UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

www.flsb.uscourts.gov

In re: )

) Case No.: 1:21-bk-14815-LMI

Violeta Marina Nunez, )

) Chapter 13

Debtor. )

____________________________________)

)

Violeta Marina Nunez, )

)

Plaintiff, )

) Adv. Pro. No.: 1:21-ap-01157-LMI

v. )

)

Wilmington Savings Fund Society, )

)

Defendant. )

)

____________________________________)

DEFENDANT WILMINGTON’S MOTION TO DISMISS

PLAINTIFF’S AMENDED COMPLAINT 

Defendant, Wilmington Savings Fund Society dba Christiana Trust, not individually, but 

solely as Trustee for NYMT Loan Trust I (“Wilmington”), by and through its undersigned counsel 

and pursuant to Federal Rule of Civil Procedure 12(b)(6), as incorporated by Federal Rule of 

Bankruptcy Procedure 7012, herby moves to dismiss Plaintiff Violeta Marina Nunez’s 

(“Plaintiff”) Amended Complaint to Avoid a Preference Pursuant to 11 U.S.C. § 547(b) and Other 

Related Relief [Doc. No. 9] (the “Amended Complaint” or “Am. Compl.”), and in support 

thereof respectfully states as follows:

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I. RELEVANT BACKGROUND.

1. On April 21, 2005, Plaintiff took out a loan (the “Loan”) to purchase real property 

located at 14920 SW 82nd Lane, Miami, Florida, 33193-3112 (the “Property). See Am. Compl. 

¶¶ 8-10.

2. Plaintiff defaulted under the Loan, and on August 25, 2020, Wilmington filed a 

complaint to foreclose the mortgage encumbering the Property in the Circuit Court of the Eleventh 

Judicial Circuit in and for Miami-Dade County, Florida (the “State Court”), initiating case 

number 2020-017983-CA-01 (the “Foreclosure Action”). See Am. Compl. ¶ 9. A true and correct 

copy of the Foreclosure Action docket is attached hereto as Exhibit A.1

3. On January 27, 2021, the State Court entered a final judgment of foreclosure against

Plaintiff in the amount of $150,164.85 (the “Final Judgment”). See Am. Compl. ¶ 10; Ex. A.

4. The Property was sold pursuant to the Final Judgment on April 13, 2021 (the 

“Foreclosure Sale”). See Am. Compl. ¶ 11; Ex. A. Wilmington was the successful bidder at the 

Foreclosure Sale with a credit bid of $69,100.00. See Am. Compl. at Exhibit 1; Ex. A. 

5. On April 27, 2021, a certificate of sale was filed in the Foreclosure Action. See id.

6. On May 4, 2021, Plaintiff filed an objection to the Foreclosure Sale. See Ex. A. 

After a hearing on May 18, 2021, the State Court entered an order on May 20, 2021, denying 

Plaintiff’s objection and ordering the clerk to issue a certificate of title. See Ex. A. 

1 Wilmington requests that this Court take judicial notice of the complete docket and documents filed in the 

Foreclosure Action, which may be considered at the motion to dismiss stage. See Ebeh v. St. Paul Travelers, 2010 

WL 5553687, at *3 (M.D. Fla. Oct. 6, 2010) (“On the matter of judicial notice, Fed. R. Evid. 201(f) provides that 

judicial notice of adjudicative facts may be taken at any stage in a proceeding.... A district court may take judicial 

notice of certain facts without converting a motion to dismiss into a summary judgment motion....” and finding that 

the court could take judicial notice of state court pleadings at the motion to dismiss stage (internal citations omitted));

Ferrari v. County of Suffolk, 790 F. Supp. 2d, 34, 47 n.4 (“In the Rule 12(b)(6) context, a court may take judicial 

notice of prior pleadings, orders, judgments, and other related documents that appear in the court records of prior 

litigation and that relate to the case sub judice”); AAMP of Florida, Inc. v. Automotive Data Solutions, Inc., 2014 WL 

12620847, at *6 (M.D. Fla. Aug. 26, 2014).

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7. Also on May 18, 2021, Plaintiff filed a petition for relief under chapter 13 of the 

Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Florida, 

initiating bankruptcy case number 1:21-bk-14815-LMI (the “Bankruptcy Case”). See Ex. A; 

Bankruptcy Case Doc. No. 1. 

