Court Opinion

ID: 5134199
Source: CourtListenerOpinion
Date Created: 2021-12-11 02:00:35.376739+00
Date Added: 2024-06-11T09:16:37.463776
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
Nos. 21-1084 and 21-1101
CITIMORTGAGE, INC.,
                                                   Plaintiff-Appellee,
                                 v.

JEROME M. DAVIS and LYNNE
TERNIOR-DAVIS,
                                             Defendants-Appellants.
                    ____________________

        Appeals from the United States District Court for the
          Northern District of Illinois, Western Division.
           No. 3:19-cv-50299 — Iain D. Johnston, Judge.
                    ____________________
No. 21-1446
JEROME M. DAVIS,
                                                 Plaintiff-Appellant,
                                 v.

CITIMORTGAGE, INC.,
                                                Defendant-Appellee.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Western Division.
          No. 3:19-cv-50277 — Iain D. Johnston, Judge.
                    ____________________
2                                            Nos. 21-1084, et al.

SUBMITTED SEPTEMBER 22, 2021 — DECIDED DECEMBER 10, 2021
                    ____________________

    Before SYKES, Chief Judge, and FLAUM and BRENNAN, Cir-
cuit Judges.
    BRENNAN, Circuit Judge. For several years, CitiMortgage,
Inc., has ȱȱȱȱȱĴȱ ȱJerome M. Davis
and Lynne Ternoir-Davis over a mortgage the couple took out
on their residence in 2005. After the Davises defaulted on the
ȱȱęȱȱ¢ǰȱ ȱȱȱȱȬ
¢ȱǰȱ  the bankruptcy court later held did
not extend to the debt Davis  ȱǯȱ
    Rather than appeal that ǰȱȱȱĴȱȱ
¢ȱĴȱat court’s ruling—ęǰ ¢ȱĴȱȱ
remove CitiMortgage’s foreclosure action to federal court,
and second, ¢ȱęȱȱȱȱȱCitiMortgage. Da-
vis lost in each of those proceedingsǰȱȱȱ ȱ
 ȱĴ¢ȱȱȱ ȱȱȱ the
foreclosure proceeding.
    ȱȱȱ ȱǯȱȱ e lack jurisdiction
ȱ ȱthe remand order, and Davis ȱ ȱȱȬ
ments challenging ȱĴ¢ȱȱȱȱ . We also
ȱ ȱȱȱȂȱdismissal of Davis’s suit against
CitiMortgage.
                                I
    This dispute ȱȱ Ǳȱ(1) an adversary
proceeding in bankruptc¢ȱȱȱ ȱJerome Davis chal-
lenged CitiMortgage’s debt and security interest; (2) CitiMort-
gage’s foreclosure action against the Davises; and (3) Davis’s
suit against CitiMortgage alleging, among other things, unfair
Nos. 21-1084, et al.                                                           3

debt collection practices. Only the Ĵȱ ȱactions are before
us.
   1. Davis’s bankruptcy and adversary proceeding. In 2005, the
Davises ¡ȱ ȱ ȱ ȱ ȱ ȱ ȱȱ
Amro Mortgage Group, Inc. After defaulting on the mort-
gage, Davis 1 entered bankruptcy in 2011. CitiMortgage, the
successor in interest to ABN Amro Mortgage Group due to a
mergerǰȱęȱȱȱȱclaim in the amount of $478,238.90,
secured by the Davis’s residence. Davis’s Chapter 13 bank-
¢ȱȱ ȱȱȱŘŖŗŘȱand incorporated an agree-
ȱ ȱȱȱȱȱȱȱ¢ȱ
on Davis making monthly mortgage payments to CitiMort-
gageǰȱȱ ȱȱ¢ȱȱȱa post-petition
arrearage of $23,402.24 and a pre-petition arrearage of
$78,640.90. According to the agreement, if Davis defaulted on
the ¢ȱȱǰȱȱȱ¢ȱ ȱt,
and CitiMortgage could foreclose on the residence.
    In 2014, after Davis defaulted on the payments, CitiMort-
gage e ȱȱȱȱȱęed the bankruptcy
court that the stay had terminated. Davis then challenged
CitiMortgage’s debt and security interest by ęing an adver-
sary proceeding, ȱȱ¢ȱęȱ¢ǰȱŘśŖȱȱ
entries, and scores of hearings. While that ȱ ȱ
pending, Davis completed the Chapter 13 plan and received
a bankruptcy discharge in 2018.
   Ȃȱ¢ȱȱȱȱŘŖŗşȱ ȱȱ
bankruptcy court granted CitiMortgage’s motion to dismiss.

