Court Opinion

ID: 4670534
Source: CourtListenerOpinion
Date Created: 2021-03-23 17:00:23.092547+00
Date Added: 2024-06-11T08:02:01.673670
License: Public Domain

DLD-116                                                        NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                       No. 20-1614
                                       ___________

                                    LYNN Z. SMITH,
                                               Appellant

                                             v.

            ANDREA DOBIN, Esq.; ELI HALTOVSKY; FIVE STAR
            SERVICES LLC; HONORABLE ANNE E. THOMPSON;
        HONORABLE MICHAEL B. KAPLAN; JOHN DOE 1; JOHN DOE 2;
           JOHN DOE 3; JOHN DOE 4; JOHN DOE 5; JOHN DOE 6;
           JOHN DOE 7; JOHN DOE 8; JOHN DOE 9; JOHN DOE 10
                 ____________________________________

                     On Appeal from the United States District Court
                              for the District of New Jersey
                            (D.C. Civil No. 1-18-cv-17515)
                         District Judge: Honorable Esther Salas
                      ____________________________________

            Submitted for Possible Dismissal Due to a Jurisdictional Defect or
      Possible Summary Action Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6
                                    March 11, 2021
               Before: JORDAN, KRAUSE, and PHIPPS, Circuit Judges

                             (Opinion filed March 23, 2021)
                                       _________

                                        OPINION*
                                        _________

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM

       Lynn Z. Smith appeals from the order of the District Court dismissing her

complaint. We will affirm.

                                             I.

       Smith is the debtor in an ongoing Chapter 7 bankruptcy proceeding during which

the Bankruptcy Judge authorized the sale of her house pursuant to a judgment of

foreclosure. The sale was consummated on November 1, 2018. Smith’s unsuccessful

efforts to avoid the sale—which did not include an available appeal of the Bankruptcy

Court’s order authorizing it—are described in In re Smith, 757 F. App’x 77 (3d Cir.

2018) (affirming Bankruptcy Court order converting Smith’s bankruptcy proceeding

from Chapter 13 to Chapter 7). Smith also has filed with the District Court at least six

other bankruptcy appeals and three civil actions implicating her bankruptcies.

       This appeal concerns one of those civil actions. In this case, which Smith filed 11

days after our decision in In re Smith, Smith filed a complaint pro se alleging in wholly

conclusory fashion that the sale of her house resulted from a “fraudulent bid-rigging

scheme.” As defendants, Smith named her Chapter 7 Trustee, the Bankruptcy Judge, a

District Judge who presided over her bankruptcy appeals and one of her related civil

actions, the individual who purchased her former house at the bankruptcy auction (Eli

Haltovsky), and a company allegedly hired by Haltovsky to perform “demolition” work

on the property (Five Star Services LLC). For relief, Smith requested the return of her
                                             2
former house in its original condition as well as millions of dollars in damages.

       The District Court, acting on motions to dismiss filed by three of the four

categories of defendants, dismissed Smith’s complaint as follows. First, the District

Court dismissed Smith’s claims against the Trustee pursuant to the Barton doctrine

because Smith did not obtain the Bankruptcy Court’s permission before seeking

resolution of those claims in a different court. See In re VistaCare Grp., LLC, 678 F.3d

218, 224-28 (3d Cir. 2012) (discussing Barton v. Barbour, 104 U.S. 126 (1881)). Second,

the District Court held that Smith’s claims against Haltovsky are barred by claim

preclusion because the Bankruptcy Court, in its sale-authorization order, already has

adjudicated Haltovsky a good-faith purchaser for purposes of 11 U.S.C. § 363(m). Third,

the District Court dismissed Smith’s claims against the judicial defendants and Five Star

without prejudice for inadequate service of process. The District Court also noted that

Smith’s complaint suffered from other deficiencies, including its failure to state any

plausible claim to relief and the fact that her claims against the judicial defendants likely

are barred by judicial immunity. Smith appeals.

                                              II.

       In addition to filing this appeal, Smith also filed a motion for reconsideration with

the District Court. The District Court docketed that motion about a month and a half

after Smith filed this appeal and about three months after its order of dismissal. As

docketed, Smith’s motion for reconsideration did not suspend this appeal under Fed. R.

                                              3
App. P. 4(a)(4). The District Court later denied that motion on October 14, 2020. Smith

claims that the District Court committed “fraud” by failing to docket the motion sooner,

but we lack jurisdiction to review the District Court’s handling of that motion because

Smith did not file another notice of appeal after the District Court denied the motion and

her time to do so has expired.1 Thus, the only order before us for review is the District

Court’s order of dismissal. We have jurisdiction over that order under 28 U.S.C. § 1291.2

                                            III.

