A Wild West Blunder: PHH’s Hired Bounty Hunters at Hopkins Law Deliver a Cockamamie Response

TO THE HONORABLE UNITED STATES DISTRICT COURT JUDGE AND ALL INTERESTED PARTIES:

In legal terms, this acrimonious dispute centers around a “very important piece of real property”—the Plaintiff’s homestead. Setting aside the personal nature of the home, the Texas Constitution, state law, and the federal bankruptcy code, along with their associated procedures and rules, are all designed to protect this “very important piece of real property” from being wrongfully taken by unscrupulous, predatory lenders and loan sharks like the Defendants.

Defendants’ financial penalty data obtained from Violation Tracker website at

https://violationtracker.goodjobsfirst.org/?company=ocwen

(Last visited: Nov. 16, 2024)

When a home equity loan (HELOC) is involved, this property receives additional protections under these laws.

The Texas Constitution ensures the homeowner is safeguarded by requiring strict compliance with numerous statutory requirements, as Texas is considered a “debtor-friendly” state.

Texas common law and property laws treat any HELOC as a loan secured by the property itself, and any disputes over such a loan are governed by a strict four-year foreclosure timeline.

Importantly, there is no personal liability for the homeowner as long as the property remains exempt as their homestead (i.e., personal residence).

In legal terms, this is known as an in rem action, as confirmed in the deed of trust, which outlines the legal agreement between the parties for the HELOC loan.

This protection can be extended for an additional four-year period, either ex-parte or by mutual agreement, but only if the extension of time is properly recorded in the county’s real property records.

See; Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex. 2001) (“This four-year limitations period can be suspended by filing a written agreement in the county clerk’s office where the real property is located. Tex. Civ. Prac. Rem. Code § 16.036.”).

Similarly, federal bankruptcy laws treat this “very important piece of real property” as part of the bankruptcy estate, managed by the trustee upon the homeowner’s filing of the bankruptcy petition.

Once the bankruptcy is filed, this property legally detaches from the homeowner, who is then considered the “renting debtor” during the proceedings.

The Debtor’s “very important piece of real property” owner status returns after the bankruptcy case matures.

Returning to the specific facts of this case and recognizing that the court and parties are fully aware of the history of this prolonged and contentious legal dispute, a brief summary is provided here, relevant to this motion.

On March 12, 2024, the Defendants snap-removed the Plaintiff’s lawsuit from the Harris County District Court (state court) to this District Court, knowingly violating the automatic bankruptcy stay.

Additionally, they engaged in forum shopping, often referred to as “judge shopping,” by removing the case to this District Court instead of the Bankruptcy Court, where Joanna Burke had already filed for voluntary Chapter 13 bankruptcy protection on March 1, 2024—well before the unlawful snap-removal.

At the time, the automatic stay was in full effect, and under federal bankruptcy law, all debt collection litigation should cease during this period. As a result of these actions, the court was now faced two related cases: one in the District Court and the other in Bankruptcy Court.

The District Court case was assigned to Senior Judge Ewing Werlein, Jr., while the bankruptcy case was assigned to Judge Jeffrey Norman.

Under General Order 2012-06 for the Southern District federal courts, all bankruptcy-related cases should be automatically transferred to the bankruptcy court as an Adversary Case.

However, this transfer did not occur.

After partial briefing and consideration of the Plaintiff’s Emergency Motion to Remand and related pleadings, three months later, on June 17, 2024, this Court issued five orders.

Most notably, the Emergency Motion to Remand was denied (Doc. 18), based on the limited briefing regarding the violation of the automatic stay.

In Judge Werlein’s opinion, the District Court, not the Bankruptcy Court had “related to” jurisdiction at the time of the unlawful snap-removal.

This is a central issue in the current dispute and response by Defendants to the Plaintiff’s motion.

A SUMMARY OF PHH’s LEGAL & JURISDICTIONAL ARGUMENTS

PHH’s position is like a passenger in a car, eagerly urging the driver, Judge Werlein, to stay on a reckless route—a one-way street, but only in reverse.

They insist that the law allows them to travel against the traffic of established legal precedent, convinced that the “related to” jurisdiction can be manipulated like a GPS recalculating a wrong turn.

