149 Conn. App. 224
Conn. App. Ct.2014Background
- In 2012 Sidney F. Manning filed a foreclosure action based on a 1987 note and mortgage against property now owned by El‑Achkar; Homeowners Finance held two later-recorded mortgages.
- Manning had filed a Chapter 7 bankruptcy in 1995 and did not list the 1987 note or mortgage on his bankruptcy schedules; the trustee closed the case as a no‑asset case in 1997.
- Defendants moved to dismiss for lack of subject‑matter jurisdiction, arguing the note and mortgage remained property of the bankruptcy estate because they were unscheduled.
- The trial court granted the motion, concluding Manning lacked standing under 11 U.S.C. § 554(d) because unscheduled property remains estate property unless the bankruptcy court abandons it.
- Manning appealed, arguing the state court should have abstained or stayed and referred bankruptcy issues to the Bankruptcy Court, that defendants lacked standing to raise bankruptcy issues, and that the bankruptcy trustee should have been substituted as plaintiff.
- The appellate court affirmed: Manning lacked standing to prosecute the foreclosure; defendants were permitted to raise the jurisdictional issue; and Manning bore the burden to reopen his bankruptcy case or seek substitution of the trustee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state court should abstain/stay and refer bankruptcy issues to Bankruptcy Court | Manning: state court should abstain/stay and refer the bankruptcy ownership question to Bankruptcy Court | Defs: unscheduled mortgage remains estate property; state court lacks jurisdiction over foreclosure because Manning lacks standing | Court: No abstention required; dismissal appropriate because Manning lacks standing; he must reopen bankruptcy if he wants the issue resolved in Bankruptcy Court |
| Whether defendants may raise bankruptcy/standing issue | Manning: defendants lack standing to raise bankruptcy issues (their only interest is subject to his mortgage) | Defs: they have property interests affected by foreclosure and may raise jurisdictional defects | Court: Defendants may raise standing; court must address subject‑matter jurisdiction regardless who raises it |
| Whether court should have substituted bankruptcy trustee as plaintiff | Manning: defendants should have moved to substitute a party plaintiff chosen by Bankruptcy Court | Defs: dismissal proper given lack of plaintiff standing; substitution is plaintiff's burden | Court: Substitution was not required by defendants/court; Manning bore responsibility to seek substitution or to reopen bankruptcy; dismissal stands |
Key Cases Cited
- Dayner v. Archdiocese of Hartford, 301 Conn. 759 (Connecticut Supreme Court) (standard of review on motion to dismiss; construe allegations in plaintiff's favor)
- Assn. Resources, Inc. v. Wall, 298 Conn. 145 (Connecticut Supreme Court) (unscheduled claims remain estate property; debtor lacks standing)
- AvalonBay Communities, Inc. v. Orange, 256 Conn. 557 (Connecticut Supreme Court) (standing as element of subject‑matter jurisdiction)
- Cox v. Aiken, 278 Conn. 204 (Connecticut Supreme Court) (motion to dismiss tests court's jurisdiction)
- Caruso v. Bridgeport, 285 Conn. 618 (Connecticut Supreme Court) (motion to dismiss may assert plaintiff cannot state a cause of action for the court to hear)