Court Opinion

ID: 5133991
Source: CourtListenerOpinion
Date Created: 2021-12-10 17:00:35.338384+00
Date Added: 2024-06-11T08:23:41.409610
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                                             No. 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 been locked in a legal battle with Jerome M. Davis
and Lynne Ternoir-Davis over a mortgage the couple took out
on their residence in 2005. After the Davises defaulted on the
loan and ﬁled for bankruptcy, Jerome Davis received a bank-
ruptcy discharge, which the bankruptcy court later held did
not extend to the debt Davis owed CitiMortgage.
    Rather than appeal that decision, Davis has attempted to
collaterally attack that court’s ruling—ﬁrst, by attempting to
remove CitiMortgage’s foreclosure action to federal court,
and second, by ﬁling a separate suit against CitiMortgage. Da-
vis lost in each of those proceedings, and CitiMortgage was
awarded attorney fees and costs when the court remanded the
foreclosure proceeding.
    Davis appeals these two decisions. But we lack jurisdiction
to review the remand order, and Davis has waived his argu-
ments challenging the attorney fees and costs award. We also
agree with the district court’s dismissal of Davis’s suit against
CitiMortgage.
                                I
    This dispute encompasses three lawsuits: (1) an adversary
proceeding in bankruptcy court in which Jerome 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
No. 21-1084, et al.                                                    3

debt collection practices. Only the latter two actions are before
us.
   1. Davis’s bankruptcy and adversary proceeding. In 2005, the
Davises executed a mortgage on their residence with ABN
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
merger, ﬁled a proof of claim in the amount of $478,238.90,
secured by the Davis’s residence. Davis’s Chapter 13 bank-
ruptcy plan was approved in 2012 and incorporated an agree-
ment between the parties that conditioned the automatic stay
on Davis making monthly mortgage payments to CitiMort-
gage, along with scheduled payments to cure a 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 payments to CitiMortgage, the automatic stay would lift,
and CitiMortgage could foreclose on the residence.
    In 2014, after Davis defaulted on the payments, CitiMort-
gage withdrew its proof of claim and notiﬁed the bankruptcy
court that the stay had terminated. Davis then challenged
CitiMortgage’s debt and security interest by ﬁling an adver-
sary proceeding, which spanned nearly ﬁve years, 250 docket
entries, and scores of hearings. While that proceeding was
pending, Davis completed the Chapter 13 plan and received
a bankruptcy discharge in 2018.
   Davis’s adversary proceeding concluded in 2019 when the
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 the mortgage at issue. For ease of reference, we refer to them
collectively as “Davis.”
4                                                  No. 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 the debt owed CitiMortgage:
        [T]he dispute between CitiMortgage, Inc. and
        the Debtor does not implicate his discharge. …
        To the extent that CitiMortgage, Inc.'s claim was
        treated by the plan, such claim is non-discharge-
        able as a cured long-term debt. 11 U.S.C.
        § 1328(a)(1). To the extent that the withdrawal
        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
        U.S.C. § 1328(a). Either way, the Debtor's dis-
        charge is not implicated.
Id. at *5. Because the mortgage issue was “a two-party dispute
under state law which does not implicate bankruptcy rights,”
id., the court granted CitiMortgage’s motion to dismiss.
    This was not the ﬁrst time the bankruptcy court had told
Davis that a discharge did not aﬀect the debt owed CitiMort-
gage. In 2016, after Davis’s bankruptcy case had been errone-
ously closed, the court reopened it and stated “[t]he debt
owed CitiMortgage 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 declared that the debt “was not
subject to discharge—either because it was a long-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.
No. 21-1084, et al.                                                  5

or in the alternative it was not a debt provided for by the con-
ﬁrmed Chapter 13 plan.”
   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 Following the dismis-
sal, CitiMortgage ﬁled a foreclosure complaint against Davis
in Illinois state court. Davis attempted to remove the foreclo-
sure action to bankruptcy court, arguing removal was justi-
ﬁed because CitiMortgage was seeking a personal deﬁciency
judgment against him, which allegedly contravened Davis’s
bankruptcy discharge. In response, CitiMortgage moved to
remand, claiming there was no federal jurisdiction on the face
of its foreclosure pleading.
    The bankruptcy court instructed Davis to respond to
CitiMortgage’s remand motion and show why the court had
jurisdiction. But Davis—a licensed attorney who represented
himself and his wife in all underlying proceedings on review
before our court, as well as in this appeal—failed to respond.
Because Davis had no basis to assert federal question jurisdic-
tion, the removal was unreasonable, so CitiMortgage was
awarded attorney fees and costs under 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-
olating the bankruptcy discharge when the court “has held,
on numerous occasions, that the debt owed to [CitiMortgage]
is not subject to discharge in Mr. Davis’ now-closed

