Court Opinion

ID: 4702446
Source: CourtListenerOpinion
Date Created: 2021-07-09 15:00:59.9147+00
Date Added: 2024-06-11T08:06:24.951134
License: Public Domain

USCA11 Case: 20-14663     Date Filed: 07/09/2021    Page: 1 of 5

                                                          [DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                            No. 20-14663
                        Non-Argument Calendar
                      ________________________

               D.C. Docket No. 6:19-cv-00890-RBD-LRH

OSCAR CALDERON,
CARMEN V. ORTIZ,

                                                           Plaintiffs-Appellants,

ALTAGRACIA CALDERON,

                                                                          Plaintiff,

                                    versus

U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE
FOR SG MORTGAGE SECURITIES TRUST 2006-FRE2
ASSET BACKED CERTIFICATES SERIES 2006-FRE2,
DOES 1-10 INCLUSIVE,

                                                          Defendants-Appellees.

                      ________________________

               Appeal from the United States District Court
                   for the Middle District of Florida
                     ________________________

                               (July 9, 2021)
          USCA11 Case: 20-14663       Date Filed: 07/09/2021   Page: 2 of 5

Before WILSON, ROSENBAUM, and BRANCH, Circuit Judges.

PER CURIAM:

      Oscar Calderon and Carmen Ortiz (collectively “the Calderons”) appeal

from the district court’s grant of summary judgment in favor of the defendants on

the Calderons’ complaint for “declaratory relief to enforce rescission” of a

mortgage loan based on its conclusion that the Calderons lacked standing. After

review, we affirm.

                               I.      Background

      The facts in this case are not in dispute. On May 2, 2006, Oscar Calderon

closed on a mortgage loan for a residential property in Florida. Almost three years

later, on April 3, 2009, Calderon sent to defendant U.S. Bank and other related

companies a formal letter demanding recission of the mortgage due to various

alleged violations of the Truth in Lending Act (“TILA”) and other federal lending

laws. Calderon was notified in writing this his demand for recission was denied.

      Approximately five months later, Calderon filed a voluntary petition for

Chapter 7 bankruptcy. He listed the mortgage loan in his bankruptcy petition as a

secured claim, and he made no mention of his demand for recission. In January

2010, Calderon received a discharge in his bankruptcy proceeding.

      Over nine years later, the Calderons filed the underlying petition to enforce

recission of the 2006 mortgage loan, seeking declaratory relief, recission of the

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          USCA11 Case: 20-14663       Date Filed: 07/09/2021    Page: 3 of 5

loan, termination of the defendants’ security interest in the property, return of any

money paid by the Calderons, statutory damages, actual damages, and attorneys’

fees and costs.

      U.S. Bank ultimately moved for summary judgment, arguing, in relevant

part, that the Calderons lacked standing and were otherwise not entitled to relief on

the merits of their claim. The district court granted U.S. Bank’s motion for

summary judgment and dismissed the complaint for lack of standing. The district

court explained that, once Oscar Calderon filed Chapter 7 bankruptcy, his recission

claim, of which he was aware prior to filing bankruptcy, became—and remained—

part of the bankruptcy estate. Therefore, only the bankruptcy trustee had standing

to bring the claim. Accordingly, the district court dismissed the complaint. This

appeal followed.

                                II.      Discussion

      The Calderons argue that the district court erred in concluding that the

recission was the property of the bankruptcy estate because the recission was

complete and effective upon receipt of the recission notices by the defendants,

which occurred prior to the filing of the bankruptcy petition, and, therefore, it was

not an asset, claim, or cause of action for purposes of the bankruptcy estate. We

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             USCA11 Case: 20-14663     Date Filed: 07/09/2021    Page: 4 of 5

disagree.1

      The Bankruptcy Code provides that virtually all of a debtor’s assets and

legal and equitable interests in property “as of the commencement” of the

bankruptcy case vest in the bankruptcy estate upon the filing of the petition. See

11 U.S.C. § 541(a)(1); see also In re Witko, 374 F.3d 1040, 1042 (11th Cir. 2004)

(“The commencement of a voluntary bankruptcy case creates an estate generally

consisting of the legal or equitable interests of the debtor in property as of the

commencement of the case.” (quotation omitted)). Even if not disclosed by the

debtor during the bankruptcy proceeding, the property of the bankruptcy estate

includes causes of action and potential causes of action belonging to the debtor at

the commencement of the bankruptcy case. Parker v. Wendy’s Int’l, Inc., 365 F.3d

1268, 1272 (11th Cir. 2004); see also Ajaka v. Brooksamerica Mortg. Corp., 453

F.3d 1339, 1344 (11th Cir. 2006) (explaining that a debtor has a duty to “disclose

all assets, or potential assets, to the bankruptcy court”); In re Alvarez, 224 F.3d

1274, 1276–79 (11th Cir. 2000) (holding that, under both state and federal law, the

debtor’s legal malpractice claim was “sufficiently rooted in his pre-bankruptcy

past” that it was properly considered property of the bankruptcy estate even though

      1
      “We review standing determinations de novo.” A&M Gerber Chiropractic LLC v.
GEICO Gen. Ins. Co., 925 F.3d 1205, 1210 (11th Cir. 2019).

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           USCA11 Case: 20-14663           Date Filed: 07/09/2021       Page: 5 of 5

debtor had not yet brought a cause of action against his counsel at the time of the

filing of the petition).

       The bankruptcy trustee “is the only party with standing to prosecute causes

of action belonging to the estate.” Parker, 365 F.3d at 1272. Even after the close

of a bankruptcy case, property of the bankruptcy estate remains in the estate unless

abandoned back to the debtor under 11 U.S.C. § 554. Id.

       Although the Calderons had yet to file any formal recission-related cause of

action at the time of the filing of the bankruptcy petition, they had sent a notice

demanding recission to the defendants. Thus, the Calderons’ recission claim is a

pre-petition claim that became a part of the bankruptcy estate upon the filing of the

Chapter 7 petition. Parker, 365 F.3d at 1272; In re Alvarez, 224 F.3d at 1279.

Because there is no evidence that the trustee ever abandoned this pre-petition

recission claim, the Calderons lacked standing to bring this action. Parker, 365

F.3d at 1272. Accordingly, we affirm the district court’s entry of summary

judgment on this basis. 2

       AFFIRMED.

       2
        In light of our standing determination, we do not reach the other arguments that the
Calderons raise in their brief which go to the merits of their claim.
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