Court Opinion

ID: 6344822
Source: CourtListenerOpinion
Date Created: 2022-05-27 15:00:53.93582+00
Date Added: 2024-06-11T09:03:28.371101
License: Public Domain

Appellate Case: 21-4050       Document: 010110689967   Date Filed: 05/27/2022   Page: 1
                                                                  FILED
                                                      United States Court of Appeals
                       UNITED STATES COURT OF APPEALS         Tenth Circuit

                             FOR THE TENTH CIRCUIT                         May 27, 2022
                           _________________________________
                                                                       Christopher M. Wolpert
                                                                           Clerk of Court
     In re: CHARLES C. WALDO;
     ETHANNE S. WALDO,

          Debtors.

     ----------------------------

     CHARLES C. WALDO; ETHANNE
     S. WALDO,

          Appellants,
                                                         No. 21-4050
     v.                                         (D.C. No. 2:20-CV-00238-DBB)
                                                           (D. Utah)
     BANK OF NEW YORK MELLON
     TRUST COMPANY; OCWEN
     LOAN SERVICING, LLC,

          Appellees.
                           _________________________________

                              ORDER AND JUDGMENT *
                           _________________________________

 Before BACHARACH, EID, and ROSSMAN, Circuit Judges.
                _________________________________

 *
       Oral argument would not help us, so we have decided the appeal
 based on the record and the parties’ briefs. See Fed. R. App. P.
 34(a)(2)(C); Tenth Cir. R. 34.1(G).

       Our order and judgment does not constitute binding precedent except
 under the doctrines of law of the case, res judicata, and collateral estoppel.
 But the order and judgment may be cited for its persuasive value if
 otherwise appropriate. See Fed. R. App. P. 32.1(a); Tenth Cir. R. 32.1(A).
Appellate Case: 21-4050   Document: 010110689967   Date Filed: 05/27/2022   Page: 2

       This appeal involves property once owned by Charles and Ethanne

 Waldo. The Waldos obtained a mortgage, which was secured by a deed of

 trust. The Waldos eventually defaulted on the loan, triggering foreclosure

 proceedings. But the Waldos filed bankruptcy. In the bankruptcy

 proceedings, the Waldos unsuccessfully tried to prevent a creditor from

 enforcing the debt. Our appeal involves the aftermath of those bankruptcy

 proceedings.

 I.    The Waldos challenge the proof of claim involving the mortgage.

       In those bankruptcy proceedings, a proof of claim was filed by the

 Bank of New York Mellon Trust Company, NA, as Indenture Trustee for

 the IMC Home Equity Loan Owner Trust 1998-7, and Ocwen Loan

 Servicing, LLC. The Waldos objected, but didn’t deny arrearage on the

 mortgage. They instead questioned whether the bank and Ocwen could

 enforce the debt. The bankruptcy court overruled the Waldos’ objection

 and granted summary judgment to the bank and Ocwen. 1

       The Waldos unsuccessfully moved to reopen and later sought

 reconsideration of the refusal to reopen, arguing that the bank and Ocwen

 1
       The bankruptcy court conducted a hearing and issued a written order.
 We don’t know whether the bankruptcy court provided an oral explanation
 because the bankruptcy court’s docket contains no transcript or audio
 recording of the hearing. We thus lack any explanation from the
 bankruptcy court for its rulings. But the Waldos never properly appealed
 the bankruptcy court’s denial of their objection or grant of summary
 judgment to the bank and Ocwen.

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Appellate Case: 21-4050   Document: 010110689967   Date Filed: 05/27/2022   Page: 3

 had no right to enforce the debt. In making this argument, the Waldos

 again questioned the proof of claim, insisting that the mortgage contract

 was no longer valid, Ocwen no longer serviced the loan, and the bank

 entity (that filed the proof of claim) no longer existed.

 II.    The bankruptcy court denies the motions to reopen and
        reconsider.

        To decide the motion to reopen, the bankruptcy court considered how

 long the case had been closed, the possible relief for the Waldos, the

 strength of the fraud allegations, the similarity between the current

 allegations and earlier allegations, the potential for another court to hear

 the issues raised in the motion, the prejudice to Ocwen and the bank, and

 the prejudice to the Waldos if the case were to remain closed. The

 bankruptcy court concluded that these factors weighed against the Waldos,

 so the court denied their motion to reopen.