    1 Jerome Davis is a party in all the underlying suits. Lynne Ternoir-
Davis is a party only in the foreclosure proceeding. Both individuals
executed ȱ ȱ ȱ ǯȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ȱ
collectively as “Davis.”
4                                                 Nos. 21-1084, et al.

Davis v. CitiMortgage, Inc. (In re Davis), Ch. 13 Case No. 11-
81785, Adv. No. 14-96129, 2019 WL 2108048 (Bankr. N.D. Ill.
May 10, 2019).2 The court decided that Davis’s 2018 bank-
ruptcy discharge did not cover ȱȱ ȱCitiMortgage:
        [T]ȱ ȱ  ȱ ǰȱ ǯȱ ȱ
        the Debtor does not implicate his discharge. …
        To the extenȱȱǰȱ ǯȇȱȱ ȱ
        treated by the plan, such claim is non-discharge-
        able as a cured long-term debt. 11 U.S.C.
        § ŗřŘŞǻǼǻŗǼǯȱ ȱȱ¡ȱȱȱ  ȱ
        of CitiMortgage, Inc.'s claim caused its claim to
        not be “provided for by the plan,” then on that
        account it is not subject to the discharge. 11
        ǯǯǯȱ ȗȱ ŗřŘŞǻǼǯȱ ȱ ¢ǰȱ ȱ ȇȱ Ȭ
        charge is not implicated.
Id. at *5. Because ȱȱȱ ȱȃȱ -party dispute
ȱȱ ȱ ȱȱȱȱbankruptcy rights,”
id., the court granted CitiMortgage’s motion to dismiss.
    Tȱ ȱȱȱęȱȱȱ¢ȱȱȱtold
Davis that a ȱȱȱěȱȱȱ ȱȬ
gage. In 2016, after Davis’s bankruptcy case had been errone-
ously closed, the court reopened it and stated “[t]he debt
 ȱ  appears to be such a debt that is not
subject to discharge.” Then, in its 2018 opinion denying
CitiMortgage’s motion for summary judgment in the adver-
sary proceeding, the court decȱ ȱ ȱ ȱ ȃ ȱ ȱ
subject to discharge—ȱȱȱ ȱȱ-term debt
provided for under Section 1322(b)(5) of the Bankruptcy Code

    2Neither party included this bankruptcy court decision in their sub-
missions to this court.
Nos. 21-1084, et al.                                                 5

ȱȱȱȱȱ ȱȱȱȱȱȱ¢ȱȱȬ
ęȱȱŗřȱ.”
   After the bankruptcy court dismissed the adversary pro-
ceeding, Davis had 14 days to appeal the court’s decision un-
der Federal Rule of Bankruptcy Procedure 8002. Davis did not
appeal that decision.
    2. CitiMortgage’s foreclosure action. 3  ȱȱȬ
ǰȱȱęȱȱȱȱȱȱ
in Illinois state court. ȱĴȱȱȱȱȬ
sure action to bankruptcy court, arguing ȱ ȱȬ
ęȱbecause ȱ ȱȱȱȱęiency
judgment against ǰȱ ȱallegedly contravened Davis’s
bankruptcy discharge. In response, CitiMortgage moved to
ǰȱȱȱ ȱȱȱȱȱȱȱ
of its foreclosure pleading.
    The bankruptcy court instructed Davis to respond to
Ȃȱȱȱȱ ȱ ¢ȱȱȱȱ
jurisdiction. But Davis—a licensed attorney ȱȱ
ȱȱȱ ȱȱȱ¢ȱȱȱ ȱ
before our court, ȱ ȱȱȱȱ—failed to respond.
Because Davis had no basis to assert federal question jurisdic-
ǰȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ
 ȱ ¢ȱ ȱ ȱ ȱ ȱ 28 U.S.C. § 1447(c).
Although lacking jurisdiction to reach the merits, the court
found it unreasonable for Davis to accuse CitiMortgage of vi-
ȱȱ¢ȱȱ ȱȱȱȃȱǰȱ
ȱȱǰȱȱȱȱ ȱȱǽǾȱ
is not subject to discharge in Mǯȱ Ȃȱ  -closed

