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BankruptcyThe Bankruptcy StrategistFeatures

Third Circuit Blocks ‘Do-Over’ Under Rooker-Feldman Doctrine

By Francis J. Lawall and Amita Chohan
December 01, 2025

It is not unusual for a debtor to try to escape a negative state court ruling by filing bankruptcy and seeking a “do over.” In a recent U.S. Court of Appeals for the Third Circuit decision, In re Eileen T. Adams, Case No. 24-1212, 3rd Cir. Sept. 3, 2025, the appellate court blocked just such an effort following an analysis of the Rooker-Feldman doctrine and the ultimate application of preclusion principles. This decision supports the general proposition that a bankruptcy proceeding cannot be used to revive foreclosure-related disputes that have been previously and conclusively resolved by a state court.

In 2009, Eileen Adams and her husband transferred their New Jersey family home to her father, who then borrowed $360,000 from AmTrust Bank. That loan was secured by a mortgage on the property in favor of AmTrust’s nominee. Not long after, Eileen Adams’ father died resulting in the house being returned to her (encumbered by the mortgage). AmTrust later collapsed and most of its assets and liabilities were acquired by The New York Community Bank (NYCB). Ownership of the mortgage then became an issue, although AmTrust’s nominee appears to have assigned it to EverBank. When the loan went into default in 2014, EverBank commenced foreclosure proceedings in state court, which entered summary judgment in favor of EverBank in October 2015. The mortgage was subsequently assigned to Nationstar Mortgage, which obtained a final foreclosure judgment in March 2017.

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