In re Harrison
| Decision Date | 24 January 2020 |
| Docket Number | Case No. 15-10836 |
| Parties | In re: JACK B. HARRISON Debtor |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
This decision is not intended for publication.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(a) and 1334, and the standing General Order of Reference in this District. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B).
This matter is before this Court on Debtor Jack B. Harrison ("Debtor")'s Objection to Proof of Claim Filed by Fifth Third Mortgage Company ("Objection") [Docket Number 70]; the Response of Fifth Third Mortgage Company to Debtor's Objection to Proof of Claim ("Response") [Docket Number 71]; and the Joint Stipulations of Fact of Debtor Jack Harrison and Fifth Third Mortgage Company, Regarding Debtor's Objection to Supplemental Proof of Claim ("Stipulations of Fact") [Docket Number 81].
At a hearing held on May 2, 2019, the parties dispensed with an evidentiary hearing to have the matter decided on the parties' Stipulations of Fact and memoranda of law that the parties intended to file in accordance with a briefing schedule to be prepared by this Court. Accordingly, this Court entered an order providing a briefing schedule [Docket Number 84] and the parties filed memoranda of law in support of their positions [Docket Numbers 86, 87 and 88].
Upon review of the facts and legal arguments presented in the parties' filings and memoranda of law, this Court concludes that the Debtor's Objection lacks merit and, accordingly, is overruled.
Because the parties waived an evidentiary hearing, this Court's findings of fact are limited to those found in the Stipulations of Fact and matters of record on this Court's docket of which this Court takes judicial notice.
The Debtor filed a chapter 13 bankruptcy petition on March 9, 2015. On his petition, he indicated his street address as 3921 Miami Run, Cincinnati, Ohio (the "Miami Run Property") [Docket Number 1]. In his schedules, he indicated ownership of two parcels of real estate: the Miami Run Property and a condominium unit known as 1213 Vine Street, Unit E, Cincinnati, OH 45202 (the "Vine Street Property"), which is the property at issue in this matter [Id., Schedules A]. Both the petition and schedules indicate that the Debtor's residence was the Miami Run Property [Id., Petition and Schedule C (indicating the Debtor's intent to take a "homestead exemption" in the Miami Run Property)].
At the time of the bankruptcy filing, Creditor Fifth Third Mortgage Company ("Fifth Third") held a mortgage lien against the Vine Street Property and subsequently filed a proof of claim for the secured mortgage loan totaling $119,707.61 on April 7, 2015 [Proof of Claim Number 7-1]. In addition to Fifth Third's mortgage lien against the Vine Street Property, the Debtor scheduled another secured creditor, Duncanson Lofts Condo Association ("Duncanson"), as having a claim and statutory lien against the Vine Street Property based on the Debtor's outstanding HOA dues [Docket Number 1, Schedule D].
On the same date the petition was filed, the Debtor also filed a chapter 13 plan ("Original Plan") calling for the surrender of the Vine Street Property [Docket Number 2].
On May 4, 2015, Fifth Third filed a motion for relief from the automatic stay and co-debtor stay regarding the Vine Street Property [Docket Number 19] ("Motion for Relief from Stay") alleging grounds for relief that included that the Debtor intended to surrender the property.
On June 3, 2015, Fifth Third paid the outstanding HOA dues that the Debtor owed on the Vine Street Property to Duncanson. Fifth Third's payment to Duncanson occurred prior to the claims bar date and Duncanson did not file a proof of claim.
On the same date, June 3, 2015, Debtor filed a motion to continue the hearing on Fifth Third's Motion for Relief from Stay to allow the Debtor additional time to file an amended plan to provide for cure of the arrearage on Fifth Third's mortgage loan [Docket Number 26].
On June 8, 2015, Debtor filed his first Amended Plan [Docket Number 31] ("Amended Plan"). The Amended Plan provided for the cure of the mortgage loan default to Fifth Third on the Vine Street Property, while continuing to make post-petition mortgage payments to Fifth Third through the chapter 13 trustee on a conduit basis. The Debtor's Amended Plan further proposed to pay Duncanson for the arrearage in the HOA dues in the estimated amount of $12,000.00 throughthe Debtor's plan payments. The Debtor was not aware of Fifth Third's advancement of HOA dues at the time he filed the Amended Plan. The Amended Plan further provided for the surrender of the Miami Run Property. The Amended Plan was confirmed by this Court on July 15, 2015 [Docket Number 36].
