In re Feinberg

• Decision Date: 30 July 2010
• Docket Number: Bankruptcy No. 09–37151.,Adversary No. 09–09091.
• Parties: In re Eric S. FEINBERG, Debtor.Eric S. Feinberg and Jeffrey Sapir, as chapter 13 trustee, Plaintiffs,v.Bank of New York, as trustee for the Certificate Holders CWABS, Inc. Asset–Backed Certificates, Series 2005–17, Countrywide Home Loans, Inc., CWABS, Inc., Bank of America, Mortgage Electronic Systems, Inc., BAC Home Loan Servicing, LP, Defendants.
• Court: U.S. Bankruptcy Court — Southern District of New York

442 B.R. 215

In re Eric S. FEINBERG, Debtor.Eric S. Feinberg and Jeffrey Sapir, as chapter 13 trustee, Plaintiffs,

v.Bank of New York, as trustee for the Certificate Holders CWABS, Inc. Asset–Backed Certificates, Series 2005–17, Countrywide Home Loans, Inc., CWABS, Inc., Bank of America, Mortgage Electronic Systems, Inc., BAC Home Loan Servicing, LP, Defendants.

Bankruptcy No. 09–37151.

Adversary No. 09–09091.

United States Bankruptcy Court,S.D. New York,Poughkeepsie Division.

July 30, 2010.

Eric Steven Feinberg, New York, NY, pro se.Casey B. Howard, Locke Lord Bissell & Liddell LLP, New York, NY, Jeffrey Meyers, Ballard Spahr LLP, Philadelphia, PA, for Defendants.

DECISION AND ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DISMISSING COMPLAINT

CECELIA MORRIS, Bankruptcy Judge.

Debtor filed for relief under Chapter 13 on August 6, 2009. On Schedule A, which lists debtor's real property, Debtor indicated that he owned real property located at 4 Stissing Mountain Lane, Pine Plains, N.Y. in fee simple. ECF Docket No. 1. The current value of the real property is listed as $250,000 and the amount of the secured claim is listed as $278,400. Id. On Schedule D, which lists creditors holding secured claims, Debtor indicated that Bank of New York, as trustee c/o Countrywide Home Loans holds a secure claim on the real property in the amount of $278,400 and that MERS, Inc. holds a secure claim on the real property in the amount of $79,600. Both of these secured debts are marked as disputed by the debtor.

The last date to file proofs of claim was set at December 8, 2009. On September 16, 2009, Bank of New York as Trustee by its servicer BAC Home Loans filed a timely proof of claim (Claim No. 4)(hereafter, “Proof of Claim”) for a secured debt in the amount of $273,392.79, with arrearages of $77,267.86. Undisputed Facts ¶ 1. Debtor did not request any supporting information to the proof of claim before he commenced this adversary proceeding. Undisputed Facts ¶ 7.

The present adversary proceeding (hereafter, “Complaint”) was commenced on October 14, 2009. The Complaint sought, inter alia, declaratory judgment and equitable relief to disallow the Proof of Claim or determine the secured status of the Proof of Claim, and damages against the Defendant for filing a fraudulent proof of claim. On November 30, 2009, Defendants filed an Answer (hereafter, “Answer”), inter alia, denying the Plaintiff's allegations and affirming that they filed a valid proof of claim. The Complaint alleges that Defendants cannot show that they have a secured lien or that they are the owner of the mortgage and debt. (Complaint ¶¶ 5–6). Complaint seeks an extinguishing of the proof of claim because the Defendants are not the rightful owners of the Plaintiffs' mortgage and debt. (Complaint ¶ 7). Discovery took place between the parties and motions for summary judgment were made by all parties.

The parties filed motions for summary judgment on June 18, 2010 (hereafter, “Plaintiff's Summary Judgment” and “Defendant's Summary Judgment”). Both parties filed opposition to the respective motions for summary judgment on July 2, 2010 (hereafter, “Plaintiff's Opposition” and “Defendant's Opposition”). The parties filed a Joint Statement of Undisputed Facts on July 8, 2010 (hereafter, “Undisputed Facts”). On July 8, 2010, Defendants filed an Objection to Debtor's Declaration (hereafter, “Defendant's Objection to Declarations”) after the deadline set by the Court for summary judgment papers. Plaintiff, by multiple letters, asked for the Court, inter alia, to disregard the Defendant's Objection to Declarations. (See ECF Docket Nos. 31, 33). The hearing to consider all summary judgment motions was scheduled for July 20, 2010. On July 14, 2010, the Court entered a Notice of Adjournment of Hearing (hereafter, “Notice of Adjournment”) to postpone the scheduled hearing to July 28, 2010. The Notice of Adjournment also informed all parties that the Court would consider all summary judgment papers on July 28, 2010 including the Defendant's Objection to Declarations. The Plaintiff was given until July 23, 2010 to file any responsive papers to the Defendant's Objection to Declarations. On July 23, 2010, Plaintiff responded to the Defendant's Objection to Declarations (hereafter, “Reply to Defendant's Objection to Declarations”). The Court heard oral argument on July 28, 2010 (hereafter, “Oral Argument”).