        The Waldos asked the bankruptcy court to reconsider, but the court

 treated the request as a motion to alter or amend a judgment and denied

 relief.

        The district court affirmed, and the Waldos appeal.

 III.   Article III Standing

        Before reviewing the bankruptcy court’s rulings, we assess Article

 III standing, which entails a jurisdictional issue. See Lee v. McCardle (In

 re Peeples), 880 F.3d 1207, 1212 (10th Cir. 2018). The Waldos deny that

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 the bank has Article III standing in the appeal. But it is the Waldos, not the

 bank, who have invoked federal jurisdiction. So it’s the Waldos who must

 show Article III standing. See Spokeo, Inc., v. Robins, 578 U.S. 330, 338

 (2016). The Waldos do have Article III standing, and no one contends

 otherwise.

       We need not address whether the bank had Article III standing in the

 bankruptcy court. The bank’s standing in bankruptcy court could bear on

 summary judgment, but the Waldos didn’t properly appeal the summary-

 judgment ruling.

 IV.   Discretion to Reopen or Reconsider

       The bankruptcy court did not err in declining to reopen the

 proceedings or to reconsider that ruling.

       A.     Standard of Review

       Despite the district court’s ruling, we independently review the

 bankruptcy court’s decisions without deferring to the district court’s

 analysis. WD Equip., LLC v. Cowen (In re Cowen), 849 F.3d 943, 947

 (10th Cir. 2017). In conducting this review, we apply the abuse–of–

 discretion standard. See Nelson v. City of Albuquerque, 921 F.3d 925, 929

 (10th Cir. 2019) (motion to alter or amend the judgment); Woods v. Kenan

 (In re Woods), 173 F.3d 770, 778 (10th Cir. 1999) (motion to reopen). The

 bankruptcy court abuses its discretion if the decision is “arbitrary,

 capricious, whimsical, or manifestly unreasonable.” Rocky Mountain

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 Christian Church v. Bd. of Cnty. Comm’rs, 613 F.3d 1229, 1239 (10th Cir.

 2010) (internal quotation marks omitted).

       B.     Motion to Reopen

       In seeking reopening, the Waldos presented numerous theories. Most

 stemmed from alleged trickery by the bank and Ocwen in filing the proof

 of claim in bankruptcy court.

       Duration. The Waldos contend that the bankruptcy court focused too

 heavily on how long the case had been closed. The bankruptcy court did

 label the passage of time the “most influential” factor. Suppl. R. at 549.

 And the Waldos correctly say that no time bar prevents the setting aside of

 a judgment for fraud on the court. United States v. Buck, 281 F.3d 1336,

 1341–42 (10th Cir. 2002). But the passage of time is a proper factor for a

 bankruptcy court to consider when deciding whether to reopen a case. See

 Redmond v. Fifth Third Bank, 624 F.3d 793, 798 (7th Cir. 2010). The

 bankruptcy court did not treat the passage of time as conclusive; the court

 considered this as just one of several factors. In doing so, the court acted

 within its discretion. See id.

       Prejudice. The bankruptcy court also acted within its discretion

 when finding that reopening would prejudice Ocwen and the bank by

 forcing them to relitigate the validity of their proof of claim. In the

 Waldos’ view, Ocwen and the bank shouldn’t have participated in this

 case, so reopening the case would not have prejudiced them. The Waldos’

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 argument ignores the interest of Ocwen and the bank in defending their

 judgment. Although the Waldos downplay the expected costs for Ocwen

 and the bank, the bankruptcy court could reasonably consider those costs

 prejudicial.

       Consideration of the Waldos’ arguments. The Waldos assert that

 the bankruptcy court ignored their arguments and evidence. We disagree.

 The bankruptcy court denied the Waldos’ motion to reopen and explained

 the decision. The Waldos do not point to anything in the record showing

 that the bankruptcy court ignored any arguments or evidence.

       Standing. The Waldos imply that the bankruptcy court overlooked

 their challenge to Article III standing for Ocwen and the bank. But the

 Waldos’ motion to reopen did not challenge Article III standing of Ocwen

 or the bank.