   3  Ȃȱȱȱȱ ȱȱ—Nos. 21-
1084 and 21-1101—because Davis filed an amended notice of appeal in the
district court.
6                                            Nos. 21-1084, et al.

bankruptcy case.” The court entered a separate, final order on
ȱȱȱȱȱ ¢ȱŜǰȱŘŖŘŖǰȱ ȱȱȱ
total of $6,500.
    Davis appealed the bankruptcy court’s remand order to
the district court, but the ȱ ȱ Ĝǯȱ ȱ  ȱ
appeals the remand order to us. He ȱȱ ȱȱȱ
Ĵ¢ȱ ȱ ȱ ȱ  ȱȱ ǰȱ although he
failed to ȱȱ¢ȱȂȱęȱȱȱ
ȱ ȱǯȱ
    3. Davis’s suit against CitiMortgage. In addition to CitiMort-
gage’s foreclosure action, Davis sued CitiMortgage in federal
district court, alleging violations of the Fair Debt Collection
Practices Act, the Illinois Consumer Fraud and Deceptive
Practices Act, and the 2018 bankruptcy discharge injunction.
But as the district court noted, all three of Davis’s claims cen-
ȱ ȱ ȱ ȱ ȱ ȱ ȱ  ȱ ȱ ȱ
subject to his 2018 discharge. Because the bankruptcy court
had held the opposite in Davis’s adversary proceeding, the
district court took judicial notice of the decision in In re Davis
and granted CitiMortgage’s motion to dismiss Davis’s suit
  ȱ ǯȱ ȱ  ȱ ȱ ȱ ssal of his suit
against CitiMortgage.
                               II
   ȱȱǰȱ ȱȱȱIn re Davis, ȱ ȱȱȬ
ruptcy court ruled that Davis’s 2018 bankruptcy discharge
ȱȱȱȱȱ ȱ, is not on appeal
before us. Davis had an opportunity to timely appeal the
bankruptcy court’s decision, but he chose not to do so.
    Davis challenges the bankruptcy court’s remand of
CitiMortgage’s foreclosure action. Before reaching the merits
Nos. 21-1084, et al.                                               7

