United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
J. ROSENSTENGEL United States District Judge.
an appeal from the Bankruptcy Court's Order dated
December 30, 2015, which granted Creditor/Appellee Federal
National Mortgage Association's Motion for Relief from
the Automatic Stay and Co-Debtor Stay (In re Kim
Downs, Bankruptcy Case No. 15-31561, Doc. 41). The
appeal is fully briefed. Downs filed her Appellant Brief with
Appendix on March 23, 2016 (Doc. 8); Federal National
Mortgage Association filed its Appellee Brief on April 22,
2016 (Doc. 11); and Downs filed a Reply Brief on May 6, 2016
(Doc. 12). For the reasons set forth below, the Court affirms
the decision of the Bankruptcy Court.
Court adopts the background as set forth by the Bankruptcy
Court and summarizes the lengthy procedural history that is
not disputed by the parties (See In re Kim Downs,
Bankruptcy Case No. 15-31561, Doc. 41).
April 5, 2010, One West Bank, FSB (“One West”),
the predecessor in interest to Federal National Mortgage
Association (“FNMA”), filed a complaint in the
St. Clair County Circuit Court to foreclose on its mortgage
on the real estate known as 3521 Steinberg Farm Road,
Belleville, Illinois 62226 (“Property”). The
Property at that time was owned by Downs (formerly known as
Kim Hawthorne) and Gerald Hawthorne, the mortgagors, and
monthly mortgage payments had not been made in ten months. On
June 24, 2010, the St. Clair County Circuit Court entered an
Order of Default and a Judgment for Foreclosure and Sale of
the Property, in the amount of $319, 337.68. A judicial sale
of the Property was held on April 25, 2011, at which time One
West purchased the Property for the amount of its debt. On
May 19, 2011, the St. Clair County Circuit Court entered an
Order Approving the Report of Sale and Distribution. The
Property was then deeded to FNMA on May 25, 2011.
filed various post-judgment motions. In these motions, Downs
argued that One West had not complied with a Consent Order
between One West and the Office of Thrift Supervision, the
transfer of the ownership of the note and mortgage was
falsely attested to, One West did not have standing to bring
the original foreclosure action, and One West may have
committed fraud upon the St. Clair County Circuit Court. The
post-judgment motions were denied, as the court found that
Downs had not shown the existence of a meritorious defense
that was likely to succeed.
October 28, 2011, Downs appealed to the Illinois Appellate
Court for the Fifth District, raising the same issues. On
March 12, 2013, the Appellate Court affirmed the St. Clair
County Circuit Court's ruling. See OneWest Bank, FSB
v. Hawthorne, 2013 IL App (5th) 110475. The Appellate
Court agreed with the St. Clair County Circuit Court that
Downs had failed to plead facts showing the existence of a
meritorious defense to the foreclosure action. In addition,
the Appellate Court concluded that Downs also had failed to
demonstrate due diligence in pursuing or presenting her
defense prior to the entry of the foreclosure judgment.
October 29, 2013, Downs filed a separate lawsuit in the
Circuit Court of St. Clair County against One West and two
other defendants. In this lawsuit, Downs alleged that One
West had not followed proper foreclosure procedures, had not
been the legal holder of the mortgage and note, and had
lacked standing in the foreclosure action. On February 11,
2014, the Court dismissed Downs's complaint with
prejudice. Downs appealed that dismissal. On April 29, 2015,
the Illinois Appellate Court for the Fifth District affirmed
the dismissal, finding that her complaint was barred by the
doctrine of res judicata. See Downs v.
OneWestBank, FSB, 2015 IL App (5th) 140086-U.
on June 11, 2013 (during the pendency of her state court
proceedings), Downs filed for Chapter 13 bankruptcy. In
re Kim Downs, Bankruptcy Case No. 13-31082. On July 3,
2013, the bankruptcy case was dismissed for failure to comply
with an order requiring her to file documents. In re Kim
Downs, Bankruptcy Case No. 13-31082, Doc. 43.
August 7, 2013, Downs filed a second Chapter 13 bankruptcy
case. In re Kim Downs, Bankruptcy Case No. 13-31457.
On August 12, 2013, Creditor FNMA moved for relief from the
automatic stay, which the Bankruptcy Court granted on October
8, 2013 (written order entered on October 22, 2013). Downs
filed a Motion to Reconsider this order, which was denied on
November 26, 2013. On December 9, 2013, Downs appealed the
denial of the Motion to Reconsider to the District Court.
See Downs v. Federal National Mortgage Association,
Case No. 14-0003.
Bankruptcy Court dismissed her case on January 14, 2014, for
failing to file an amended Chapter 13 plan. In re Kim
Downs, Bankruptcy Case No. 13-31457, Doc. 63. On
February 5, 2014, Downs filed a second Notice of Appeal to
the District Court, this time appealing the dismissal of her
Chapter 13 case. See Downs v. Federal National Mortgage
Association, Case No. 14-1386.
District Court dismissed both appeals. On January 20, 2015,
the District Court dismissed Downs's appeal of the denial
of her Motion to Reconsider on the basis of her failure to
file requested documents, including her designation of the
record, statement of issues to be presented, and opening
brief. On February 19, 2015, the District Court dismissed
Downs's appeal of the dismissal of her case, citing her
failure to comply with Court rules and procedures.
appealed both orders. On August 13, 2015, the Seventh Circuit
Court of Appeals dismissed her first appeal as untimely.
In re Kim Downs, Case No. 15-1376. On September 23,
2015, the Seventh Circuit affirmed the District Court's
dismissal of her case for failure to prosecute. In re Kim
Downs, Case No. 15-1370.
October 5, 2015, Downs filed another Chapter 13 bankruptcy
case. This is the case subject to this appeal. On October 30,
2015, FNMA filed a Motion for Relief from the Automatic Stay
and Co-Debtor Stay (Doc. 17 in Bankruptcy Case No. 15-31561).
In the motion, FNMA asserted that, despite the confirmation
of the foreclosure sale, Downs has continued to reside on the
Property (Id.). Thus, FNMA sought relief from the
stay in order to assert its possessory rights as owner of the
Property (Id.). On December 30, 2015, the Bankruptcy
Court granted the Motion for Relief from Automatic Stay ...