No: ____________
________________________________________________________________
XXX DISTRICT COURT
EASERN DISTRICT OFXXXX
______________________________________________________________
XXX,
Appellant (Debtor),
v.
XXX
COURTNEY R. XXX, FAY SERVICING
LLC, XXX LOAN MANAGEMENT SERVICES,
INC., XXX, THE XXXX
OF XXXX, DOES 1-100 INCLUSIVE
Appellees.
________________________________________________________________
Appeal from the United States Bankruptcy Court, Eastern District of XXX
Case No. XXX
________________________________________________________________
APPEAL BRIEF
________________________________________________________________
XXX
XXX
XXX
Appellant, in pro per
2
TABLE OF CONTENTS
TABLE OF CONTENTS i
TABLE OF AUTHORITIES ii
JURISDICTIONAL STATEMENT 1
STATEMENT OF THE ISSUES PRESENTED FOR REVIEW 1
STATEMENT OF THE CASE 1
SUMMARY OF THE ARGUMENT 2
THE APPLICABLE STADARD OF REVIEW 3
ARGUMENTS 3
A. The Trial Court failed to address the concern that the Proofs of Claim were
false 3
B. The Trial Court abused its discretion when it failed to address the $63,000
that was entered in the schedule falsely; the Court also failed to order an
accounting 4
C. The Trial Court failed to address the Trustee’s breached of fiduciary duty 5
D. Appellant is entitled to withdraw the case 6
CONCLUSION 7
CERTIFICATE OF COMPLIANCE 8
3
TABLE OF AUTHORITIES
Cases
In re C. Keffas & Son Florist, Inc., 240 B.R. 466 (Bankr. E.D.N.Y. 1999) 8
In re C. Keffas Son Florist, Inc., 240 B.R. 466 (Bankr. E.D.N.Y. 1999) 9
In re Isaacson, 478 B.R. 763, 792 (Bankr.E.D.Va.2012) 6
In re Salander-O’Reilly Galleries, LLC, 475 B.R. 9, 19 (S.D.N.Y. 2012) 7
Merchants Bank v. Goodyear, 228 B.R. 87, 880 (2d Cir.2003) 6
Overbaugh v. Household Bank N.A. ( In re Overbaugh ), 559 F.3d 125, 129 (2d
Cir.2009) 6
Parmalat Capital Fin. Ltd. v. Bank of Am. Corp., 639 F.3d 572, 580 (2d Cir.2011) 6
Santa Rosa Mall, LLC v. Sears Holdings Corp., No. 20-CV-03923, 2021 WL
4429507, at *2 (S.D.N.Y. Sept. 27, 2021) 7
Scheidelman v. Henderson (In re Henderson), 423 B.R. 598, 619
(Bankr.N.D.N.Y.2010) 6
Statutes
11 U.S. Code § 707(b)(1) 9
11 U.S.C. § 727(a) (4)(B). 6
11 USC. § 704(1) & (4) 8
28 U.S. Code § 158(a)(3) 3
4
Other Authorities
6 Collier on Bankruptcy, (15th Ed. Revised), ¶ 704.02[3] at 704-12 8
Rules
Fed. R. Bankr. P. 8013 6
5
JURISDICTIONAL STATEMENT
Appellant ASHMEEN MODIKHAN hereby appeals the order issued by
Judge Jill Mazer-Marino on August 25, 2022 (hereinafter “order”), pursuant to 28
U.S. Code § 158(a)(3). Notably, the order is an interlocutory order issued by a
bankruptcy judge of the United States Bankruptcy Court, Eastern District of New
York. Further, Appellant files this Appeal in the judicial district of the Trial Court.
STATEMENT OF THE ISSUES PRESENTED FOR REVIEW
1. WHETHER THE TRIAL COURT FAILED TO ADDRESS THE
CONCERN THAT THE PROOFS OF CLAIM WERE FALSE
2. WHETHER THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT
FAILED TO ADDRESS THE $63,000 THAT WAS ENTERED IN THE
SCHEDULE FALSELY; THE COURT ALSO FAILED TO ORDER AN
ACCOUNTING
3. WHETHER THE TRIAL COURT FAILED TO ADDRESS THE
TRUSTEE’S BREACHED OF FIDUCIARY DUTY
4. WHETHER APPELLANT IS ENTITLED TO WITHDRAW THE CASE
STATEMENT OF THE CASE
On or about January XXXX, the Appellant commenced the adversary
proceedings in this Honorable Court by filing a Complaint.
6
On October XXX Appellant filed in this Court a petition for relief under
Chapter 13 of the Bankruptcy Code. Consequently, the Appellant filed a Notice of
Voluntary Conversion from Chapter 13 to Chapter 7, upon which the case was
converted to a Chapter 7 bankruptcy.
The Court then appointed XXX as the Trustee of the Appellant’s
Estate.
