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Lisse v. HSBC Bank USA, N.A.

United States District Court, W.D. Wisconsin

February 15, 2018

STEVEN ROBERT LISSE, Debtor-Appellant,



         In response to repeated assertions that this court has given Attorney Wendy Alison Nora insufficient notice of the bases for the issuance of the Order To Show Cause in Lisse v. HSBC Bank; 16-cv-617-wmc, and to assist the preparation of her recently retained counsel for the February 23, 2018, hearing on that order, the following outlines the specific instances of misconduct on which the order is based. There is no need for counsel to respond further in writing to this supplemental notice, as counsel will be given an opportunity to respond orally at the February 23 hearing, but if counsel so chooses, any response must be filed on or before noon on Wednesday February 21, 2018.

         I. Principal Basis for the Order to Show Cause

         1/22/18 - Order (dkt. #49)

• The court received appellant's motion to dismiss his bankruptcy appeal (dkt. #48), which was GRANTED with prejudice and statutory costs. “In addition, appellant's motion state[d] disingenuously in defense of his filing a notice of appeal in the first place that “since the confirmation hearing additional facts . . . have become known to Appellant that give every indication that Appellee committed fraud in the state court and in the bankruptcy court.” (Dkt. #48 at 1-2.) In fact, appellant and his wife raised this so-called “fraud” issue in state court at a motion hearing on March 13, 2015. (See In re Lisse, No. 16-bk-12556-cjf (Bankr. W.D. Wis.) Dkt. #74 at 28-32).) Moreover, the bankruptcy order from which appellant purported to appeal was issued on August 22, 2016.” (Id. at 1.)
• “Because this is the latest in a pattern of sharp practice by Attorney Nora (see dkt. #42 at 1-2), appellant's counsel [was given] twenty-one (21) days to provide a written response to this ORDER TO SHOW CAUSE why she should not be sanctioned for her frivolous, or at best vexatious, appeal, including referring her conduct to the Wisconsin Supreme Court's Office of Lawyer Regulation and barring her from appearing in any new matter before the courts of this district.” (Id. at 1-2.)

1/18/18 - Order (dkt. #46)

• “At some point, an attorney's efforts to vindicate her client's rights cross the line between zealous advocacy and abuse of process. This is such a case” (Id. at 1.)
• “Here, appellant even concedes that his current appeal “involve[s] the same fundamental issue” as the related appeals filed by his wife, which was already addressed and rejected by Judge Peterson. See Lisse, 2017 U.S. Dist. LEXIS 200196, at *12-*18. At this point, the debtor's sole purpose appears to be to delay an inevitable foreclosure through every legal artifice available both in state and federal court.” (Id. at 1.)

9/21/17 - Order (dkt. #42)

