Court Opinion

ID: 3196568
Source: CourtListenerOpinion
Date Created: 2016-04-21 17:00:31.856295+00
Date Added: 2024-06-11T14:37:10.004925
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 _____________

                                      No. 15-1972
                                     _____________

    In re: JAMES ALBERT D'ANGELO, SR. & CAROLYN MARIE D'ANGELO,
                                           Debtors

         CAROLYN MARIE D'ANGELO; JAMES ALBERT D'ANGELO, SR.,
                                        Appellants

                                             v.

              JP MORGAN CHASE BANK, NATIONAL ASSOCIATION
                             ______________

                     On Appeal from the United States District Court
                        for the Eastern District of Pennsylvania
                          (District Court No. 2-14-cv-02084)
                          District Judge: Hon. Jan E. DuBois
                                    ______________

                   Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                  January 11, 2016
                                  ______________

         Before: MCKEE, Chief Judge, AMBRO, and SCIRICA, Circuit Judges

                              (Opinion filed: April 21, 2016)

                               _______________________

                                      OPINION*
                               _______________________

*
 This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
MCKEE, Chief Judge

       James Albert D’Angelo, Sr. and Carolyn Marie D’Angelo appeal the order of the

District Court affirming the Bankruptcy Court’s dismissal of Count Nine of their Second

Amended Complaint with prejudice. For the reasons that follow, we will affirm.

                                             I.

       Because we write for the parties who are already familiar with the facts and

procedural history, we set forth only the background necessary to our conclusion. The

District Court affirmed the Bankruptcy Court’s dismissal of the D’Angelos’ attempt to

invalidate their note and mortgage pursuant to 11 U.S.C. § 544(a) and (b). The District

Court also held that the Bankruptcy Court had properly concluded that the Rooker-

Feldman doctrine barred review of the state court’s equitable lien order.

       While the § 544 appeal was pending, the D’Angelos commenced another

proceeding, seeking to avoid as a preferential transfer the equitable lien against the

property pursuant to 11 U.S.C. § 547. The Second Amended Complaint filed by the

D’Angelos contained a total of nine counts. The Bankruptcy Court initially dismissed all

of the counts in the D’Angelos’ Second Amended Complaint, except Count Nine, which

sought to avoid the equitable lien as a preferential transfer. In reviewing Count Nine, the

Bankruptcy Court concluded that the equitable interest acquired by JPM through the

equitable lien was an interest assigned to JPM in 2006 when JPM succeeded to the

interests previously held by the prior mortgagee of the property. The Bankruptcy Court

characterized the equitable lien as an “equitable assignment” or “subrogation.” Therefore

                                              2
no interest of the D’Angelos was transferred to JPM during the preference period as

required by § 547(b). This appeal followed.

                                             II.

       We review the Bankruptcy Court’s decision de novo.1 We exercise plenary review

over the District Court’s legal determinations.2 The Bankruptcy Court’s decision will not

be disturbed absent “a clearly erroneous finding of fact, an errant conclusion of law, or an

improper application of law to fact.”3

       The primary issue before us is whether the Bankruptcy Court correctly found that

the D’Angelos could not establish that the 2011 equitable lien order imposed by the state

court transferred a property interest to JPM such that it was a voidable transfer under 11

U.S.C. § 547(b). This provision allows a bankruptcy trustee to recover certain transfers

of interests in property made by a debtor within 90 days prior to filing a petition in

bankruptcy.4

       The D’Angelos allege their original pleadings demonstrate that the equitable lien

involved a transfer of an interest in their home and JPM’s admission to fraud establishes

1
  See In re Hechinger Inv. Co. of Del., 298 F.3d 219, 224 (3d Cir. 2002) (citing In re
Telegroup, Inc., 281 F.3d 133, 136 (3d Cir. 2002)).
2
  See In re Trans World Airlines, Inc.,145 F.3d 124, 131 (3d Cir. 1998).
3
  In re 15375 Memorial Corp., 589 F.3d 605, 616 (3d Cir. 2009) (citing In re SGL Carbon
Corp., 200 F.3d 154, 159 (3d Cir. 1999)).
4
   There are several elements that a debtor must satisfy to establish such a claim: (1) a
transfer of an interest of the debtor in property; (2) the transfer was made to or for the
benefit of a creditor of the debtor; (3) the transfer was made on account of an antecedent
debt; (4) the transfer was made while the debtor was insolvent; (5) the transfer was made
either (a) within ninety days of the petition date; or (b) if the creditor was an insider,
within the year of the petition date; and (6) the transfer enabled the creditor to receive
more than it would have received pursuant to a Chapter 7 liquidation. 11 U.S.C. §
547(b)(1)–(5).
                                              3
that the equitable lien involved an interest of the D’Angelos unlawfully transferred to a

fraudulent actor as a matter of law. However, as the Bankruptcy Court succinctly and

correctly explained, the equitable lien given to JPM consisted of nothing more than the

equitable lienholder’s right of subrogation to the rights of the prior lienholder.5 It did not

constitute an assignment of an interest of the D’Angelos’. The Bankruptcy Court

correctly reasoned that, since § 547(b) requires an actual transfer of an interest in

property, the assignment between the lenders fell outside of the scope of § 547(b).

       To the extent that the D’Angelos argue the equitable lien transferred an interest of

theirs where none existed before—allegedly as a result of JPM’s fraud—the District

Court concluded that it was deprived of jurisdiction pursuant to the Rooker-Feldman

doctrine. That conclusion was correct because summary judgment was entered against

the D’Angelos in state court before they filed for bankruptcy in federal court.6

                                             III.

       For the reasons set forth above, we will affirm.

5
  See Lewis v. Diethorn, 893 F.2d 648, 651 (3d Cir. 1990); In re Bridge, 18 F.3d 195, 201
(3d Cir. 1994).
6
  See Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16 (1923) (holding lower federal
courts are courts of original, not appellate, jurisdiction and lack federal jurisdiction to
review final judgment entered by a state court); Madera v. Ameriquest Mortgage Co. (In
re Madera), 586 F.3d 228, 232 (3d Cir. 2009).
                                              4