472 B.R. 98
10th Cir. BAP2012Background
- Debtor filed a Chapter 13 petition March 21, 2005 in New Mexico and was not listed in schedules; Notice was not mailed to Defendants.
- Defendants Deutsche Bank and its loan servicer served an amended foreclosure complaint postpetition on March 29, 2005.
- Defendants learned of Debtor’s bankruptcy on April 11, 2005 and stayed further action, but did not dismiss the foreclosure proceeding.
- A relief-from-stay motion was granted July 1, 2005; Debtor’s Chapter 13 case was dismissed July 13, 2005.
- Foreclosure judgment and sale occurred in December 2005 and January 2006, respectively; Debtor later pursued an adversary proceeding alleging willful stay violation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether postpetition service of the amended foreclosure complaint violated the stay and was willful | Debtor asserts willful violation due to continued action after notice | Defendants argue they lacked knowledge of the stay when serving the amended complaint | No willful violation; initial violation occurred pre-knowledge, later actions were after relief from stay and dismissal |
| Whether continuing the foreclosure after learning of the bankruptcy breaches stay remedies | Debtor contends failure to remedy and re-serve caused damages | Defendants stayed proceedings after learning of the bankruptcy and pursued relief from stay | Not a basis for damages because actions occurred post-stay after relief from stay and dismissal |
| Whether the case is barred by Rooker-Feldman from challenging the Foreclosure Judgment | Debtor seeks federal relief for state-court proceedings | State-court judgment cannot be reviewed in federal court; arguments rest on state law | Rooker-Feldman bars review of the Foreclosure Judgment and related state-court rulings in this proceeding |
| Whether the Adversary Proceeding properly challenges the state-court foreclosure under § 362(k) and the stay | Debtor seeks damages for stay violation connected to foreclosure | Actions post-stay do not support a § 362(k) claim when relief from stay obtained | § 362(k) claims focus on stay pendency; post-relief actions are not stay violations; damages rejected |
Key Cases Cited
- Diviney v. NationsBank of Tex., N.A. (In re Diviney), 225 B.R. 762 (10th Cir. BAP 1998) (stay violations and remedies under § 362(k))
- In re Johnson, 501 F.3d 1163 (10th Cir. 2007) (willful violation standard and knowledge requirement)
- Mo's Express, LLC v. Sopkin, 441 F.3d 1229 (10th Cir. 2006) (Rooker-Feldman and foreclosure context guidance)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005) (superiority of preemption and related principles; standard of review cited)
- Bolden v. City of Topeka, 441 F.3d 1129 (10th Cir. 2006) (Rooker-Feldman and related doctrine application)