Opinion
Case No. 03-00925.
January 7, 2007
The debtor, Fannie Plain, has filed a motion entitled "Motion Requesting That All Previous Bank as Well as Previous Cashier Checks Be Applied to the First Mortgage Regardless of Dates on Checks" (Docket Entry ("DE") NO. 231) ("Debtor's Motion"). Chase Home Finance LLC ("Chase") has responded by filing a Motion to Strike (DE No. 241) invoking res judicata as a basis for striking the Debtor's Motion. The court will deny the Debtor's Motion for the following reasons. The court will dismiss the Motion to Strike as moot.
I
The debtor's home is subject to two deeds of trust securing Chase regarding two different obligations, one relating to a promissory note of November 25, 1992 (the first deed of trust) and the other relating to a note of December 15, 1995 (the second deed of trust). The debtor filed an objection (DE No. 34) to Chase's proof of claim relating to the arrerarages that Chase claimed it was owed on the petition date. The court overruled that objection by an order entered on August 6, 2004 (DE No. 127).
Chase sought relief from the automatic stay and co-debtor stay as to the deeds of trust via two motions that are pertinent here. The first motion (DE No. 161) related to the second deed of trust, and resulted in a Consent Order Modifying Automatic Stay and Co-Debtor Stay (DE No. 180) ("Consent Order") entered on June 27, 2005, in which the debtor stipulated to the existence of postpetition defaults. The Consent Order set forth certain terms conditioning the continued existence of the automatic stay and co-debtor stay, and upon the debtor's default in complying with those terms, Chase could file a Notice of Default to terminate the stays, but providing that:
The Consent Order implicitly vacated an earlier order entered on May 26, 2005 (DE No. 171) that granted the motion without qualification.
Should the Debtor dispute the Notice of Default and file a response within the ten (10) day cure period that states with particularity the basis for disputing the Notice of Default, then the dispute shall be set for hearing and the automatic stay shall remain in effect pending a hearing on the Notice of Default[.]
Chase filed a Notice of Default on August 23, 2006 (DE No. 197). The debtor filed no response to that Notice of Default, and unless the debtor timely cured the default that was the subject of the Notice of Default, relief from the automatic stay is in effect.
The second motion (DE No. 188) related to the first deed of trust, and resulted in an Order Modifying Automatic Stay and Co-Debtor Stay (DE No. 237) entered on December 20, 2006, based on postpetition defaults to which the debtor stipulated in open court at a hearing of December 7, 2006.
An earlier motion (DE No. 46) also sought relief from the automatic stay as to the first deed of trust, but that motion was withdrawn.
The Debtor's Motion refers to, first, a 2002 check for which the debtor was not given credit, but that check relates to the prepetition arrearages, and has nothing to do with the postpetition defaults to which she stipulated. The Debtor's Motion refers to, second, payments that should have been applied to the second deed of trust, not the first deed of trust:
On December 07, 2006, I continued to allude to the payments being applied to the wrong account. As a result, this reflected that the second mortgage account was delinquent. The account history shows the following dates the second mortgage account did not receive its payment: May 2004, February 15, 2005 ($246.00 was included in the payment of $2,004.00)[.] The entire payment of $1,000.00 should have been applied to the second mortgage of $246.00.
Debtor's Motion at 2. The Consent Order addressed the status of the second deed of trust at the end of May 2005, and acknowledged that the account had been brought current except that the debtor "remains in arrears $1018.67, which amount represents attorneys fees of $1,000.00, plus accrued late charges of $48.51, minus the $29.84 overage from the post-petition payment[.]" The May 2004 and February 15, 2005 payments to which the Debtor's Motion refers preceded the end of May 2005. The Debtor's Motion fails to indicate any basis for relieving her of the Consent Order's recitation of the status of the second deed of trust obligation as of the end of May 2005.
II
To the extent that the debtor seeks reconsideration of the court's orders in this case, the Debtor's Motion must be denied.
Order Overruling Objection to Chase's Proof of Claim. The Debtor's Motion appears to be directed to the court's oral ruling at the hearing of December 7, 2006, that led to the order entered on December 20, 2006, not the order overruling the objection to Chase's proof of claim for prepetition arrearages. That claim had no impact on the rulings on the motions for relief from the automatic stay. The amount of the prepetition arrearages affects the amount of the prepetition arearages claim that the debtor's confirmed plan provides is to be paid by the trustee to Chase, whereas the motions for relief from the automatic stay were directed to postpetition defaults. The Debtor's Motion, therefore, does not clearly indicate that the debtor seeks reconsideration of the order allowing Chase's proof of claim for prepetition arrearages (which has no impact on the granting of relief from the automatic stay as to either of the deeds of trust). To the extent that the Debtor's Motion nevertheless could be construed as seeking reconsideration of the order overruling her objection to Chase's proof of claim for prepetition arrearages, it does not show a basis under Fed.R.Bankr.P. 3008 and Fed.R.Civ.P. 60(b) at this late date for revisiting that order. Consent Order Regarding Second Deed of Trust. To the extent that the debtor seeks reconsideration of the Consent Order modifying the automatic stay as to the second deed of trust, the debtor has not shown good cause for relieving the debtor from that Consent Order under Fed.R.Civ.P. 60(b), particularly in light of the fact that she stipulated to the terms of the Consent Order. That Consent Order set forth a procedure for the debtor to file a response contesting the existence of a default indicated by a Notice of Default, and the debtor did not file a timely response to Chase's Notice of Default.
If the debtor files a separate motion limited to addressing only the order allowing Chase's proof of claim for prepetition arrearages, and if she has a canceled check (or other evidence of payment) that Chase's proof of claim for prepetition arearages did not take into account, and if she can offer a good explanation for why she failed to produce that evidence earlier when the court heard the objection to claim, and if she can demonstrate that the motion is timely under Fed.R.Bankr.P. 3008 or Fed.R.Civ.P. 60(b), the court could consider a request to reconsider the amount of the prepetition arrearages claim that should be allowed.
Order Granting Stay Relief Regarding First Deed of Trust. To the extent that the debtor seeks relief with respect to the oral ruling which led to the entry of the Order Modifying Automatic Stay and Co-Debtor Stay (DE No. 237) on December 20, 2006, the court will treat the Debtor's Motion as one to alter or amend that Order under Fed.R.Civ.P. 59. The debtor stipulated in open court to the amount of postpetition payments that were in default under the first deed of trust. Indeed, even though the Debtor's Motion is styled as seeking to compel application of payments to the first deed of trust obligation, the body of the Debtor's Motion does not specify any postpetition payments that ought to have been applied to that obligation. The Debtor's Motion fails to set forth adequate grounds to reconsider the Order.
III
To the extent that the Debtor's Motion seeks relief other than reconsideration of prior orders, the debtor has no right to proceed by way of a contested matter under Rule 9014 to seek an order compelling a mortgagee to apply payments in a certain fashion. Such relief, as injunctive relief, must be sought via an adversary proceeding. Fed.R.Bankr.P. 7001.
Although a debtor can defend against a motion for relief from the automatic stay, or object to a proof of claim, on the basis that payments should have been applied in a different fashion, no motion for relief from the automatic stay or objection to claim now awaits disposition, orders having already been issued regarding Chase's motions and the objection to its proof of claim. The issue can be raised by way of seeking reconsideration of those orders, but the Debtor's Motion fails to show grounds for granting reconsideration (as discussed in part II, above).
IV
An order follows.