In re Rodriguez
| Decision Date | 01 April 2009 |
| Docket Number | Bankruptcy No. 07-23124 JPK.,Adversary No. 08-2017. |
| Citation | 402 B.R. 299 |
| Parties | In re Christine Marie RODRIGUEZ, Debtor. Christine Marie Rodriguez, Plaintiff, v. Countrywide Home Loans, Inc., Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of Indiana |
Lori D. Fisher, Esq., Merrillville, IN, for the debtor, Christine Marie Rodriguez.
Rayanna L. Alexander, Esq., Indianapolis, IN, for the Defendant Countrywide Home Loans, Inc.
Mark R. Galliher, Esq., Indianapolis, IN, for the Defendant Countrywide Home Loans, Inc.
This adversary proceeding was initiated by a complaint filed by Christine Marie Rodriguez ("Rodriguez") on February 18, 2008.1 The focus of the complaint is Rodriguez's assertion that a mortgage granted by Rodriguez and her non-debtor spouse to Countrywide Home Loans, Inc. ("Countrywide") is avoidable by her utilization of the "strong arm" powers of the Chapter 13 Trustee. The defendant Countrywide of course opposes Rodriguez's contentions.
Rodriguez initiated her Chapter 13 case by the filing of a petition on November 14, 2007. On February 18, 2008, Rodriguez initiated this adversary proceeding. Countrywide filed its answer on February 21, 2008. On May 22, 2008, the court entered a docket order following a pre-trial conference held on May 21, 2008 which stated the following:
Complaint filed by Plaintiff Christine Marie Rodriguez. APPEARANCES: Atty. Fisher on behalf of Plaintiff and Atty. Galliher on behalf of Defendant. Atty. Fisher will confirm that the non-debtor spouse signed the mortgage. It is ORDERED that Atty. Fisher shall file the authorization of the Chapter 13 trustee for the debtor to pursue action on behalf of the Chapter 13 bankruptcy estate within 21 days. At the next Telephonic Conference set for 6/25/08 at 10:00 A.M. the parties will address possible resolution on a designated record.
As required by the May 22, 2008 order, on June 12, 2008 a "Statement of Authorization" was filed, as signed jointly by Rodriguez's counsel and by the Chapter 13 Trustee. This Statement is as follows:
The Trustee, Paul R. Chael, hereby authorizes and assigns to the Plaintiff/Debtor, Christine Marie Rodriguez, the standing/right to pursue any and all voidance actions under 11 U.S.C. §§ 544, 545, 546, 547, 548, 549 and 550 that she may have against the above named Defendant.
The court entered an order on July 1, 2008, which stated the manner in which this adversary proceeding would be finally determined. Pursuant to that order, on August 15, 2008, Rodriguez and Countrywide jointly filed their "Stipulation for Trial", which states all of the facts necessary for final determination of this adversary proceeding. On October 16, 2008, Countrywide filed its "Brief of Defendant on Stipulated Facts", and on that same date, Rodriguez filed her "Plaintiff's Memorandum". Countrywide filed its "Reply Brief of Defendant" on November 25, 2008, and on that same date, Rodriguez filed her "Plaintiff's Reply Brief".
This adversary proceeding is now at issue on the stipulated evidentiary record provided by the parties, and the legal arguments advanced by the parties in their respective memoranda.
The court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C § 1334(b), 28 U.S.C. § 157(a) and (b), and N.D.Ind.L.R. 200.1. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(K).
As provided by the court's order entered on July 1, 2008, the entire factual record for submission of this adversary proceeding to the court for final judgment is the parties' "Stipulation for Trial" filed on August 15, 2008.
The necessary facts established by that stipulation are the following:
1. On August 21, 2006, Rodriguez executed an Adjustable Rate Note in favor of BancGroup Mortgage Corporation.2
2. At the time of the execution of the foregoing Note, Rodriguez owned real property located at 955 Ridgeland Avenue, Valparaiso, Indiana as tenants by the entireties with her husband, Agustin Rodriguez.
3. Rodriguez and her husband signed a Mortgage, which is attached to the parties' stipulation as Exhibit "A". This mortgage designates the mortgagor as "Christine M. Rodriguez, and Agustin Rodriguez, wife and husband". The signatures of the individuals who signed the mortgage are as follows in the document:
NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE
The jurat/acknowledgment in the document is the following:
NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE
4. The mortgage was recorded in the Office of the Porter County Recorder on October 4, 2006, as document number 2006-029968.
