Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00034/USCOURTS-casd-3_17-cv-00034-2/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 (District or BAP)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

IN RE: STEVEN HARRY LUCORE, SR. 

and JUDY LYNNE LUCORE,

 Debtors. 

STEVEN HARRY LUCORE, SR., et al., 

Plaintiffs and Appellants,

 v. 

U.S. BANK, N.A., AS TRUSTEE, etc., et 

al., 

Defendants and Appellees.

Civil No.: 17cv34-JAH (JLB) 

Bankruptcy Adversary No. 16-90149-MM 

ORDER:

1. AFFIRMING THE ORDER OF THE

BANKRUPTCY COURT; AND 

2. DENYING APPELLANTS’ EX

PARTE APPLICATION

Steven H. Lucore, Sr. and Judy L. Lucore (“Appellants”), proceeding pro per, appeal 

from an order of the United States Bankruptcy Court for the Southern District of California

granting U.S. Bank, N.A.’s (“Appellee”) motion to dismiss the adversary proceeding. See 

Doc. Nos. 1, 32-8. The issues on appeal have been fully briefed and argued. Having

considered the parties’ submissions and for the reasons set forth below, the Court 

AFFIRMS the order of the Bankruptcy Court. 

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Additionally, on June 1, 2018, Appellants filed before this Court an Ex Parte

Application for an order vacating a September 2012 bankruptcy court order terminating 

the automatic stay with respect to U.S. Bank in a separate bankruptcy case; an order not 

issued by the bankruptcy court in the instant case and not currently before this Court on 

appeal. After the bankruptcy court denied reconsideration, the Lucores appealed the 2012 

Order to the Ninth Circuit Bankruptcy Appellate Panel (“BAP”). The BAP affirmed on 

June 24, 2013. Final decisions of the BAP must be timely appealed to the Court of Appeals 

pursuant to Federal Rules of Appellate Procedure (“FRAP”) 4(a)(1) and 6. This Court is 

without jurisdiction to consider Appellants’ Ex Parte Application and it is therefore 

summarily DENIED.

I. BACKGROUND

Since 2010, Appellants have filed two Chapter 13 bankruptcy petitions, initiated three 

state court actions, two District Court actions and five appeals in state and federal courts 

including the BAP. See Doc. No. 32-3 at 73-74; Doc. No. 32-8 at 4-9, 14. The first Chapter 

13 bankruptcy petition was initiated on August 25, 2011 and dismissed on August 14, 2013

for failure to timely file an amended plan. See Case No. 13cv1474-H-JMA; Doc. No. 17 at

3. On August 26, 2013, the Lucores filed a second Chapter 13 bankruptcy petition. See

Doc. No. 32-8 at 6 ¶ 9.

Within the two bankruptcy cases, Appellants filed numerous motions and adversary 

pleadings: (1) a motion for reconsideration of an order granting U.S. Bank relief from stay, 

(2) an ex parte motion for reconsideration of the same, (3) an adversary proceeding alleging 

wrongful foreclosure, (4) a motion for contempt of automatic stay (5) emergency motions 

to impose an automatic stay pending adjudication of the contempt motion, (6) a motion to 

extend the automatic stay order in the second bankruptcy case, (7) a renewed motion (filed 

in the second bankruptcy case) to vacate the court’s order granting U.S. Bank relief form 

stay in the first case, (8) a motion to reimpose the automatic stay as to U.S. Bank in the 

second case due to alleged wrongful foreclosure, and (9) a motion to transfer venue to the 

District Court. Doc. No. 32-8 at 4-9. In each of the above-referenced matters Appellants

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challenged the validity of a 2011 non-judicial foreclosure sale to U.S. Bank. Doc. No. 32-

8 at 14.

