United States District Court, S.D. Indiana, Indianapolis Division
OPINION AND ORDER
L. Miller, Jr., United States District Court Judge
and Carmen Francis sought relief that the bankruptcy court
had no power to grant, so the bankruptcy court dismissed
their adversary petition. Mr. and Mrs. Francis appeal, but
the bankruptcy court was exactly right.
Francises were granted a discharge in bankruptcy in their
2014 Chapter 7 case. In February 2016, the Marion Superior
Court entered a foreclosure judgment against the Francises
and in favor of EMC Mortgage LLC. The Francises returned to
the bankruptcy court and filed a new voluntary Chapter 13
petition in April 2016. The bankruptcy court dismissed that
petition after a June 2016 hearing on the U.S. Trustee's
motion because it was too soon after the bankruptcy discharge
in the 2014 case. Back in state court, the Indiana Court of
Appeals affirmed the foreclosure order in February 2017, also
declining to consider “new evidence” that
wasn't in the appellate record. In the same month, the
Francises' home was sold at a sheriff's sale.
2017, back in the bankruptcy court, the Francises filed the
adversary petition that gave rise to the order from which
they appeal today. They styled their filing a “Motion
for Order of Contempt Pursuant to FRBP 9020 of the Bankruptcy
Court Orders and Motion for Sanctions, Against the Creditor
of EMC Mortgage Corporation, LLC, Successors in interest EMC
Mortgage Corporation, a Subsidiary of J.P. Morgan Chase Bank,
et al.” The adversary complaint sought damages from EMC
for its alleged violation of the discharge injunction -
foreclosing on their home - in the state courts.
Judge James Carr issued a rule to show cause why the
adversary petition shouldn't be dismissed. The Francises
filed an amended petition on the day of the show cause
hearing. Judge Carr patiently explained to Mr. Francis that
while he would review the amended petition, it didn't
look to him as though the court had the authority to consider
the Francises' grievances. First, the actions of EMC and
the others in state court couldn't have violated any
order in the 2016 bankruptcy court because that case had been
dismissed without a discharge order. Second, to the extent
the Francises complained about what had happened in the state
proceedings, federal courts (other than the Supreme Court)
don't have the power to reverse actions taken by state
courts, D.C. Ct. App. v, Feldman, 460 U.S. 462, 476,
482-483 (1983); Rooker v. Fidelity Trust Co., 263
U.S. 413, 415-416 (1923), so any remedy for the Francises lay
in their then-pending (and eventually denied) belated motion
to transfer the state case to the Indiana Supreme Court.
Because the amended complaint contained nothing that would
create jurisdiction - the court's power to decide a case
- Judge Carr dismissed the adversary petition on June 30,
2017. This appeal followed five days later.
Francises devote the lion's share of their appellate
brief to an explanation of why they shouldn't have lost
their house and why it happened anyway, but only a few pages
address the bankruptcy court's conclusion that it had no
authority to hear the Francis's complaint.
from the Supreme Court, which was created by the constitution
rather than by statute, all federal courts are limited in
what authority they have. United States v.
Alkaramla, 872 F.3d 532, 534 (7th Cir. 2017). No.
federal court other than the Supreme Court has appellate
authority over the courts of any state. See 28
U.S.C. § 1257; United States v. Alkaramla, 872
F.3d at 534. A party seeking federal review of a state court
judgment can only get there by litigating to (and losing in)
the state's highest court, then asking the United States
Supreme Court to issue a writ of certiorari and consider the
The Rooker-Feldman doctrine prevents lower federal
courts from exercising jurisdiction over cases brought by
state court losers challenging state court judgments rendered
before the district court proceedings commenced. The
rationale for the doctrine is that no matter how wrong a
state court judgment may be under federal law, only the
Supreme Court of the United States has jurisdiction to review
Jakupovic v. Curran, 850 F.3d 898, 902 (7th Cir.
2017), quoting Sykes v. Cook Cty. Cir. Ct. Prob.
Div., 837 F.3d 736, 741-742 (7th Cir. 2016) (citations
omitted). A court must consider whether a federal claim is
inextricably intertwined with a state court judgment such
that the federal claim seeks, directly or indirectly, to set
aside the state claim. Taylor v. Fed. Nat'l Mortg.
Ass'n, 374 F.3d 529, 533 (7th Cir. 2004). If a
federal claim is inextricably intertwined with a state court
judgment, the Rooker-Feldman doctrine bars the
federal claim as long as the plaintiff had a reasonable
opportunity to raise the issue in state court proceedings.
v. Citibank, N.A., 852 F.3d 669 (7th Cir. 2017),
provides an example of the doctrine's operation in a case
similar to the Francis's adversary complaint. Mr. Mains
took out a home mortgage with Washington Mutual. Id.
at 674. After the mortgage went through several hands, Chase
Bank served Mr. Mains time default and acceleration notice in
June 2009 and filed a foreclosure action in April 2010.
Id. Mr. Mains contended that Chase Bank wasn't
the real party in interest, but the trial court disagreed and
granted Chase Bank summary judgment. Id. The Indiana
Court of Appeals affirmed the judgment, and Indiana Supreme
Court denied transfer. Id. Mr. Mains then brought
suit in this (federal) court, which ruled against him.
Id. The court of appeals affirmed the judgment under
the Rooker-Feldman doctrine, explaining:
Reading through the verbiage of Mains's filings, we are
left with the impression that the foundation of the present
suit is his allegation that the state court's foreclosure
judgment was in error because it rested on a fraud
perpetrated by the defendants. Mains wants the federal courts
to redress that wrong. That is precisely what
Rooker-Feldman prohibits, however. If we were to
delve into the question whether fraud tainted the state
court's judgment, the only relief we could give would be
to vacate that judgment. That would amount to an exercise of
de facto appellate jurisdiction, which is not permissible.
Mains's remedies lie in the Indiana courts. Indiana
allows a party to file for relief from judgment based on
newly discovered evidence or on the fraud or
misrepresentation of an adverse party, either through a
motion or through an independent action. See Ind. R. Trial P.
60(B). The state's courts are quite capable of protecting
their own integrity.
Id. at 676. See also Podemski v. U.S. Bank
Nat'l Ass'n for Residential Funding Mortgage
Prods., Inc., 2017 WL 5714760 at *2 (N.D. Ind. March 30,
2017) (“In filing her lawsuit and seeking the
injunctive relief, Plaintiff essentially wants to set aside
state court rulings regarding the foreclosure of the property
in question, the sheriff's sale, and her eviction. If
this Court were to agree with Plaintiff's
preposition-wrong as it is-that she properly rescinded the
mortgage loan, it would necessarily overrule the Indiana
court of appeals and the superior court. This is prohibited
by the Rooker-Feldman doctrine.”).
differences there might be between the facts of
Mains and the facts of this case don't affect
the operation of the Rooker-Feldman doctrine. The
Francises wanted the bankruptcy court to, for all practical
purposes, overturn the state court's judgment ordering
their house sold. As in Mains, the Francises'
arguments about fraud and contempt amount to the same
challenge to the Marion Superior Court judgment. The only
federal court with the power to conduct an appellate review
of the actions of the Indiana courts is the United States
Supreme Court, not the United States Bankruptcy Court for the
Southern District of Indiana. United States v.
Alkaramla, 872 F.3d at 534.
bankruptcy court ruled correctly, and had no jurisdiction to
rule in any other way. The bankruptcy ...