In re Harper, Bankruptcy No. 89-60943.
| Decision Date | 12 August 1991 |
| Docket Number | Bankruptcy No. 89-60943. |
| Citation | 138 BR 229 |
| Parties | In re James Winston HARPER, M.A., M.D., Debtor. |
| Court | U.S. Bankruptcy Court — Northern District of Indiana |
Jerald Meacham, Gary, Ind., for debtor.
Elizabeth Merkley, Merrillville, Ind., for Gainer Bank.
This Chapter 13 proceeding came before this court on the trustee's objection filed on March 11, 1991, to the "Second Amended" proof of claim filed by Gainer Bank (hereinafter: "Creditor") on February 15, 1991 in the amount of $35,846.93. Said claim states that "collateral of no value to creditor due to superior lien and encumbrances". The claim has attached thereto a note allegedly executed by the Debtor on September 8, 1987 in favor of the creditor secured by certain real estate. The court set this matter for an initial pre-hearing conference on May 7, 1991 which was attended by the trustee and an attorney for creditor. The parties reported to the court that they were investigating the trustee's objection and requested that the court reset the matter.
The Court takes judicial notice that the creditor also filed an "amended proof of claim" on May 22, 1990. That claim appears to be identical to the "second amended proof of claim" filed by the creditor on February 15, 1991.
On February 5, 1991, the creditor also filed a Motion to Allow Amended Claim which provided in relevant part:
On March 12, 1991, the court entered an order and notice that the creditor had filed its motion to allow Amended Claim, and provided any objections thereto must be filed with the clerk's office on or before April 2, 1991. The trustee filed his objection to the creditor's second amended claim on March 11, 1991.
The court reset the hearing for June 4, 1991, at which hearing the parties agreed that this contested matter could be decided by the court as a question of law. The parties stipulated that the creditor did not file a timely formal proof of claim prior to the bar date, but that the creditor did file an objection to the confirmation of the debtor's plan on September 21, 1989, prior to the bar date to file claims. The court then gave the parties 14 days to submit any legal memorandum.
The trustee having submitted his legal memorandum on June 17, 1991, and the creditor having submitted its legal memorandum on June 18, 1991, this matter is ready for a decision.
The debtor filed a Chapter 13 petition and plan on June 21, 1989. The notice of the debtor's § 341 meeting of creditors was mailed on June 30, 1989 to all scheduled creditors pursuant to the Clerk's Certificate of Service dated June 30, 1989. The creditor is set out in the Clerk's Certificate of Service. This notice provided that all claims must be filed with the court on or before November 20, 1989, and that claims not filed on or before that date would not be allowed, except as otherwise provided by law.
The Court takes judicial notice that the Debtor's original Schedule A-2 filed June 2, 1989 "Creditors Holding Security" lists a secured claim by the creditor in the sum of $37,205.62 with collateral therefore valued at $27,500.00.
The Court takes further judicial notice that the Debtor's Amended Schedule A-2 filed October 16, 1989, which was filed prior to the bar date to file claims and after the creditors' objections to confirmation, also listed the creditor as a secured creditor with a claim of $35,646.93. The Amended Schedule identified the note and mortgage which evidenced the debt as being executed on September 8, 1987, and stated that the security for the obligation was valued between $27,500.00 to $79,000.00. The Amended Schedule further noted that the regular payment on the debt was $1,056.21 per month.
The Debtor's original plan filed on June 19, 1989 treated the creditor as a Class IV secured creditor secured by the Debtor's apartment building at 3848 Euclid Avenue, East Chicago, Indiana with payment in the sum of $27,500.00 as a secured claimant and $9,705.62 to be paid to the creditor as an unsecured Class VI creditor.
The Debtor's amended plan filed on October 16, 1989, again treated the creditor as a Class IV secured creditor secured by the Debtor's apartment building at 3848 Euclid Avenue, East Chicago, Indiana. The amended plan proposed that the real estate be surrendered to the creditor and any deficiency be paid as a Class VI creditor.
On September 21, 1989, or before the bar date to file claims, the creditor filed a timely objection to confirmation of the Debtor's original chapter 13 plan of reorganization alleging generally it was a "secured creditor" of the Debtor, and objected to the confirmation of the Debtor's plan on the grounds that "the fair market value of Gainer Bank, National Association collateral is greater than alleged by Debtor(s)". The objection does not set out the nature of the instrument of indebtedness by the debtor to the creditor, the date thereof, the original amount thereof, or the balance allegedly due and owing by the Debtor to the creditor, nor does it specifically demand payment. The court set a pre-hearing conference on the creditor's objection to confirmation for October 31, 1989; however, as noted previously prior to that time, on October 16, 1989, prior to the bar date to file claims, and after the creditor filed its objection to confirmation.
On October 17, 1989, the court mailed an Order and Notice of Debtor's First Petition to Modify Chapter 13 plan Prior to Confirmation to the debtor's attorney for service to all creditors. This notice provided that any objections to the debtor's Petition had to be filed with the Clerk's office prior to November 6, 1989. On October 26, 1989, debtor's counsel filed a certificate of service showing that the notice was mailed to all creditors on October 19, 1989. On November 21, 1989, the court entered an Order regarding First Pre-Confirmation Amendments of Chapter 13 Plan and fixing time to Object Thereto. Said order was served by the debtor on all creditors and fixed the time for filing objections as December 11, 1989.
On November 21, 1989, or one day after the bar date to file claims, the creditor filed a Motion for Order Granting Relief from the Automatic Stay. Said motion had attached as exhibits the note and security agreement allegedly executed by the Debtor in favor of the creditor on September 8, 1987. The motion alleged that the debtor was in default and owed the creditor the amount of $35,646.93, plus interest, and alleged that the amount of the debt exceeded the value of the security. The motion also stated that the debtor's plan proposes to surrender the collateral to the creditor.
The creditor also filed its Application for an Order Authorizing Abandonment and Notice thereof to all creditors on November 21, 1989. Said application included the same information outlined above in the Motion for Stay Relief. The notice provided that any objections to abandonment must be filed with the Clerk prior to December 11, 1989.
The Court on November 27, 1989 entered an Order for a Pre-Hearing Conference, which set the creditor's Motion for Relief from the Automatic Stay for a Pre-Hearing Conference on December 19, 1989. The Court also set the creditor's Motion for Abandonment on the same date. As a result of the prehearing held on December 17, 1989, debtor's counsel and counsel for the creditor notified the court that an agreed order authorizing abandonment and relief from the automatic stay would be submitted by counsel. Said stipulation was filed with the court on January 3, 1990.
The court confirmed the debtor's amended plan of reorganization on January 16, 1990, after a confirmation hearing was held on that same date.
On March 9, 1990, the Court entered orders granting the creditor's motion for relief from the automatic stay as to the real estate securing the debtor's obligation to the creditor, and authorizing the abandonment of the property from the bankruptcy estate.
On December 14, 1990, the debtor filed a Second Amended Plan. This Second Amended Plan did not change the treatment of the creditor's claim.
No objection was made by counsel to the jurisdiction of this Court as to this matter, the Court finds jurisdiction to be present, and that this contested matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B), (K) and (L).
The Trustee's brief notes that the filing and allowance of a proof of claim is controlled by Bankr.Rules 3001 and 3002 and 11 U.S.C. §§ 501 and 502.
Section 501 of title 11 provides as follows:
The Code does not set out the time limits for filing a claim. The Bankruptcy Rules set the time limits, the form, and the procedure for filing claims, which will determine whether claims are timely or tardily filed. See, Norton Bankruptcy Law and Practice, Bankruptcy Code, ...
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