They argue that it’s not only permissible, but the law itself.

Yet as Judge Werlein grips the wheel, steering the vehicle full speed down this dangerous road, the Plaintiff has already mapped the entire highway of federal case law.

She has found nothing—a barren stretch of road with no signs, no cases, no guiding principles that could justify this illegal u-turn.

She’s searched the federal docket for the past decade, only to find the highway is clear of any precedent that would give this maneuver any legal legitimacy.

And still, PHH shouts from the passenger seat, frantically waving a map that’s blank on every page, desperately claiming that the driver’s instincts are correct, that they can still make it.

Their response, a cacophony of baseless arguments, insists that Judge Werlein’s course is right, but not a single case is offered to back them up.

They’re screaming into the void, offering no legal foundation, no reasoning—just empty assurances as the vehicle barrels ahead.

The Defendants are not silent bystanders; they’re active participants in this reckless drive, cheering on the misguided driver while ignoring the cliff that looms just ahead.

No legal authority.

No support.

Only hollow claims of confidence, pushing full speed into the unknown, while the road to disaster is clearly marked.

Their argument is suicidal, and this court should not become part of the wreckage.

Instead, it should dismiss the case and remand it to state court, where the law can take a safer, more well-driven course.

The Numbered Summarized Responses with Bulleted Replies by Plaintiff

1.      Burke’s “Motion to Dismiss for Lack of Jurisdiction” is her second attempt to challenge the jurisdiction of this court and amounts to nothing more than a motion to reconsider her Motion to Remand.

RESPONSE: The Defendants continue to ignore the Plaintiff’s legal arguments and authorities, including the motion’s section labeled: “CHECKING JURISDICTION: LEGAL AUTHORITIES” which explains that subject-matter jurisdiction [and void judments] can be contested at any time, and the court is obligated to check its jurisdiction sua sponte.

2.      Though a valid judgment for foreclosure exists, Burke continues to file repeated frivolous lawsuits to stop the foreclosure sale from taking place.

RESPONSE: See; related pleadings, including surreplies wherein Plaintiff provides full legal argument as to why the judgment of foreclosure is deficient, void and time-barred.

Additionally, Defendants continually present a frivolous argument, namely that res judicata applies, yet the very reasoning they rely upon is rejected by their own legal authority, namely Maluski v. Rushmore Loan Mgmt. Servs., LLC, No. 14-17-00233-CV (Tex. App. Oct. 4, 2018).

3.      Burke’s second attempt to contest jurisdiction of this Court presents no new compelling legal argument for the Court to reconsider its jurisdiction.

RESPONSE: False, refer to Plaintiff’s motion and exhibits in conjunction with this reply.

4.      Gen. Order 2012-06. Burke confuses internal procedures of the Court with the jurisdiction of the Court.

RESPONSE: False, refer to 6., and Plaintiff’s motion and exhibits in conjunction with this reply.

5.      Bankruptcy courts are simply a ‘unit’ of the district court where they are located.

RESPONSE: True, but both Judge Werlein and PHH misinterpret the clear facts. The bankruptcy court, as a unit of the district court, has been authorized to take full charge of its own cases, as well as those “related to” its jurisdiction.

The “related to” jurisdiction is specifically assigned to the bankruptcy court, and any attempt to contravene General Order 2012-06 or the governing bankruptcy laws is a clear violation of established legal rules, procedures, and authority.

6.      Burke’s argument (properly framed) is not one about jurisdiction, it is about Burke’s perception that the Court elected to maintain the case on its docket instead of referring the matter to its adjunct.

RESPONSE: False. “Although jurisdiction under §§ 1334 and 1452 lies with the district court, 28 U.S.C. § 157(a) provides that “[e]ach district court may provide that any or all proceedings arising under title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district. 28 U.S.C. § 157(a). The Southern District of Texas has so provided.

See General Order 2012-6 (May 24, 2012).” Cantu v. Stone, CIVIL ACTION No. 7:13-CV-292, at *5 n.4 (S.D. Tex. July 1, 2014).

7.      In re Hester, 899 F.2d 361, 3698 (5th Cir. 1990). The Fifth Circuit made it abundantly clear that a bankruptcy court’s jurisdiction rests on a district court’s jurisdiction.

