507 B.R. 62
Bankr. D.R.I.2014Background
- Debtor filed this adversary alleging TILA/Reg Z violations, rescission, damages, and fees tied to a 2007 mortgage on Rhode Island residence.
- Borrower sent a Notice of Rescission in 2010; lender allegedly refused rescission on June 30, 2010.
- Debtor filed Chapter 13 in 2011, converted to Chapter 7, and received a discharge; the trustee filed a No-Asset Report and the case closed.
- The adversary remained open; the trustee abandoned the estate’s claims, and no proof of claim was filed by defendant.
- Court determined it no longer has bankruptcy subject matter jurisdiction over the matter due to estate abandonment and case closure; dismissal is required.
- The ruling discusses core vs. non-core (related-to) jurisdiction, discretionary retention, and timeliness limitations under TILA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case is within bankruptcy jurisdiction as core or related-to. | Plaintiff contends court retains jurisdiction. | Defendant argues no jurisdiction after estate abandonment. | Not core or related-to; jurisdiction ceased after abandonment. |
| Whether the court should retain jurisdiction to decide merits despite dismissal. | Court should retain to adjudicate claims. | No retention; needs dismissal and refile in another forum. | Discretionary retention denied; dismissal appropriate. |
| Whether TILA rescission and damages timing affect retention of jurisdiction. | Rescission and damages timing support retention as to substantive claims. | Limitations period and modest damages undermine retention. | Not sufficient to overcome dismissal; limitations do not justify retention. |
Key Cases Cited
- In re G.S.F. Corp., 938 F.2d 1467 (1st Cir.1991) (defines core/non-core boundaries under § 157(b)(2) and related-to analysis)
- Starn v. Stern? (Stern v. Marshall), 131 S. Ct. 2594 (2011) (announces limits of bankruptcy court jurisdiction; core vs. non-core framework)
- Quinn v. City of Boston, 325 F.3d 18 (1st Cir.2003) (subject-matter jurisdiction may be raised at any time; waiver cannot confer jurisdiction)
- Morales Feliciano v. Rullan, 303 F.3d 1 (1st Cir.2002) (jurisdiction precedes merits; preference for deciding jurisdiction first)
- Acosta-Ramirez v. Banco Popular de Puerto Rico, 712 F.3d 14 (1st Cir.2013) (burden on plaintiff to show federal jurisdiction; 12(b)(1) standard)