In re Wilson

(Bankr. W.D. Ky. Nov. 1, 2017)

The bankruptcy court grants the creditor’s motion for stay relief to proceed with a state court foreclosure action. The creditor had obtained an order granting stay relief in a prior bankruptcy filed by the debtor’s son, the owner of the property. The debtor’s life estate interest in the property does not prevent the foreclosure action from proceeding. Opinion below.

Judge: Lloyd

Attorney for Debtor: Mark H. Flener

Attorney for Creditor: Bradley S. Salyer

2017-11-01 – in re wilson

Author: Matt Lindblom

Isaacs v. DBI-ASG Coinvester Fund III, LLC (In re Isaacs)

(6th Cir. B.A.P. July 3, 2017)

The Sixth Circuit B.A.P. vacates the bankruptcy court’s judgment and remands for dismissal based on lack of subject matter jurisdiction. The creditor failed to record its mortgage prior to the first Chapter 7 case, recorded it during that case, and it was not challenged. The creditor then sought to foreclose on the mortgage and obtained a state court in rem judgment permitting foreclosure. The debtor then filed a Chapter 13 case and challenged the state court judgment, based on the stay violation in the Chapter 7. The bankruptcy court held that the Rooker-Feldman doctrine did not apply because the state court judgment modified the discharge injunction inappropriately, as the lien was not valid based on the Chapter 7 discharge. The B.A.P. reverses, finding that the Rooker-Feldman doctrine does apply, and that the lien was effective under Kentucky law even if not perfected prior to the Chapter 7. Opinion below.

Judge: Humphrey

Attorney for Debtor: Marcus H. Herbert

Attorney for Creditor: DBI-ASG Coinvester Fund, III, LLC

2017-07-03 – in re isaacs

Author: Matt Lindblom

In re Pace

(B.A.P. 6th Cir. June 20, 2017)

The Sixth Circuit B.A.P. holds that 11 U.S.C. § 522(f)(2)(C) does not preclude avoidance of mortgage deficiency judgment liens. Rather, based on the plain meaning of the statute, that section simply makes clear that entry of a judgment in a foreclosure action does not convert the underlying mortgage agreement into a judicial lien that may be avoided. Here, the bankruptcy court denied the debtor’s motion to avoid a deficiency judgment lien following a real property foreclosure action, stating that § 522(f)(2)(C) bars avoidance of a foreclosure deficiency judgment lien. The B.A.P. analyzes conflicting case law from multiple jurisdictions and reverses the bankruptcy court.

Judge: Wise

Attorney for Debtor: T. Robert Bricker

Author: Matt Lindblom

2017-06-20 – in re pace

In re Parker

(Bankr. E.D. Ky. Jan. 6, 2017)

The bankruptcy court sustains the creditor’s objection to confirmation of the Chapter 13 plan. The debtor filed her bankruptcy petition after the creditor obtained a judgment and order of sale with respect to the debtor’s residence, after the creditor was the successful bidder at the resulting foreclosure sale, but before the state court confirmed the foreclosure sale. The creditor argued the debtor was not permitted to cure the default through her plan. The court discusses 11 U.S.C. § 1322(c) and holds that the debtor may not cure the default through a plan after the “gavel comes down on the last bid.” Confirmation of the sale and the right of redemption do not affect the analysis. Opinion below.

Judge: Schaaf

Attorney for Debtor: DelCotto Law Group PLLC, Dean A. Langdon

Attorneys for Creditor: Goldberg Simpson, LLC, Stephen R. Solomon, Megan P. Keane

2017-01-06-in-re-parker

Author: Matt Lindblom

Hollowell v. JPMorgan Chase National Association

(N.D. Ind. Dec. 22, 2016)

The district court affirms the bankruptcy court’s order lifting the stay to permit the creditor to proceed with the real property foreclosure action. The debtor failed to provide factual or legal support for his claims of fraud by the creditor. Opinion below.

