Niczyporuk v. O'Rourke

1 .7 [2] FILED IN THE U.S. DISTRICT COURT 3 EASTERN DISTRICT OF WASHINGTON Jun 06, 2025 [4] 5 SEAN F. MCAVOY, CLERK 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON [8] 9 No. 2:24-CV-00423-SAB 10 In re: 11 AGNES NICZYPORUK, 12 Debtor. ORDER DISMISSING APPEAL [15] On December 18, 2024, Debtor/Appellant Agnes Niczyporuk filed a Notice [16] of Appeal, appealing the bankruptcy court’s order overruling her Amended [17] Objection to Proof of Claim 5-1. Ms. Niczyporuk is representing herself in this [18] matter. Secured creditor U.S. Bank National Association as Trustee for LB-IGLOO [19] SERIES IV TRUST, its successors and/or assigns (“USB”) is represented by Eric [20] Marshack. [21] Background Facts [22] The following backgrounds facts are set forth in the bankruptcy court’s [23] order. [24] On or about February 25, 2008, Agnes Niczyporuk and Jaroslaw Niczyporuk [25] executed a promissory note in favor of Countrywide Bank, FSB, to refinance the [26] mortgage on their home located at 1315 N. Dunbarton Oaks Lane, Liberty Lake, [27] WA (“Property”). They secured the loan with a deed of trust in favor of [28] 1 Countrywide Home Loans, Inc. and listed Mortgage Electronic Registration 2 Systems, Inc. (MERS) as nominee. In 2009, the Niczporuks stopped paying their 3 mortgage and failed to obtain a loan modification. In 2011, MERS assigned the 4 Niczyporuks’ deed of trust to Bank of America, N.A. (“BofA”). That same year, 5 the Niczyporuks filed their first chapter 7 bankruptcy and scheduled an undisputed 6 secured debt of $440,000 in favor of BofA. The Niczyporuks stated they intended 7 to reaffirm the mortgage debt and did not dispute the validity of the loan or deed of 8 trust. The Niczyporuks received their first bankruptcy discharge in 2012. 9 In 2015 BofA assigned the Niczyporuks’ deed of trust to Ventures Trust 10 2013-I-H-R (“Ventures”). After Ventures scheduled a trustee’s sale in 2016, the 11 Niczyporuks sued BofA, Ventures, and others in state court to stop the foreclosure. 12 In that suit, the Niczyporuks challenged the validity of multiple assignments of the 13 deed of trust and questioned if Ventures possessed the original Note. In 2017, the 14 parties agreed to dismiss the case with prejudice. 15 Ventures assigned the Niczyporuks’ deed of trust to Wilmington Savings 16 Fund Society, FSB, who agreed to modify the Niczyporuks’ loan in July 2019. The 17 Niczyporuks made no payments on the loan after August 2019. 18 In 2020, Wilmington Savings Fund Society, FSB assigned the deed of trust 19 to DLJ Mortgage Capital, Inc., who assigned the Niczyporuks’ deed of trust to 20 U.S. Bank in 2023. 21 U.S. Bank appointed Michelle Ghidotti as successor trustee and scheduled a 22 trustee’s sale for March 24, 2023. In March 2023, the Niczyporuks sued Michelle 23 Ghidotti in state court to stop the foreclosure on the Property. Two days prior to 24 the scheduled sale, Agnes Niczyporuk filed a chapter 13 bankruptcy petition. After 25 the Trustee and U.S. Bank objected to confirmation, Ms. Niczyporuk voluntarily 26 converted her chapter 13 case to chapter 7 and amended her schedules. 27 On May 10, 2023, Ms. Niczyporuk filed an adversary lawsuit against U.S. 28 Bank, U.S. Bank National Association, Michelle Ghidotti, and others seeking in 1 relevant part: (1) injunctive relief against foreclosure; (2) declaratory judgments 2 that Debtor’s loan obligations is unenforceable; and (3) damages for alleged fraud, 3 violations of the stay in the 2012 case, and (4) violations of state law. 4 On September 11, 2023, after converting U.S. Bank’s Motion to Dismiss the 5 adversary lawsuit to a Motion for Summary Judgment, the bankruptcy court 6 granted the motion in the adversary case and dismissed Ms. Niczyporuk’s 7 complaint with prejudice. On September 14, 2023, the bankruptcy court granted 8 U.S. Bank’s motion for relief from stay. 9 Ms. Niczyporuk filed a Motion for Reconsideration, asserting there were 10 questions of fact regarding the location of the original note and the ownership of 11 her loan. The bankruptcy court denied her motion. The Bankruptcy Appellate 12 Panel of the Ninth Circuit affirmed the bankruptcy court’s order. 