8. On May 19, 2021, Plaintiff filed her Complaint to Avoid a Preference Pursuant to 

11 U.S.C. § 547(b) and Other Related Relief (the “Original Complaint”), initiating adversary 

proceeding number 1:21-ap-01157-LMI (the “Adversary Proceeding”). See Adversary 

Proceeding Doc. No. 1. 

9. Thereafter, on June 25, 2021, Plaintiff filed the Amended Complaint. See

Adversary Proceeding Doc. No. 9. In the Amended Complaint, Plaintiff asserts that the 

Foreclosure Sale should be vacated as a preferential transfer under section 547 of the Bankruptcy 

Code. See Am. Compl. ¶¶ 15-18. 

10. The Amended Complaint fails to state a claim upon which relief may be granted 

because (i) Wilmington did not receive more from the Foreclosure Sale than it would have received 

in a chapter 7 liquidation; (ii) the interest transferred to Wilmington at the Foreclosure Sale was 

not on account of an antecedent debt; and (iii) Plaintiff does not have standing to bring this action. 

Accordingly, for these reasons and the reasons set forth more fully herein, this Court should 

dismiss Plaintiff’s Amended Complaint with prejudice. 

II. LEGAL STANDARD.

11. Wilmington brings this motion to dismiss pursuant to Federal Rule of Civil 

Procedure 12(b)(6), as incorporated by Federal Rule of Bankruptcy Procedure 7012, based upon 

Plaintiff’s “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). To 

state a legally sufficient claim, “a complaint must contain sufficient factual matter, accepted as 

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true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009) (citation omitted); accord Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim 

has facial plausibility when the plaintiff pleads factual content that allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 

1949. This “requires more than labels and conclusions, and a formulaic recitation of the elements 

of a cause of action.” Wilchombe v. Tee Vee Toons, Inc., 555 F.3d 949, 958 (11th Cir. 2009) (citing 

Twombly, 550 U.S. at 555). A court is “‘not bound to accept as true a legal conclusion couched as 

a factual allegation.’” Ashcroft, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Thus, “[a] 

pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause 

of action will not do.’” Id. “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid 

of ‘further factual enhancement.’” Id. (quoting Twombly, 550 U.S. at 555).

III. ARGUMENT.

A. Plaintiff’s Claim Fails as a Matter of Law because the Transfer Arising 

from the Foreclosure Sale Did Not Result in Wilmington Receiving More 

Value Than It Would Otherwise Have Received in a Chapter 7 Liquidation 

as the Value of Property at the Time of a Foreclosure Sale is Presumed to 

be the Foreclosure Sale Price.

12. In the Amended Complaint, Plaintiff asserts that the Foreclosure Sale should be 

avoided and vacated under section 547 because Wilmington purportedly received more value as 

the winning bidder at the Foreclosure Sale than it would have otherwise received under a chapter 

7 liquidation of the Debtor’s assets. See Am. Compl. ¶¶ 15, 16. In support thereof, Plaintiff 

incorrectly alleges that the Property was worth $192,000.00 at the time of the Foreclosure Sale 

when Wilmington received it. See Am. Compl. ¶ 12. Plaintiff further asserts that, among other 

reasons, because Wilmington was purportedly owed only $150,164.84 but received the 

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purportedly $192,000.00-valued Property, the Foreclosure Sale constitutes a preferential transfer. 

See Am. Compl. ¶¶ 10, 12, 17. 

13. To avoid the Foreclosure Sale as a preferential transfer, Plaintiff must show that 

Wilmington received more from the Foreclosure Sale than it otherwise would have in a chapter 7 

liquidation. See 11 U.S.C. § 547(b)(5). The Supreme Court of the United States has held that “the 

reasonably equivalent value[] a for foreclosed property[] is the price in fact received at the 

foreclosure sale, so long as all the requirements of the State's foreclosure law have been complied 

with.” BFP v. Resolution Trust Corporation, 511 U.S. 531, 545 (1994) (considering the avoidance 

of a foreclosure sale as a fraudulent transfer under section 548 and finding that the “fair market 

value” and “reasonable forced-sale price” are not proper valuations of a property sold at 

foreclosure). Although the Supreme Court’s ruling in BFP involved section 548, its holding has 

been applied to cases involving avoidable preferences under section 547. See e.g., In re Veltre, 

562 B.R. 890, 893-94 (Bankr. W.D. Pa. 2017), aff’d, 2017 WL 3481077 (W.D. Pa. Aug. 14, 2017), 

aff’d, 732 F. App’x 171 (3d Cir. 2018) (holding that “[u]nder the Supreme Court’s holding in BFP 

... if applicable state foreclosure requirements are met, the price obtained at the foreclosure sale 

constitutes reasonably equivalent value as a matter of law”); In re Pulcini, 261 B.R. 836, 844

(Bankr. W.D. Pa. 2001) (holding that although BFP dealt with section 548, its rationale applies to 

preference actions with “equal force”); In re FIBSA Forwarding, Inc., 230 B.R. 334, 341 (Bankr. 

