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Wenegieme v. Macco

United States District Court, E.D. New York

January 9, 2018

Celestine Wenegieme, Appellant,
Michael J. Macco, et al., Appellees.


          JOSEPH F. BIANCO United States District Judge.

         The instant case involves an appeal from the January 13, 2017 Order dismissing the voluntary bankruptcy proceeding (the “Dismissal Order”) of debtor Celestine Wenegieme (“appellant” or “Wenegieme”), pursuant to Chapter 13 of the Bankruptcy Code, in the United States Bankruptcy Court for the Eastern District of New York (the “Bankruptcy Court”), against Chapter 13 Trustee Michael Macco[1] (“Macco”) and the United States Trustee (“U.S. Trustee, ” and together with Macco, “the trustees” or “appellees”). Wenegieme appeals from Bankruptcy Judge Robert E. Grossman's Dismissal Order, which granted the U.S. Trustee's motion to dismiss pursuant to 11 U.S.C. § 1307(c) (“Section 1307(c)” or “§ 1307(c)”). (In re Wenegieme, Bkr. Dkt. No. 58.)[2] Judge Grossman dismissed the case with prejudice to filing for one year from the entry of his Order without a further order of the court. (Id.)

         As set forth below, after a de novo r e v i e w, the Court finds appellant's arguments on appeal to be without merit and affirms the January 13, 2017 Order of the Bankruptcy Court.

         I. Background

         The Court assumes the parties' familiarity with the full facts and procedural history of this action and summarizes the facts and history relevant to the instant appeal based on the Bankruptcy Record on Appeal (ECF No. 3)[3], filings in Wenegieme's bankruptcy proceeding, and the parties' affidavits and exhibits in this case.

         A. Facts

         On September 6, 2016, appellant filed a Chapter 13 bankruptcy petition in the Bankruptcy Court. (In re Wenegieme, Bkr. Dkt. No. 1.) Appellant sought to preserve his interest in real property located at 215 West 134th Street, New York, New York 10030 (the “Property”). (R-2 at 13, 25, 45-56.) Creditor Goldstein Group Holding (“Goldstein Group”) was the holder of a mortgage encumbering the Property and sought to proceed with a foreclosure action in New York State court (the “Foreclosure Action”)[4] to enforce its rights against the Property, which appellant and other family members obstructed through a series of filings in different bankruptcy proceedings. (R-2 at 45-56.) Appellant's bankruptcy petition resulted in an automatic stay of the Foreclosure Action.[5] Prior to filing the September 6, 2016 bankruptcy petition, appellant had previously filed two others: one in the District of Maryland on April 28, 2014, which was dismissed on October 2, 2014 (Bkr. Case No. 14-16790 (NVA), Dkt. No. 42), and the other in the Southern District of New York on April 27, 2015, which was dismissed on March 11, 2016 (Bkr. Case No. 15-11075 (JLG), Dkt. No. 30).

         After appellant filed his petition in the most recent bankruptcy proceeding (the proceeding underlying this appeal), on September 13, 2016, Goldstein Group moved for an order dismissing the bankruptcy proceeding or, in the alternative, terminating the automatic stay of sale, nunc pro tunc, of the Property. (In re Wenegieme, Bkr. Dkt. Nos. 10-13.) Appellant did not oppose Goldstein Group's motion. (See In re Wenegieme, Bkr. Dkt.) The Bankruptcy Court held a hearing on Goldstein Group's motion on September 19, 2016 (see id.), at which Judge Grossman determined that Goldstein Group had standing to file its motion, and that relief from the automatic stay was warranted for cause pursuant to 11 U.S.C. § 362(d)(1) (see Wenegieme v. Goldstein Grp. Holding, E.D.N.Y., Case No. 16-cv-05368-JFB, “Tr. of Sept. 19, 2016 Hr'g, ” ECF No. 19-1 at 19-20). Specifically, Judge Grossman found “abuse of the bankruptcy process” by appellant and that there was “no question . . . based upon the evidence that ha[d] been put before the [Bankruptcy] Court that there [was] ample cause for the relief from the stay that” appellee sought. (Id.)

         Accordingly, Judge Grossman issued the Order Granting Motion for Relief from Stay (“Stay Order”) on September 23, 2016, granting appellee's motion and directing that:

The automatic stay imposed by [the Bankruptcy] Court pursuant to 11 U.S.C. § 362(d)(1) is terminated, nunc pro tunc, to the date of filing, for cause as to [appellee]'s interest in the Property to allow [appellee]'s enforcement of its rights and remedies in and to the Property, including the finalization of a foreclosure sale held September 7, 2016, against the Property.

         (In re Wenegieme, Bkr. Dkt. No. 24 at 1-2.) As authorized by the Stay Order, the Property was sold to a third party at a September 7, 2016 public auction held in the Foreclosure Action, and the Property deed was transferred to that party. (Wenegieme v. Goldstein Grp. Holding, “Order Granting Mot. Dismiss, ” ECF No. 27 at 2.) Appellant appealed the Stay Order to this Court on September 27, 2016 (id., ECF No. 1), and the Court granted the motion to dismiss the appeal of the Stay Order on April 27, 2017 (id., ECF No. 27).

         Prior to the close of the appeal of the Stay Order, on January 13, 2017, the Bankruptcy Court issued the Dismissal Order, dismissing the bankruptcy proceeding in its entirety with prejudice to re-filing for one year from entry of the Dismissal Order. (In re Wenegieme, Bkr. Dkt. No. 58.) Appellant then filed this appeal of the Dismissal Order on March 3, 2017. (ECF No. 1.)

         B. Procedural History

         As stated supra, on March 3, 2017, Wenegieme filed his notice of appeal from the Bankruptcy Court's January 13, 2017 Order dismissing his bankruptcy case. The U.S. Trustee moved to dismiss the appeal for failure to prosecute on May 8, 2017. On July 10, 2017, this Court ordered appellant to submit his brief. After receiving an extension of time to file, on October 30, 2017, Wenegieme filed a brief in support of his appeal. The U.S. Trustee filed a brief in opposition ...

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