Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-01084/USCOURTS-caed-2_15-cv-01084-1/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

JAMES L. MACKLIN,

Appellant,

v.

DEUTSCHE BANK NATIONAL TRUST 

CO.,

Appellee.

No. 2:15-cv-01084-JAM

ORDER AFFIRMING JUDGMENT OF THE 

BANKRUPTCY COURT

Appellee Deutsche Bank National Trust Company (“Appellee” 

or “Deutsche Bank”) bought the real property of Appellant James 

L. Macklin (“Appellant” or “Macklin”) at foreclosure sale. 

After Macklin litigated his continued right to the property in 

an adversary bankruptcy proceeding and lost, he litigated it 

again in district court, and a third time on a motion for relief 

from judgment back in bankruptcy court. Now appealing the order 

denying relief, Macklin continues to advance his unfounded 

theory that all courts lack jurisdiction to enter orders against 

him and that Deutsche Bank has no standing to defend its right 

in its property. For the reasons stated below, the Court 

Case 2:15-cv-01084-JAM Document 17 Filed 12/21/15 Page 1 of 9
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affirms the bankruptcy court’s order.1 

I. FACTUAL AND PROCEDURAL BACKGROUND

In April 2006, Macklin took out a loan on his property at 

10040 Wise Road in Auburn, California, secured by a deed of 

trust. See Appellant’s Excerpts of Record (“ER”) at 33. After 

Macklin defaulted on the loan a few years later, he sent a 

letter to the lender and the trustee designated on the deed of 

trust. See id. at 36, 67. The letter was entitled “Notice of 

Rescission” and stated in part:

This is constructive notice of my rescission to the 

above described contracts [referring to loan numbers

listed in the letter]. . . . I will accept the cash 

amount of $125,713.46 as this represents the cash 

payments made by me on the debt side of the ledger, 

and I will expect the return of the original 

promissory notes as listed above so that I may retain 

my property. If you will not, or cannot, return the 

original promissory notes to me, then my deposit 

amount will be returned to me since it was my property 

to begin with. That amount is $659,000.00. No 

further action will be pursued by me if the above 

rescission requests are fulfilled in a timely manner. 

See id. at 67-68. The trustee responded to Macklin’s letter 

advising that it was disputed whether the letter caused an 

automatic recession and how much money Macklin was entitled to.

See id. at 70-72. The letter also stated, “If you wish to 

pursue your claim for rescission of the subject loan, please 

confirm your ability to tender the return of funds in the above 

approximate amount and we will submit your request to the 

beneficiary and/or servicer to either acknowledge the rescission

 

1 This motion was determined to be suitable for decision without 

oral argument. Fed. R. Bankr. P. 8019(b)(3). The hearing was 

scheduled for December 2, 2015.

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or not.” See id. at 72.

Macklin apparently never responded and the property was 

sold at foreclosure sale to Appellee Deutsche Bank. Id. at 125; 

Appellee’s Supplemental Excerpts of Record (“SER”) at 128-29.

Macklin commenced an adversary proceeding against Deutsche 

Bank in the Bankruptcy Court of the Eastern District of 

California in January 2011, alleging that the rescission letter 

automatically made the deed of trust void, so Deutsche Bank 

could not later have obtained rights to that deed of trust. ER 

at 74; SER at 143. 

The bankruptcy court ultimately denied Macklin’s motion for

summary judgment and granted summary judgment in favor of 

Deutsche Bank. See SER at 149-50. Judgment was entered in July 

2013. ER at 111. Macklin attempted to appeal the order 

granting summary judgment to the Bankruptcy Appellate Panel, but 

the Panel dismissed the appeal as untimely. Id. at 112-14; SER 

at 13-14. The bankruptcy case was then closed in April 2014. 

ER at 114.

Meanwhile, Macklin had also sued Deutsche Bank in a 

separate civil action which was removed to the District Court 

for the Eastern District of California. See Macklin v. 

Hollingsworth, 10-cv-01097-MCE-KJN (filed May 3, 2010). The 

district court stayed the case until resolution of the 

bankruptcy matter. See Order at 1 (Doc. #25), Macklin v. 

