Milian v. Wells Fargo & Co.
507 B.R. 386
S.D. Fla.2014Background
- In 2005 Milian executed a promissory note and mortgage; he defaulted in 2009 and Wells Fargo filed a state-court foreclosure.
- On the day a state-court foreclosure trial was scheduled (Jan 23, 2013), Milian filed a pro se no-asset Chapter 7 petition; he claimed his residence exempt and later received discharge.
- Milian then filed a pro se adversary complaint in bankruptcy naming hundreds of defendants, largely re-asserting that Wells Fargo lacked standing as holder of the note and raising federal statutory claims.
- Wells Fargo moved to dismiss or for abstention, arguing (inter alia) Milian’s claims were pre-petition assets (trustee’s exclusive standing) and that the dispute duplicated the pending state foreclosure.
- The bankruptcy court found Milian filed bankruptcy to delay the state trial, that he failed to list his claims as assets on bankruptcy schedules, applied judicial estoppel, and abstained under 28 U.S.C. § 1334(c)(1); it dismissed/remanded the adversary.
- The district court affirmed, holding abstention and judicial estoppel appropriate and that dismissal was not erroneous or biased against Milian’s pro se status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bankruptcy court erred by abstaining under 28 U.S.C. § 1334(c) | Milian sought federal adjudication of lien validity and statutory claims in bankruptcy | Wells Fargo argued the adversary duplicates state foreclosure issues, forum shopping, and state law predominates | Court affirmed abstention under § 1334(c)(1); state-court foreclosure predominated and factors (estate administration, forum shopping, related state action) favored abstention |
| Whether judicial estoppel should bar Milian’s claims | Milian said omission of claims from schedules was inadvertent and should be allowed to amend | Wells Fargo argued claims were pre-petition assets not scheduled; omission waived claims and estoppel applies | Court affirmed sua sponte application of judicial estoppel: claims were undisclosed assets, debtor had motive to conceal (filed to delay trial), estoppel proper |
| Whether dismissal of the adversary was improper or biased against a pro se litigant | Milian contended the bankruptcy judge was biased and procedure was unfair | Wells Fargo maintained dismissal followed review, liberal construction of pro se filings, and correct application of law | Court held dismissal proper; judge appropriately considered pro se status, questioned Milian, and reached lawful conclusions |
| Whether bankruptcy jurisdiction under § 1334(c)(2) required abstention | Milian implied federal forum appropriate; did not contest abstention framework specifically | Wells Fargo argued alternate abstention bases exist; primary reliance on § 1334(c)(1) discretionary abstention | Court found it unnecessary to decide § 1334(c)(2) because § 1334(c)(1) abstention was dispositive |
Key Cases Cited
- In re Englander, 95 F.3d 1028 (11th Cir. 1996) (standard for appellate review of bankruptcy factual findings)
- In re Piper Aircraft Corp., 244 F.3d 1289 (11th Cir. 2001) (de novo review of mixed questions of law and fact)
- Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002) (judicial estoppel and debtor’s duty to disclose assets)
- Barger v. City of Cartersville, Ga., 348 F.3d 1289 (11th Cir. 2003) (doctrine of judicial estoppel may be raised sua sponte)
- Superior Crewboats, Inc. v. Primary P & I Underwriters (In re Superior Crewboats), 374 F.3d 330 (5th Cir. 2004) (failure to disclose claims is a representation that no such claim existed)
- McKaskle v. Wiggins, 465 U.S. 168 (1984) (limits on judicial obligation to provide legal advice to pro se litigants)