Three years later, in 2014, Erickson filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Middle District of North Carolina. The case was later converted to Chapter 13. A year after filing, in June 2015, a final Chapter 13 plan was confirmed by the bankruptcy court. That plan included releasing—essentially surrendering—the property to CitiMortgage for liquidation.
CitiMortgage then launched a new foreclosure action on June 14, 2019. Erickson pushed back with a defense that the case was time-barred under the statute of limitations. He also tried to assert counterclaims. But in 2022, the trial court sided with CitiMortgage, finding that Erickson had already surrendered the property and was now judicially estopped—legally blocked—from taking a contrary position in state court. The Appellate Division agreed, noting that a confirmed bankruptcy plan binds both the borrower and the lender, and surrendering the property ends a borrower’s right to contest foreclosure.
Erickson later tried to reopen the issue by citing the Foreclosure Abuse Prevention Act (FAPA), which became law in New York at the end of 2022. He argued that the new law gave him a fresh chance to challenge the foreclosure. But the court rejected that too, ruling that FAPA didn’t override the doctrine of judicial estoppel.
Where CitiMortgage ran into trouble was not on legal grounds, but on paperwork. The lender moved to confirm a referee’s report to calculate how much was owed, but the court found that the numbers were based on business records that weren’t included in the record. Without those documents, the court said it couldn’t accept the payoff amount as valid.
As a result, the Appellate Division denied CitiMortgage’s motion to confirm the report and refused to grant a judgment of foreclosure and sale. The case was sent back to the trial court for a new report with proper documentation.