Court Opinion

ID: 6316250
Source: CourtListenerOpinion
Date Created: 2022-02-22 15:00:22.601763+00
Date Added: 2024-06-11T09:01:42.921154
License: Public Domain

21-810-bk
     In re: 22 Fiske Place, LLC

                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                                SUMMARY ORDER

     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
     CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
     PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A
     SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
     MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE
     (WITH THE NOTATION “SUMMARY ORDER”).       A PARTY CITING TO A
     SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
     REPRESENTED BY COUNSEL.

 1         At a stated term of the United States Court of Appeals for the Second Circuit,
 2   held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
 3   City of New York, on the 22nd day of February, two thousand twenty-two.
 4
 5           PRESENT:          PIERRE N. LEVAL,
 6                             RAYMOND J. LOHIER, JR.,
 7                             MYRNA PÉREZ,
 8                                      Circuit Judges.
 9           ------------------------------------------------------------------
10           IN RE: 22 FISKE PLACE, LLC,
11
12                    Debtor.
13           ------------------------------------------------------------------
14           NICHOLAS GORDON,
15
16                    Appellant,
17
18                      v.                                                        No. 21-810-bk
19
20           IAN J. GAZES,
21
22                    Appellee.
23           ------------------------------------------------------------------
 1         FOR APPELLANT:                              BRENT CHAPMAN, Law Office of
 2                                                     Brent Chapman, P.C., Garden
 3                                                     City, NY
 4
 5         FOR APPELLEE:                               DAVID DINOSO, Law Office of
 6                                                     David Dinoso, New York, NY

 7         Appeal from a judgment of the United States District Court for the

 8   Southern District of New York (Mary Kay Vyskocil, Judge).

 9         UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

10   AND DECREED that the judgment of the District Court is AFFIRMED.

11         Appellant Nicholas Gordon appeals from a judgment of the United States

12   District Court for the Southern District of New York (Vyskocil, J.) dismissing as

13   moot his appeal from a January 28, 2020 order issued by the United States

14   Bankruptcy Court for the Southern District of New York (Chapman, B.J.).        The

15   District Court also concluded that, in the alternative, Gordon forfeited any

16   challenge to one of the Bankruptcy Court’s bases for granting the order by failing

17   to address the issue before the Bankruptcy Court.    We assume the parties’

18   familiarity with the underlying facts and record of prior proceedings, to which

19   we refer only as necessary to explain our decision to affirm.

                                              2
1          This case arises from a Chapter 11 bankruptcy proceeding involving 22

2    Fiske Place, LLC (the “Debtor”), of which Gordon is the sole member.     In 2008

3    the Debtor acquired a brownstone following a foreclosure sale that generated

4    $214,979 in surplus funds, which were then deposited with the Clerk of the

5    Supreme Court of New York, Kings County.         In 2014 Gordon, on behalf of the

 6   Debtor, commenced a state court civil action (the “Holdover Action”) against the

7    previous owner of the brownstone, Fiske House Apartment Corporation (“Fiske

8    House”), to recoup approximately $717,271 in purportedly unpaid rent.      When

9    Fiske House failed to respond, the state court entered a default judgment in favor

10   of the Debtor and thereafter recognized the judgment as a valid lien against the

11   entirety of the surplus funds.

12         In May 2016 the Debtor filed for bankruptcy under Chapter 11 of the

13   Bankruptcy Code, and the Bankruptcy Court appointed Appellee Ian J. Gazes as

14   the Debtor estate’s trustee (the “Trustee”).   In June 2016 the Bankruptcy Court

15   confirmed the Trustee’s Chapter 11 Plan (the “Plan”).    Thereafter, acting on

16   behalf of the estate and with the Bankruptcy Court’s approval, the Trustee

17   moved in the Holdover Action to vacate the 2014 default judgment and dismiss

                                               3
 1   the action with prejudice on the ground that Gordon had fabricated allegations

