Where the debtor was not deprived of the opportunity to fully participate in the state court proceedings, there was no “extrinsic fraud” and his bankruptcy court challenge to the state court judgment was barred by the Rooker-Feldman doctrine. Reyes v. Kutnerian (In re Reyes), No. 18-1229 (B.A.P. 9th Cir. April 19, 2019) (unpublished).
Enrique and Guadalupe Reyes placed their trailer home on land they rented in a month-to-month lease from Migran Kutnerian. Various disputes arose leading Kutnerian to give the Reyes a 30-day notice of eviction. When the Reyes failed to vacate the land, Kutnerian filed an unlawful detainer (UD) action against them. The Reyes filed a demurrer in lieu of an answer to the UD complaint. The court set the action for trial and allowed Reyes’s demurrer to stand as their answer. At trial, the Reyes asserted that they were not served with the eviction notice, and that, in any case, they were entitled to 60-day notice under state law because they had been on the property over one year and because the property was subject to mobile home park law. The trial court granted possession of the property to Kutnerian and ordered the Reyes to pay judgment in the amount of $699.99.
The state court of appeals rejected the Reyes’s arguments that they were deprived of due process when the lower court proceeded to trial before the Reyes filed an answer to the complaint and without ruling on the demurrer. The appellate court also rejected the Reyes’s arguments relating to the adequacy of the 30-day notice. The court affirmed.
The Reyes filed for chapter 13 bankruptcy. In that case, they moved for an order vacating the state UD judgment on grounds of due process deprivation based on “extrinsic fraud” perpetrated on the state court by Kutnerian. (The Reyes’s additional attempt to have the bankruptcy court vacate the judgment under F.R.C.P. 60(b) was rejected as that Rule is inapplicable to state court judgments). The bankruptcy court found that, under the Rooker-Feldman doctrine, it lacked jurisdiction to review the state court judgments. The Reyes appealed to the Bankruptcy Appellate Panel for the Ninth Circuit.
Broadly speaking, the Rooker-Feldman doctrine prohibits a federal court from exercising appellate jurisdiction over a state court judgment unless that judgment is found to be a legal nullity, void ab initio. Such may be the case if the state court judgment was obtained in the absence of jurisdiction or as a result of “extrinsic fraud.” For a state court judgment to be deemed void by reason of extrinsic fraud, the fraudulent conduct must have prevented the complaining party from presenting a defense in the state court proceeding.
The BAP found that was not the case here. All of the conduct the Reyes maintained was fraudulent—failure of service of the eviction notice, failure to provide 60-days notice under state law, and improper notice of the UD summons and complaint—were addressed during the state court proceedings. Furthermore, because the state court, at both the trial level and on appeal, found that the 30-day notice was sufficient, the state court judgment was not entered in the absence of jurisdiction. The Reyes’s argument that they were denied due process because judgment was entered without their having had the opportunity to file an answer to the UD complaint, was unavailing. They had every opportunity to present all relevant defenses and, in fact, did so.
The bankruptcy appellate panel agreed that the bankruptcy court lacked subject matter jurisdiction and affirmed.