   3  CitiMortgage’s foreclosure action has two case numbers—Nos. 21-
1084 and 21-1101—because Davis filed an amended notice of appeal in the
district court.
6                                              No. 21-1084, et al.

bankruptcy case.” The court entered a separate, final order on
the bill of costs on January 6, 2020, awarding CitiMortgage a
total of $6,500.
    Davis appealed the bankruptcy court’s remand order to
the district court, but the remand was aﬃrmed. Davis now
appeals the remand order to us. He also seeks review of the
attorney fees and costs award to CitiMortgage, although he
failed to appeal the bankruptcy court’s ﬁnal order calculating
the award amount.
    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-
ter on his contention that the debt owed CitiMortgage was
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
with prejudice. Davis now appeals the dismissal of his suit
against CitiMortgage.
                                II
   At the outset, we note that In re Davis, in which the bank-
ruptcy court ruled that Davis’s 2018 bankruptcy discharge
did not cover the debt owed CitiMortgage, 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
No. 21-1084, et al.                                                7

of his argument, we must ﬁrst determine whether we have ju-
risdiction. Two statutes aid our inquiry.
    Title 28 U.S.C. § 1447(d) provides that “[a]n order remand-
ing a case to the State court from which it was removed is not
reviewable on appeal or otherwise.” As we have previously
held, § 1447(d) bars review of remands under § 1447(c), and
“[t]he reasons for remand that are enumerated in § 1447(c) in-
clude defects in removal procedure and lack of subject matter
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).
The practical eﬀect of § 1447(d) is that “[i]n most removed
cases, 28 U.S.C. § 1447(d) prohibits review of a remand order.”
Betzner v. Boeing Co., 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 ability to review the “[r]emoval of
claims related to bankruptcy cases.” This statute states that a
remand order issued “on any equitable ground” “is not re-
viewable by appeal or otherwise by the court of appeals … 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
unreviewable only when it relies on ‘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), we have deter-
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
review the district court’s aﬃrmance of the remand order.
8                                                    No. 21-1084, et al.

The bankruptcy court remanded CitiMortgage’s foreclosure
proceeding under § 1447(c) because the court lacked subject
matter jurisdiction over the dispute. As a result, we are with-
out authority under § 1447(d) to review the bankruptcy
court’s remand order. Because a dismissal for lack of subject
matter jurisdiction is “appropriate,” § 1452(b) also precludes
our review.
    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 order was not appealable,
it nonetheless held that the order of dismissal was reviewable
because it preceded the remand order “in logic and in fact.”
Id. at 143. Davis contends that, by extension, his appeal of the
remand order ﬁts within Waco because he contests the bank-
ruptcy court’s conclusion that his discharge did not cover the
debt owed CitiMortgage rather than disputing the court’s
holding that it lacked subject matter jurisdiction.
    Davis’s invocation of Waco does not persuade. In rejecting
a similar argument, the Court has expressly stated that “Waco
does not permit an appeal when there is no order separate
from the unreviewable remand order.” Powerex 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-
rate from the remand order, which this court is statutorily

    4 Our research yielded that City of Waco has been cited by this circuit
only seven times since the Court’s decision in 1934.
No. 21-1084, et al.                                             9

barred from reviewing. And while Davis insists that the un-
derlying purpose of Waco is to ensure that appealable issues
do not evade review, 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
debt owed CitiMortgage. Yet, he chose not to. Davis cannot
now complain that the scope of his bankruptcy discharge has
evaded review.
    Even if our court had jurisdiction over the bankruptcy
court’s remand order, we would ﬁnd that Davis waived the
right to object. When CitiMortgage ﬁled its motion to remand
the foreclosure proceeding, the bankruptcy court instructed
Davis to show why the court had jurisdiction by October 25,
2019. That day came and went, but Davis failed to respond to
the motion to remand. In briefs before this court, Davis admits
that waiver of the right to establish subject matter jurisdiction.
So, we need not entertain that objection.
                               III
   Davis argues separately that the bankruptcy court’s attor-
ney fees and costs award to CitiMortgage should be reversed
because he had a reasonable basis to contend that his bank-
ruptcy discharge covered the debt owed CitiMortgage.
   In the bankruptcy court’s October 28, 2019 order remand-
ing CitiMortgage’s foreclosure proceeding to state court, the
bankruptcy court also awarded CitiMortgage attorney fees
and costs in an undetermined amount. On November 13,
2019, Davis appealed the bankruptcy court’s order, including
the decision to award CitiMortgage attorney fees. CitiMort-
gage then moved to dismiss. In addition to defending the re-
mand order, CitiMortgage argued that the fees and costs
award should be aﬃrmed—both because Davis’s appeal of
10                                             No. 21-1084, et al.