S.D. Tex.), aff'd, 244 B.R. 94 (S.D. Tex. 1999) (finding that the court was “bound” by BFP and 

holding that a foreclosure sale cannot be avoided as a preferential transfer because it would create 

the same problems that BFP attempted to prevent); In re Cottrell, 213 B.R. 378, 383 (Bankr. M.D. 

Ala. 1996) (holding that BFP “is equally applicable to both kinds of avoiding powers,” fraudulent 

conveyances under section 548 and preferential transfers under section 547).

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14. Particularly persuasive is In re Cottrell, in which a chapter 13 debtor sought to 

avoid a prepetition foreclosure sale as a preference. See In re Cottrell, 213 B.R. 378 at 380.

Adhering to BFP, the Cottrell Court held that the value of the transferred property was the 

foreclosure sale price, reasoning that the foreclosure sale’s “forced sale price ... would 

undoubtedly be duplicated by a trustee in a forced sale in bankruptcy,” and holding that “[t]he 

amount received at the foreclosure sale [was] the reasonably equivalent value of the residence.” 

Id. at 383 (internal quotations omitted).

Here, as in Cottrell, although the Property may have had a fair market value greater than 

the $69,100 price Wilmington paid at the Foreclosure Sale, the liquidation sale price for which a 

chapter 7 trustee would have sold the Property would be the same as the price at foreclosure. As 

such, Wilmington received the same value when it purchased the Property at the Foreclosure Sale 

as it would have received if the Property were sold at a liquidation sale. Further, as with the 

Cottrell Court, this Court should follow the Supreme Court’s guidance in BFP and find that the 

value of the Property at the time of the Foreclosure Sale was Wilmington’s purchase price. 

Accordingly, Wilmington received a prepetition transfer of only $69,100.00 [see Am. Compl. at 

Exhibit 1], rather than a transfer of $192,000.00, and the $69,100.00 Wilmington received was the 

reasonably equivalent value of the Property. As such, Wilmington did not receive more at the 

Foreclosure Sale than it otherwise would have in a chapter 7 liquidation, and Plaintiff’s claim 

consequently fails as a matter of law. This Court should thus dismiss the Amended Complaint 

with prejudice. 

15. Moreover, even if the Property had been subsequently resold by Wilmington for 

more than $69,100.00 after the Foreclosure Sale (which it has not), Wilmington still did not receive 

more than it would have in a chapter 7 liquidation. The fact that a creditor sells property that it 

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purchased at a prepetition foreclosure sale for a profit does not make the foreclosure sale an

avoidable preference. See In re Ehring, 900 F.2d 184, 188-89 (9th Cir. 1990). 

16. Particularly on point is the Ninth Circuit’s In re Ehring in which a creditor 

purchased the debtor’s house for $199,746.41 at a trustee’s sale (nonjudicial foreclosure) and 

shortly thereafter sold the property to a third party for $390,000. See In re Ehring, 900 F.2d 184

at 185-86. The Ehring Court rejected the notion that the value of the property received by the 

creditor through the foreclosure sale was the $390,000 for which the creditor subsequently sold 

the property. See id. at 188-89. Indeed, the Ehring Court held that “[i]f the creditor received 

‘more’ [at the foreclosure sale than it would have in a chapter 7 liquidation] it is only because the 

creditor elected to purchase the property at the foreclosure sale rather than simply accepting the 

receipts of a sale to a third party.” Id. at 188. The Ehring Court noted that it saw “no reason to 

construe section 547 to permit avoidance of an otherwise properly conducted sale based solely on 

the creditor being the highest bidder.” Id. at 189; see In re Wilson, 2020 WL 5542444, at *4 

(Bankr. D.D.C. Sept. 14, 2020) (“There would not be any preference if the Property had been 

bought [at a foreclosure sale] by someone else for a bid of $1.00 more. No preference should exist 

on the basis that [the secured creditor], by way of bidding on its claim, happened to turn out to be 

the highest bidder.”). 

