In re Hernandez, Case No. 08-38201-H4-13 (Bankr. S.D. Tex. 12/7/2009)
| Decision Date | 07 December 2009 |
| Docket Number | Case No. 08-38201-H4-13.,Adv. Proceeding. No. 09-03280. |
| Parties | IN RE: CHRISTIAN ROLANDO HERNANDEZ, Chapter 13, Debtor. CHRISTIAN ROLANDO HERNANDEZ, Plaintiff, v. ARGENT SECURITIES, INC., ARGENT MORTGAGE COMPANY, LLC, AMERIQUEST MORTGAGE COMPANY, DEUTSCHE BANK NATIONAL TRUST COMPANY, ARGENT SECURITIES INC., ASSET-BACKED PASS THROUGH CERTIFICATES SERIES 2005-W3, AMERICAN HOME MORTGAGE SERVICING, INC., AND CITI RESIDENTIAL LENDING, INC., Defendants. |
| Court | United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Texas |
The dispute in this adversary proceeding revolves around an adjustable-rate home mortgage loan (the ARM) entered into on or about August 17, 2005 by the Plaintiff, Christian Rolando Hernandez, who is the debtor in the above-referenced Chapter 13 case (the Debtor). The Debtor alleges that: (a) the entity that filed a proof of claim based on the ARM lacks standing to file this proof of claim; (b) any post-petition attempt to transfer or assign an interest in the deed of trust relating to the mortgage loan was void under 11 U.S.C. § 549, or alternatively, a violation of the automatic stay under 11 U.S.C. §§ 362(a)(4) & (5); (c) the proof of claim is false and fraudulent, and therefore the Debtor is entitled to recover his attorney's fees and costs, plus sanctions, for prosecuting this lawsuit; and (d) the Debtor was fraudulently induced entering into the ARM.
The Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052. To the extent that any finding of fact is construed as a conclusion of law, it is adopted as such. Moreover, to the extent that any conclusion of law is construed as a finding of fact, it is adopted as such. The Court reserves its right to make additional findings of fact and conclusions of law as it deems appropriate or as maybe requested by any of the parties.
1. On December 3 0,2008, the Debtor filed a petition for relief under Chapter 13 of the United States Bankruptcy Code, commencing case number 08-38201 (the Main Case). [Case No. 08-38201, Docket No. 1.]
2. On April 29, 2009, American Home Mortgage Servicing, Inc. (AHMSI) filed a proof of claim, the first page of which reflects that AHMSI holds a secured claim secured by certain real estate (the Proof of Claim). The amount listed on the Proof of Claim is $164,079.71. The full name of the creditor shown on the Proof of Claim form is AHMSI. Attached to the Proof of Claim, however, is an untitled, one-page document containing one paragraph representing that the name of the creditor is not AHMSI, but rather is American Home Mortgage Servicing, Inc., as servicing agent for Deutsche Bank National Trust Company, as Trustee in trust for the benefit of the Certificateholders for Argent Securities Trust 2005-W3, Asset-File Number 7415-N-4043 / poc. [Case No. 08-38201, Proof of Claim No. 4.]1
3. Also attached to the Proof of Claim is a copy of an adjustable rate note securing property located at 6219 Newbury Drive, Katy, TX 79449, dated August 17, 2005 (the Note). The lender listed on the Note is Argent Mortgage Company, LLC (Argent Mortgage), not AHMSI. The Note requires the Debtor to pay to Argent Mortgage the principal of $139,500.00, plus interest. There is no documentation attached to the Proof of Claim evidencing that the Note has ever been endorsed over or assigned to AHMSI, or to any other third-party. [Case No. 08-38201, Proof of Claim No. 4.]
4. Also attached to the Proof of Claim is a copy of a deed of trust, dated August 17,2005 (the Deed of Trust). The lender listed on the Deed of Trust is Argent Mortgage, not AHMSI. The Deed of Trust states that "[t]he Security Instrument [i.e., the Deed of Trust] secures to Lender: (i) the repayment of the [Note], and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note." Moreover, the Deed of Trust states that "[t]he [Deed of Trust] shall be governed by federal law and the law of the jurisdiction in which the Property is located." [Case No. 08-38201, Proof of Claim No. 4.]
5. Also attached to the Proof of Claim is an Assignment of Deed of Trust/Transfer of Lien (the Assignment). According to the Assignment, which was executed on April 2, 2009, Argent Mortgage assigned the Deed of Trust to AHMSI effective on February 11, 2009. The Assignment reflects that AHMSI has become the holder and owner of the Deed of Trust, but there is no language in the Assignment reflecting that Argent Mortgage assigned the Note to AHMSI. Moreover, the Assignment in no way indicates that AHMSI is acting as a servicing agent for DB Trust, as the trustee for the Certificateholders. Indeed, the Proof of Claim contains no documentation evidencing that (a) AHMSI became a servicing agent for DB Trust; (b) DB Trust in any way is the holder and owner of the Note or the Deed of Trust; or (c) DB Trust is a trustee in trust for the benefit of the Certificateholders. [Case No. 08-38201, Proof of Claim No. 4.]