On September 19, 2016, appellants filed an adversary complaint against U.S. Bank and 

its law firm, Adam Barasch and Severson & Werson, APC, asserting fraudulent 

misrepresentation. Doc. No. 21-2 at 17. Appellants claim that U.S. Bank misrepresented 

facts in its motion for relief from automatic stay in the original bankruptcy proceeding 

when U.S. Bank claimed to have a valid legal interest in the foreclosed property. Id. at 23-

24. Appellants base the alleged misrepresentations on the assertion that the foreclosure of 

their home was void due to a 2009 letter demanding their loan be rescinded under the 

Federal Truth in Lending Act (“TILA”). Id. at 10. Appellants’ prayer for relief included 

a request that the court “issue an order pursuant to 11 U.S.C. §105 (a) and the Court’s 

inherent equitable powers: imposing appropriate monetary sanctions against each 

defendant,” for failing to ensure the accuracy of pleadings. Id. at 26. In addition, Appellants 

sought an order “enjoining and restraining each defendant from engaging in bad faith and 

abusive practices in connection with the preparation, verification, filing and prosecution of 

state court actions... involv[ing] ... claims or liens that have previously been the subject 

of the bankruptcy estate.” Id. at 27.

The bankruptcy court dismissed the adversary proceeding on two grounds. First, the 

court held that the relief sought under 11 U.S.C. § 105(a) and the court’s inherent powers 

was tantamount to seeking recourse for contempt of court. The bankruptcy court dismissed 

the action under Rule 9020, concluding contempt remedies must be sought by motion and 

not in an adversary proceeding. Doc. No. 32-8 at 10. Second, the court ruled that even if 

procedural defects were overlooked, the action required dismissal on discretionary 

abstention grounds. Id. The bankruptcy court noted that the claims were the subject of 

litigation in three other courts within two separate forums1 and were best resolved in the 

 

1 In 2015 the state court sustained a demurrer to the Lucores’ complaint on the ground that two prior 

judgments in favor of U.S. Bank barred re-litigation of the issue. The state court action was on appeal at 

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previously filed actions. In a detailed analysis, the court considered each of the twelve

factors outlined in Tucson Estates and held that abstention was appropriate. In re Tucson

Estates. Inc., 912 F.2d 1162, 1167 (9th Cir. 1990).

On December 29, 2016, the bankruptcy court entered an order dismissing the adversary 

proceeding. Doc. No. 4-3. U.S. Bank filed a motion to correct or amend the Order under 

Federal Rule of Civil Procedure 59 and 60(a),(b). Doc. No. 4-4. The bankruptcy court 

granted the motion and entered the amended order on February 13, 2017. Appellants filed 

the instant appeal prior to entry of the amended order. See Doc. No. 1. To ensure the 

bankruptcy court’s jurisdiction, this Court granted a limited remand to allow the 

bankruptcy court to re-enter its amended order. Doc. No. 23. The final judgment subject to 

appeal under Federal Rule of Bankruptcy Procedure (“FRBP”) 7054 is the bankruptcy 

court’s re-entered Amended Order on Motion to Dismiss Adversary Complaint. Doc. No. 

24-1 at 1. Appellants’ appeal is therefore treated as filed on the date of entry of the final 

judgment. FRBP 8002(a)(2).

II. ISSUES 

Did the Bankruptcy court err in dismissing the adversary complaint:

(a) on the basis that the relief sought was tantamount to a contempt motion; and/or

(b)on discretionary abstention grounds? 

III. JURISDICTION AND STANDARD OF REVIEW 

This Court has jurisdiction to hear appeals from a final order of the bankruptcy court

pursuant to 28 U.S.C. § 158(a); See In re AFI Holding, Inc., 530 F.3d 832, 836 (9th Cir. 

2008) (“[A] bankruptcy court order is final and thus appealable where it (1) resolves and 

seriously affects substantive rights and (2) finally determines the discrete issue to which it 

 

the time the bankruptcy court dismissed the adversary proceeding. A district court case (case 

no.15cv2246) was also stayed pending the outcome of the state court action. On February 22, 2017 the 

The California Court of Appeal affirmed the lower court’s ruling and held that all claims challenging the 

validity of the foreclosure were barred the doctrine of res judicata.

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is addressed.”) The dismissal of Appellants’ adversary complaint constitutes a final 

appealable order. Id. 

