In re Minbatiwalla

• Decision Date: 01 March 2010
• Docket Number: No. 09-15693 (MG).,09-15693 (MG).
• Citation: 424 B.R. 104
• Parties: In re Kerman J. MINBATIWALLA, Debtor.
• Court: U.S. Bankruptcy Court — Southern District of New York

Page 104

424 B.R. 104

In re Kerman J. MINBATIWALLA, Debtor.

No. 09-15693 (MG).

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

March 1, 2010.

COPYRIGHT MATERIAL OMITTED

Shaev & Fleischman, by David B. Shaev, New York, NY, for Debtor.

Jeffrey L. Sapir, by Jody S. Kava, White Plains, NY, Chapter 13 Trustee.

OPINION & ORDER SUSTAINING DEBTOR'S OBJECTION TO PROOF OF CLAIM #2 PURSUANT TO FRBP 3001 WITHOUT PREJUDICE

MARTIN GLENN, Bankruptcy Judge.

Before the Court is debtor Kerman J. Minbatiwalla's ("Debtor") Objection to Proof of Claim ("Claim") # 2, filed by J.P. Morgan Chase Bank, N.A. ("Chase") (the "Objection"). (ECF # 15.) Debtor objects to the claim, alleging that Chase did not attach any writing to the Claim demonstrating its interest in the property in violation of FED. R. BANKR.P. 3001(c) and (d), and failed to include information required by Official Bankruptcy Form B 10. The Debtor seeks to expunge Claim # 2, and to require Chase to pay all reasonable legal fees and expenses incurred by his attorney. For the reasons explained below, the Court sustains the Debtor's Objection to Claim # 2 without prejudice. The proper creditor may file an amended proof of claim pursuant to 11 U.S.C. § 502(j) within 21 days of the entry of this order. If Chase holds the note and mortgage, it must affix documents to the proof of claim establishing that relationship. Alternatively, if Chase is not the holder, it must give the holder notice of this 21-day deadline and file a declaration with the Court that such notice has been given. The Debtor has 14 days after any amended proof of claim is filed to object. The Court denies Debtor's request for legal fees and expenses.

BACKGROUND

The Debtor filed a voluntary chapter 13 petition on September 22, 2009. ("Petition," ECF # 1.) The Debtor is the joint owner of a condominium located at 300 East 93rd Street, Apt. 35 B-C, New York, N.Y. 10128 ("the Property"). In his proposed Amended Chapter 13 plan ("Amended Plan"), filed on November 13, 2009, which has not been confirmed, the Debtor requested "Loss Mitigation" on the Property pursuant to this District's Guidelines.¹ (ECF # 12.) The Amended Plan was served on all creditors, including several Chase entities. No Chase entity filed an objection to the request for Loss Mitigation, but the Debtor's counsel never submitted a proposed order that would have formally commenced a Loss Mitigation Period.² The Debtor's Schedule A lists the value of the Property as $1,050,000. (ECF # 1.)

According to the Debtor's Schedule D, the Property is subject to two liens, held by "Chase Mortgage" ($832,319.13) and "Chase Home Equity Line of Credit" ($177,932.94), linked to account numbers 1704021981 and 00429228620649, respectively. The original Schedule D did not indicate whether these loans were "unliquidated," "contingent" or "disputed," but on November 13, 2009, Debtor amended his Schedule D to list the Chase Mortgage and the Chase Home Equity Line of Credit claims as "disputed." (ECF # 13.) Debtor's Amended Plan, filed on the same day, lists "Chase Line of Credit" and "Chase Mortgage" as the Secured Creditors to whom arrearages, "as per loss mitigation," are owed. The Debtor's original proposed Plan listed the same secured creditors holding claims against the Property, with no arrearages owed and amounts to be paid "per contract." (ECF ## 5, 12.) Debtor's Form 22C, Chapter 13 Statement of Current Monthly and Disposable Income, listed creditors holding secured claims against the Property as "Chase" and "Chase Mortgage." (ECF # 2.)

On December 3, 2009, Chase Home Finance, LLC, as servicer for U.S. Bank National Association, as Trustee, successor in interest to Wachovia Bank National Association, as Trustee for GSR Mortgage Loan Trust 2005-6F ("Chase Home Finance, LLC"), filed a proof of claim in the amount of $842,098.03, including prepetition arrears, secured by the Property (Claim # 8). Claim # 8 includes: (1) two pages of a Recording and Endorsement Cover Page (between Debtor, the joint owner of the Property, and JP Morgan Chase Bank); and (2) a Consolidation, Extension, and Modification Agreement between Debtor, the joint owner, and JP Morgan Chase Bank, with various exhibits, including (i) the consolidated Note and Mortgage, in favor of JP Morgan Chase Bank, N.A. (collectively, the "Consolidated Mortgage and Note"), in the amount of $907,500, (ii) the underlying Washington Mutual mortgages which were consolidated into the Consolidated Mortgage, and (iii) an affidavit from the Federal Deposit Insurance Corp. ("FDIC") contending that JP Morgan Chase Bank, pursuant to a certain "Purchase and Assumption Agreement," acquired all loans and loan contributions from Washington Mutual.³

