisdiction; he also filed a second lis pendens.
- The bankruptcy court denied Jones’s motion (Dec 21, 2015), expunged the lis pendens, found Jones violated the automatic stay and Rule 9011, and enjoined further lis pendens filings.
- Jones appealed to the district court (which dismissed for untimeliness); Jones appealed to the Fifth Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether this appeal is timely | Jones contended his post-December 21 motion (construed under Rule 60(b)(4)) rendered the appeal timely | First Bank argued any appeal attacking the March 2 Order was untimely | The court reversed the district court: appeal timely as to the Dec. 21 order (but not timely as to the March 2 Order itself) |
| Whether the March 2 Order is void for lack of jurisdiction | Jones argued the bankruptcy court lacked jurisdiction over abandoned property when it lifted the stay | First Bank argued Jones had notice and opportunity to challenge the March 2 Order and the appeal of that order is untimely | The bankruptcy court’s denial of a Rule 60(b)(4) challenge was affirmed: March 2 Order not void under Rule 60(b)(4) and cannot be collaterally attacked as substitute for a timely appeal |
| Whether Jones could use Rule 60(b)(4) to vacate the March 2 Order | Jones relied on Rule 60(b)(4) to void the earlier order | First Bank asserted Rule 60(b)(4) is limited and not a substitute for appeal | Held for First Bank: Rule 60(b)(4) inapplicable because Jones had opportunity to contest the March 2 Order and the circumstances do not show total lack of jurisdiction |
| Whether the bankruptcy court erred in expunging lis pendens | Jones argued the expungement was improper and First Bank lacked standing after selling properties | First Bank maintained expungement and sanctions were proper | Expungement/sanctions were not reviewed on appeal (argument waived); court stated outcome would be the same even assuming standing issues |
Key Cases Cited
- In re Berman-Smith, 737 F.3d 997 (5th Cir.) (timely notice of appeal required; untimeliness deprives courts of jurisdiction)
- Grant v. Cuellar, 59 F.3d 523 (5th Cir.) (pro se filings construed liberally)
- In re Bell Family Trust, [citation="575 F. App'x 229"] (5th Cir.) (Rule 60(b)(4) collateral-attack limits where party had opportunity to challenge jurisdiction)
- In re Texas Extrusion Corp., 844 F.2d 1142 (5th Cir.) (appellate review may address merits to conserve judicial economy)
- In re Plunk, 481 F.3d 302 (5th Cir.) (same standard of review for bankruptcy and district courts)
- Callon Petroleum Co. v. Frontier Ins. Co., 351 F.3d 204 (5th Cir.) (denial of Rule 60(b)(4) reviewed de novo)
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (U.S.) (a judgment is not void merely because erroneous)
- Picco v. Global Marine Drilling Co., 900 F.2d 846 (5th Cir.) (res judicata bars collateral attack on jurisdiction when party had opportunity to challenge)
- Nemaizer v. Baker, 793 F.2d 58 (2d Cir.) (defining situations where a judgment is truly void)