• “The court is in receipt of appellant's motion for stay (dkt. #27), as well as attorney Wendy Alison Nora's ex parte submission of her medical documentation supporting the request for a 90-day stay and then an additional 30 days to file an opening brief. (See dkt. #34). Typically, such a proffer of medical information would be enough to justify a requested stay. Unfortunately, there is nothing typical about Attorney Nora, who has a history of frivolous and dilatory tactics recognized by this and other courts. See In re Nora, 778 F.3d 662 (7th Cir. 2015) (finding sanctions warranted against Nora because “her arguments in this appeal were motivated by improper purposes”); Spencer v. Fed. Home Loan Mortg. Corp., Nos. 15-cv-332-wmc, 15-cv-327-wmc, 2015 U.S. Dist. LEXIS 96663, at *1-*2 (W.D.W.I. July 24, 2015) (Conley, J.) (noting that “each appeal appears motivated by the goal to further delay a warranted state court foreclosure” and that “[t]he bankruptcy court, this court and the Seventh Circuit are all familiar with debtor Sheila Spencer and her attorney Wendy Alison Nora's efforts to delay foreclosure on Spencer's home.”); Rinaldi v. HSBC Bank USA, N.A., Nos. 13-cv-336-JPS, 13-CV-643-JPS, 2014 U.S. Dist. LEXIS 182089 (E.D.W.I. April 9, 2014) (concluding court “ha[d] no choice but to impose sanctions” because its prior order noted that “any further frivolous submissions will result in an award of appropriate sanctions against the Rinaldis' attorney”), aff'd 778 F.3d 672 (7th Cir. 2015); In re Schmid, 494 B.R. 737, 748 (W.D.W.I Bankr. 2013) (“At every turn, the Debtor has sought delays of these proceedings . . . .”); In re Disciplinary Action Against Nora, 450 N.W.2d 328 (Minn. 1990) (suspending Attorney Nora for misconduct in three cases, including one in which “the litigation was undertaken to buy time and to delay efforts to recover certain farm land”).” (Id. at 1-2.)
• “As amply documented in appellee's response, cause for skepticism is further fueled by its torturous, now seven-year quest to obtain and enforce a judgment of foreclosure on the Lisses' home, which Attorney Nora has successfully delayed by various maneuvers in state and now federal court, most recently by petition for review by the Wisconsin Supreme Court and ‘tag-team' bankruptcy filings by the appellant and his wife. Indeed, even before this court, Attorney Nora has successfully dragged out the briefing on the merits by satellite skirmishes, of which her current motion may well be the latest. Indeed, Attorney Nora has now taken the time to file a “response” to appellee's response to her motion because it contains a request that factual representations be struck in the first twelve paragraphs of Lisse's motion, which in fairness reads like an opening appellate brief, demonstrating that her diagnosis of “intermittent symptoms of mild” Traumatic Brain Injury (“TBI”) caused by a fall on January 17, 2017, has not to date prevented her from carrying on her practice of law in two states. Of course, her condition may still require her cessation of her practice altogether for 90 days for her symptoms to resolve fully, as indicated by the four sentence letter written “To Whom It May Concern” by her neurologist.” (Id. at 2-3.)
• “Further complicating this matter are the related appeals involving Lisse's wife (17-cv-206-jdp, 17-cv-207-jdp, 17-cv-208-jdp), which were consolidated with each other before Judge Peterson, but not with this case. All of these appeals, including the one before me, involve: 5701 Leanne Lane McFarland, WI 53558, (compare 17-cv-206-jdp dkt. #7-10, with 16-cv-617-wmc dkt. #26); appear to involve the same or similar issues; same or similar objections by HSBC Bank USA, N.A. for the benefit of (or as Trustee, in trust for the registered holders of) Ace Securities Corp. Home Equity Loan Trust, Series 2006-NC3, Asset Backed Pass-Through Certificates (compare generally 17-cv-206-jdp docket with 16-cv- 617-wmc docket and 16-bk-12556-cjf Dkt. #42 with 16-bk-10935-cjf Dkt. #34); and efforts by the respective debtors to challenge the validity of the same note (and its assignment to HSBC) (compare 17-cv-206-jdp dkt. #6 at 10-11 with 16-cv-617-wmc dkt. #27 at 2-3), despite the decision of the Dane County Circuit Court that HSBC was the holder of the note with standing to enforce the same, see HSBC Bank USA, N.A. v. Lisse, 367 Wis.2d 749, 877 N.W.2d 650 (Ct. App. 2016) (unpublished) (affirming Circuit Court decision). They have another common denominator: in all appeals, Attorney Nora is representing the appellants.” (Id. at 3.)

         II. Further Basis for Order to Show Cause

         A. Lisse v. HSBC Bank, USA., 17-cv-206-jdp / 17-cv-207-jdp / 17-cv-208-jdp (affirmed bankruptcy court)

         12/5/17 - Opinion & Order (dkt. #17)

• “Lisse's discovery requests posed an undue burden for HSBC. The Note's authenticity was already decided in Lisse's foreclosure action in state court, so the doctrine of issue preclusion barred Lisse from litigating the same issue again.” (Id. at 2.)
[On filing late reply brief] “Wendy Nora, could not finish the brief on time because ‘a recent update to her Acrobat program . . . prevented her from selecting text from PDF documents.'” (Id. at 4.)
• “This appeal, like the bankruptcy litigation, plainly lacks merit and was wastefully presented. Lisse's counsel has been sanctioned for similar conduct in other cases.” (Id. at 15.)

         B. Spencer v. Federal Home Loan Mortgage Corp a/k/a Freddie Mac; 15-cv-332-wmc & 15-cv-327-wmc (affirmed bankruptcy court)

         7/24/15 - Order (dkt. #6)

• “Spencer's second motion to ‘stay' is essentially a motion for extension of time to file statements of interest and designations of record, which the court will grant, albeit reluctantly. The court's review of the underlying bankruptcy dockets also reveals, however, that extensive briefing is simply not warranted for essentially meritless appeals. Instead, each appeal appears motivated by the goal to further delay a warranted state court foreclosure.” (Id. at 1-2.)
• “The bankruptcy court, this court and the Seventh Circuit are all familiar with debtor Sheila Spencer and her attorney Wendy Alison Nora's efforts to delay foreclosure on Spencer's home.” (Id. at 2.)
• “Finally, as noted at the outset of this opinion, review of Spencer's motion below and on appeal, as well as the underlying bankruptcy dockets as a whole, amplifies concerns raised by the bankruptcy court, this court, other district courts and the Seventh Circuit regarding Attorney Nora's questionable practices. See In re Nora, 778 F.3d 662, 664-667 (7th Cir. 2015).” (Id. at 9.)
• “Attorney Nora is reminded that frivolous arguments may result in sanctions. See In re Nora, 778 F.3d at 667.” (Id. at 10.)

3/30/17 - Order (dkt. #12)

• “As detailed above, the bankruptcy court dismissed Spencer's petition after she was warned in open court on the record and again in a written order that she had until June 13, 2015, to file a plan amendment and a declaration explaining Spencer's failure to file tax returns for certain years. Making this failure even more egregious is that the deadline was proposed by Spencer's counsel with full knowledge that a ...

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