JP Morgan Chase Bank N.A. filed Claim # 2 on October 19, 2009, asserting a secured claim in the amount of $178,257.72, including prepetition arrears of $123.45, against the Property. Claim # 2 consists of two documents: Official Form 10, and a two-page itemized statement entitled "Exhibit A." Official Form 10, signed by Gary D. Crockett, indicates that the claim is for a loan secured by real estate in the amount of $178,257.72, including $123.45 in arrears, plus interest or other charges. Exhibit A lists the case number, the name of the Debtor, the last three digits of the "Loan Number," and a summary list of the principal, interest, and late charges. The summary breaks down the claim into $177,432.94 owed on the principal, $701.33 in interest, and a $123.45 arrearage claim. The addresses for disbursements and correspondence shown on Claim # 2 are different from the addresses listed on the Debtor's (original and amended) Schedule D. The "Loan Number" listed on Exhibit A to Claim # 2, "XXXXXXXX 649," corresponds to the last three digits and the number of characters in the "Account Number" on the Debtor's (original and amended) Schedule D (00429228620649), removing the two leading zeros.

On October 22, 2009, Debtor's counsel requested documentation from Chase supporting Claim # 2. (See ECF # 15.) In the letter, counsel indicated that Chase only attached "Exhibit A" to the claim, showing a summary, arrearage and post-petition chart. (Id.) In addition, Debtor's counsel requested that (a) Chase forward any missing pages from the Claim, and (b) advise which entity currently holds the note and mortgage and whether or not there have been any assignments. (Id.) According to the Debtor, Chase has not responded to the request. On November 24, 2009, Debtor objected to Claim # 2. (ECF # 15.) Chase has not responded to the Objection. On January 14, 2010, the Court held a hearing on Debtor's Objection to Claim # 2. No attorney for Chase appeared at the hearing.

DISCUSSION

A. Standing to File a Proof of Claim

To file a proof of claim, a claimant must be a "creditor or the creditor's authorized agent." FED. R. BANKR.P. 3001(b). A "creditor" is "an entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor." 11 U.S.C. § 101(10)(A). A claim is a "right to payment" or a "right to an equitable remedy for breach of performance if such breach gives rise to a right to payment." 11 U.S.C. § 101(5)(A) and (B). "[A] claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest ... objects." 11 U.S.C. § 502(a).

"[The] Bankruptcy Code and Fed.R.Civ.P. 17 each have liberal standing provisions, designed to allow a party to appear as long as it has a direct stake in the litigation under the particular circumstances." In re Conde-Dedonato, 391 B.R. 247, 250 (Bankr.E.D.N.Y.2008) (internal quotation marks omitted). "A servicer of a mortgage is clearly a creditor and has standing to file a proof of claim against a debtor pursuant to its duties as a servicer." Id. at 250 (citing In re Viencek, 273 B.R. 354, 359 (Bankr.N.D.N.Y.2002); Greer v. O'Dell, 305 F.3d 1297, 1302 (11th Cir.2002); Bankers Trust (Delaware) v. 236 Beltway Inv., 865 F.Supp. 1186, 1191 (E.D.Va.1994); In re Tainan, 48 B.R. 250, 252 (Bankr.E.D.Pa.1985) (determining that mortgage servicer was a party in interest for purposes of a relief from stay proceeding)). In Conde-Dedonato, the court determined that where the loan servicer "provided an affidavit attesting that it is the servicer of the note and mortgage, has provided the original note and mortgage, was listed on the Debtor's Schedules as having a claim against the estate, and was provided for in the Debtor's Chapter 13 Plan," and where "[t]he Debtor d[id] not dispute that [servicer was] the servicer ... it [was] clear that [servicer] is the servicer of the note and mortgage and it ha[d] standing to file a proof of claim against the Debtor." Conde-Dedonato, 391 B.R. at 250.

An assignee of a note and mortgage also has standing to file a proof of claim. Id. at 251. In New York State, assignments can be effected solely by the transfer of the relevant note and mortgage. See N.Y. REAL PROPERTY LAW § 244 ("A grant takes effect, so as to vest the estate or interest intended to be conveyed, only from its delivery; and all the rules of law, now in force, in respect to the delivery of deeds, apply to grants hereafter executed."); see also Deutsche Bank Nat'l Trust Co. v. McRae, No. 36701(TJW), 2010 WL 309015 at *2 (N.Y.Sup. Jan. 25, 2010) (citing Fryer v. Rockefeller, 63 N.Y. 268 (1875); Curtis v. Moore, 152 N.Y. 159, 46 N.E. 168 (1897); N.Y. JUR.2D MORTGAGES AND DEEDS OF TRUST § 272 (2009) ("A mortgage can be assigned in two ways—by delivery of the bond and mortgage by the assignor to the assignee with the intention that all ownership interests thereby transferred, or by a written instrument of assignment.")). Thus, an assignee can demonstrate standing by attaching the note and the mortgage to a Proof of Claim; it does not need to attach a written assignment to the proof of claim. Conde-Dedonato, 391 B.R. at 251 ("Thus, a mortgage and note can be transferred...