A bankruptcy court’s decision to grant a motion to dismiss an adversary proceeding is 

reviewed de novo. Henry A. v. Willden, 678 F.3d 991, 998 (9th Cir.2012); In re Levander, 

180 F.3d 1114, 1118 (9th Cir. 1999) (a district court reviews a bankruptcy court’s 

conclusions of law de novo, and its findings of fact for clear error.) Whether a case meets 

the requirements of the abstention doctrine being invoked is also reviewed de novo. 

Garamendi v. Allstate Ins. Co., 47 F.3d 350, 354 (9th Cir. 1995), aff’d sub nom. 

Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996). Once the reviewing court 

determines that the requirements have been met, it reviews the decision to abstain for abuse 

of discretion. Id. Appellants must show that the decision to abstain was “illogical, 

implausible, or without support in the inferences that may be drawn from the record.” 

United States v. Hinkson, 585 F.3d 1247, 1261 (9th Cir.2009) (en banc); See also In re 

Conejo Enters., Inc., 96 F.3d 346, 351 (9th Cir. 1996) (decisions committed to the 

bankruptcy court’s discretion will be reversed only if based on an erroneous conclusion of 

law or when the record contains no evidence on which the bankruptcy court rationally 

could have based that decision). The Court may affirm on any ground supported by the 

record. Vestar Dev. II, LLC v. Gen. Dynamics Corp., 249 F.3d 958, 960 (9th Cir.2001).

IV. DISCUSSION 

A. Adversary Proceedings: FRBP 7001

Part VII of the Bankruptcy Rules governs adversary proceedings. See Barrientos v. 

Wells Fargo Bank, N.A., 633 F.3d 1186, 1189 (9th Cir. 2011). Rule 7001 describes which 

matters qualify as an “adversary proceeding.” FRBP 7001. Any such matter not listed 

under Rule 7001 is deemed a contested matter governed by Rule 9014. Barrientos, 633 

F.3d at 1189. U.S. Bank argues that the Lucores fail to point to any Rule 7001 category 

that covers the claims for sanctions. Appellants do not dispute that contempt proceedings 

must be brought by motion pursuant to Rule 9014. Instead, Appellants argue that the 

bankruptcy court improperly misconstrued the complaint as seeking contempt remedies. 

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Appellants’ adversary complaint outlined four requests within the prayer for relief. The 

first two are at issue on appeal.

1. Request for “Appropriate Monetary Sanctions”

Appellant’s prayer for relief sought an order from the bankruptcy court for 

“appropriate monetary sanctions” pursuant to its authority under 11 U.S.C § 105(a) and 

“the Court’s inherent equitable powers.” Section 105(a) gives the Bankruptcy court 

authority to impose, as a remedial measure, sanctions for ordinary civil contempt. In re 

Dyer, 322 F.3d 1178, 1189–90 (9th Cir. 2003) (noting that although the availability of civil 

contempt sanctions under § 105(a) has a checkered past in our circuit, the recent precedent 

makes clear that this remedy is available.) A bankruptcy court may also impose monetary 

sanctions pursuant to its inherent powers under §105 if it determines that bad faith exists. 

Miller v. Cardinale (In re DeVille), 280 B.R. 483, 492 (9th Cir.BAP 2002), aff’d, 361 F.3d 

539 (9th Cir.2003) (citing Chambers v. NASCO, 501 U.S. 32, 50 (1991)). 

Considering the allegations in Appellants’ adversary complaint and the lack of 

reference to any violation of a specific and definite court order, it appears Appellants 

sought monetary sanctions under a theory of bad faith rather than civil contempt. In either 

case, the bankruptcy court properly construed Appellants’ request for sanctions as one that 

must be sought by motion under Rule 9014 as a contested matter. In its opening brief 

however, Appellants abandon their primary prayer for relief.

2. Injunctive or Equitable Relief and Declaratory Judgment 

Appellants assert that the crux of their complaint centered on their second request 

for injunctive relief and declaratory judgment. In Appellants’ opening brief, they first 

contend that the court erred by holding them to the same stringent standards as legal 

counsel. They argue that by converting the adversary complaint to a motion for contempt, 

the bankruptcy court circumvented its responsibility to liberally construe the allegations 

against appellees for abuse of process and misusing the legal process. 