Hollingsworth, 10-cv-01097-MCE-KJN (dated Oct. 6, 2010). In 

February 2014, the court lifted the stay, and later ruled that 

claim preclusion barred Macklin’s claims – which were 

essentially identical to those raised in his bankruptcy case. 

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See Order at 2 (Doc. #29), Macklin v. Hollingsworth, 10-cv01097-MCE-KJN; Memorandum and Order at 13-14 (Doc. #87), Macklin 

v. Hollingsworth, 10-cv-01097-MCE-KJN. 

Before the district court entered judgment, Macklin filed a 

motion to reopen the adversary proceeding in bankruptcy court. 

See ER at 114. The bankruptcy court granted that motion, and 

Macklin filed a motion for relief under Federal Rule of Civil 

Procedure 60(b), contending that the earlier bankruptcy court 

orders were “void.” Id. at 115. Macklin argued that he should 

not be bound by the court’s prior orders, because “[Deutsche 

Bank] should not have been allowed to defend itself against the 

claims asserted by Macklin, and that it is ‘unfair’ for Macklin 

to be bound by the orders and judgment in this litigation[.]” 

SER at 18 (summarizing Macklin’s arguments and the bases for his 

motion). The bankruptcy court denied Macklin’s motion. ER at 

118-19. 

Macklin now appeals the bankruptcy court’s denial of his 

Rule 60(b) motion. Id. at 119. Appellee Deutsche Bank has 

elected to proceed in the district court (Doc. #1), and this 

Court2 has jurisdiction pursuant to 28 U.S.C. § 158(a). 

II. ISSUES ON APPEAL

Macklin attacks the jurisdiction of the court below and 

 

2 The parties filed notices of related case to inform the Court 

of the similarity between this bankruptcy matter and the district 

court action Macklin filed in 2010. See Notice of Related Case 

(Doc. #4). Chief District Judge Morrison England declined to 

relate the cases so the matter remains before this Court. See

Non-Related Case Order (Doc. #107), Macklin v. Hollingsworth, 10-

cv-01097-MCE-KJN.

Case 2:15-cv-01084-JAM Document 17 Filed 12/21/15 Page 4 of 9
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contests whether Deutsche Bank had standing. Specifically, he

raises two issues on appeal in regard to the bankruptcy court’s 

order denying his Rule 60(b) motion: whether the bankruptcy 

court erred in determining that (1) it had jurisdiction and 

(2) Deutsche Bank had standing, despite Macklin’s purported 

rescission letter.

III. OPINION

A. Legal Standard

The parties disagree about what legal standard applies 

here. Macklin contends that the order below should be reviewed 

“based on a void judgment standard.” Reply at 4. That 

standard, according to Macklin, is that the Court should reverse 

the bankruptcy decision if “the jurisdictional error was 

‘egregious.’” Appellant’s Opening Br. at 4. Deutsche Bank 

states that an abuse of discretion standard applies. Appellee’s 

Opening Br. at 2. 

The Court finds that the bankruptcy court’s decision is 

subject to review for abuse of discretion. 

Lemoge v. United States, 587 F.3d 1188, 1191–92 (9th Cir. 2009); 

In re Summerville, 361 B.R. 133, 139 (B.A.P. 9th Cir. 2007) (“We 

review a bankruptcy court's ruling on a motion for relief from 

judgment (FRCP 60(b)) for abuse of discretion.”) (citation 

omitted). “A bankruptcy court abuses its discretion if it 

applied the wrong legal standard or its findings were illogical, 

implausible or without support in the record.” In re Jensen, 

2015 WL 1019557, at *3 (B.A.P. 9th Cir. Mar. 10, 2015) (citing

TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832 (9th 

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Cir. 2011)).

B. Analysis

Macklin’s theory is that the letter he sent to the lender 

and trustee immediately caused a rescission of the mortgage, 

making the mortgage contract “void.” Because the contract was 

void, according to Macklin, Deutsche Bank had no standing to 

litigate its rights to the security underlying that contract 

(i.e., the property), and the Court had no jurisdiction (either 

personal jurisdiction or subject matter jurisdiction) to 

consider such a void contract. See, e.g., Appellant’s Opening 

Br. at 10 (“Appellee was unable to make such assertion [that it 

holds beneficial interest in the property] based on the void 

contract. Personal jurisdiction and standing were 

unavailing.”); id. at 13 (“The [bankruptcy] court lacked subject 

matter and in personum jurisdiction over a contract that was 

void, [sic] no relief could be found for Appellee for a void

contract, thus, there was not subject matter or personal 

jurisdiction for the court to hear Appellee.”) (emphasis in 

original).