On July 8, 2015, an agreed order was entered in this case resolving Fifth Third's Motion for Relief from Stay [Docket Number 34] ("Agreed Order"). The Agreed Order is signed by both Debtor counsel (through email authorization) and Fifth Third's counsel. There is no reference in the Agreed Order to Fifth Third's advancement of HOA dues although the dues had been paid prior to the date of the Agreed Order.
On August 26, 2015, Fifth Third filed a supplemental proof of claim in this case as contemplated by the Agreed Order [Proof of Claim Number 23-1] ("First Supplemental Proof of Claim"). The First Supplemental Proof of Claim states that the "[t]otal amount to cure default after the petition date added to the Proof of Claim: $2,596.24" (Id.).
On January 21, 2016, Debtor filed a Notice of Change of Address [Docket Number 50]. In the notice, the Debtor indicated that his prior address was the Miami Run Property but that his new address, "effective immediately" would be the Vine Street Property.
On January 25, 2016, the chapter 13 trustee and Debtor entered an agreed order increasing the dividend to be paid to unsecured creditors to 100% [Docket Number 51].
On October 16, 2018, Fifth Third filed another supplemental proof of claim [Proof of Claim Number 24-1] ("Claim for HOA Dues") in the amount of $12,451.59 for the HOA fees owed by the Debtor to Duncanson and paid by Fifth Third on June 3, 2015. Fifth Third asserts that its payment of the Debtor's outstanding HOA dues became an additional liability of the Debtor owedto Fifth Third and secured by its mortgage under the parties' Condominium Rider .
Debtor objected to Fifth Third's Claim for HOA Dues on Nov. 26, 2018 [Docket Number 70].
In objecting to Fifth Third's Claim for HOA Dues, the Debtor does not challenge his liability to Fifth Third for advancing payment of the HOA dues under the terms of the parties' mortgage and Condominium Rider nor that the debt is secured by Fifth Third's mortgage on the Vine Street Property. Accordingly, these issues are not addressed by this Court. Instead, this Court's findings and conclusions are limited to addressing two narrow issues raised in the Debtor's Objection, Fifth Third's Response and the parties' memoranda of law which include:
In answer to these questions, and as provided in more detail below, this Court concludes that neither Federal Rule of Bankruptcy Procedure 3002.1 nor equitable estoppel apply to the facts presented.
This Court begins with Debtor's objection to Fifth Third's Claim for HOA Dues because Fifth Third failed to provide notice of its claim in compliance with Federal Rule of Bankruptcy Procedure ("Rule") 3002.1. Fifth Third disputes the applicability of Rule 3002.1 because, at the time that Fifth Third advanced payment of the HOA dues on the Vine Street Property, the propertywas not the Debtor's principal residence and was to be surrendered per the terms of the Debtor's proposed Original Plan.
One benefit afforded debtors who file for bankruptcy protection under chapter 13 is the ability to use the plan to cure home mortgage defaults while keeping regular mortgage payments current under 11 U.S.C. § 1322(b)(5). Beiter v. Chase Home Fin., LLC (In re Beiter), 590 B.R. 446, 455 (Bankr. S.D. Ohio 2018). In 2011, Federal Rule of Bankruptcy Procedure 3002.1 was adopted to help implement this goal by imposing certain notice requirements on home mortgage creditors to keep the debtor and trustee informed of changes in the amount necessary to cure deficiencies so as to prevent unexpected deficiencies arising prior to the closing of the bankruptcy case. Id. (citing Fed. R. Bankr. P. 3002.1 Advisory Committee Notes); In re Vega, 2019 Bankr. LEXIS 545, at *6, 2019 WL 927006, at *2 (Bankr. D. P.R. Feb. 21, 2019). As adopted, and in its form when the Debtor filed his bankruptcy case, Rule 3002.1 provided:
To continue reading
Request your trial