17. Further, the Ehring Court found that the transfer arising from the foreclosure sale

where the creditor received the property was a separate and distinct transfer from the creditor’s 

subsequent sale to the third-party purchaser. See id. As such, the only transfer at issue when 

determining whether the debtor could avoid the foreclosure sale as a preference was the initial 

transfer in which the creditor purchased the property at the foreclosure sale. The subsequent sale 

of the property to the third-party purchaser was irrelevant as “section 547 does not reach a thirdCase 21-01157-LMI Doc 11 Filed 07/12/21 Page 7 of 12
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party purchaser” [id. at 188], and the $390,000 value for which the property sold to the third-party 

purchaser was likewise inapplicable to the avoidable preference analysis. See id. 

18. Moreover, the Ehring Court reasoned that the exact same scenario could have 

developed in a chapter 7 liquidation, as “[t]here is nothing in [section 547] that prohibits the 

creditor from purchasing the property in a liquidation sale-just as at foreclosure. In fact, section 

547(b)(5) likely presumes a liquidation sale similar to the foreclosure sale forced by the 

mortgagee.” Id. As such, the creditor could not have received more in the foreclosure sale than it 

otherwise would have in a chapter 7 liquidation sale, and the foreclosure sale could not be avoided 

as a preferential transfer. 

19. Here, like in In re Ehring, Wilmington purchased the Property at the Foreclosure 

Sale. Although Wilmington has not resold the Property to a third-party purchaser, the value of the 

subject transfer to Wilmington is the amount Wilmington paid when it purchased the Property at 

the Foreclosure Sale ($69,100.00), not the amount for which Wilmington may resell the Property 

to a third-party purchaser or the amount Plaintiff predicts the Property could have sold to a thirdparty in a non-foreclosure sale ($192,000.00). Accordingly, because Wilmington did not receive 

more from the Foreclosure Sale than it would have under a chapter 7 liquidation, Plaintiff’s claim 

fails as a matter of law, and this Court should dismiss the Amended Complaint with prejudice. 

B. Plaintiff’s Claim Fails as a Matter of Law because the Transfer Arising

from the Foreclosure Sale was Not on Account of Antecedent Debt.

21. Because the transfer arising from the Foreclosure Sale was not on account of an 

antecedent debt, Plaintiff’s claim fails as a matter of law. To avoid the Foreclosure Sale as a 

preferential transfer, Plaintiff must show that the transfer was made on account of an antecedent 

debt. See 11 U.S.C. § 547(b)(2). Significantly, a creditor’s purchase of a debtor’s property in a 

foreclosure sale is not payment on an antecedent debt. See In re Wilson, 2020 WL 5542444, at *1 

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(Bankr. D.D.C. Sept. 14, 2020); In re Ehring, 900 F.2d 184 at 188-19. As stated above, the Ehring

Court established that a foreclosure sale at which a creditor purchases its collateral and the 

creditor’s subsequent resale of such collateral are separate legal events and should be treated as 

such. See In re Ehring, 900 F.2d 184 at 188-89. When a creditor purchases a property at a 

foreclosure sale it is acting as a “purchaser,” not as a creditor. See id. “[A] transfer of a property 

to the holder of a perfected lien as the successful bidder at a regularly conducted foreclosure sale 

cannot be a preference: the transfer is to it as the purchaser, not in payment of its claim, and thus 

the transfer is not to it as a creditor on account of its antecedent claim as required by § 547(b)(2) 

for a preference to exist.” In re Wilson, 2020 WL 5542444, at *4 (emphasis in original; internal 

quotations omitted).

22. Here, Wilmington received the Property at the Foreclosure Sale in its capacity as a 

purchaser, not a creditor. Indeed, Wilmington paid value in the form of its credit bid in the amount 

of $69,100.00 [see Am. Compl. at Exhibit 1] in exchange for the Property. Accordingly, 

Wilmington’s receipt of the Property was not in payment of Plaintiff’s debt to Wilmington; rather, 

Wilmington received the Property in exchange for its purchasing bid at the Foreclosure Sale. See 

In re Ehring, 900 F.2d at 189 (“The creditor has no obligation to buy, let alone, bid at the 

[foreclosure] sale.”). Therefore, the transfer to Wilmington at the Foreclosure Sale was not on 

account of antecedent debt, and the Foreclosure Sale thus cannot be avoided as a preferential 

transfer. As such, Plaintiff’s claim fails as a matter of law, and this Court should dismiss the 

Amended Complaint with prejudice. 