RESPONSE: The next sentence in PHH’s partial citation of Hester states “It is to the district court that bankruptcy court litigants must turn in the first instance for careful review of the bankruptcy court’s actions.”, which is discussing why the 5th Circuit does not have jurisdiction to review the appeal, if it wasn’t mandamus – and which only confirms the Plaintiff’s argument that it is the Bankruptcy Court which controls proceedings, with any ‘appeals’ to the District Court and not the Fifth Circuit, which would not have jurisdiction to review.

8.      Thirteen years later affirmed in Bissonnet Invs. Llc. v. Quinlan, 320 F.3d 520, 525 (5th Cir. 2003)

RESPONSE: Bissonnet is outdated legal authority, but for the purposes of addressing the Defendants absurd argument, Bissonnet sub-cites in the quoted extract provided by PHH to Celotex, via the Matter of Walker, 51 F.3d 562, 568-69 (5th Cir. 1995), which stated:

“”Congress intended to grant comprehensive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters connected with the bankruptcy estate.””

– and discusses this in granular detail.

Again, PHH attempts to steer the vehicle in contempt of the clear road signage which directs all traffic to Bankruptcy Courts – and that includes transferring related matters like Plaintiff’s case.

9. Burke had an active bankruptcy case pending at the time of removal of this case, and the Court determined it has “related to jurisdiction” over this case as district courts have original and exclusive jurisdiction of all cases under Title 11. See 28 U.S.C. §1334. [Doc.18].

RESPONSE: The opinion by Senior District Judge Ewing Werlein, Jr., is erroneous. Refer to Plaintiff’s motion and exhibits in conjunction with this reply.

Burke’s grounds lack merit and are moot.

RESPONSE: False, refer to Plaintiff’s motion and exhibits in conjunction with this reply re ‘grounds’ and see Plaintiff’s own case citations in their response, which clearly state,

“The existence of subject matter jurisdiction is determined at the time of removal.”

– Bissonnet, 320 F.3d 520, 525.

10. Burke’s argument in the alternative, that the Court should have transferred the matter to bankruptcy court and is now without jurisdiction, is wrong.

RESPONSE: False, refer to Plaintiff’s motion and exhibits in conjunction with this reply.

11.    Burke’s lawsuit asserts “non-core” claims.

RESPONSE: See; Neely v. Trippon (In re Neely), BANKRUPTCY No. 04-44898-H5-7, at *14-15 (S.D. Tex. June 19, 2013)

(Fifth Circuit: Analysis of core versus non-core is the not necessary to assert “related to” jurisdiction. The Bankruptcy Court can analyze those facts).

12.    Nothing would be gained by having a bankruptcy court preside over this lawsuit as all of Burke’s prior litigation has been conducted in the federal district court.

RESPONSE: Irrelevant conclusory assumption which is not a legal argument founded in law.

13. As Burke demanded a jury trial, this would have required returning to the district court. Given Burke’s history of litigation, judicial resources strongly favored keeping the matter in the district court.

RESPONSE: This argument has been rejected in Supreme Court decisions like Langenkamp v. Culp, 498 U.S. 42, 111 S.Ct. 330, 112 L.Ed.2d 343 (1990) (per curiam).

Furthermore, in Katchen v. Landy, 382 U.S. 323, 336–37, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966):

“[E]stablish[ed] uniform laws on the subject of bankruptcy, [which] convert [ ] the creditor’s legal claim into an equitable claim to a pro rata share of the res…. As bankruptcy courts have summary jurisdiction to adjudicate controversies relating to property over which they have actual or constructive possession, and as the proceedings of bankruptcy courts are inherently proceedings in equity, there is no Seventh Amendment right to a jury trial for determination of objections to claims[.]”.

Whilst there was no claim filed in Plaintiff’s bankruptcy, DBNTCO had made an appearance and court in Katchen determined that the Bankruptcy Court is the correct “unit” for determination of property matters to which they have constructive possession.

14.    No factor that the Court may consider weighed in favor of transfer of this case to bankruptcy court for partial consideration of the issues. Now, transfer of the case is moot, given that Burke’s bankruptcy was dismissed.

