In re Porter

• Decision Date: 18 July 2007
• Docket Number: No. 07-12977bif.,07-12977bif.
• Citation: 371 B.R. 739
• Parties: In re Roslyn PORTER, Debtor.
• Court: U.S. Bankruptcy Court — Eastern District of Pennsylvania

371 B.R. 739

In re Roslyn PORTER, Debtor.

No. 07-12977bif.

United States Bankruptcy Court, E.D. Pennsylvania.

July 18, 2007.

COPYRIGHT MATERIAL OMITTED

Mary Jeffery, Mary Jeffery Esquire, Philadelphia, PA, for Debtor.

Paul J. Giordano, Philadelphia, PA, for Creditor Committee.

MEMORANDUM

BRUCE FOX, Bankruptcy Judge.

Presently before me is a motion filed by NationsCredit Consumer Discount Company (also known as NationsCredit Financial Services Corp. and referring to itself as NCCDC), which motion seeks to terminate the bankruptcy stay pursuant to 11 U.S.C. § 362(d)(1) and also seeks to "bar[] Debtor Roslyn Porter ... from filing another bankruptcy proceeding...." Amended Motion, Opening Paragraph. In essence, NCCDC contends that the debtor's present chapter 13 bankruptcy petition was filed in bad faith as an attempt to circumvent the supersedeas bond requirements of Fed.R.Civ.P. 62 and Fed. R.App. P. 7, and thereby prosecute an appeal from adverse district court judgments without NCCDC being permitted to execute. Motion, ¶¶ 5-6.

The debtor filed an answer in opposition to this motion. She asserts that NCCDC's secured claim is "adequately protected" by the provisions of her proposed chapter 13 plan, Answer, ¶ 6, and that she is likely to prevail on her appeal to the Court of Appeals for the Third Circuit from NCCDC's district court judgment. Id., 11. She thus maintains that her chapter 13 filing was done in good faith.

At the hearing held pursuant to 11 U.S.C. § 362(e)(1), it appeared that this lift-stay motion concerns a pre-bankruptcy adjudication by the District Court for the Eastern District of Pennsylvania in favor of NCCDC against the debtor, an appeal by the debtor of that adjudication, an attempt by NCCDC to execute upon its judgment, and an unsuccessful attempt by the debtor to obtain a stay of that execution pending appeal. The parties agreed that copies of the relevant adjudications would be offered by supplemental submission and they have done so. The parties also offered certain documents filed in the instant chapter 13 case and, as will be mentioned below, I shall take judicial notice of other documents filed of record in this case.

I consider the following facts uncontested by these parties.

I.

On July 20, 2000, NCCDC filed a mortgage foreclosure action in the Philadelphia Court of Common Pleas, docketed at 000702436, involving the debtor's residence located at 7110 Grays Avenue, Philadelphia, Pennsylvania. Debtor's Answer, Ex. B. According to the state court docket entries, a judgment in default was entered against the debtor on October 20, 2000, in the amount of $37,835.01. Id.

The debtor then filed a voluntary petition in bankruptcy under chapter 13 on November 15, 2000, docketed at Bankr.No. 00-34284.¹ During this 2000 bankruptcy filing, Ms. Porter proposed a chapter 13 plan which provided in relevant part:

No secured creditor will be paid through this plan. The claims of NationsCredit will be determined in litigation raising TILA claims and claims under section 506 of the Bankruptcy Code, and all other relevant claims.

NCCDC Amended Motion, Ex. C. This proposed plan also provided that property of the bankruptcy estate would revest in the debtor upon confirmation. Id.; see generally 11 U.S.C. § 1327(b).

On March 14, 2001, the debtor filed an adversary proceeding against NCCDC (and others) docketed at Adv. No. 01-00157. On May 7, 2002, without objection from NCCDC, any other creditor or the chapter 13 trustee, the debtor's proposed plan was confirmed. Soon thereafter, the chapter 13 trustee reported that the debtor had completed her reorganization plan and gave notice to that effect to all creditors. Again, without opposition, the debtor received a chapter 13 discharge under section 1328(a) on December 20, 2002.

On December 26, 2002, the debtor filed another adversary proceeding against NCCDC (and others), docketed at Adv. No. 02-01435. On May 15, 2003, I entered an order dismissing this 2002 adversary proceeding. And on October 3, 2003, the district court withdrew the reference of the 2001 adversary proceeding at the debtor's request.

The withdrawn adversary proceeding was docketed in the district court as Civ. No. 03-3768, and involved, inter alia, claims asserted by the debtor against NCCDC based upon the Truth in Lending Act, including loan rescission under 15 U.S.C. § 1635, as well as a counterclaim raised by NCCDC against the debtor seeking to enforce its loan agreement. See NCCDC Amended Motion, Ex. E (decision dated Nov. 14, 2006), reported at Porter v. NationsCredit Consumer Discount Co., 2006 WL 3333837 (E.D.Pa.2006).

