Waldo v. Bank of New York Mellon Trust, 21-4050

Background

Charles and Ethanne Waldo obtained a mortgage secured by a deed of trust, defaulted, and later filed bankruptcy while foreclosure proceedings were pending.
A proof of claim was filed in the bankruptcy by Bank of New York Mellon Trust Co., N.A., as Indenture Trustee for IMC Home Equity Loan Owner Trust 1998-7, with Ocwen Loan Servicing, LLC involved in servicing.
The Waldos objected to the proof of claim, not disputing arrearage but asserting the bank/Ocwen lacked authority to enforce the loan; the bankruptcy court granted summary judgment to the bank and Ocwen.
After the case closed, the Waldos moved to reopen and later sought reconsideration, reasserting fraud-on-the-court theories and arguing deficiencies in the bank/Ocwen’s standing and counsel’s appearances.
The bankruptcy court denied reopening and reconsideration; the district court affirmed; on appeal the Tenth Circuit independently reviewed for abuse of discretion and affirmed the denials.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the bankruptcy court abused its discretion in denying the motion to reopen	Waldos: proof of claim was fraudulent or improperly filed; mortgage/servicing contract invalid; relitigation warranted despite time lapse	Bank/Ocwen: reopening would prejudice them, claims are repetitive and previously litigated, no new evidence	Denied—no abuse of discretion; court permissibly weighed passage of time, prejudice, and duplicative allegations
Whether denial of reconsideration (motion to alter or amend) was improper	Waldos: court ignored arguments and evidence, including standing issues; relief warranted because of alleged fraud	Bank/Ocwen: no intervening change in law or new evidence; arguments were available earlier	Denied—reconsideration standards unmet; arguments properly rejected as previously available
Whether Article III standing of the bank/Ocwen required dismissal or prevented proceedings	Waldos: bank/Ocwen lacked Article III standing to file or defend the claim	Bank/Ocwen: Waldos did not timely or properly present standing challenge in motions below	Court: Waldos (appellants) have Article III standing to appeal; the bank’s standing need not be resolved here because Waldos failed to properly press the issue below
Whether the court can review attorneys’ fees and summary-judgment objections on appeal	Waldos: challenge fee award and summary judgment rulings	Bank/Ocwen: fee award became final after appeal notice (no supplemental notice), and summary judgment was not properly appealed	Court lacked jurisdiction to review fee award; summary-judgment challenges are not before the court

Key Cases Cited

Lee v. McCardle (In re Peeples), 880 F.3d 1207 (10th Cir. 2018) (standing is a jurisdictional threshold in bankruptcy appeals)
Spokeo, Inc. v. Robins, 578 U.S. 330 (U.S. 2016) (plaintiff must show Article III standing)
WD Equip., LLC v. Cowen (In re Cowen), 849 F.3d 943 (10th Cir. 2017) (appellate review of bankruptcy court decisions is independent; abuse-of-discretion standard applies)
Woods v. Kenan (In re Woods), 173 F.3d 770 (10th Cir. 1999) (standard for motions to reopen bankruptcy cases)
Rocky Mountain Christian Church v. Bd. of Cnty. Comm’rs, 613 F.3d 1229 (10th Cir. 2010) (abuse-of-discretion defined as arbitrary, capricious, or manifestly unreasonable)
United States v. Buck, 281 F.3d 1336 (10th Cir. 2002) (passage of time does not categorically bar relief for fraud on the court)
Redmond v. Fifth Third Bank, 624 F.3d 793 (7th Cir. 2010) (passage of time is a proper factor in deciding whether to reopen a bankruptcy case)
Servants of Paraclete v. Does, 204 F.3d 1005 (10th Cir. 2000) (standards for granting reconsideration: change in controlling law, new evidence, or correction of clear error/manifest injustice)
Banister v. Davis, 140 S. Ct. 1698 (U.S. 2020) (issues not raised in initial proceedings may be forfeited on reconsideration)
EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241 (10th Cir. 1999) (appellate jurisdictional rules for post-notice-of-appeal events like fee awards)
Lang v. Lang (In re Lang), 414 F.3d 1191 (10th Cir. 2005) (limits on appealing bankruptcy orders not properly before the appellate court)