RESPONSE: This is a conclusory statement that lacks legal substance and fails to present any substantive argument. The reference to “mootness” is irrelevant to the core issues raised in this motion, as discussed in 9. above.

15.    As to Burke’s continued argument regarding the automatic stay, this has been previously briefed and the Court found no violation of the automatic stay. [Doc. 18].

The bankruptcy stay only works to stop suits “against bankrupt debtors, not suits filed by bankrupt debtors.”

As the Court found, the automatic stay was simply not applicable to a lawsuit initiated by Burke and did not bar its removal to this court.

RESPONSE: False, refer to Plaintiff’s motion and exhibits in conjunction with this reply.

DECLARATION

Pursuant to Texas Civil Practice and Remedies Code Section 132.001 and “In lieu of a sworn affidavit, a litigant may submit an unsworn declaration as evidence against summary judgment. See 28 U.S.C. § 1746.”, I hereby provide my unsworn declaration. My name is Joanna …, and I declare under penalty of perjury that all information herein is true and correct.

CONCLUSION

In Cheejati v. Blinken (106 F.4th 388, 397), the Fifth Circuit clearly stated:

“When a court lacks jurisdiction, it must dismiss the case and not proceed to the merits.”

This principle directly applies here. If the District Court lacks jurisdiction over this case due to the improper removal and violation of the automatic stay, it cannot hear the case and must dismiss it or transfer it to the proper forum.

Both Judge Werlein and PHH’s attempt to retain jurisdiction in the District Court under the “related to” theory runs afoul of the Fifth Circuit’s guidance in Cheejati and fails to overcome the clear procedural rules governing bankruptcy matters.

Further, as noted by Magistrate Judge Andrew Edison in Vita Equipose Equity Partners, LLC v. Tig Romspen U.S. Master Mortg., Civil Action No. 3:21-cv-00358 (S.D. Tex. Aug. 12, 2024), under 28 U.S.C. § 1447(c), once it becomes clear that the District Court lacks subject matter jurisdiction, the case must be remanded to the proper forum. Judge Edison explained:

“Under 28 U.S.C. § 1447(c), once it becomes clear that the District Court lacks subject matter jurisdiction, the case must be remanded to the proper forum.”.

Finally, conflating bankruptcy terminology does not support Judge Werlein’s invented jurisdiction. In light of the above, the Plaintiff’s verified motion should be GRANTED. A proposed order has previously been provided.

RESPECTFULLY submitted this 19th day of November, 2024.

PHH Mortgage Corporation (“PHH”) files this its Response in Opposition to Plaintiff Joanna Burke’s (“Burke” or “Plaintiff”) Motion to Dismiss for Lack of Jurisdiction (the “Motion”).

[Doc. 33].

In support thereof, PHH would respectfully show unto the Court the following:

I.  SUMMARY& BACKGROUND

1.                  Burke’s “Motion to Dismiss for Lack of Jurisdiction” is her second attempt to challenge the jurisdiction of this court and amounts to nothing more than a motion to reconsider her Motion to Remand, which was denied by this Court.

[Doc. 18].

Burke’s motion to dismiss for lack of jurisdiction is without merit.

2.                  This suit arises from Burke’s continuing battle to prevent foreclosure of the Property.

Though a valid judgment for foreclosure exists, Burke continues to file repeated frivolous lawsuits to stop the foreclosure sale from taking place.

Burke’s repetitive lawsuits have now delayed the foreclosure of the Property1 for fourteen (14) years.

Burke filed this suit to again stop the foreclosure, asserting affirmative claims against all parties that were involved in the latest foreclosure posting.

1 46 Kingwood Greens Drive, Kingwood, Texas 77339 (“Property”).

After the state court denied her request to stop the sale, she filed her first bankruptcy.3

Shortly thereafter, the Bankruptcy Court dismissed her case for failure to file the required bankruptcy documents.

A month later, Burke finally served PHH with her lawsuit.

After learning the property was posted again for foreclosure, Burke filed her second bankruptcy.

Thereafter, PHH removed the case to this Court. Burke then moved for remand, which was denied by the Court.

[Doc. 18].

3.                  Burke’s second attempt to contest jurisdiction of this Court presents no new compelling legal argument for the Court to reconsider its jurisdiction.

