Zarour v. JP Morgan Chase Bank

Background

Simon Zarour, who was representing himself, filed this civil action against J.P. Morgan Chase Bank and unnamed defendants. The action challenged decisions issued in Zarour’s bankruptcy proceeding in the U.S. Bankruptcy Court for the Southern District of New York.

The Bankruptcy Court had exercised jurisdiction over the proceeding, classified it as a core bankruptcy proceeding, and dismissed the petition. Zarour appealed the dismissal but later asked to withdraw that appeal, stating that he wanted to file an adversary complaint in the district court. A district judge granted the request to withdraw the appeal without deciding whether Zarour could file that complaint or proceed in district court.

Claims and Requested Relief

Zarour alleged that JPMorgan Chase submitted fraudulent documents to the Bankruptcy Court and falsely certified them. He asserted that the Bankruptcy Court relied on those documents when granting a motion to lift the automatic stay, which allegedly resulted in the unlawful sale of his property.

The district court understood the complaint as possibly seeking reconsideration of the Bankruptcy Court’s decision to deny Zarour’s petition and damages for alleged violations of the automatic stay that existed before the petition was dismissed. The opinion did not decide whether those allegations were valid.

Ruling

Judge Laura Taylor Swain referred the action to the U.S. Bankruptcy Court for the Southern District of New York under the court’s standing order of reference and 28 U.S.C. § 157(a). The court concluded that the action was at least minimally related to Zarour’s bankruptcy proceeding and concerned orders issued in that proceeding, meaning that Zarour might be able to seek the requested relief in Bankruptcy Court.

The clerk was directed to refer the action to Bankruptcy Court and close the district-court action. The court also certified that any appeal would not be taken in good faith and denied fee-free status for purposes of an appeal.