the award was premature, as a ﬁnal order calculating the
award amount had not yet been entered at the time of the ap-
peal, and because the award was proper since Davis had no
basis to assert federal jurisdiction justifying removal. In re-
sponse, Davis ﬁled a memorandum that addressed the merits
of the remand order, but which neglected entirely the attor-
ney fees and costs award.
    As our court has stated repeatedly, arguments that are un-
developed before a district court are waived on appeal.
Schomas v. Colvin, 732 F.3d 702, 708 (7th Cir. 2013) (per cu-
riam); see Puﬀer v. Allstate Ins. Co., 675 F.3d 709, 718 (7th Cir.
2012). Here, in the face of CitiMortgage’s contentions to the
contrary, Davis oﬀered no argument before the district court
for why the bankruptcy court’s fees and costs award was im-
proper. Davis’s position against awarding attorney fees was
not merely underdeveloped; it was not developed at all. So,
Davis has waived his right to appeal this issue before our
court.
    Davis’s challenge to the fees and costs award is waived for
an additional reason. In his statement of issues before the dis-
trict court, Davis recognized that the basis for the attorney
fees award against him was his “fail[ure] to establish a rea-
sonable basis for asserting federal question jurisdiction.” But
before our court, Davis asserts “[t]he sole basis for the award
was . . . that the bankruptcy court deemed [his] challenge to
its ruling excepting [CitiMortgage]’s debt from discharge as
objectively unreasonable.” In other words, Davis now argues
that the fees and costs award was predicated on the bank-
ruptcy court’s determination that his substantive claim—ra-
ther than his inability to establish federal jurisdiction—was
unreasonable. “[R]aising an issue in general terms is not suf-
ficient to preserve specific arguments that were not
No. 21-1084, et al.                                          11

previously presented.” Puffer, 675 F.3d at 718. Because Davis’s
argument against the fees and costs award before our court
differs from his challenge to the award before the district
court, we conclude that Davis has waived the argument he
now advances before us.
                              IV
    Finally, Davis challenges the district court’s dismissal of
his suit against CitiMortgage, which claimed 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
hinge on the question of whether the debt owed CitiMortgage
was covered by his bankruptcy discharge. That was the reso-
lution of In re Davis, which he did not appeal. Davis’s attempt
to challenge the bankruptcy court’s holding at this stage con-
stitutes an impermissible collateral attack.
    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 was not a ﬁnal order and therefore
should not be given preclusive eﬀect. In support, Davis points
to Ritzen Group, Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582
(2020), in which the Court examined the ﬁnality of the bank-
ruptcy proceeding in that case based on certain factors. Id. at
588–89. Those factors include a proceeding commencing with
the ﬁling of a motion, followed by 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 dismissal was not a ﬁnal order. But this
overcomplicates the analysis. The Ritzen factors were used to
determine whether an order was ﬁnal, even though the un-
derlying case remained pending. Here, there is no such
12                                           No. 21-1084, et al.

complexity. The bankruptcy court dismissed the adversary
proceeding, and as our court has noted, “[a] ﬁnal resolution
of any adversary proceeding is appealable, as it is equivalent
to a stand-alone lawsuit.” Fifth 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 “a two-party dispute under state law” that
“[did] not implicate bankruptcy rights.” This conclusion was
reached because Davis’s bankruptcy discharge did not impli-
cate the debt owed CitiMortgage. For that reason, the court’s
analysis on the scope of the bankruptcy discharge was central
to the court’s decision.
    Third, Davis contends he was denied adequate notice and
an opportunity to respond to the bankruptcy discharge issue
because CitiMortgage did not ﬁle a motion or objection chal-
lenging his right to a discharge. But this argument overlooks
that it was Davis who originally placed the scope of his dis-
charge before the court. In a 2016 brief asking to reopen the
bankruptcy case, Davis stated his “pending adversary case
will determine the scope of Debtor’s discharge: whether it in-
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 that “[t]he debt owed
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 constitutionally suﬃcient notice that the bank-
ruptcy court could make ﬁndings or determinations on the
scope of his bankruptcy discharge in the adversary proceed-
ing. What is more, if Davis believed that the decision in In re
No. 21-1084, et al.                                            13

Davis had denied him due process, he had every right and op-
portunity to appeal the bankruptcy court’s ﬁnal order. Nev-
ertheless, Davis did not appeal that ruling, and it is too late to
do so now.
                         *      *      *
    For these reasons, we DISMISS the appeal of the remand or-
der, and we AFFIRM the fees and costs award and the district
court’s dismissal with prejudice of Davis’s suit against
CitiMortgage.