For the reasoning previously provided by this Court in denying remand, and as set out below, this Court has jurisdiction and should deny Plaintiff’s Motion.

II.  ARGUMENT AND AUTHORITIES

4.                  Displaying a misunderstanding of the structure of our federal courts, Burke argues the District Court is without jurisdiction over this case because she believes the bankruptcy court possesses exclusive jurisdiction over the matter.

At the core of Burke’s reasoning is General Order 2012-06, which sets out an internal procedure of the United States District Court for the Southern District of Texas regarding referral of proceedings related to a case under Title 11 of the United States Code to the bankruptcy court of the district.

See, Gen. Order 2012-06.

Burke confuses internal procedures of the Court with the jurisdiction of the Court.

5.                  Burke fails to understand that a bankruptcy court sits as an adjunct to a district court, with the district court first having jurisdiction over a matter.

A district court has the authority to refer a case within its jurisdiction to its adjunct bankruptcy court.

The United States Code provides in straightforward fashion that bankruptcy courts are simply a ‘unit’ of the district court where they are located.

Specifically, 28 U.S.C. §151 provides:

In each judicial district, the bankruptcy judges in regular active service shall constitute a unit of the district court to be known as the bankruptcy court for that district. Each bankruptcy judge, as a judicial officer of the district court, may exercise the authority conferred under this chapter [28 USC §§ 151 et seq.] with respect to any action, suit, or proceeding and may preside alone and hold a regular or special session of the court, except as otherwise provided by law or by rule or order of the district court.

28 U.S.C. §151.

6.                  It is because the Court has jurisdiction over this case that the United States Bankruptcy Court for the Southern District of Texas could even possess jurisdiction over this matter, if the Court had referred the matter to the bankruptcy court.

Burke’s argument (properly framed) is not one about jurisdiction, it is about Burke’s perception that the Court elected to maintain the case on its docket instead of referring the matter to its adjunct.

7.                  The Fifth Circuit made it abundantly clear that a bankruptcy court’s jurisdiction rests on a district court’s jurisdiction:

The bankruptcy court functions as an adjunct of the district court and, indeed, the constitutionality of the bankruptcy court’s jurisdiction rests on that fact and on the careful supervision that the district court is bound to provide over the bankruptcy court.

In re Hester, 899 F.2d 361, 3698 (5th Cir. 1990).

8.                  Thirteen years after In re Hester, the Fifth Circuit clarified again that federal courts are courts of limited jurisdiction, with bankruptcy courts serving as adjuncts to district courts:

All federal courts are courts of limited jurisdiction.

A bankruptcy court’s jurisdiction is especially circumscribed and wholly “grounded in, and limited by, statute.”

Celotex Corp. v. Edwards, 514 U.S. 300, 307, 131 L. Ed. 2d 403, 115 S. Ct. 1493 (1995).

District courts, and their adjunct bankruptcy courts, have jurisdiction “of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 1334(b).

Bissonnet Invs. Llc. v. Quinlan, 320 F.3d 520, 525 (5th Cir. 2003).

9.                  Here, Burke had an active bankruptcy case pending at the time of removal of this case, and the Court determined it has “related to jurisdiction” over this case as district courts have original and exclusive jurisdiction of all cases under Title 11.

See 28 U.S.C. §1334.2 [Doc.18].

To the extent necessary, and for the sake of judicial efficiency, PHH incorporates by reference its prior argument regarding the Court’s ‘related to’ jurisdiction [Doc. 8].

Burke’s grounds lack merit and are moot.

10.              Moreover, Burke’s argument in the alternative, that the Court should have transferred the matter to bankruptcy court and is now without jurisdiction, is wrong.

11.              Burke’s lawsuit asserts claims for violation of the Texas Constitution, Malicious Use of Process, Conspiracy, Fraud, Intentional Infliction of Emotional Distress, Mental Anguish (as an affirmative claim), Texas Debt Collection Practices Act violations, Declaratory Relief, and Injunctive Relief.

These claims largely do not invoke substantive rights created by federal bankruptcy law, could exist outside of the bankruptcy context and constitute “non-core” claims.