 2   to support the Debtor’s unpaid rent claim, and the surplus funds in fact

 3   rightfully belonged to Fiske House.    Gordon moved to intervene in the

 4   Holdover Action, but on January 28, 2020, the Bankruptcy Court issued an order

 5   (1) declaring that Gordon’s motion to intervene violated both the automatic stay

 6   under § 362(a) of the Bankruptcy Code and Section 7.6 of the Trustee’s Chapter

 7   11 Plan, and (2) enjoining Gordon from intervening in the state court

 8   proceeding. 1    On appeal, Gordon principally argues that his appeal of the

 9   Bankruptcy Court’s order is not moot and that the automatic stay did not apply

10   to his motion to intervene.

11         We may affirm a district court’s decision on any ground that is supported

12   by the record.    See CBF Indústria de Gusa S/A v. AMCI Holdings, Inc., 850 F.3d

     1
       The Bankruptcy Court’s order prompted Gordon to withdraw his motion to intervene
     in the state Holdover Action. Before accepting Gordon’s request to withdraw the
     motion, the state court explained that it would have denied the motion in any event
     because Gordon lacked standing to participate in the proceeding. App’x 47–48. The
     judge then vacated the default judgment and dismissed the Holdover Action as
     “completely groundless.” App’x 47; see Supp. App’x 85–87.

                                               4
 1   58, 78 (2d Cir. 2017).   A party forfeits a legal argument 2 and is ordinarily

 2   foreclosed from raising it on appeal when it fails to present the argument in its

 3   case-in-chief. See Doe v. Trump Corp., 6 F.4th 400, 410 (2d Cir. 2021); Allianz

 4   Ins. Co. v. Lerner, 416 F.3d 109, 114 (2d Cir. 2005) (“[I]t is a well-established

 5   general rule that an appellate court will not consider an issue raised for the first

 6   time on appeal.” (quotation marks omitted)).       “Although we may exercise

 7   discretion to consider forfeited arguments where necessary to avoid a manifest

 8   injustice, the circumstances normally do not militate in favor of an exercise of

 9   discretion to address new arguments on appeal where those arguments were

10   available to the parties below and they proffer no reason for their failure to raise

11   the arguments below.” Doe, 6 F.4th at 410 (cleaned up).

12         Applying those principles here, we conclude that Gordon forfeited any

13   argument regarding the automatic stay, and thereby forfeited his challenge to the

14   Bankruptcy Court’s order. In opposing Gordon’s intervention before the

     2
       Although the parties used the term “waive[r]” to describe Gordon’s failure to raise an
     argument before the Bankruptcy Court, “[w]here a litigant’s action or inaction is
     deemed to incur the consequence of loss of a right, or, as here, a defense, the term
     ‘forfeiture’ is more appropriate.” See Doe v. Trump Corp., 6 F.4th 400, 409 n.6 (2d Cir.
     2021) (quotation marks omitted).

                                                5
 1   Bankruptcy Court, the Trustee argued that Gordon’s intervention in the

 2   Holdover Action violated the discharge injunction under the Plan and separately

 3   also the automatic stay provisions under the Plan and § 362 of the Bankruptcy

 4   Code.    In response, Gordon argued only that the discharge injunction did not

 5   apply.   He failed to raise any argument that the automatic stay did not apply to

 6   the Holdover Action, even in the context of discussing the separate issue of the

 7   discharge injunction.     Nor has Gordon provided any reason for failing to

 8   challenge the automatic stay.     The District Court therefore did not abuse its

9    discretion in concluding that Gordon forfeited his arguments relating to the

10   automatic stay, and we decline to exercise our discretion to review the challenge

11   in the first instance.   Because we conclude that Gordon forfeited any challenge

12   regarding the automatic stay, we need not address whether his appeal of the

13   Bankruptcy Court’s order is moot. We have considered Gordon’s other

14   remaining arguments and conclude that they are without merit.        For the

15   foregoing reasons, the judgment of the District Court is AFFIRMED.

16                                           FOR THE COURT:
17                                           Catherine O’Hagan Wolfe, Clerk of Court

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