In re Osuji

• Decision Date: 17 January 2018
• Docket Number: Case No.: 15–75534–AST
• Citation: 580 B.R. 36
• Parties: IN RE: Samuel OSUJI, Debtor.
• Court: U.S. Bankruptcy Court — Eastern District of New York

580 B.R. 36

IN RE: Samuel OSUJI, Debtor.

Case No.: 15–75534–AST

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

Signed January 17, 2018

Freddie J. Berg, Berg Law Firm LLC, Jamaica, NY, Natalie Jean–Baptiste, Law Office of Natalie Jean–Baptiste, PC, Uniondale, NY, Oleg Vinnitsky, Island North Tower, New York, NY, for Debtor.

ORDER OVERRULING OBJECTIONS TO UNFILED CLAIMS

Alan S. Trust, United States Bankruptcy Judge

Currently pending before the Court are: (1)Samuel Osuji's (the "Debtor")motion to object to claim and avoid lien held by Fremont Investment & Loan ("Fremont") encumbering certain real property located at 247 East Fulton Avenue, Hempstead, New York 11575 (the "East Fulton Property" and the "East Fulton Claim Objection")[dkt item 84]; (2) Debtor's motion to object to claim and avoid lien held by IndyMac Bank F.S.B.("IndyMac") encumbering certain real property located at 113Lawrence Street, Uniondale, New York 11553 (the "Lawrence Street Property")[dkt item 86] as amended on May 15, 2017[dkt items 88, 90](the "Lawrence Street Claim Objection"); and (3) Debtor's motion to object to claim and avoid lien held by New Century and/or U.S. Bank National Association, As Trustee for the GSAMP Trust 2006–NC1 Mortgage Pass–Through Certificates, Series 2006–NC1 ("U.S. Bank") encumbering certain real property located at 126William Street, Hempstead, New York 11550 [dkt item 110](the "William Street Property" and the "William Street Claim Objection" and along with the East Fulton Claim Objection and the Lawrence Street Claim Objection, the "Claim Objections").¹For the reasons herein, the Claim Objections are overruled.

General background²

On December 30, 2015, Debtor filed a voluntary petition for relief under chapter 7 of title 11 of the United States Code(the "Bankruptcy Code").Kenneth Kirschenbaum was appointed the chapter 7trustee(the "Trustee").

On January 13, 2016, Debtor filed bankruptcy schedules, including Schedule A/B, claiming, inter alia , a fee simple ownership interest in various parcels of real property including the East Fulton Property, the Lawrence Street Property, and the William Street Property (the "Properties").[dkt item 9]

Debtor filed adversary proceedings related to each of these (and other) Properties, each seeking, inter alia , a declaratory judgment that certain parties were not the holders of the notes and mortgages encumbering each of the Properties (the "Adversaries").

On May 2, 2016, the Court entered an Order discharging Debtor (the "Discharge Order").[dkt item 29]

On October 27, 2016, the Trustee filed a status report and stated, among other things, that he did not intend to administer any interest of this bankruptcy estate in the William Street Property nor the Lawrence Street Property, but that he intended to administer the estate's interest in the East Fulton Property.[dkt item 40]

On October 28, 2016, the Trustee filed a Notice of Discovery of Assets and indicated a deadline of January 26, 2017 for proofs of claim to be filed (the "Discovery of Assets").[dkt item 41]

This Court has abstained from hearing the Adversaries, except for the one relating to the East Fulton Property.Osuji v. New Century Mortg. Corp.(In re Osuji) , 564 B.R. 180, 182(Bankr. E.D.N.Y.2017)(abstaining from multiple adversary proceedings);See generallyOsuji v. Fed. Nat'l Mortg. Ass'n , 571 B.R. 518, 524(E.D.N.Y.2017)(affirming this bankruptcy court's abstention from related adversary proceeding and finding bankruptcy court did not abuse its discretion in permissively abstaining from adversary proceeding).Subsequent to the Court abstaining from the various adversaries, Debtor filed the Claim Objections, which largely duplicate the Adversaries and seek, inter alia , to void the liens encumbering each of the Properties.Additionally, this Court has entered an order lifting the automatic stay as it relates to the Lawrence Street Property [dkt item 85].SeeIn re Osuji , No. 8-15-75534-AST, 2017 WL 1956845(Bankr. E.D.N.Y.May 9, 2017)(Order granting relief from the automatic stay), reconsideration denied sub nom.Osuji , No. 15-75534-AST, 2017 WL 4542911(Bankr. E.D.N.Y.Oct. 6, 2017).

Jurisdiction and venue

This Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(A), (B), and1334(b), and the Standing Orders of Reference in effect in the Eastern District of New York dated August 28, 1986, and as amended on December 5, 2012, but made effective nunc pro tunc as of June 23, 2011.

Findings of fact and conclusions of law

This decision constitutes the Court's findings of fact and conclusions of law as required by Rule 7052andRule 9014(c) of the Federal Rules of Bankruptcy Procedure(the "Bankruptcy Rules").