       Fraud on the court. The motion instead attacked the grant of

 summary judgment based on fraud on the court. In arguing that Ocwen and

 the bank had committed a fraud on the court, the Waldos asserted that

 “there was never the requisite [s]tanding to file a [c]laim.” Suppl. R. at

 539. Rejecting this assertion, the bankruptcy court pointed out that the

 Waldos had already raised nearly identical challenges. This

 characterization fell within the bankruptcy court’s discretion, and the

 Waldos have not shown an abuse of discretion in the denial of their motion

 to reopen.

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       C.      Motion to Reconsider

       Nor did the bankruptcy court err when denying the Waldos’ motion to

 reconsider.

       The bankruptcy court could reconsider when the controlling law has

 changed, new evidence becomes available, or correction is needed because

 of a clear error or manifest injustice. Servants of Paraclete v. Does,

 204 F.3d 1005, 1012 (10th Cir. 2000). Applying these factors, the

 bankruptcy court concluded that nothing had substantially changed since

 the ruling on the motion to reopen.

       The Waldos argue that the bankruptcy court ignored some of their

 arguments. We disagree. The court said that it had considered all of the

 arguments, and we have no reason to think otherwise.

       Granted, the bankruptcy court did not address the Waldos’ references

 to Article III standing. But even if these references had constituted an

 argument based on a lack of Article III standing, the bankruptcy court

 would have acted within its discretion by declining to consider the

 argument: The Waldos had not presented the argument in their motion to

 reopen, and the bankruptcy court didn’t need to consider arguments that

 could have been presented earlier. See Banister v. Davis, 140 S. Ct. 1698,

 1708 (2020).

       The Waldos contend that the attorney for Ocwen and the bank

 “should not have been allowed to participate” in the proceedings.

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 Appellant’s Opening Br. at 3a. 2 For this contention, the Waldos cite

 perceived deficiencies in the attorney’s entry of appearance:

     1.       The attorney never filed an entry of appearance for Ocwen or
              its successor.

     2.       The attorney’s appearance form identified the bank by its old
              name.

 This argument is invalid under Federal Rule of Bankruptcy Procedure

 9010(b): “An attorney appearing for a party in a case under the Code shall

 file a notice of appearance with the attorney’s name, office address and

 telephone number, unless the attorney’s appearance is otherwise noted in

 the record.” This rule applies because the record otherwise clarifies that

 the attorney represented both Ocwen and the bank. For example, the

 attorney’s brief for summary judgment identifies the clients as Ocwen and

 the bank under its new name. So any perceived deficiencies in the entry of

 appearance wouldn’t matter. 3 For this contention, the Waldos have not

 shown that the bankruptcy court abused its discretion when denying

 reconsideration.

 2
      The attorney did not participate in the proceedings related to the
 motion to reopen, so we understand this argument to address the denial of
 reconsideration.
 3
       We deny the Waldos’ request to strike the entry of appearance filed
 here by counsel for Ocwen and the bank. The entry of appearance complies
 with Tenth Circuit Rule 46.1.
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       D.     The Waldos’ Additional Arguments

       The Waldos challenge the bankruptcy court’s award of attorney’s

 fees. The bankruptcy court ordered the fees more than a month after the

 Waldos had filed their notice of appeal. The Waldos did not file a

 supplemental notice of appeal, a step necessary to give us “jurisdiction

 over an attorneys’ fees issue that becomes final subsequent to the initial

 notice of appeal.” EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1250

 (10th Cir. 1999). So we lack jurisdiction to consider the award of

 attorney’s fees.

       The Waldos make several claims that appear to challenge the

 bankruptcy court’s ruling on summary judgment. But that ruling isn’t at

 issue, so we cannot consider the Waldos’ challenge to the grant of

 summary judgment. See Lang v. Lang (In re Lang), 414 F.3d 1191, 1195-96

 (10th Cir. 2005).

       The Waldos allege many problems with the district court’s analysis.

 They argue, for example, that the district court erred by ignoring evidence

 and by taking judicial notice of several documents. We have independently

 reviewed the bankruptcy court’s rulings, disregarding the documents

 noticed by the district court, and we find no abuse of discretion.

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        Affirmed.

                                         Entered for the Court

                                         Robert E. Bacharach
                                         Circuit Judge

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