Judge: Miller

Plaintiff: Pro Se

Attorneys for Defendants: Dykema Gossett PLLC, Jordan S. Huttenlocker, Louis S. Chronowski

2016-12-22-hollowell-v-jpmorgan-chase

Author: Matt Lindblom

In re Elkins

(Bankr. E.D. Ky. Nov. 22, 2016)

The bankruptcy court grants the creditor’s motion to modify the stay to allow the creditor to proceed with the state court real property foreclosure action. The court finds that cause exists for stay relief for reasons including that this second bankruptcy filing by the debtor was pending for three months, the debtor’s plan depended on a sale of the property, the debtor had not taken any action to proceed with the sale, and there was no proof that the debtor’s spouse (co-owner of the property) would consent to the sale. Opinion below.

Judge: Schaaf

Attorney for Debtor: DelCotto Law Group PLLC, Dean A. Langdon

Attorney for Creditor: Miller, Griffin & Marks, P.S.C., Carroll M. Redford, III

2016-11-22-in-re-elkins

Author: Matt Lindblom

In re Jackson

(6th Cir. B.A.P. Aug. 4, 2016)

The Sixth Circuit B.A.P. holds that the bankruptcy court abused its discretion in awarding sanctions against a creditor for violation of a discharge order in the individual’s Chapter 7 bankruptcy case. The condominium association rescheduled a sheriff’s sale of the debtor’s condominium unit to complete a pre-petition foreclosure. The bankruptcy court found that the association’s primary objective was to collect the discharged debt from the debtor, for reasons including that there was likely no equity available to pay the association through the sale. The Sixth Circuit B.A.P. holds that this was an abuse of discretion, as the association had the right to enforce its lien post-petition. Opinion below.

Judge: Humphrey

Attorney for Condominium Association: Kaman & Cusimano, Erika R. Finley, Joseph E. DiBaggio

Debtor: Pro Se

2016-08-04 – in re jackson

Author: Matt Lindblom

In re Jepson

(7th Cir. Mar. 22, 2016)

The Seventh Circuit affirms the lower courts’ decision to grant the mortgagee’s motion to modify the automatic stay to proceed with the state court foreclosure action. The court also affirms the lower courts’ decision to dismiss claims in the debtor’s adversary complaint against the mortgagee based on alleged violations of a pooling and service agreement. The debtor did not have standing on those claims because the debtor was not a third-party beneficiary to that agreement. However, the court remands for reconsideration of the dismissal of two claims that were not based on the pooling and service agreement. Opinion below.

Judge: Ripple

Attorney for Debtor: Kenneth E. Kaiser

Attorneys for Mortgagee: Kluever & Platt, LLC, Matthew Reasor Bowman, Morris Laing Evans Brock & Kennedy, CHTD., Justin F. Carter

2016-03-22 – in re jepson

Author: Matt Lindblom

Harris v. Deutsche Bank National Trust Company (In re Harris)

(S.D. Ind. Feb. 8, 2016)

The district court affirms the bankruptcy court’s decision holding that the debtor was collaterally estopped from challenging the amount of the mortgage lender’s claim. The lender had obtained judgment in a prepetition state court foreclosure action, in which the debtor had presented the same arguments regarding the loan balance calculation. The district court finds that the doctrine of collateral estoppel applies and the claim amount could not be re-litigated in the bankruptcy. Opinion below.

2016-02-08 – in re harris

Author: Matt Lindblom

First National Bank of Manchester v. Elza

(E.D. Ky. Aug. 21, 2015)

The district court affirms the bankruptcy court’s order avoiding the mortgage foreclosure deficiency judgment liens on the debtor’s residence. The creditor had obtained a deficiency judgment following foreclosure of its mortgage lien and filed a judgment lien for the deficiency, which encumbered the debtors’ residence. The debtors moved to avoid the lien under 11 U.S.C. § 522(f) and the bankruptcy court granted the motion. The creditor appealed, arguing that § 522(f)(2)(C), which provides that judgments arising out of mortgage foreclosures are not avoidable, applied to the deficiency judgment lien. The court recognizes the split in authority on the issue, but ultimately concludes that § 522(f)(2)(C) merely provides that judgments in foreclosure actions (i.e. sale orders enforcing the mortgage lien) cannot be avoided such that the mortgage lien is avoided. The section does not apply to deficiency judgment liens. Opinion below.

2015-08-21 – first national bank v elza

Author: Matt Lindblom