The Lawrence Street Adversary Proceeding and Stay Relief Motion

On March 30, 2016, acting pro se , Debtor commenced an adversary proceeding (the "Lawrence Street Adversary") against IndyMac by the filing of a complaint (the "Lawrence Street Complaint"), assigned adversary proceeding number 16–08045. [adv. pro. no.: 16–08045; dkt item 1] In the Lawrence Street Complaint, Debtor alleges, inter alia , that IndyMac is not the holder of the note and mortgage that encumbers the Lawrence Street Property.

Additionally, Debtor alleges as follows: that on August 17, 2009, IndyMac commenced a state court foreclosure action against the Lawrence Street Property by filing an action against a purported prior owner of that property, a Fidelis Mgbeahuru, assigned state court index number 016475/2009(the "2009 Mgbeahuru Case"); that IndyMac did not revoke its notice of acceleration of the mortgage; however, Debtor did not allege that the 2009 Mgbeahuru Case was closed or what its disposition was.Debtor further alleged: that on November 20, 2012,³ Debtor filed a state court action against Mr. Mgbeahuru to determine title to the Lawrence Street Property, state court index number 014253/2012(the "2012 Mgbeahuru Case"); that on March 7, 2014, the state court entered an order in favor of Debtor, vesting title to the Lawrence Street Property in him free of any liens.Debtor does not allege that he joined IndyMac or any other mortgagee of record in the 2012 Mgbeahuru Case.Thus, Debtor contends he acquired an ownership interest in the Lawrence Street Property while the 2009 Mgbeahuru Case was pending but chose not to intervene in that action, and that the interest Debtor acquired was after Mr. Mgbeahuru had already surrendered his interest in the Lawrence Street Property to IndyMac as part of Mr. Mgbeahuru's bankruptcy.

On July 26, 2016, the Court entered an Order to Show Cause as to Why the Court Should Not Abstain from Hearing this Adversary Proceeding .[adv. pro. no.: 16–08045; dkt item 19]On February 2, 2017, the Court issued a Decision and Order abstaining from hearing the Lawrence Street Adversary (the "Lawrence Street Order to Abstain").[adv. pro. no.: 16–08045; dkt item 29]The Court determined that permissive abstention from the Lawrence Street Adversary was warranted for the efficient administration of the estate, as the Trustee has determined not to pursue any interest in the Lawrence Street Property, state law issues predominate over bankruptcy related issues, and because there is a pending state court proceeding related to the Lawrence Street Property.Osuji , 564 B.R. at 188.

On March 15, 2017, Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007–AR1, Mortgage Pass–Through Certificates Series 2007–AR1 ("Deutsche"), filed a motion for relief from the automatic stay with respect to the Lawrence Street Property and scheduled a hearing for April 20, 2017(the "Lawrence Street Stay Relief Motion").[dkt items 69, 70]

On April 20, 2017, the Court held a hearing on the Lawrence Street Stay Relief Motion.Deutsche appeared at the Hearing by counsel; Debtor appeared along with counsel.

On April 27, 2017, Debtor filed a motion to reconsider the Lawrence Street Stay Relief Motion(the "Lawrence Street Motion to Reconsider").[dkt item 82]

On May 9, 2017, the Court entered an Order granting Deutsche relief from the automatic stay as it relates to the Lawrence Street Property (the "Lawrence Street Stay Relief Order").[dkt item 85] The Lawrence Street Stay Relief Order states:

The Court in abstaining from the [Lawrence Street] Adversary has already determined that Debtor's filing stayed a state court proceeding; to keep the stay in effect is inimical to the ability of the parties to receive a determination of who has what rights in the Property.As this Court abstained in favor of the state court, clearly so that court could adjudicate the claims of Debtor and Deutsche, ... were the stay to remain in effect, there would be no ability of the state court to adjudicate the very claims and assertions made by Debtor and by Deutsche.

Osuji , No. 8-15-75534-AST, 2017 WL 1956845 at *4.

On May 23, 2017, Debtor filed his Notice of Appeal to District Court of the Lawrence Street Stay Relief Order.[dkt item 93]

On October 6, 2017, the Court entered an Order denying Debtor's Lawrence Street Motion to Reconsider.[dkt item 122]

The Lawrence Street Claim Objection

On May 10, 2017, Debtor filed the Lawrence Street Claim Objection, in which he asserts, among other things, that the IndyMac lien encumbering the Lawrence Street Property should be disallowed and void pursuant to 11 U.S.C. § 506(d)(2)and§ 502 because a proof of claim asserting the lien was not timely filed after the Trustee's Discovery of Assets.

On June 2, 2017, Deutsche filed an opposition to the Lawrence Street Claim Objection (the "Deutsche Opposition").[dkt item 99] Deutsche asserts that, as a secured creditor, it was not required to file a claim in Debtor's case to preserve its lien against the Lawrence Street Property, the Lawrence Street Claim Objection is procedurally improper as it was not brought as an adversary proceeding pursuant to Bankruptcy Rule 7001, and it is duplicative of the Lawrence...