In re Nyamusevya
| Docket Number | Case No. 19-52868 |
| Decision Date | 21 September 2022 |
| Citation | 644 B.R. 375 |
| Parties | IN RE: Leonard NYAMUSEVYA, Sr., Debtor. |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
Kara Czanik, Cincinnati, OH, Counsel for CitiMortgage, Inc.
Harry W. Cappel, Cincinnati, OH, Counsel for CitiMortgage, Inc.
The automatic stay freezes the status quo and puts a halt to collection efforts. So too does the postponement of a foreclosure sale. It therefore follows that postponing a foreclosure sale does not violate the automatic stay. Property inspections conducted to ensure the good condition of the property also do not violate the automatic stay. Leonard Nyamusevya, Sr., the Chapter 7 debtor, disputes both points. He moves to hold CitiMortgage, Inc. liable for violating the automatic stay ("Stay Violation Motion") (Doc. 77) based on property inspections and the postponement of a foreclosure sale, all done without any effort to collect from him. For the reasons explained below, the Court concludes that CitiMortgage did not violate the automatic stay.
The Court has jurisdiction to hear and determine this matter under 28 U.S.C. § 1334(b) and the general order of reference entered in this district in accordance with 28 U.S.C. § 157(a). This is a core proceeding. 28 U.S.C. § 157(b)(2)(A) & (O). The matter before the Court is a motion to hold a party liable for purportedly violating the automatic stay, and it therefore "stems from the bankruptcy itself," Stern v. Marshall , 564 U.S. 462, 499, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), meaning there is no constitutional impediment to the entry of this order. See In re Johnson , 580 B.R. 766, 769 (Bankr. S.D. Ohio 2018) ().
While this matter is simple at its core, it has a long history. The reason for this is because Nyamusevya is an "exceedingly litigious borrower." Nyamusevya v. CitiMortgage, Inc. (In re Nyamusevya) , No. 19-8027, 2021 WL 193965, at *1 (B.A.P. 6th Cir. Jan. 20, 2021). For about nine years before Nyamusevya filed his bankruptcy case on May 1, 2019 ("Petition Date"),1 he litigated with CitiMortgage in a foreclosure action it had commenced against him in the Franklin County Court of Common Pleas as to real property located at 2064 Worcester Court, Columbus, Ohio 43232 ("Property"). Certified Docket for Franklin County Clerk of Courts Case No. 10 CV 013480 ("Foreclosure Action"), CitiMortgage Ex. A at 1 (). In addition to the nine or so years that the Foreclosure Action was pending before the Petition Date, it was delayed for several months after the Petition Date due to the automatic stay. CitiMortgage was cleared to pursue the Foreclosure Action when the automatic stay terminated with respect to the Property upon its abandonment by the Chapter 7 trustee in October 2019. Nyamusevya , 2021 WL 193965, at *3. Once Nyamusevya received his discharge, the discharge injunction protected him, but "it did not protect the Property to the extent of CitiMortgage's lien." Id . at *5. "In other words, [Nyamusevya's] discharge preclude[d] CitiMortgage from collecting its debt directly from [Nyamusevya] himself (in personam ) but d[id] not prevent CitiMortgage from liquidating the ... Property to satisfy the debt (in rem )." Id. Despite this, he continued his litigious ways in the state court after the stay was lifted. And so, all together, "[r]emarkably, [Nyamusevyua] ... managed to resist foreclosure for more than a decade." Id . at *2.