of his argument, ȱȱęȱȱ ȱ ȱȱȬ
ǯȱ ȱȱȱȱinquiry.
    Title 28 U.S.C. § 1447(d) provides that “[a]n order remand-
ȱȱȱȱȱȱȱȱ ȱȱ ȱȱȱȱ
 ȱȱȱȱ ǯȄ ȱ ȱȱeviously
ǰȱȗȱŗŚŚŝǻǼȱȱ ȱȱȱȱȗȱŗŚŚŝǻǼǰȱȱ
“[t]he reasons for remand that are enumerated in § 1447(c) in-
ȱȱȱȱȱȱȱȱȱĴȱ
jurisdiction.” Foster v. Hill, 497 F.3d 695, 697 (7th Cir. 2007); see
Hernandez v. Brakegate, Ltd., 942 F.2d 1223, 1225 (7th Cir. 1991).
ȱ ȱ ěȱ ȱ § 1447(d) is that “[i]n most removed
ǰȱŘŞȱǯǯǯȱȗȱŗŚŚŝǻǼȱȱ ȱȱȱȱǯȄȱ
ĵȱǯȱȱǯ, 910 F.3d 1010, 1013 n.1 (7th Cir. 2018).
    In addition to § 1447(d)’s general prohibition on our juris-
diction over remand orders, 28 U.S.C. § 1452(b) adds an inde-
pendent limitation on our ¢ȱȱ the “[r]emoval of
claims related to bankruptcy cases.” This statute states that a
remand order issued “on any equitable ground” “is not re-
 ȱ¢ȱȱȱ ȱ¢ȱȱȱȱȱ… or
by the Supreme Court of the United States.” Our prior cases
have interpreted this provision to mean that “a district court’s
decision to remand a case or claim pursuant to § 1452(b) is
 ȱ¢ȱ ȱȱȱȱ‘any equitable ground’ in
doing so.” Good v. Voest-Alpine Indus., Inc., 398 F.3d 918, 927
(7th Cir. 2005). But in the context of § 1452(b)ǰȱ ȱȱȬ
mined that “the term ‘equitable’ means ‘appropriate.’” Id.
(quoting Hernandez, 942 F.2d at 1226). For that reason, “this
court has held that the limitations in section 1452(b) on appeal
are identical to the limitations in section 1447.” Townsquare
Media, Inc. v. Brill, 652 F.3d 767, 769 (7th Cir. 2011).
   Here, both § 1447(d) and § 1452(b) foreclose our ability to
 ȱ ȱ ȱ Ȃȱ Ĝȱ ȱ ȱ remand order.
8                                                   Nos. 21-1084, et al.

The bankruptcy court remanded CitiMortgage’s foreclosure
proceeding under § 1447(c) because the court lacked subject
Ĵȱȱȱȱǯȱȱȱǰȱ ȱȱ Ȭ
out authority under § 1447(d) ȱ  ȱ ȱ bankruptcy
court’s remand order. Because a dismissal for lack of subject
ĴȱȱȱȃǰȄȱ§ 1452(b) also precludes
ȱ ǯȱ
    To avoid this conclusion, Davis argues that jurisdiction ex-
ists under the Supreme Court’s decision in City of Waco v.
United States Fidelity & Guaranty Co., 293 U.S. 140 (1934). 4
There, the district court issued “a single decree embodying
three separate orders,” including an order dismissing one of
the defendants and a remand order. Id. at 142–43. While the
Court determined that the remand ordeȱ ȱȱǰȱ
ȱȱȱȱȱȱȱȱ ȱ ȱ
because it preceded the remand order “in logic and in fact.”
Id. at 143. Davis contends that, by extension, his appeal of the
ȱȱęȱ ȱWaco because he contests the bank-
ruptcy court’s conclusion that his discharge did not cover the
ȱ  ȱ  rather than disputing the court’s
holding ȱȱȱȱĴȱǯȱ
    Davis’s invocation of Waco does not persuade. In rejecting
a similar argument, the Court has expressly stated that “Waco
ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ order separate
ȱȱ ȱȱǯȄȱPowerex Corp. v. Reli-
ant Energy Servs., Inc., 551 U.S. 224, 236 (2007); see also Lindner
v. Union Pac. R.R. Co., 762 F.3d 568, 571 (7th Cir. 2014). Simi-
larly, the bankruptcy court here did not issue an order sepa-
ȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ ȱ ¢ȱ

    4 Our research yielded that City of Waco has been cited by this circuit
only seven times since the Court’s decision in 1934.
Nos. 21-1084, et al.                                            9