On January XXX, alleged creditor Board of Managers of Patchogue
Homes Corp. Condominium #2 filed a proposed proof of claim, in the amount of
$24,736.15 for prepetition HOA fees and additional charges for the Appellant’s
Howard Beach Property of address 870 149 th Avenue, 5N, Howard Beach, NY
11414.
However, the proof of claim was defective. For instance, in Part 1, question
2 of Form 410, the proof of claim alleged that the claim had not been acquired
from someone else. However, a separate document disclosed that there was “prior
management balance”, which shows that the alleged creditor’s assertions were
wrong.
The creditor also attached a lien recorded on April 10, 2012, in the name of
Patchogue Homes Corp. Condominum #2. Contrary to the creditor’s averments,
the lien’s dates and their amounts were discharged in the Appellant’s 2012 Chapter
7 bankruptcy under case number 12-44750. This shows that the alleged creditor
7
had hired a new management company, which failed to update the creditor of the
discharged debt.
On August XXX, the Plaintiff filed an Amended Complaint asserting
causes of action for fraud, misrepresentation, wire fraud, and replevin and seeking
a temporary restraining order and $86,500.00, representing the amounts expended
by the Plaintiff in this bankruptcy case.
SUMMARY OF THE ARGUMENT
The Proof of Claim filed by Patchogue Homes Corp. was defective in that
inter alia, Part 1, question 2 of Form 410, the proof of claim alleged that the claim
had not been acquired from someone else, yet a separate record from said creditor
stated that there was prior management. Also, the claim addressed debts that are
already discharged.
Next, the Trial Court’s failure to address the $63,000 error stated in
Appellant’s records was erroneous. Further, the Court did not order an accounting
to get the correct facts in the finances. The Court also failed to order an account of
the Estate’s finances, which would have provided a clear picture of the Estate.
The Trustee severally breached the fiduciary duties required of Trustees in
bankruptcy proceedings. For instance, the Trustee was expected to protect the best
interests of the Appellant. However, the Trustee breached this duty by hired a law
8
firm for the rate of $700 per hour, which is clearly against Appellant’s financial
interests.
Collectively, the foregoing justifies the withdrawal of the Chapter 7 case by
the Appellant.
THE APPLICABLE STADARD OF REVIEW
A district court reviews a bankruptcy court’s findings of fact for clear error
and reviews its legal conclusions de novo. Overbaugh v. Household Bank N.A. ( In
re Overbaugh ), 559 F.3d 125, 129 (2d Cir.2009) (per curiam); see Fed. R. Bankr.
P. 8013 (district court may “affirm, modify, or reverse a bankruptcy judge’s
judgment, order, or decree,” and “[f]indings of fact, whether based on oral or
documentary evidence, shall not be set aside unless clearly erroneous”). “Mixed
questions of fact and law are subject to de novo review.” Merchants Bank v.
Goodyear, 228 B.R. 87, 880 (2d Cir.2003); see Parmalat Capital Fin. Ltd. v. Bank
of Am. Corp., 639 F.3d 572, 580 (2d Cir.2011).
ARGUMENTS
A. The Trial Court failed to address the concern that the Proofs of Claim
were false
A creditor may be denied discharge if he has “knowingly and fraudulently …
presented or used a false claim” in connection with a bankruptcy case. 11 U.S.C. §
727(a) (4)(B).
9
False claims under § 727(a)(4)(B) generally involve the scheduling of non-
existent debts, the scheduling of inflated debts, or the filing by the creditor of a
false proof of claim. In re Isaacson, 478 B.R. 763, 792 (Bankr.E.D.Va.2012); see
also Scheidelman v. Henderson (In re Henderson), 423 B.R. 598, 619
(Bankr.N.D.N.Y.2010).
As already identified above, Part 1, question 2 of Form 410, the proof of
claim alleged that the claim had not been acquired from someone else. However, a
separate document disclosed that there was “prior management balance”, which
shows that the alleged creditor’s assertions were wrong.
The creditor also attached a lien recorded on April 10, 2012, in the name of
Patchogue Homes Corp. Condominum #2. Contrary to the creditor’s averments,
the lien’s dates and their amounts were discharged in the Appellant’s 2012 Chapter
7 bankruptcy under case number 12-44750. This shows that the alleged creditor
had hired a new management company, which failed to update the creditor of the
discharged debt.
It follows; Judge Jill Mazer’s decision failed to regard Appellant’s concern
that the Proof of Claims was false and not valid. Further, both the Judge and the
Trustee refused to investigate the Proof of Claims. The court also never looked into
who is the Trust Creditor. It is Appellant’s averment that the Proof of Claims is
fraudulent.