In addition to defending against the Foreclosure Action in the state court, Nyamusevya went on the offensive in his bankruptcy case. He first sought a determination that the mortgage lien of CitiMortgage on the Property was wholly unsecured and void (Doc. 22). He did so even though his position was "contrary to the conclusions of the Ohio courts." Nyamusevya , 2021 WL 193965, at *1, 2. About two months after the Petition Date he requested an expedited hearing (Doc. 40) on his motion to void CitiMortgage's lien. Motions to void liens do not typically require expedited relief, but Nyamusevya alleged in his motion for an expedited hearing that CitiMortgage was violating the automatic stay. The Court therefore held a status conference to determine whether an expedited hearing was warranted. During the status conference, Nyamusevya stated that a foreclosure sale of the Property ("Sheriff's Sale") had been scheduled for July 5, 2019 and that employees or agents of CitiMortgage had been coming onto the Property in connection with the scheduled sale. Tr. of June 27, 2019 Status Conference (Doc. 80) at 5–7. Counsel for CitiMortgage responded that the Sheriff's Sale had been cancelled but also stated that he did not know whether employees or agents of CitiMortgage had come onto the Property. Id . at 6–7. To address that allegation, a follow-up status conference on the expedited hearing motion was held the next day. During the follow-up status conference, counsel for CitiMortgage again represented that the Sheriff's Sale had been cancelled and provided documents to that effect. Tr. of June 28, 2019 Status Conference (Doc. 82) at 3–6. Counsel for CitiMortgage also represented that the servicer of the CitiMortgage loan had conducted an inspection of the Property after the Petition Date by taking photographs from across the street, but that the servicer had not contacted Nyamusevya or entered onto the Property while conducting the inspection. Id . at 6–7. Because no emergency warranting immediate relief existed, the Court denied the expedited hearing motion (Doc. 45).
Continuing on the offensive, Nyamusevya filed the Stay Violation Motion.2 Just ten days before the hearing on the Stay Violation Motion ("Hearing"), Nyamusevya moved for summary judgment on his claim against CitiMortgage for its alleged violation of the automatic stay ("Summary Judgment Motion") (Doc. 240). The Court denied the Summary Judgment Motion for two reasons: (1) it was untimely and (2) it did not establish that Nyamusevya was entitled to judgment as a matter of law. See Order on Debtor's Motion for Summary Judgment (Doc. 243). But because Nyamusevya filed the Summary Judgment Motion before the deadline that the Court set for filing pre-Hearing briefs, the Court treated the Summary Judgment Motion as his pre-Hearing brief. See id . at 9.
Before the Hearing, Nyamusevya filed three notices to supplement the record with exhibits (Docs. 235, 236 and 239). CitiMortgage filed an objection to the notices (Doc. 241) because Nyamusevya had not filed an exhibit list by the deadline established by the Court in its order scheduling the Hearing. Two of the notices to supplement the record (Docs. 235 and 236) were filed by the deadline, so the Court considered those notices to be timely filed exhibit lists as to the exhibits identified in those notices, subject to any other objections that CitiMortgage had. The documents in those notices were (1) a Preliminary Judicial Report and Supplemental Final Judicial Report, (2) a printout from the Franklin County Sheriff's office showing a sale date for the Property of July 5, 2019; and (3) CitiMortgage's Exhibits A through G (identified further below). The third notice (Doc. 239) was filed after the deadline, and the exhibits identified in that notice therefore were excluded. The excluded exhibits were photographs of the Property that appear to have been taken from the street. It is unknown who took the photographs, but it would appear that Nyamusevya took them.
During the Hearing,3 the Court heard the testimony of Nyamusevya on his own behalf, and three witnesses testified for CitiMortgage—Sherry Dufford, Carson Rothfuss and Jessica Gonzalez. Dufford is an account clerk supervisor in the Franklin County Sheriff's Office real estate division, which handles properties that are the subject of a sheriff's sale; Rothfuss is the attorney with Lerner, Sampson & Rothfuss ("Lerner Sampson"), the firm that was handling the Foreclosure Action; and Gonzalez is a senior asset analyst with Cenlar FSB, the loan servicer that hired a company to conduct inspections of the Property.
CitiMortgage's Exhibits A through G were admitted into evidence without objection during the Hearing. CitiMortgage's exhibits were as follows:
Nyamusevya relied on CitiMortgage's Exhibits B, C and G. Also admitted into evidence was a version of Exhibit C that Nyamusevya marked to show purported redactions. Hr'g Tr. at 37–40. In addition, at his request, the Court took judicial notice of CitiMortgage's objection to confirmation of his Chapter 13 plan (Doc. 41), in which CitiMortgage "represent[ed] to [the Court] that the foreclosure was postponed." Hr'g Tr. at 19.
Although the history of this matter is long, there are just a few salient facts. This is because Nyamusevya, who has the burden of proof, presented very little...
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