ȱȱ ǯ ȱ ȱȱȱ the un-
derlying purpose of Waco is to ensure that appealable issues
ȱȱȱ , that rationale is equally absent from this
case. Davis had every opportunity to timely appeal the court’s
conclusion that his bankruptcy discharge did not cover the
ȱ ȱǯȱYet, he chose not to. Davis cannot
 ȱȱȱȱȱȱȱ¢ȱȱȱ
ȱ ǯ
    Even if our court had jurisdiction over the bankruptcy
Ȃȱȱǰȱ ȱ ȱęȱȱȱ ȱthe
right to object. ȱȱęȱȱmotion to remand
the foreclosure proceeding, the bankruptcy court instructed
ȱȱ ȱ ¢ȱȱȱȱ by October 25,
ŘŖŗşǯȱȱ¢ȱȱȱ , but Davis failed to respond to
the motion to remand. In briefs before this court, Davis admits
ȱ ȱȱ ȱȱȱȱĴȱǯȱ
So, ȱneed not entertain that objection.
                               III
   ȱȱ¢ȱȱȱ¢ȱȂȱĴȬ
¢ȱȱȱȱ ȱȱȱȱȱȱ
because he had a reasonable basis to contend that his bank-
¢ȱȱȱȱȱ ȱgage.
   In the bankruptcy court’s October 28, 2019 order remand-
ing CitiMortgage’s foreclosure proceeding to state court, the
bankruptcy court ȱ  ȱ ȱ Ĵ¢ȱ ȱ
and costs in an undetermined amount. On November 13,
2019, Davis appealed the bankruptcy court’s order, including
ȱ ȱ ȱ  ȱ ȱ Ĵ¢ȱ ǯȱ Ȭ
gage then moved to dismiss. In addition to defending the re-
mand order, CitiMortgage argued that the fees and costs
 ȱ ȱ ȱ Ĝ—both because Davis’s appeal of
10                                             Nos. 21-1084, et al.

ȱ  ȱ ȱ , as ȱ ęȱ ȱ ȱ ȱ
 ȱȱȱȱ¢ȱȱȱȱȱȱȱȱȬ
ǰȱȱȱȱ ȱ ȱȱsince Davis had no
basis to assert federal jurisdiction justifying removal. In re-
ǰȱȱęȱȱȱȱȱȱȱ
of the remand order, but ȱneglected entirely the ĴȬ
ney ȱȱȱ ǯȱ
    As our court has stated repeatedly, arguments that are un-
ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ .
Schomas v. Colvin, 732 F.3d 702, 708 (7th Cir. 2013) (per cu-
riam); see ěȱǯȱȱ ǯȱǯ, 675 F.3d 709, 718 (7th Cir.
2012). Here, in the face of CitiMortgage’s contentions to the
¢ǰȱȱěȱȱȱȱȱȱȱ
ȱ ¢ȱȱ¢ȱȂȱȱȱȱ ȱ ȱȬ
proper. Davis’s position ȱ ȱĴ¢ȱȱ ȱ
ȱ¢ȱǲȱȱ ȱot developed at all. So,
ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ
court.
    Ȃȱȱȱȱȱȱȱ ȱȱ ȱȱ
an additional reason. In his statement of issues before the dis-
trict court, Davis recognized that the basis for the attorney
fees  ȱagainst him ȱȱȃǽǾȱȱȱȱȬ
sonable basis for asserting federal question jurisdiction.” But
before our court, Davis asserts ȃǽǾȱȱȱȱȱ ȱ
  ȱ. . . that the bankruptcy court deemed [his] challenge to
its ruling excepting [CitiMortgage]’s debt from discharge as
objectively unreasonable.” ȱȱ ǰȱȱ ȱȱ
ȱ ȱ ȱ ȱ ȱ  ȱ ȱ ȱ ȱ ȱ Ȭ
ruptcy court’s determination that his substantive claim—ra-
ther than his inability to establish federal jurisdiction— ȱ
unreasonable. “[R]aising an issue in general terms is not suf-
ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ
Nos. 21-1084, et al.                                             11

