In re Moehring

• Decision Date: 08 January 2013
• Docket Number: No. 10–37308.,10–37308.
• Citation: 485 B.R. 571
• Parties: In re Patricia M. MOEHRING, Debtor.
• Court: U.S. Bankruptcy Court — Southern District of Ohio

485 B.R. 571

In re Patricia M. MOEHRING, Debtor.

No. 10–37308.

United States Bankruptcy Court,

S.D. Ohio,

Western Division.

Jan. 8, 2013.

Jonathan S. Hawkins, Austin Landing I, Dayton, OH, for the Creditor.

Scott G. Stout, Dayton, OH, Staff Attorney for the Chapter 13 Office.

Decision Granting Motion for Summary Judgment for U.S. Bank, as Trustee for Certificateholders of SACO I Trust 2006–3, Mortgage Backed–Certificates, Series 2006–3 on the Debtor's Claim Objections and Determining the Debtor Lacks Standing to Object to the Notice of Assignment of the Proof of Claim

GUY R. HUMPHREY, Bankruptcy Judge.

I. Introduction

This decision addresses all pending filings relating to a dispute between a debtor and an asserted holder of a promissory note and assignee of a mortgage on the debtor's principal residence. The ultimate issue is whether the creditor should be granted summary judgment determining that it has an allowed secured claim and, if so, the amount of the claim. This court has jurisdiction pursuant to 28 U.S.C. § 1334 and this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B).

II. Facts and Procedural Background

On June 1, 2005 the debtor, Patricia M. Moehring (“Moehring”), and her non-filing spouse, Gary R. Moehring, (collectively, the “Moehrings”) executed a promissory note evidencing a loan through which they borrowed $32,800 from SouthStar Funding, LLC (“Southstar”) [Movant Exhibit 1; (the “Note”) ]. By an allonge, the Note was endorsed in blank (not to a particular individual or entity) by Southstar. Id. In addition, on June 1, 2005 the Moehrings granted a mortgage on their residence located at 110 E. North Street, Mason, Ohio (Movant Exhibit 2) (the “Mortgage”). The mortgagee of record is listed as Mortgage Electronic Registration Systems, Inc. (“MERS”),¹ as nominee for Southstar. Id. The Mortgage was recorded on June 8, 2005. Id.

The Note and Mortgage were later bundled and securitized into a securitization trust known as the “SACO I Trust 2006–3, Mortgage Backed–Certificates, Series 2006–3” (the “Trust”).² On December 9, 2010 MERS assigned the Mortgage to Bear Stearns Asset Backed Securities I, LLC, which was the depositor for the Trust. LaSalle Bank, N.A. was the original trustee of the Trust for the certificate holders who owned the beneficial interests in the Trust, including the Note and Mortgage. Bank of America, N.A. (“BOA”) succeeded to LaSalle Bank as the trustee of the Trust as a result of the merger of LaSalle Bank with BOA.

On November 11, 2010 Moehring filed a petition for relief under Chapter 13 of the Bankruptcy Code (doc. 1). She filed her schedules with her petition, noting a first mortgage secured debt owed to Litton Loan Servicing in the amount of $136,814 and a second mortgage secured debt owed to EMC Mortgage Corporation in the amount of $32,527 on her Schedule D (doc. 1). These two mortgage debts were not scheduled as disputed, unliquidated, or contingent. In addition, in the column titled “Date Claim Was Incurred, Nature of Lien, and Description and Value of Property Subject to Lien,” Moehring proposed the EMC Mortgage debt was to be “PAID IN FULL THROUGH THE PLAN, NOT AS A CONDUIT” and that the mortgaged residence was jointly owned with her non-filing spouse. Moehring has not disputed that the second mortgage debt which she scheduled and provided for in the Plan under the name “EMC Mortgage Corporation” is the same debt which U.S. Bank asserts to hold.

On December 30, 2010, after Moehring filed her bankruptcy petition but before any proof of claim was filed in the bankruptcy case, BOA entered into an Assignment and Assumption Agreement with U.S. Bank, N.A. (“U.S. Bank”) through which BOA's interest in the Note and Mortgage as trustee of the Trust was transferred to U.S. Bank. Juarez Affidavit, ¶ 7; Movant Exhibit 4. U.S. Bank's position is this Assignment and Assumption Agreement resulted in U.S. Bank being a creditor in this case since it is the holder of the Note.

The last date to file proofs of claim in this case was March 14, 2011 (doc. 11, Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors, & Deadlines ). On January 20, 2011, 21 days after it transferred its interest in the Note and Mortgage to U.S. Bank, “Bank of America, National Association as successor by merger to LaSalle Bank National Association, as Trustee for Certificateholders of Bear Stearns Asset Backed Securities LLC Mortgage Backed Securities Series 2006–3” filed a proof of claim [3–1] (Movant Exhibit A), purporting to hold the Note, secured by the Mortgage (the “Claim”). Movant Exhibit B, ¶ 6. This proof of claim [3–1] (the “BOA Proof of Claim”) was filed by Chase Home Finance, LLC as the servicer of the loan. Attached to the proof of claim was a copy of the endorsed Note as well as a copy of the recorded Mortgage.

