In re Luera
| Decision Date | 16 December 2022 |
| Docket Number | CASE NO: 17-70478 |
| Citation | 647 B.R. 886 |
| Parties | IN RE Jaime Omar LUERA and Christina Isabel PAZ, Debtors |
| Court | U.S. Bankruptcy Court — Southern District of Texas |
Reese W. Baker, Nikie Marie Lopez-Pagan, Baker & Associates, Houston, TX, for Debtors Christina Isabel Paz, Jaime Omar Luera.
The instant dispute is a strong reminder that "[t]he law ministers to the vigilant not to those who sleep upon perceptible rights."1 On the eve of discharge, an end of case battle has erupted between debtors Jamie Omar Luera and Christina Isabel Paz and creditor MidFirst Bank. This dispute stems from an amended proof of claim filed by MidFirst Bank 899 days after the bar date and listing $4,140.74 in additional arrearages. Curiously, Jamie Omar Luera and Christina Isabel Paz waited two more years after MidFirst Bank amended its proof of claim to bring the instant objection. The debtors are now in month sixty of their sixty-month plan without having provisioned for the $4,140.74 in additional arrearages. On November 22, 2022, the Court held a hearing and for the reasons stated herein, Jamie Omar Luera and Christina Isabel Paz's objection to MidFirst Bank's amended proof of claim are overruled and MidFirst Bank's amended proof of claim is allowed.
This Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52, which is made applicable to adversary proceedings pursuant to Federal Rule of Bankruptcy Procedure 7052. To the extent that any finding of fact constitutes a conclusion of law, it is adopted as such. To the extent that any conclusion of law constitutes a finding of fact, it is adopted as such. This Court made certain oral findings and conclusions on the record. This Memorandum Opinion supplements those findings and conclusions. If there is an inconsistency, this Memorandum Opinion controls.
A. Procedural History
This Court holds jurisdiction pursuant to 28 U.S.C. § 1334 and exercises its jurisdiction in accordance with Southern District of Texas General Order 2012-6.18 Section 157 allows a district court to "refer" all bankruptcy and related cases to the bankruptcy court, wherein the latter court will appropriately preside over the matter.19 This court determines that pursuant to 28 U.S.C. § 157(b)(2)(A), (B) and (O) this proceeding contains core matters, as it primarily involves allowance of claims and proceedings concerning the administration of this estate.20 This proceeding is also core under the general "catch-all" language because such a suit is the type of proceeding that can only arise in the context of a bankruptcy case.21
Furthermore, this Court may only hear a case in which venue is proper.22 Pursuant to § 1409(a), "a proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending."23 Debtors’ chapter 13 case is presently pending in this Court and therefore, venue of this adversary proceeding is proper.
While bankruptcy judges can issue final orders and judgments for core proceedings, absent consent, they can only issue reports and recommendations on non-core matters.24 The pending claim objection is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A),(B) and (O). Accordingly, this Court concludes that the narrow limitation imposed by Stern does not prohibit this Court from entering a final order here.25 Alternatively, this Court has constitutional authority to enter a final order because all parties in interest have consented, impliedly if not explicitly, to adjudication of this dispute by this Court.26
None of these parties has ever objected to this Court's constitutional authority to enter a final order or judgment. These circumstances unquestionably constitute implied consent. Thus, this Court wields the constitutional authority to enter a final order here.
In this case, the bar date for the filing of non-governmental proofs of claim was February 12, 2018.27 Prior to this deadline, on February 9, 2018, Amerihome filed its Original Proof of Claim.28 Amerihome subsequently transferred the Original Proof of Claim to MidFirst Bank on November 8, 2018.29 The Original Proof of Claim asserts a secured claim in the amount of $142,052.18 including an arrearage amount of $11,114.81.30 Specifically, the arrearage consisted of $5,492.48 in principal and interest, $2,136.79 in pre-petition fees, $2,272.98 in escrow deficiency for funds advanced, and $1,212.56 in projected escrow shortages.31
Section 502 provides that "a claim or interest, proof of which is filed under § 501 of this title, is deemed allowed, unless a party in interest ... objects."32 The legislative history of § 502 provides in relevant part, that 33 Here, no objection to the Original Proof of Claim was filed by any party.34 Thus, the Original Proof of Claim was allowed under § 502.
Debtors’ Plan35 was filed on April 11, 2018, and confirmed on April 19, 2018.36 The Plan provisioned, inter alia, for the exact amounts contained within MidFirst Bank's Original Proof of Claim37 by providing a total claim in the amount of $142,052.18 with sixty on-going monthly mortgage payments in the amount of $1,394.86 (inclusive of principal and interest in the amount of $686.56 and an escrow component in the amount of $698.40) and an arrearage claim in the amount of $11,114.81 to be paid over the next fifty two months of the Plan.38
As stated above, no party objected to the Original Proof of Claim and it was thus allowed under § 502. However, on July 30, 2020, in the thirty-first month of the Plan, MidFirst Bank filed its Amended Proof of Claim.39 Notably, this was 899 days after the bar date and 833 days after the Plan was confirmed.40 The Amended Proof of Claim asserts a secured claim in the amount of $141,962.18 including an arrearage amount of $15,255.55.41 The Amended Proof of Claim...
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