In response, Appellees argue that the complaint never mentions abuse of process or 

declaratory relief, nor does it allege the elements of those claims. Nonetheless, the Lucores 

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maintain that the adversary complaint sought a declaratory judgment finding that 

defendants submitted false and fraudulent documents to the bankruptcy court to procure an 

order for relief from stay. Appellants also contend that the complaint sought to enjoin U.S. 

Bank from advancing further action against them and their property.

In pertinent part, Rule 7001 describes an adversary proceeding as: 

(7) a proceeding to obtain an injunction or other equitable relief, except when a 

chapter 9, chapter 11, chapter 12, or chapter 13 plan provides for the relief; and 

(9) a proceeding to obtain a declaratory judgment relating to any of the foregoing.

As the District Court for the Eastern District of California recognized:

A declaratory relief claim operates “prospectively,” not to redress past 

wrongs...[and] brings to the present a litigable controversy, which otherwise might 

only be tried in the future. As an equitable remedy, declaratory relief is dependent 

upon a substantive basis for liability and has no separate viability if all other causes 

of action are barred. (Citations omitted) (Emphasis added).

Flores v. EMC Mortg. Co., 997 F. Supp. 2d 1088, 1111 (E.D. Cal. 2014).

Even if the bankruptcy court erred to the extent that it dismissed the entire complaint 

as a contempt proceeding, including those portions of the complaint seeking a declaratory 

judgment in relation to Appellants’ request for an injunction, the adversary complaint filed 

by the Lucores sought to redress alleged wrongs of a previously dismissed bankruptcy case 

– not a prospective wrong. See Flores, 997 F. Supp. 2d at 1112. (finding that the complaint 

failed to substantiate an independent claim for declaratory relief when the claims alleged 

sought to redress past alleged wrongs in connection with authority to foreclose on the 

property.) The bankruptcy court correctly determined that granting the relief sought by 

Appellants would “require the court to find the loan was rescinded....” It is clear in Flores,

that “declaratory relief does not serve to furnish a litigant with a second cause of action for 

the determination of identical issues.” (Internal quotations and citations omitted). Id. This

axiom holds especially true when the same issues are being, or have been, litigated in 

various other courts within multiple forums. 

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3. Conclusion 

The Court finds that the Bankruptcy Court properly construed the complaint as a 

request for sanctions that should have been brought by motion. The Court also finds that 

the request for sanctions was properly dismissed pursuant to Rules 7001 and 9014. To the 

extent that Appellants seek reversal only upon the merits of their request for injunctive and 

declaratory relief, the Court finds that their claim is legally deficient. Such forms of relief 

are not standalone claims, but remedies available upon an initial finding of liability on a 

substantive claim. The Court finds the complaint failed to allege a prospective wrong or an 

independent cause of action that has not been barred by previous judicial determinations.

B. Discretionary Abstention: 28 U.S.C. § 1334

Appellants argue that the bankruptcy court’s reliance on the abstention doctrine was 

improper on various grounds. Section 1334(c)(1) of Title 28 of the United States Code 

governs permissive or discretionary abstention and sets forth the circumstances in which a 

bankruptcy court may abstain from hearing a particular proceeding. Section 1134(c)(1) 

states:

Except with respect to a case under chapter 15 of title 11, nothing in this section prevents 

a district court in the interest of justice, or in the interest of comity with State courts or 

respect for State law, from abstaining from hearing a particular proceeding arising under 

title 11 or arising in or related to a case under title 11.

Appellant’s adversary proceeding was filed in a Chapter 13 case, arising under Title 11. 