Undisputed Facts

On or about November 29, 2005, Debtor executed and delivered the Note to Countrywide. Undisputed Facts ¶ 2. Debtor also executed the Mortgage in favor of MERS, acting solely as nominee for lender Countrywide, mortgaging the Subject Property as security for the Note. Id. The Mortgage was recorded in the Dutchess County Clerk Office on December 7, 2005. Id.

The Note called for the Debtor to make consecutive monthly payments starting on January 1, 2006 and continuing through December 1, 2035. Undisputed Facts ¶ 4. In the Note, in the event of default, the holder of the Mortgage could declare the entire indebtedness secured by the Mortgage immediately due and payable. Undisputed Facts ¶ 4. The Note also called for the Debtor to pay the principal sum of $278,600 along with overdue fees as accrued and in the event of foreclosure, costs and fees for enforcement of the Note. Undisputed Facts ¶ 4. Debtor has not made payment on the Note and Mortgage since October 1, 2007 and is in default. Undisputed Facts ¶ 5. Defendant produced the original Note in response to the filing of this adversary proceeding. Undisputed Facts ¶ 8. Plaintiff contends that he only signed one version of the note and mortgage and signed no copies. (Plaintiff's Reply ¶ 28 –9).

JURISDICTION

This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1334(a), 28 U.S.C. § 157(a) and the Standing Order of Reference signed by Acting Chief Judge Robert J. Ward dated July 10, 1984. Adjudication of the Motion constitutes a core proceeding within the meaning 28 U.S.C. § 157(b)(2)(B) and (K). Venue of the captioned cases in this District is proper pursuant to 28 U.S.C. §§ 1408 and 1409. These motions deal with the Court's statutory power pursuant to sections 502 and 105(a) of title 11 of the United States Code (the “Bankruptcy Code” or alternatively the “Code”).

Procedural Matters

In this Circuit and elsewhere there is a “jurisprudential preference for adjudication of cases on their merits rather than on the basis of formalities.” Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir.1988). The Court believes that it has the authority to consider Defendant's Objection to Declarations based upon a judicial preference for adjudication on the merits. Despite the authority to consider the papers, the Court did not consider Defendant's Objection to Declarations or the Reply to Defendant's Objection to Declarations because it was in substance an unauthorized sur-reply in the summary judgment motions, despite being characterized by Defendants as an independent motion.

Summary Judgment

Pursuant to Fed.R.Civ.P. 56(c) (applicable to this adversary proceeding by Fed. R. Bankr.P. 7056), summary judgment should be granted to the moving party if the Court determines that “the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)). A movant has the initial burden of establishing the absence of any genuine issue of material fact. Celotex, 477 U.S. at 322–23, 106 S.Ct. 2548. “A fact is material only if it affects the result of the proceeding and a fact is in dispute only when the opposing party submits evidence such that a trial would be required to resolve the differences.” In re CIS Corp., 214 B.R. 108, 118 (Bankr.S.D.N.Y.1997).

The role of the court in deciding a motion for summary judgment “is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party.”

Goldberg & Connolly v. New York Comm. Bancorp, Inc., 565 F.3d 66, 71 (2d Cir.2009) (quoting Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.1986)). There is no genuine issue for trial if the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A moving party may obtain summary judgment by showing that little or no evidence may be found in support of the nonmoving party's case. Gallo v. Prudential Residential Servs. Ltd. P'ship, 22 F.3d 1219, 1223–1224 (2d Cir.1994). The non-moving party “must do more than simply show that there is some metaphysical doubt as to material facts.” Repp v. Webber, 132 F.3d 882, 889 (2d Cir.1997). If the facts are “so one-sided that one party must prevail as a matter of law,” then summary judgment should be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The primary goal of summary judgment is to “dispose of factually unsupported claims or defenses.” Celotex, 477 U.S. at 323–24, 106 S.Ct. 2548. The party opposing summary judgment must set forth specific facts that show that there are triable issues, and cannot rely merely on pleadings containing allegations or denials. Id. at 324, 106 S.Ct. 2548.Proof of Claim

Pursuant to Bankruptcy Code Section 502(a), a proof of claim is deemed allowed unless a party in interest objects to it. As Bankruptcy Rule 3001(f) states, “A proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim.” Assuming that the “averments in [the] filed claims meet the standard of...