See generally, Longhorn Partners Pipeline L.P. v. KM Liquids Terminals, L.L.C, 40 B.R. 90, 96 (Bankr. S.D. Tex. 2009).

The only core claim asserted by Burke was her alleged claim of violation of the automatic stay, which was determined against her.

[Doc. 18].

As the bankruptcy courts are limited in power, parties must look at the bankruptcy court’s power over referred matters and issues that are “non-core.”

Id. §157(b).

If a proceeding is not core, the bankruptcy judge may only submit proposed findings of fact and conclusions of law to the district court; only the district court may enter a final order,

“after considering the bankruptcy judge’s proposed findings and conclusions and after reviewing de novo those matters to which any party has timely and specifically objected.”

2 To be clear, the Court possesses both federal question jurisdiction and diversity jurisdiction.

[Doc. 8].

The Court did not reach PHH’s assertion regarding federal question jurisdiction or diversity jurisdiction in its Order on Motion to Remand [Doc. 18], since it determined it possessed “related to” jurisdiction.

28 U.S.C. §157(c)(i);

Vela v. Enron Oil & Gas Co., No. 5:02-cv-37, 2007 U.S. Dist. LEXIS 38997 at *9 (S.D. Tex. 2007).

12.              Further, nothing would be gained by having a bankruptcy court preside over this lawsuit if a bankruptcy court did not possess any intimate familiarity with the case in which to justify its assertion of jurisdiction.

In re Doctors Hosp. 1997, L.P., 351 B.R. 813, 868 (Bankr. S.D. Tex. 2006).

As all of Burke’s prior litigation has been conducted in the federal district court, this Court is intimately familiar with Burke and her claims.

13.              In typical pro se style, Burke has attempted to forum shop her claims in Texas state courts, bankruptcy courts, and Minnesota federal courts (along with multiple attempted interventions in many other states). See PHH’s Second Motion to Declare Burke as a Vexatious Litigant, [Doc. 28].

Also important, as Burke demanded a jury trial, this would have required returning to the district court.

In re Align Strategic Partners, LLC, 2019 Bankr. LEXIS 1906 at *5.

Given Burke’s history of litigation, judicial resources strongly favored keeping the matter in the district court.

14.              No factor that the Court may consider weighed in favor of transfer of this case to bankruptcy court for partial consideration of the issues.

Now, transfer of the case is moot, given that Burke’s bankruptcy was dismissed within 30 days of its filing for non-compliance in failing to comply with the Court’s order on filing any bankruptcy documents (schedules, statement of financial affairs, income, etc.).

See In Re Joanna Burke, Case No. 24-30885 at Docket 5 and 24.

15.              As to Burke’s continued argument regarding the automatic stay, this has been previously briefed and the Court found no violation of the automatic stay.

[Doc. 18].

The bankruptcy stay only works to stop suits “against bankrupt debtors, not suits filed by bankrupt debtors.”

McMillian v. MBank Fort Worth, N.A., 4 F.3d 362, 366 (5th Cir. 1993) citing 11 U.S.C. § 362(a).

Nothing has changed since the Court correctly determined the suit was filed by, not against, Burke, and the automatic stay was not invoked.

Order denying Remand at P.6.

[Doc. 18].

“Against the debtor’ means that Congress intended only to stay suits filed against bankrupt debtors, not suits filed by bankrupt debtors.”

Stafford v. Wilmington Trust, 2023 U.S. Dist. LEXIS 16588, 2023 WL 1421564 (N.D. Tex. 2023);

relying on, McMillan, 4 F.3d at 366; (LIT: 1993)

see also In re Merrick, 175 B.R. 333, 336 (B.A.P. 9th Cir. 1994)

(“[T]he stay is inapplicable to post-petition defensive action in a prepetition suit brought by the debtor.”).

As the Court found, the automatic stay was simply not applicable to a lawsuit initiated by Burke and did not bar its removal to this court.

III.  CONCLUSION

For each of the reasons set out above, PHH Mortgage Corporation requests that the Court deny Plaintiff’s Motion to Dismiss for Lack of Jurisdiction. [Doc. 33], and further requests the Court grant such other relief, in law or in equity, to which it may be justly entitled.

Respectfully submitted,