Macklin’s argument misconstrues the concepts of standing 

and jurisdiction. The court below properly determined that 

Deutsche Bank had standing and that the court had jurisdiction 

to hear the issues before it. See SER at 33-37. It applied the 

correct legal standards in evaluating standing and jurisdiction, 

as described below.

Standing requires that the litigant show “an invasion of a 

legally protected interest that is concrete and particularized 

and actual or imminent.” Arizonans for Official English v. 

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Arizona, 520 U.S. 43, 64 (1997) (citing Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560 (1992)) (quotation marks omitted); 

see SER at 36 (applying this standard). Deutsche Bank 

throughout this litigation has contested whether the purported 

rescission letter’s language in fact effected a rescission and

whether the amount of money Plaintiff sought through rescission 

was accurate. Deutsche Bank has also asserted that it had 

rights under the deed of trust lawfully authorizing the 

foreclosure sale. These issues show a clear, concrete, and 

particularized interest in the subject matter of this case, and 

Deutsche Bank has (and has had throughout the life of this case) 

standing to litigate this interest.

Subject matter jurisdiction is proper in federal court 

where the well-pleaded complaint states a cause of action 

arising under federal law, or where the parties present complete 

diversity of citizenship. 28 U.S.C. §§ 1331, 1332. Federal 

courts also have exclusive jurisdiction over property in the 

bankruptcy estate. 28 U.S.C. § 1334(e). 

The case here arose when Macklin filed an adversary 

complaint to adjudicate ownership of the property he claimed in 

his bankruptcy estate. See generally SER at 333-378. Macklin’s

complaint asserted federal claims against Deutsche Bank, such as 

violations of the federal Truth in Lending Act (“TILA”), 

codified at 15 U.S.C. § 1601 et seq. See id. at 357. Subject 

matter jurisdiction was therefore not lacking. See id. at 34-35 

(applying the same standards).

Personal jurisdiction was also not lacking. Deutsche Bank 

availed itself of the court’s jurisdiction, as evidence by 

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(among other things) appearing in the case and filing motions. 

See Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986) amended,

807 F.2d 1514 (9th Cir. 1987).

Nonetheless, Macklin argues that his theory is supported by 

two cases-- Jesinoski v. Countrywide Home Loans, Inc., 135 S. 

Ct. 790 (2015) and Merritt v. Countrywide Financial Corp., 759 

F.3d 1023 (9th Cir. 2014). See Appellant’s Opening Br. at 8, 

12, 18-19. But Macklin’s interpretation of these cases

stretches their holdings and reasoning beyond recognition. In 

reality, neither case supports his position.

Jesinoski held that a borrower need not file a TILA lawsuit 

within three years, and rather, TILA’s three-year requirement 

refers to the period within which the borrow must notify the 

lender of her intent to rescind. 135 S. Ct. at 791. Merritt

held that a plaintiff need not plead ability to tender in order 

to state a TILA claim, although she may need to prove this 

ability by the summary judgment stage. 759 F.3d at 1031, 1033. 

Neither case considered, or even suggested, that a borrower’s 

letter indicating a desire to rescind a loan contract 

automatically divests the court of jurisdiction or deprives any 

party of standing. Indeed, this Court knows of no District 

Court, Ninth Circuit or Supreme Court authority that would 

support such a contention. As described above, Macklin’s theory 

misinterprets the concepts of jurisdiction and standing, and is 

entirely incorrect.

The court below therefore did not abuse its discretion. It 

applied the correct legal standard to accurately determine that 

it had jurisdiction and that Deutsche Bank had standing. 

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IV. ORDER

For the reasons set forth above, the Court AFFIRMS the 

order of the bankruptcy court denying Macklin’s Rule 60(b) 

motion. 

IT IS SO ORDERED.

Dated: December 18, 2015

Case 2:15-cv-01084-JAM Document 17 Filed 12/21/15 Page 9 of 9