6. On July 17, 2009, the Debtor filed a complaint (the Complaint) initiating an adversary proceeding styled as follows: Christian Rolando Hernandez v. Argent Securities, Inc., Argent Mortgage Company, LLC, Ameriquest Mortgage Company, Deutsche Bank National Trust Company, Argent Securities Inc., Asset-Backed Pass-Through Certificates Series 2005-W3, and Citi Residential Lending, Inc., Adversary No. 09-03280 (the Adversary Proceeding). [Adv. Docket No. 1.] In the Complaint, the Debtor sets forth the following four causes of action: (1) that AHMSI and DB Trust lack standing to file the Proof of Claim;2 (2) that the postpetition assignment of the Deed of Trust is an improper postpetition transfer of property of the estate, or alternatively, a violation of the automatic stay; (3) that the Debtor is entitled to recover sanctions and attorney's fees because there was a false and fraudulent filing of the Proof of Claim; and (4) that the Debtor was fraudulently induced into entering the ARM. Further, in the Complaint, the Debtor requests the following relief: (1) a declaratory judgment determining the secured status of the defendants in the Adversary Proceeding pursuant to 11 U.S.C. §§ 105(a), 502(b)(1), 506, and 544(a), as well as Bankruptcy Rule of Procedure 3007; (2) actual damages, punitive damages, and sanctions pursuant to 11 U.S.C. §§ 105(a), 362(a), & 501, and Bankruptcy Rule 3001(c) & (d); and (3) actual and punitive damages based upon fraudulent inducement under state law in relation to the ARM made to the Debtor.3 [Adv. Docket No. 1.]
7. On August 19, 2009, AHMSI and DB Trust filed Defendants American Home Mortgage Servicing, hic.'s and Deutsche Bank National Trust Company's Motion to Dismiss Complaint and Jury Demand (the Motion to Dismiss). [Adv. Docket No. 34.]
8. On August 24, 2009, AHMSI and DB Trust filed Defendants American Home Mortgage Servicing, Inc.'s and Deutsche Bank National Trust Company's Motion to Withdraw the Reference (the Motion to Withdraw Reference). [Adv. Docket No. 36.]
9. On September 8, 2009, the Debtor filed Plaintiffs Response in Opposition to Motion to Dismiss Filed by Defendants American Home Mortgage Servicing, Inc. and Deutsche Bank National Trust Company (the Response). [Adv. Docket No. 43.]
10. On September 14,2009, the Debtor filed Plaintiffs Response in Opposition to Defendants' Motion to Withdraw Reference. [Adv. Docket No. 44.]
The Court has jurisdiction over the Adversary Proceeding pursuant to 28 U.S.C. §§ 1334(b) and 157(a). This particular dispute is a core proceeding pursuant to any of the following provisions under 28 U.S.C. § 157(b):
• § 157(b)(2)(A) because the resolution of the Adversary Proceeding concerns the administration of the Debtor's Chapter 13 estate;4
• § 157(b)(2)(B) because the Adversary Proceeding deals with allowance or disallowance of a claim against the Debtor's estate—specifically, the claim for $164,079.71 set forth in the Proof of Claim; [ of Fact No. 2];
• § 157(b)(2)(C) because the Debtor's Complaint consists of counterclaims against a party filing a Proof of Claim against the estate;
• § 157(b)(2)(0) because the Adversary Proceeding is a proceeding that affects the adjustment of the debtor/creditor relationship; or
• the general "catch-all" language of 28 U.S.C. § 157(b)(2).5
Venue is proper pursuant to 28 U.S.C. § 1409.
Contrary to AHMSI and DB Trust's assertions in the Motion to Dismiss, the Debtor has standing to object to the Proof of Claim because 11 U.S.C. § 502(a) states that "[a] claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest, including a creditor of a general partner in a partnership that is a debtor in a case under chapter 7 of this title, objects." 11 U.S.C. § 502(a). The Debtor is a party-in-interest in this Chapter 13 case.6 Accordingly, the Debtor has standing to obj ect to the Proof of Claim. Moreover, a Chapter 13 debtor has standing to pursue a cause of action that would benefit the estate. Wilborn v. Wells Far go Bank, N.A. (In re Wilborn), 401 B.R. 872, 885 n.8 (Bankr. S.D. Tex. 2009) . "[A] Chapter 13 debtor has standing to bring lawsuits that `affect[] the terms of the debtor's discharge in bankruptcy.'" Wilborn v. Wells Fargo Bank, N.A. (In re Wilborn), 404 B.R. 841, 856 n.12 (Bankr. S.D. Tex. 2009) (quoting Martin v. O'Connor (In re Martin), 201...
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