       We will affirm. Smith has filed over 20 documents in support of this appeal,

including two responses and a letter purporting to supplement the record after we advised

her that we would consider taking summary action. Smith, however, has not

1
  Smith has raised complaints about the District Court’s handling of her motion for
reconsideration in documents that she filed with this Court both before and after the
District Court denied the motion. The documents that she filed before the District
Court’s ruling cannot serve as notice of appeal from that ruling. See Marshall v. Comm’r
Pa. Dep’t of Corr., 840 F.3d 92, 94-95 (3d Cir. 2016) (per curiam). In the documents that
she filed after the District Court’s ruling, Smith does not indicate any intent to appeal
(which she knows how to do) and instead asserts merely that the District Court’s alleged
fraud constitutes a ground to add the District Judge as a defendant. Thus, we decline to
construe any of these documents as a notice of appeal. And because Smith could have
filed a notice of appeal from the denial of reconsideration but did not, we also decline to
treat any of her filings as a petition for a writ of mandamus. See Gillette v. Prosper, 858
F.3d 833, 841 (3d Cir. 2017) (noting that “mandamus must not be used as a mere
substitute for appeal”) (quotation marks omitted).
2
  Although the District Court dismissed certain of Smith’s claims without prejudice for
insufficient service of process, the District Court did not permit Smith to cure that defect
and instead twice directed its Clerk to close the case. Thus, the District Court’s order is
final for purposes of § 1291 because the District Court dismissed the entire action and the
case is over as far as the District Court is concerned. Cf. Doe v. Hesketh, 828 F.3d 159,
                                               4
meaningfully challenged the District Court’s order of dismissal. Indeed, Smith has not

even mentioned the grounds on which the District Court dismissed her complaint, let

alone raised anything suggesting that those grounds present a substantial question.

       Nevertheless, we will affirm the District Court’s order of dismissal on the

following grounds. First, we will affirm the District Court’s ruling that it lacked subject-

matter jurisdiction over Smith’s claims against the Trustee under the Barton doctrine.

See In re VistaCare Grp., 678 F.3d at 224-28. We add, as did the District Court, that

Smith was well aware of the Barton doctrine because the District Court previously

applied it in dismissing Smith’s claims against the Trustee in one of her other

bankruptcy-related actions. (D.N.J. Civ. No. 1-18-cv-11483, ECF No. 15.) Smith did not

appeal that ruling.

       Second, we will affirm the District Court’s ruling that Smith’s claims against

Haltovsky are barred by claim preclusion, and we conclude that Smith also failed to state

a claim on which relief can be granted. Smith unsuccessfully challenged Haltovsky’s

purchase of her former house in the Bankruptcy Court, which adjudicated Haltovsky a

good-faith purchaser for purposes of 11 U.S.C. § 363(m). Smith either litigated or could

have litigated her allegations of fraud regarding Haltovsky in that proceeding. See In re

Pursuit Capital Mgmt., LLC, 874 F.3d 124, 135-36 (3d Cir. 2017) (explaining that “good

faith” for purposes of § 363(m) requires, inter alia, the absence of fraud or collusion);

165-66 (3d Cir. 2016).
                                              5
CoreStates Bank, N.A. v. Huls Am., Inc., 176 F.3d 187, 194-95 (3d Cir. 1999)

(describing claim-preclusive effect of Bankruptcy Court orders).3 To be sure, Smith’s

allegations of fraud against Haltovsky (like those against the other defendants) are wholly

conclusory. Thus, to the extent that Smith’s allegations may be too deficient to permit a

determination whether she litigated or could have litigated them in her bankruptcy, those

allegations fail to state a plausible claim to relief, see Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009), and amendment of her complaint is not warranted.4

       Third, we will affirm the dismissal of Smith’s claims against the judicial

defendants on the ground that those claims are barred by judicial immunity. Smith

alleges that the judicial defendants, through their rulings, either sanctioned or failed to

3
  Among Smith’s few factual allegations (which she asserts in several of her filings but
not her actual complaint) is the allegation that Haltovsky told her husband in August
2017 that “I am the only person who can buy your property.” If that alleged statement
called into question the validity of the sale to Haltovsky as Smith claims, then she could
have raised it in the Bankruptcy Court before that court approved the sale almost a year
later on July 25, 2018.
4
  Smith has had adequate notice and opportunity to address this issue. Haltovsky argued
in the alternative below, and the District Court suggested, that Smith failed to state a
plausible claim to relief. Smith filed at least two responses on that issue in which she
insisted that Haltovsky already had adequate notice of her claims. (E.g., ECF No. 19 at
11-12.). Smith also has filed numerous documents in support of her claims in both the
District Court and this Court, all of which we have reviewed, some of which promise to
provide an amended complaint or evidence that never proves forthcoming, and none of
which suggests that Smith has any plausible claim against Haltovsky, let alone any claim
that she could not have raised in the Bankruptcy Court. Thus, to the extent that Smith
may have attempted to assert a claim against Haltovsky that would not have been barred
by claim preclusion, we conclude both that she failed to state a claim and that amendment
would be futile.
                                               6
correct the other parties’ alleged fraud. It is apparent that Smith bases this claim solely

on the judicial defendants’ judicial rulings, which were not made “in the clear absence of

all jurisdiction.” Capogrosso v. N.J. Sup. Ct., 588 F.3d 180, 184 (3d Cir. 2009) (per

curiam) (quotation marks omitted). Indeed, Smith alleged in her complaint that the

judicial defendants’ alleged misconduct “can be proved entirely from the court records.”

(ECF No. 1 at 7 ⁋ 14.) Thus, her claims against the judicial defendants fall squarely

within the bounds of judicial immunity. See Capogrosso, 588 F.3d at 184.

       Finally, we will affirm the dismissal of Smith’s claims against Five Star on the

ground that she failed to state a plausible claim to relief. Smith’s claims against Five Star

are derivative of her claims against Haltovsky because she alleges only that Five Star,

working with Haltovsky, performed work on and removed property from her former

house, which Haltovsky bought at auction. Smith has not stated any claim against

Haltovsky as explained above, so she has not stated and has no basis for a claim against

Five Star either.

                                             III.

       For these reasons, we will affirm the judgment of the District Court. Smith’s

motions are denied.

                                              7