10
B. The Trial Court abused its discretion when it failed to address the
$63,000 that was entered in the schedule falsely; the Court also failed to
order an accounting
An abuse of discretion may consist of an error of law or a clearly erroneous
finding of fact, or a decision that, though not necessarily the product of a legal
error or a clearly erroneous factual finding[, ] cannot be located within the range of
permissible decisions.” Santa Rosa Mall, LLC v. Sears Holdings Corp., No. 20-
CV-03923, 2021 WL 4429507, at *2 (S.D.N.Y. Sept. 27, 2021) (quoting In re
Salander-O’Reilly Galleries, LLC, 475 B.R. 9, 19 (S.D.N.Y. 2012) (alteration in
original)).
The Trustee failed to address Appellant’s concerns over the actions of
Appellant’s former attorney Darren Aronow, whose employee Marianne DeRosa
made an error indicating Appellant’s bank balance as $63,000, which error has
subjected Appellant to much harm. Appellant later found out that the correct
balance in the account was $1,700.78 and nothing close to $6,300 or $63,000. This
error portrayed Appellant as a fraud, which impeded the just prosecution of
Appellant’s case. Appellant has therefore had to expend resources and time in
pursuit of justice. It is also notable that when Darren Aronow stopped representing
Appellant, he did not provide any bank statements and accounting of the Estate’s
finances, to keep Appellant updated.
11
C. The Trial Court failed to address the Trustee’s breached of fiduciary
duty
11 USC. § 704(1) & (4) provides the duties of a Chapter 7 Trustee. It is the
Trustee’s duty to investigate the debtor’s financial affairs, collect the property of
the estate, reduce it to money, distribute the money to the creditors, and close the
estate "as expeditiously as is compatible with the best interests of parties in
interest." "[A] chapter 7 trustee voluntarily assumes a statutory duty under § 704(1)
to collect and reduce the property of the estate for which trustee serves, and close
such estate as expeditiously as is compatible with the best interests of parties in
interest." In re C. Keffas & Son Florist, Inc., 240 B.R. 466 (Bankr. E.D.N.Y.
1999).
It is also the trustee’s duty to both the debtor and the creditors to realize from
the estate all that is possible for distribution among the creditors. See 6 Collier on
Bankruptcy, (15th Ed. Revised), ¶ 704.02[3] at 704-12.
Here, Appellant the Trustee failed to act in the best interest of the Appellant,
or Appellant’s assets. For instance, the Trustee hired a law firm for the rate of $700
per hour, which is clearly against Appellant’s financial interests. The Trustee also
hired Appellant’s personal injury attorney, which creates a conflict of interest. The
Trustee’s further disregard of Appellant’s financial interests is depicted in the
Trustee’s increased fees, in the Declaration filed in December 2021.
12
Lastly, the Trustee erroneously sought control over Appellant’s Personal
Injury Case. Immediately after Appellant filed the motion to withdraw the Chapter
7 bankruptcy on March 14, 2022, Appellant’s former attorney called Appellant
indicating that the Trustee’s office was concerned that Appellant had filed a
motion to withdraw from the bankruptcy proceedings. Consequently, Appellant’s
former attorney claimed there was a verbal offer from the defendant to settle for
$400,000.00 and that they had been pushed up $500,000.00. Appellant was not
involved in the negotiations. The foregoing therefore shows how the Trustee has
breached its duties of loyalty to the Estate.
D. Appellant is entitled to withdraw the case
Pursuant 11 U.S. Code § 707(b)(1), “[a]fter notice and a hearing, the court,
on its own motion or on a motion by the United States trustee, trustee…, or any
party in interest, may dismiss a case filed by an individual debtor under this
chapter…” (Emphasis added). The Debtor is by definition a "party in interest" in
her own case and necessarily has an interest in the "expeditious" administration of
her case. See In re C. Keffas Son Florist, Inc., 240 B.R. 466 (Bankr. E.D.N.Y.
1999).
The foregoing averments in arguments A to D above show clearly that the
Trustee has failed to protect the Appellant and her assets. This amounts to just
cause to withdraw the Petition, since Appellant’s best interests are at stake.
13
CONCLUSION
In light of the foregoing, Appellant prays that this Court should issue an
Order dismissing and/or reversing the Bankruptcy Court’s decision issued on
August 25, 2022. Appellant further prays that this Court issues any other order it
deems just.
Date: _________________ XXX
XXX
Pro Se Debtor
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CERTIFICATE OF COMPLIANCE
Pursuant to Rule 32(g)(1), I hereby certify that this brief is prepared in
Times New Roman font size 14, and contains 1734 words. In making this
certification, I have relied on the word count of the computer program used to
prepare the brief.
Date: _________________ XXX
XXX
XXX
XXX
15
CERTIFICATE OF SERVICE
I certify that a copy of this Appeal Brief was served on [ENTER DATE] to the all
parties listed below:
XXXX Chapter 7 Trustee
XXX, LLP
XXX
XXX
XXX
XXX
16
Attorneys for Board of Managers of Patchogue Homes Corp. Condominium
#2
XXX
17XXDATE:
XXX
XXX
XXX
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