The bankruptcy court therefore acted within its authority to consider abstention. The Court 

considers the twelve-factor test2 outlined in Christensen v. Tucson Estates, Inc. (In re 

 

2 The factors include: (1) the effect or lack thereof on the efficient administration of the estate if a Court 

recommends abstention,(2) the extent to which state law issues predominate over bankruptcy issues, (3) 

the difficulty or unsettled nature of the applicable law, (4) the presence of a related proceeding commenced 

in state court or other nonbankruptcy court, (5) the jurisdictional basis, if any, other than 28 U.S.C. § 1334, 

(6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case, (7) the 

substance rather than form of an asserted ‘core’ proceeding, (8) the feasibility of severing state law claims 

from core bankruptcy matters to allow judgments to be entered in state court with enforcement left to the 

bankruptcy court, (9) the burden of [the bankruptcy court's] docket, (10) the likelihood that the 

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Tucson Estates), 912 F.2d 1162 (9th Cir.1990) to determine whether the bankruptcy court’s 

application of the abstention doctrine was an abuse of discretion. It is useful, however, to 

first give consideration to the lengthy procedural history which shapes the litigation in this 

case and the issues now before the Court on appeal.

On November 22, 2010, Appellants filed a complaint in San Diego County Superior 

Court against U.S. Bank N.A., Recontrust Company N.A., and Bank of America N.A. 

(“2010 state court action”) to restore title to the property, enforce rescission, and void the 

deed of trust (caseno. 37-2010-00072157-CU-OR-EC). See Doc. No. 32-3 at 73. 

Appellants’ complaint also included a claim for trespass on the contract, deceptive business 

practices, wrongful conversion, violation of Civil Code § 2923.5, filing a false document 

and intentional misrepresentation. Id. U.S. Bank filed a demurrer. Id. On April 15, 2011, 

at the hearing on Defendant’s demurrer, the Superior Court dismissed the complaint on the 

record without leave to amend. See Id. On May 3, 2011, the Superior Court issued an 

Order and Judgment dismissing Plaintiffs’ entire case with prejudice. See Id. at 134. The 

record does not reflect whether Appellants filed an appeal. Approximately three months 

after dismissal of the case, on August 18, 2011, the property was sold to U.S. Bank at a 

trustee’s sale in a non-judicial foreclosure. Doc. No.32-3 at 71; See also Doc. No. 32-8 at 

4-5.

On August 25, 2011, the Lucores filed their first Chapter 13 bankruptcy petition. 

Doc. No. 32-8 at 4-5. Appellants made numerous unsuccessful attempts to extend the 

automatic stay, filed an adversary proceeding against U.S. Bank alleging wrongful 

foreclosure, and filed three contempt motions against U.S. Bank alleging that it was in 

contempt of the automatic stay; despite the court granting and affirming relief from stay. 

See Doc. No. 32-8 at 5-6 ¶¶ 2-8. In a November 9, 2012 Order denying Appellants’ motion 

for reconsideration, the bankruptcy court reminded Appellants that the court would not 

 

commencement of the proceeding in bankruptcy court involves forum shopping by one of the parties,(11) 

the existence of a right to a jury trial, and (12) the presence in the proceeding of non-debtor parties.

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address their claims of wrongful foreclosure. Doc. No. 10-2 at 27. On February 7, 2013, 

the bankruptcy court dismissed the first adversary proceeding on two grounds: (1) the 

claims were barred by res judicata and (2) the identical causes of action had previously 

been addressed and dismissed in the 2010 state court action. See Doc. No. 32-8 at 5 ¶5.

On June 12, 2013, the bankruptcy court denied the Lucore’s third contempt motion. 

See Id. at 5-6 ¶6. The Lucore’s appealed this decision to the U.S. District Court and the 

District Court affirmed. Id. The first bankruptcy case was dismissed on August 14, 2013. 

Id. at 6 ¶8. The record does not reflect whether Appellants appealed the final order 

dismissing the case. 

Less than two weeks after dismissal, Appellants filed a second Chapter 13 petition. 

Id. at 6 ¶9. Between August 26, 2013 and October 2015, the Lucores also filed a second 

adversary proceeding, two additional state actions3

, and two federal actions4 against U.S. 