5. As stated in paragraph 9 of the stipulation:
9. At the time of the execution of the Note and Mortgage, there were joint creditors of Christine Rodriguez and Agustin Rodriguez as evidenced by the Debtor's Schedules attached hereto as Exhibit "B". For purposes of this adversary proceeding only, Countrywide stipulates that the Debtor's schedules correctly set out the dates each creditor's claim was incurred. The parties disagree whether the Debtor's 2006 income tax liabilities accrued on December 31, 2006, or daily through 2006. Otherwise, claims dated only "2006" will be treated as incurred after execution of the Note and Mortgage.
6. As stated in paragraph 10 of the stipulation:
10. At the time of the filing of the petition, there were joint creditors of Christine Rodriguez and Agustin Rodriguez which include the Internal Revenue Service, Bank of America, Claudia Wayman, CollectCorp, HSBC, and Washington Mutual/Providian.
7. Rodriguez's petition, initiating her Chapter 13 case, was filed on November 14, 2007.
8. Countrywide has filed a timely claim: claim number 2, which asserts a secured claim in the amount of $184,759.67.
The issues, as presented to the court by the "contentions" section of the "Stipulation for Trial" and the legal memoranda filed by the parties, are the following:
A. To what extent does 11 U.S.C. § 522(h) bar or limit the relief requested by Rodriguez?
B. To the extent that Countrywide's mortgage interests are avoidable, to what extent can the debtor obtain exemption with respect to the real property subject to the avoided transfer?
C. If Rodriguez can pursue this action, to what extent is the mortgage granted to Countrywide avoidable pursuant to 11 U.S.C. § 544(a)(3)?3
Countrywide contends that this adversary proceeding is now pursued solely by the debtor with respect to interests of the debtor, and is not pursued on behalf of the Chapter 13 bankruptcy estate. Countrywide therefore argues that the action contravenes 11 U.S.C. § 522(h), which states:
(h) The debtor may avoid a transfer of property of the debtor or recover a setoff to the extent that the debtor could have exempted such property under subsection (g)(1) of this section if the trustee had avoided such transfer, if—
(1) such transfer is avoidable by the trustee under section 544, 545, 547, 548, 549, or 724(a) of this title or recoverable by the trustee under section 553 of this title; and
(2) the trustee does not attempt to avoid such transfer.
The purpose of section 522(h) is to provide a debtor, including a Chapter 13 debtor, with both the standing and authority to assert avoidance actions delineated in section 522(h)(1) for the benefit of the debtor with respect to exemptions claimed or potentially claimable by the debtor, if the Trustee chooses to not exercise avoidance powers on behalf of the bankruptcy estate. The circumstances which bring section 522(h) into play are simply not at play in this case. It is absolutely clear from the record in this case that Rodriguez is pursuing the avoidance action on behalf of the estate. First, the court's docket order entered on May 22, 2008 expressly stated that the debtor's counsel was to "file the authorization of the Chapter 13 trustee for the debtor to pursue action on behalf of the Chapter 13 bankruptcy estate within 21 days" (emphasis supplied). Within the time frame delineated by that order, on June 12, 2008, a "Statement of Authorization" was filed by which the Chapter 13 Trustee authorized and assigned to the debtor his standing/right to pursue any and all avoidance actions under various sections of the Bankruptcy Code, including 11 U.S.C. § 544. While the Trustee's Statement is not a model of artful drafting, providing as it does for "assignment" to Rodriguez of the standing and rights of the Trustee to "pursue ... actions ... that she may have against the above named Defendant", the court construes the Statement to be in direct response to the court's May 22, 2008 order, and thus intended to parallel the terms of that order by authorizing Rodriguez to pursue the avoidance action asserted by the complaint on behalf of the Chapter 13 bankruptcy estate. Moreover, to the extent that the Statement may have been somehow intended to limit the scope of the authorization dictated by the May 22, 2008 order, which the court deems to not be its intent, the court rejects that limitation. Finally, with respect to a record nearly identical to that in this case in the context of the debtor's pursuing an action on behalf of the Chapter 13 estate, in In re Stubbs, 330 B.R. 717, 723 (Bankr.N.D.Ind.2005), the court explicitly held that a Chapter 13 debtor has standing to pursue strong arm avoidance claims on behalf of the bankruptcy estate, citing U.S. v. Dewes (In re Dewes), 315 B.R. 834 (N.D.Ind.2004) in support of its determination [there is no indication in the facts recited in Dewes that the Trustee had even specifically authorized the debtor to pursue any action on behalf of the estate]. The court's decision in In re Stubbs was affirmed by the United States District...
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