On September 13, 2011 the BOA Proof of Claim was amended to change the address for disbursements made to Chase as the servicer of the loan [claim 3–2]. On April 5, 2012 a notice of Transfer of Claim Other Than for Security was filed, noting the December 30, 2010 transfer of the Claim to U.S. Bank as the trustee of the Trust (doc. 72).³ The Note and Mortgage remained for the benefit of the Trust and is currently serviced by JP Morgan Chase Bank, N.A. (“Chase”) (Affidavit of Silvia Juarez [Movant Exhibit B], ¶ 1).⁴

On May 17, 2012 U.S. Bank amended the BOA Proof of Claim to reflect an original principal loan balance on the petition date of $32,527.62, rather than $35,527.62 [claim 3–3]. The Note, Mortgage, and Assignment of Mortgage were attached to amended proof of claim, and the name of the creditor was changed from BOA to U.S. Bank.

Moehring's Chapter 13 plan (doc. 6) was confirmed through an order entered on January 14, 2011 (doc. 20) and provides for payment in full of the Note.

On June 23, 2011, through legal counsel, Moehring filed an objection to the Claim (doc. 37). This objection disputed the amount of interest included in the arrearage portion of the Claim. On March 30, 2012 Moehring, pro se, filed an amended objection to the Claim, asserting that the Claim is “false” (doc. 71).⁵ In addition, on April 26, 2012 Moehring filed an objection to the notice of the Transfer of Claim (docs. 72 & 73), again asserting that the Claim is “false” (doc. 77). U.S. Bank has moved for summary judgment on all of Moehring's objections to its proof of claim, as amended (doc. 93), and asserts that Moehring lacks standing to object to the assignment of the proof of claim.

III. Positions of the Parties

Moehring has raised three fundamental concerns in her filings: 1) the original proof of claim was false as filed; 2) the underlying documents were fraudulently assigned; and 3) the accrued interest sought to be collected through the proof of claim was improperly calculated. See Objection to Proof of Claim (doc. 37) and Amended Objection to Claim 3 of Bank of America C/O Chase Home Finance, LLC (doc. 71). Moehring has also objected (doc. 77) to the notice of the transfer of the claim to U.S. Bank filed on April 5, 2012 (doc. 72). U.S. Bank denies Moehring's assertions and argues that it is the holder the Note and, therefore, is entitled to enforce the Note; the Proof of Claim originally filed by BOA and later amended by U.S. Bank is valid and should be allowed; U.S. Bank's calculation of its claim as evidenced by the Proof of Claim, as amended, is correct and Moehring does not have standing to object to the notice of the transfer of the claim to U.S. Bank and, therefore, that objection should be denied.

For the reasons stated below, the court determines that U.S. Bank is entitled to summary judgment denying Moehring's objections and allowing its Claim in the amount asserted in the proof of claim, as filed on May 17, 2012. The court further determines that U.S. Bank's claim shall be paid in accordance with the treatment provided in Moehring's confirmed Plan.

IV. Conclusions of LawA. Summary Judgment Standard

Federal Rule of Civil Procedure 56, made applicable through Federal Rules of Bankruptcy Procedure 7056 and 9014, sets forth the standard to address the parties' filings. It states, in part, that a court must grant summary judgment to the moving party “if the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.”

In order to prevail, the movant, if bearing the burden of persuasion, must establish all elements of its claim. Celotex Corp. v. Catrett, 477 U.S. 317, 331, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the burden is on the nonmovant, the movant must: 1) submit affirmative evidence that negates an essential element of the nonmovant's claim or 2) demonstrate to the court that the nonmovant's evidence is insufficient to establish an essential element of the nonmovant's claim. Id. at 331–32, 106 S.Ct. 2548. Thereafter, the nonmovant “must come forward with ‘specific facts showing that there is a genuine issue for trial.’ ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249–50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). All inferences drawn from the underlying facts must be viewed in a light most favorable to the party opposing the motion. Matsushita, 475 U.S. at 587–88, 106 S.Ct. 1348.

Affidavits presented as evidence must be based upon personal knowledge and set forth facts admissible in evidence. Fed.R.Civ.P. 56(c)(4). A party may object to purported evidence presented in a form that would not be admissible. Fed.R.Civ.P. 56(c)(2).

B. As the Holder of the Note, U.S. Bank May Enforce the Note and Mortgage

Based upon the undisputed evidentiary record, U.S. Bank, as Trustee for the Trust, may enforce the Note. The Note is an unconditional promise to pay and is therefore a negotiable instrument under Ohio's version of the Uniform Commercial Code, codified in Title 13 of the Ohio Revised Code. SeeOhio...