On November 14, 2006, the District Court entered the following judgment in favor of NCCDC and against Ms. Porter:

VERDICT/CIVIL JUDGMENT

AND NOW, this 14th day of November, 2006, following a bench trial on the merits and pursuant to the attached Findings of Fact and Conclusions of Law,

IT IS ORDERED that the Court finds for NationsCredit Defendants and against Plaintiff Roslyn Porter. The Court holds that NationsCredit Defendants did not violate TILA or the UTPCPL. The Court has already dismissed Defendant Protective Life Insurance Company from the case pursuant to counsel's oral Rule 41 motion, which was granted at the September 12, 2006 bench trial. (Document No. 187).

IT IS ORDERED that Judgment be entered in favor of NationsCredit Defendants and against Plaintiff Rosyln Porter as follows: NationsCredit Defendants is awarded $55,834.22 on its counterclaim.

Id., 2006 WL 3333837, at *9.

On January 3, 2007, the district court denied the debtor's motions under Fed. R.Civ.P. 52 and 59. Porter v. NationsCredit Consumer Discount Co., 2007 WL 30117 (E:D.Pa.2007). According to the District Court docket entries, NCCDC obtained a writ of execution on its counterclaim on January 24, 2007. The debtor then filed a notice of appeal from the District Court judgments on February 1, 2007.

On February 28, 2007, the District Court denied the debtor's motion for a stay pending appeal without her needing to post a supersedeas bond. NCCDC' Motion, Ex. F, reported at Porter v. NationsCredit Consumer Discount Co., 2007 WL 674709 (E.D.Pa.2007). The Third Circuit Court of Appeals, on April 13, 2007, then denied the debtor's motion for a stay pending appeal with a waiver of supersedeas bond. NCCDC Amended Motion, Ex. B.

A second writ of execution was issued by the District Court on March 1, 2007 and served on March 12, 2007. An execution sale of the debtor's home appears to have been scheduled for May 24, 2007. However, the debtor filed the instant second chapter 13 petition on May 22, 2007, triggering the bankruptcy stay under 11 U.S.C. § 362(a).²

The debtor's bankruptcy schedules filed with her petition disclose that she values the Grays Avenue realty at $60,000, and believes that NCCDC's secured claim is $55,834.22, albeit disputed. Schedules A, D.³ Her bankruptcy schedules also reveal that the City of Philadelphia holds a delinquent real estate tax lien in the amount of $801.28. The debtor's monthly income from employment is $1,130.62 after taxes, plus $142.00 in child support for her 23 year old daughter, who purportedly is still in school. Schedule I.

On June 6, 2007, the debtor filed a proposed chapter 13 plan. Ex. D-1. The plan states that the debtor will pay the chapter 13 trustee only $25 per month for 36 months. The plan places the secured claim of NCCDC in class 3 and states:

c. CLASS 3 claims: The Trustee will not pay any allowed secured claim in this class.

Debtor will pursue her claims currently pending before the United States Court of Appeals for the Third Circuit in No 06-5099 on behalf of herself and all others similarly situated. Until such time as a final unappealable Order is entered on Debtor's claim for rescission and damages, debtor will pay to NationsCredit Financial Services Corporation directly an amount sufficient to provide adequate protection in the form of interest on its security interest, in an approximate amount of $280 monthly. In the event the debtor is ultimately unsuccessful and NationsCredit is determined to have a valid secured claim against debtor, upon entry of a final unappealable Order, the debtor will re-finance the amount of the allowed secured claim of NationsCredit, unless the creditor agrees to different treatment.

Debtor is not intending to waive any claims against NationsCredit by providing for adequate protection in this provision, including a claim for return of all monies paid pursuant to this provision, if she is ultimately successful in her claims for rescission and damages.

Debtor will avoid the judicial lien of NationsCredit Financial Services in accordance with the provisions of 11 U.S.C. § 522.

Ex. D-1.

A hearing on confirmation is presently scheduled by the chapter 13 trustee for October 16, 2007.

II.

A.

Before focusing on the lift-stay issue before me, I note that I have no authority to review any of the decisions entered by the District Court or the Court of Appeals. See Teachers Ins. and Annuity Ass'n of America v. Butler, 803 F.2d 61, 66 (2d Cir.1986) ("[T]he bankruptcy court should not permit the partnership to relitigate issues already decided by [District] Judge Weinfeld, for to allow the partnership to do so, when it knew of the judgment before it filed for bankruptcy, would result in its slipping arguments through the backdoor that had already been turned away at the frontdoor.... [A]llowing relitigation in the bankruptcy court would subvert the intent of 28 U.S.C. § 1294(1) (1982) which provides that appeals from district court decisions are to be heard by the court of appeals for the circuit that embraces the district").⁴ However, I have exclusive jurisdiction to determine whether the bankruptcy stay should be terminated, modified, conditioned or annulled under section 362(d). See Acands, Inc. v. Travelers Cas. and Sur. Co., 435 F.3d 252, 261 (3d Cir.2006); Constitution Bank v. Tubbs...