In re Sharpe, Case No. 03-04644-BGC-13 (Bankr. N.D. Ala. 6/27/2007)
| Decision Date | 27 June 2007 |
| Docket Number | A.P. No. 04-00250.,Case No. 03-04644-BGC-13. |
| Parties | In re: Roderick Sharpe, Debtor. Roderick D. Sharpe and Linda Sharpe, Plaintiffs, v. Wells Fargo Home Mortgage, Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of Alabama |
MEMORANDUM OPINION
The three matters before the Court are:
1. The plaintiffs' Motion for Findings of Fact and Conclusions of Law filed February 9, 2007, (docketed by the plaintiffs as a Motion to Reconsider), Proceeding No. 90;1
2. The plaintiffs' Motion to Certify Summary Judgment Decision as Final Order filed on March 6, 2007, (docketed by the plaintiffs as a Motion for Leave to Appeal), Proceeding No. 96; and
3. The defendant's Motion to Strike Jury Demand filed on March 1, 2007, (docketed by the defendant as a Motion to Strike Plaintiffs' Jury Demand (Brief in Support of), but titled Brief in Support of Motion to Strike Plaintiffs' Jury Demand), Proceeding No. 94.
A hearing was held on March 8, 2007. Appearing were Lee Loder for the plaintiffs; and Stephen Porterfield for the defendant Wells Fargo Home Mortgage.
The plaintiffs executed a note with Southern Atlantic Financial Services, Inc. on May 15, 1998, for a loan of $51,300. In exchange, they gave Southern a security interest in certain real estate on which they had a home. Southern transferred its interest in the property and the note to the defendant's predecessor on June 3, 1998.
Prior to filing the pending case, the plaintiffs failed to make all required mortgage payments. When this case was filed on May 28, 2003, they were, according to an amended plan dated October 9, 2003, about $9,500 in arrears.
After filing this case, the plaintiffs again became delinquent in their payments. In response, the defendant filed a Motion for Relief from Stay and Motion for Relief from Co-Debtor Stay (Proceeding No. 10 in the main case) on August 28, 2003, seeking permission to foreclose its mortgage. That motion was resolved when the parties entered into an agreement regarding the plaintiffs' future mortgage payments. That agreement was incorporated into an order entered by this Court on November 19, 2003. The pertinent parts of that order are:
1. The Debtors shall resume making the regular monthly mortgage payment unto the Creditor, presently in the amount of $ 531.95, beginning OCTOBER 20, 2003.
..............
3. The automatic stay of Section 362(a) is hereby MODIFIED to provide future relief unto the Creditor as follows: should the Debtors default under the terms of this order, or the terms of the mortgage contract, by the failure to make a payment which is received by the Creditor within thirty (30) days from the date that it becomes due beginning on or before OCTOBER 20, 2003, then the automatic stay of Section 362 terminates as to the Creditor without further notice or order. The waiver of any default occurring under this order shall not constitute a waiver as toward any subsequent default occurring under this order.
Order on Motion for Relief from Automatic Stay, November 19, 2003, Proceeding No. 21 in the main case (emphasis added).
Contending that the plaintiffs did not make all payments after entering into the above agreement, and therefore that the stay lifted, in June 2005 the defendant began foreclosure proceedings against the plaintiffs. That process ended with a foreclosure sale on August 30, 2004.
The plaintiffs contend that they made all of the mortgage payments required by the above-quoted November 19, 2003, order. As such, they conclude the stay did not lift and therefore the foreclosure action taken was wrongful and in violation of the stay. In the alternative, the plaintiffs contend that even if they did not make all of their post-November 19, 2003, payments, the defendants failed to give required notice before instituting foreclosure. Specifically, the plaintiffs contend that the defendant did not satisfy Paragraph 21 of the parties' mortgage, which is the acceleration after default clause in that mortgage. The plaintiffs argue that if the defendants did not satisfy paragraph 21, an action which the plaintiffs contend is a condition precedent to foreclosure, the foreclosure is void. Based on that argument, the plaintiffs conclude that the foreclosure was wrongful and the defendant's actions in "taking" the property gave rise to numerous actions, which the plaintiffs list in their original and amended complaints. Those include: breach of contract; wrongful foreclosure; conversion; trespass; violation of the automatic stay; estoppel; fraud; unjust enrichment; and breach of fiduciary duty.