Bank and its law firm, reasserting their recession claims and right to clear title. Id. at 6-8 

 

3 (1) Steven H. Lucore, Sr.,et al., v. U.S. Bank, N.A., as Trustee, etc. et al.,Case No. 37-2013-00069963-

CU-OR-CTL. This suit was dismissed on demurrer on January 22, 2014 on the ground that it was barred 

by res judicata. The Lucores appealed the dismissal, which was affirmed by the California Court of Appeal 

on December 19, 2014. See Cal. Ct. Appeal, Case No. D065486. 

 (2) Steven H. Lucore, Sr., et al., v. U.S. Bank, N.A., as Trustee, etc. et al., Case No. 37-2015-00029825-

CU-OR-CTL. This suit was dismissed on March 3, 2016 on the ground that it was barred by res judicata. 

The Lucores appealed the dismissal on March 22, 2016. The California Court of Appeal affirmed on

February 22, 2017. See Cal. Ct. Appeal, Case No. D070103.

4 (1) Lucore, Sr. et al v. Zeff et al., Case No. 3: 15-cv-00910- JLS-MDD. The Lucores filed a complaint 

in district court against Michael D. Zeff and the law firm Rosenthal, Withem, & Zeff (attorneys 

representing U.S. Bank in unlawful detainer proceedings). The District Court granted Defendants’ motions 

to dismiss and dismissed the Lucores’ third amended complaint with prejudice on February 26, 2018. On 

July 30, 2018, the court granted an ex parte motion to extend time to appeal. 

 (2) Lucore, Sr. v. US Bank, NA, et al., Case No. 3: 15-cv-2246- JLS-MDD. This complaint alleged 

violations of the Rosenthal Fair Debt Collection Practices Act and the Business and Professions Code. 

The District Court stayed the case pending the resolution of the appeal in the 2015 state court case (Case 

No. 37-2015-00029825). The stay was lifted on August 14, 2017 and a third amended complaint was filed 

on March 13, 2018 with a new cause of action for declaratory relief. Defendant’s motion to dismiss the 

Lucore’s third amended complaint is now pending before the court. 

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¶9-10, 12, 13, 15, 19. In the second adversary proceeding, now before this Court on appeal,

appellants again requested the bankruptcy court to determine the validity of the August 

2011 foreclosure on the merits and find that U.S. Bank acted in bad faith when it moved 

for relief from stay in the first bankruptcy proceeding. 

The basis and primary focus of Appellants’ arguments rely on the legal conclusion 

that “the note and deed of trust became void upon recession.” Yet, no court has made such 

a determination. Appellants’ continued, relentless reiterations of the same argument will 

not make it so. The Lucores’ complaint, much like their oral argument before this Court,

advances the same claims for wrongful foreclosure and recession that were brought (or

should have been brought) before the state court in 2010. The state court: (1) ruled in favor

of U.S. Bank on these claims, (2) determined they are now barred by the doctrine of res 

judicata and (3) had its rulings upheld by the California Court of Appeal (Case Nos. 

D065486 and D070103) and recognized by the federal district court (case no. 15cv2246,

Doc. No. 56). Appellants were therefore precluded from continuing to assert the invalidity 

of the pre-petition foreclosure in the adversary proceeding below. 

Based upon the Court’s de novo review of the record, the Court finds that the case

meets the requirements of the Colorado River abstention doctrine, (Colorado River Water 

Conservation District v. United States, 424 U.S. 800 (1976)), invoked by the bankruptcy 

court and now turns to the Tucson factors to determine whether abstaining was an abuse of 

discretion.

On appeal, Appellants challenge the bankruptcy court’s findings on five of the 

twelve Tucson factors. 

1. First Factor: Efficient Administration of the Bankruptcy Estate 

Appellants allege that the efficient administration of the bankruptcy estate 

outweighed other factors in favor of determining the case on the merits. Appellants attempt 

to relate their request for sanctions and injunctive relief to the efficient administration of 

the post-confirmation bankruptcy estate. The argument is based largely on the erroneous 

assumption that the subject property was “in essence” an asset of the bankruptcy estate. 