previously presented.” Puffer, 675 F.3d at 718. Because Davis’s
argument against the ȱȱȱ ȱȱȱȱ
ȱ ȱ ȱ ȱ ȱ ȱ  ȱ ȱ ȱ ȱ
ǰȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ
 ȱȱȱǯȱ
                                IV
    Finally, Davis challenges the district court’s dismissal of
his suit agaȱǰȱ ȱed violations under
the Federal Debt Collections Practice Act, the Illinois Con-
sumer Fraud and Deceptive Practices Act, and of the 2018
bankruptcy discharge injunction. Yet, as the district court
noted, and Davis does not dispute, all three of his claims
ȱȱȱȱȱ ȱȱȱ ȱȱ
  ȱȱ¢ȱȱ¢ȱǯȱȱ ȱȱȬ
lution of In re Davisǰȱ ȱhe did not appeal. Davis’s Ĵȱ
to challenge the bankruptcy court’s holding at this stage con-
ȱȱȱȱĴǯ
    To avoid this conclusion, Davis makes three arguments.
First, he asserts the bankruptcy court’s dismissal of his adver-
sary action in In re Davis ȱȱȱęȱȱȱtherefore
ȱȱȱȱȱěǯȱ  support, Davis points
to ĵȱ oup, Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582
(2020)ǰȱȱ ȱȱCourt ¡ȱȱę¢ȱȱȱȬ
ruptcy proceeding in that case based on certain factors. Id. at
588–89. Those factors include a proceeding commencing ȱ
ȱęȱȱȱǰȱ ȱby procedural steps, and re-
sulting in a dispositive decision based on the application of a
legal standard. Without those factors here, Davis argues the
bankruptcy court’s ȱ ȱ ȱ ȱ ęȱ ǯȱ But this
overcomplicates the analysis. The ĵ ȱ ȱȱȱ
ȱ ȱȱȱ ȱę, even though the un-
derlying case remained pending. Here, there is no such
12                                           Nos. 21-1084, et al.

complexity. The bankruptcy court dismissed the adversary
ǰȱȱȱȱȱȱǰȱȃǽǾȱęȱȱ
of any adversary proceeding is appealable, as it is equivalent
to a stand-ȱ ǯȄȱFifth Third Bank, Ind. v. Edgar Cnty.
Bank & Tr., 482 F.3d 904, 905 (7th Cir. 2007).
    Second, Davis characterizes the bankruptcy court’s analy-
sis regarding the scope of his bankruptcy discharge as dicta.
But this mischaracterizes the court’s decision. The bankruptcy
court dismissed the adversary proceeding because it had de-
volved into a “ȱ  -¢ȱ ȱ ȱ ȱ  Ȅȱ ȱ
“[did] not implicate bankruptcy rights.” This ȱ ȱ
reached because Davis’s bankruptcy discharge did not impli-
ȱȱȱ ȱǯȱȱȱǰȱȱȂȱ
¢ȱȱȱȱȱȱ¢ȱȱ ȱȱ
to the court’s decision.
    Third, ȱȱȱ ȱied adequate notice and
an opportunity to respond to the bankruptcy discharge issue
because CitiMortgage did not ę a motion or objection chal-
lenging his right to a discharge. But this argument overlooks
ȱȱ ȱȱ ȱ¢ȱȱȱȱȱȱȬ
charge before the court. In a 2016 brief asking to reopen the
bankruptcy case, Davis stated his “pending adversary case
  ȱȱȱȱȱȂȱǱȱ ȱȱȬ
cluded the debt asserted by CitiMortgage.” While the bank-
ruptcy court agreed to reopen Davis’s bankruptcy case, the
court made sure to note in its decision ȱȃǽǾȱȱ ȱ
CitiMortgage appears to be such a debt that is not subject to
discharge.” As a result, Davis has no basis to contend that he
did not have constitutional¢ȱĜ notice that the bank-
¢ȱ ȱ ȱ ȱ ęȱ ȱ ȱ ȱ ȱ
scope of his bankruptcy discharge in the adversary proceed-
ing. What is more, if Davis believed that the decision in In re
Nos. 21-1084, et al.                                           13

Davis had denied him due process, he had every right and op-
¢ȱȱȱȱ¢ȱȂȱęȱǯȱNev-
ertheless, Davis did not appeal that ruling, and it is too late to
ȱȱ ǯȱ
                         *      *      *
    ȱȱǰȱ ȱDISMISS the appeal of the remand or-
ǰȱȱ ȱAFFIRM the ȱȱȱ  and the district
Ȃȱ ȱ ȱ ȱ ȱ Ȃȱ suit against
CitiMortgage.