13 On November 14, 2024, Ms. Niczyporuk filed an Amended Objection, in 14 which she again disputed the validity of U.S. Bank’s claim. She argued she was 15 denied her constitutional rights because the bankruptcy court failed to properly 16 consider her objection to U.S. Bank’s claim. 17 The bankruptcy court relied on the claims preclusion doctrine to overrule 18 Ms. Niczyporuk’s objection. It noted Ms. Niczyporuk was advancing arguments 19 essentially identical to those previously raised and rejected by the bankruptcy court 20 and Bankruptcy Appellate Panel, she offered no new evidence or substantive 21 allegations of fraud and failed to raise any issues that were not already rejected on 22 appeal. Ms. Niczyporuk is appealing that Order. 23 Standard of Review 24 A district court has jurisdiction to hear an appeal from a bankruptcy court. [25] 28 U.S.C. § 158 . “On an appeal the district court or bankruptcy appellate panel 26 may affirm, modify, or reverse a bankruptcy judge’s judgment, order, or decree or 27 remand with instructions for further proceedings.” Fed. R. Bankr. P. 8013. 28 When examining an appeal, a district court uses the same standard of review that a 1 circuit would use when reviewing a district court’s decision. See In re Baroff, 105 2 F.3d 439 , 441 (9th Cir. 1997). A bankruptcy court’s order overruling objections is 3 reviewed for abuse of discretion. In re Medina, 2020 WL 885967 (9th Cir. BAP 4 2020). 5 A bankruptcy court abuses its discretion if it applies the wrong legal 6 standard, misapplies the correct legal standard, or makes factual findings that are 7 illogical, implausible, or without support in the record. United States v. Hinkson, [8] 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en banc). 9 Analysis 10 The bankruptcy court did not abuse its discretion in finding that U.S. Bank’s 11 proof of claim was valid. The bankruptcy court properly found Debtor/Appellant’s 12 arguments before the bankruptcy court were identical to those previously raised, 13 considered and rejected by the courts, including the constitutional claims and 14 challenges to standing, and therefore were barred by claim preclusion. Courts have 15 consistently held that U.S. Bank Trust maintained possession of the original note 16 and it was not required to present the original note to prove possession. Finally, it 17 appears the issue of proof of claims in the bankruptcy proceedings is moot, given 18 the sale of the property in question. See In re Royal Properties, Inc., 621 F.2d 984 , 19 986 (9th Cir. 1980) (“Once the orders have been performed, an appeal attacking 20 the order is moot). Even if the Court were to grant Ms. Niczyporuk’s requested 21 relief, it would be an advisory opinion upon a moot question. 22 // 23 // 24 // 25 // 26 // 27 // 28 // 1 Accordingly, IT IS HEREBY ORDERED: 1. Debtor/Appellant’s Appeal is DISMISSED, with prejudice. 3 2. Debtor/Appellant’s Motion for Judicial Notice of Transcript Correction Appeal (Case No. 2:25-cv-00179-TOR), ECF No. 13, is DENIED, as moot. 3. Debtor/Appellant’s Pro Se Motion for Electronic Case Filing Authorization, ECF No. 14, is DENIED, as moot. 8 4. The Clerk of Court is directed to enter judgment in against Debtor/Appellant and in favor of Appellees. 10 IT IS SO ORDERED. The Clerk of Court is directed to enter this Order, 11|| forward copies to Plaintiff and counsel and close the file. 12 DATED this 6th day of June 2025. 14 oY 2 ~ 15 sin in har 16 Chief United States District Judge [28] ORDER DISMISSING APPEAL ~ 5