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Appellee’s argue, and the Court agrees, that any interest the Lucores held in the property 

was extinguished when the property itself was foreclosed upon in 2011. In re Pearl, 811

F.3d 1120, 1128 (holding that the debtor had no remaining legal interest in the property 

when the property was purchased at a pre-petition foreclosure sale and the deed recorded 

within fifteen days of the sale.) If the Lucores held no legal interest in the property at the 

time the bankruptcy petition was filed, neither did the bankruptcy estate. See In re 

Gendreau, 122 F. 3d 815, 819 (filing bankruptcy cannot give a debtor a greater interest in 

an asset than that which he owned pre-bankruptcy). Further, the bankruptcy court correctly 

determined that any potential claims the Lucores have against Appellees are not property 

of the estate, as the rights to those claims re-vested in the Lucores after the Chapter 13 plan 

was confirmed on August 20, 2016. See 11 U.S. C. §1327. Appellants, therefore, fail to 

establish the court erred in determining that the first factor weighed in favor of abstention. 

2. Second Factor: State Law versus Bankruptcy Issues

Appellants contend that the second factor weighed in favor of abstention because 

there are no state law claims which predominate over the bankruptcy issues. Appellants 

point to the Federal Truth in Lending Act and generally reference, but do not cite, Ninth 

Circuit and Supreme Court opinions that discuss effective recession. However, the Lucores 

do not dispute the filing of three state court actions to restore title to the property and 

enforce rescission by asserting claims for violations of various state statues5

. More 

importantly, the claims asserted in the adversary complaint seek to hold U.S. Bank and its 

attorneys liable for allegedly mispresenting facts to the court in its motion for relief from 

stay. Appellants themselves characterize the complaint as one alleging “abuse of process” 

for filing bad faith pleadings. While the complaint may arguably allege an ethical 

violation, it does not allege a bankruptcy issue. The mere fact that the court in question is 

 

5 The 2013 state court action (Case no. 37-2013-00069963) asserted claims for violation of California 

Civil Code § 2924.17, wrongful foreclosure, quiet title, declaratory relief, unfair business practices (Bus. 

Prof. Code § 17200 et seq.), and cancellation of void instruments.

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a bankruptcy court does not make the substance of the complaint relevant to property of 

the estate, property in the possession of the trustee, or the debtors in possession. The court’s 

finding that the case only involved non-bankruptcy issues and therefore weighed in favor 

of abstention was not erroneous.

3. Fourth Factor: Related Proceedings in State Court or other Nonbankruptcy 

Courts

In their opening brief, Appellants argue that the pending unlawful detainer case is 

not the proper venue to allege abuse of process for filing bad faith bankruptcy pleadings. 

U.S. Bank contends the bankruptcy court correctly found that the adversary complaint was 

based on claims being litigated in the unlawful detainer action and claims brought in the 

2015 state court action pending decision on appeal. Not only did these claims live on in 

two other state court actions, but they were also pending before the District Court.6 This 

factor weighs heavily in favor of abstention. 

4. Seventh Factor: Assertion of a “Core Proceeding”

Appellant’s argument that the complaint constitutes a core proceeding because it 

involved the bankruptcy trustee’s duties in administering the estate and a disputed 

creditor’s claim is legally unsound. Appellees first contend that the complaint does not 

seek to dispute a creditor’s claim or aid in the trustee’s administration of the estate because 

the property in question was foreclosed upon pre-petition, alleviating any need for 

Appellee’s to file a creditor’s claim. Second, the relief sought by appellants does not fall 

under 28 U.S.C. §157(b)(2), nor was the complaint related to any property of the estate. 

The Court agrees with Appellee and finds that this factor also favors abstention. 

5. Tenth Factor: Likelihood of Forum Shopping

The bankruptcy court found that there could be no reason for the filing of a third suit 

on the same issues other than forum shopping. This Court has noted more than seven 

 

6 During oral argument, Appellants reluctantly conceded that the same claims and allegations were 

brought in both pending actions. 

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complaints filed by Appellants in bankruptcy court, state court and District Court, not 

including those removed from state court to federal court and the various appeals from 

each. Appellants’ arguments completely ignore the numerous orders barring further claims 

attacking the validity of the foreclosure proceedings, including the most recent by the 

California Court of Appeal. Accordingly, the Court finds that the record plainly supports 

the bankruptcy court’s findings and weighs in favor of abstention. 