C. Plaintiff Lacks Standing to Bring this Action.

23. Because Plaintiff does not have standing to bring this action, her claim fails as a 

matter of law. Plaintiff’s Amended Complaint seeks to avoid the Foreclosure Sale as a preference. 

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See Am. Compl. Doc. No. 9. In bringing this Adversary Proceeding against Wilmington, Plaintiff 

exercised powers that are reserved for a chapter 13 trustee. See In re Richardson, 311 B.R. 302, 

306 (Bankr. S.D. Fla. 2004) (Holding that “Chapter 13 debtors lack standing to utilize the 

avoidance and recovery powers of a trustee under section 544(b)” and dismissing count seeking to 

avoid a purportedly fraudulent transfer of the debtor’s residence). 

There is no statutory authority, or controlling caselaw, by which a chapter 13 debtor can 

exercise a trustee’s avoidance powers. See In re Thompson, 2014 WL 3925277, at *2 (S.D. Ga. 

Aug. 11, 2014); In re Richardson, 311 B.R. 302, 304 (Bankr. S.D. Fla. 2004); In re Holcombe, 

284 B.R. 141, 144-45 (Bankr. N.D. Ala. 2001) (Finding that “a Chapter 13 debtor lacks standing 

to assert the powers set forth in §§ 544 and 547 [based on] both a statutory construction analysis 

and ... a controlling case law analysis); In re Parker, --- B.R. ---, 2021 WL 2315181, at *11 n.129 

(Bankr. S.D. Fla. June 7, 2021) (“The Court does note, however, that if there was a basis to attach 

the sale, only a trustee - and not a chapter 13 debtor - could bring an action to avoid a transfer 

under Chapter 5 of the Bankruptcy Code.”). Accordingly, chapter 13 debtors lack standing to 

bring avoidance actions, including the instant Adversary Proceeding seeking to avoid and vacate 

the Foreclosure Sale as a preferential transfer. Because Plaintiff lacks standing to bring the single 

claim alleged in the Amended Complaint, her claim fails as a matter of law, and this Court should 

dismiss the Amended Complaint. 

IV. CONCLUSION

This Court should dismiss Plaintiff’s Amended Complaint in its entirety and with prejudice 

for failure to state a claim upon which relief can be granted because (i) Wilmington did not receive 

greater value from the Foreclosure Sale than it would have otherwise received in a chapter 7

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liquidation; (ii) the interest transferred to Wilmington in the Foreclosure Sale was not on account 

of Wilmington’s antecedent debt; and (iii) Plaintiff does not have standing to bring this action. 

WHEREFORE, Wilmington respectfully requests that this Court enter an order (i) granting 

this motion; (ii) dismissing Plaintiff’s Amended Complaint in its entirety and with prejudice; and 

(iii) granting any and all further relief as is necessary and just. 

Dated: July 12, 2021. Respectfully Submitted,

/s/ Elizabeth R. Brusa

Elizabeth R. Brusa, Esq.

Fla. Bar No. 125655

BRADLEY ARANT BOULT CUMMINGS LLP

100 N. Tampa Street

Suite 2200

Tampa, FL 33602

Primary email: ebrusa@bradley.com

Secondary email: ddecker@bradley.com

T: (813) 559-5500 | F: (813) 229-5946

Counsel for Wilmington Savings Fund Society dba 

Christiana Trust, not individually, but solely as 

Trustee for NYMT Loan Trust I

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on July 12, 2021, a true and correct copy of the foregoing has 

been furnished to all parties receiving CM/ECF notification via the Court’s CM/ECF system and 

via U.S. Mail or electronic mail, as indicated, to the parties below: 

Via U.S. Mail

Violeta Marina Nunez

14920 SW 82nd Lane

Bldg 12 Unit 205

Miami, FL 33193

Via email

Laila S. Gonzalez

Gianny Blanco 

Freire & Gonzalez, P.A. 

10691 N. Kendall Drive

Suite 207

Miami, FL 33176

courtdoc@fgbkc.com

laila@fgbkc.com

gianny@fgbkc.com

 

/s/ Elizabeth R. Brusa 

Attorney 

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