C. Frivolous and Harassing Conduct

Appellants may not continuously force feed the courts with their various theories 

surrounding the validity of the foreclosure through ongoing litigation in multiple actions 

within different forums simultaneously, hoping that one court will decide in their favor. 

As the bankruptcy court aptly noted, such actions are indicative of a vexatious litigant. As 

stated by the Federal Circuit Court in Finch v. Hughes Aircraft Co.:

The [ ] court based its ruling on two independently sufficient grounds for dismissal 

of the complaint.... A trial court has discretion to dismiss a complaint which simply 

duplicates another pending related action. See, e.g., Oliney v. Gardner, 771 F.2d 

856, 859 (5th Cir.1985) (Where “a plaintiff files a second complaint alleging the 

same cause of action as a prior, pending, related action, the second complaint may 

be dismissed.”) (citations omitted) (emphasis in original); Washington Metro. Area 

Transit Auth. v. Ragonese, 617 F.2d 828, 830 (D.C.Cir.1980) (judge “acted within 

his discretion” in dismissing one of two identical cases). [Appellant] however, has 

not demonstrated that the [] judge erred, much less abused [her] discretion, in 

dismissing [Appellants’] complaint as duplicative, and so the judgment must be 

affirmed.... That res judicata precludes relitigation of such claims is too plain for

argument.

926 F.2d 1574, 1577 (Fed. Cir. 1991).

As in Finch, there are no less than three separate grounds on which the bankruptcy 

court’s judgment must be affirmed: (1) the foreclosed property was not part of the 

bankruptcy estate (2) request for sanctions must be filed in a motion – not a separate 

complaint and (3) the complaint was duplicative and barred per res judicata. Under similar 

facts, the Finch court found:

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Any one of these grounds would be sufficient to require affirmance; taken together, they 

present such an overwhelming obstacle to reversal that [Appellants’] decision to file 

this appeal can only be seen as a frivolous waste of the resources of this court and of 

the time and money of his hapless opponent...Thus, the filing of this appeal in itself 

merits sanctions. 

Id. at 1580. Appellants have not addressed the legal authority against their position. 

Accordingly, the bankruptcy court did not abuse its discretion in finding abstention was 

proper. 

Appellants may not seek refuge behind the veil of being untrained, pro se litigants. 

Their status as pro se litigants is undermined by the number of complaints filed, 

appearances made, motions brought and orders appealed in the last eight years7

. See Finch, 

926 F.2d at 1582 (a finding of frivolity is not precluded by an appellant’s status as pro se

in cases where even a non-lawyer should have been aware that his conduct was frivolous). 

Appellants were made aware that their conduct was improper, frivolous, and harassing by 

the bankruptcy court’s amended order directing the issuance of a separate prefiling order. 

Appellants are now on notice by this Court that future suits, proceedings, or actions 

within the District Court for the Southern District of California attempting to re-litigate 

those claims which have been deemed barred by prior judicial determinations may result 

in sanctions.

Accordingly, IT IS HEREBY ORDERED: 

1. The Bankruptcy Court’s Order dismissing the Adversary Complaint is 

AFFIRMED,

2. Appellants’ Ex Parte Application for an Order Vacating the Order Granting 

Relief from Stay and Denying Appellant’s Motion to Extend the Automatic Stay 

is DENIED. 

 

7 Appellants have been a party to fourteen separate unrelated actions within the Southern District of 

California. The Lucores have initiated three removals from state court, appealed six court orders, and 

filed five complaints - one against a district court judge and four against various financial institutions.

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3. NOTICE IS GIVEN that continuous frivolous and harassing conduct as 

described in this order, including but not limited to the filing of future suits, 

proceedings, motions or actions within the District Court for the Southern District 

of California attempting to re-litigate those claims which have been deemed 

barred by prior judicial determinations, may result in sanctions.

IT IS SO ORDERED. 

DATED: August 3, 2018

_________________________________

HON. JOHN A. HOUSTON

UNITED STATES DISTRICT JUDGE

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