The defendant contends that the plaintiffs did not make all of their scheduled mortgage payments. Based on that contention, the defendant argues that when the plaintiffs did not make all payments, the stay lifted pursuant to the Court's November 19, 2003, order and therefore, the defendant was free to exercise its state law remedy of foreclosure. In the alternative, the defendant contends that it satisfied all notice requirements either directly or through constructive notice.
The plaintiffs filed their original complaint on December 30, 2004. That complaint included causes of action for breach of contract, wrongful foreclosure, conversion, trespass, and violation of the automatic stay. Wells Fargo filed an Answer to the original complaint on March 4, 2005 (Proceeding No. 5).
The Court scheduled a trial for July 21, 2005. On July 6, 2005, Wells Fargo filed a Motion for Summary Judgment (Proceeding No. 18). The Court entered an order (Proceeding No. 19) scheduling oral arguments for August 9, 2005, and cancelling the trial set for July 21, 2005. Before the hearing, the plaintiffs filed a Response to Defendant Wells Fargo's Motion for Summary Judgment (Proceeding No. 23). Oral arguments were held on August 9, 2005. Appearing were Mr. Loder for the plaintiffs and Mr. Thomas Tutten for the defendant. The matter was submitted on the arguments of counsel and the pleadings.
On September 30, 2005, nine months after the plaintiffs filed their original complaint, and seven months after the defendant filed an answer, the plaintiffs filed a Demand for Jury Trial (Proceeding No. 26).
On October 4, 2005, the defendant filed a Motion to Strike Plaintiffs' Demand for Trial by Jury (Proceeding No. 27). On November 18, 2005, the Court entered an order denying the plaintiffs' demand for a jury, finding that the plaintiffs' demand was not timely (Proceeding No. 30). As explained in its comments on the record, the Court denied the jury demand based on Rule 38 of the Federal Rules of Civil Procedure, (applicable to this adversary proceeding through Rule 9015 of the Federal Rules of Bankruptcy Procedure). That rule provides that a demand for a jury trial must be made either at the commencement of the case or within 10 days after service of the answer to the complaint. The complaint was filed on December 30, 2004, and the defendant filed an answer on March 4, 2005. The plaintiffs first made a demand for a jury trial on September 30, 2005.
On January 3, 2006, the Court entered an Order (Proceeding No. 32) granting the defendant's Motion for Summary Judgment (Proceeding No. 18).
On January 13, 2006, the plaintiffs filed a Motion to Reconsider (Proceeding No. 34) and a Notice of Appeal (Proceeding No. 35).2 The Court scheduled a hearing for February 8, 2006.
On January 25, 2006, the defendant filed a Response to Motion to Reconsider (Proceeding No. 42). On February 7, 2006, the plaintiffs filed a Supplement to Motion to Reconsider (Proceeding No. 44).
The February 8 hearing was held. Appearing were Mr. Loder for the plaintiffs and Mr. Stephen Porterfield for the defendant.
On May 23, 2006, the Court entered an Order (Proceeding No. 50) reversing its January 3, 2006, Order. That order read in part:
After notice, a hearing was held on February 8, 2006. Appearing at the hearing were Lee Loder for the plaintiffs; and Stephen Porterfield for the defendant. The parties were given a deadline of February 15, 2006, to file briefs and February 22, 2006, to file reply briefs. The matter was submitted on the arguments of counsel and the pleadings.
The defendant filed a letter brief on February 15, 2006. The plaintiffs did not file a brief.
The Court has reviewed its previous order. And, the Court has conducted a second review of the record in this proceeding. After those reviews, the Court finds that there may be a genuine issue of material fact. As such the Court finds that it should reverse its January 3, 2006, order granting summary judgment and allow this matter to proceed to a trial on the merits.
The Court recognizes that such a ruling is unusual. But the Court also recognizes that even where no new evidence is presented, a court is free to reconsider its findings and to reach another conclusion. See, Wm. G. Roe & Co. v. Armour & Co., 414 F.2d 862 (11th Cir 1969). (After remand from the circuit court, while the district court was not directed to reconsider its findings, the district court could reconsider its findings and find that it was wrong and reverse itself.)
In this proceeding, while this Court is not finding that its factual conclusions about certain evidence are wrong, it is finding that it may have been wrong in finding that there was not a genuine issue of material fact and that there may be some factual issues that were not addressed initially by the Court, issues that should be addressed through a trial on the merits.
Order and Notice of Status Conference, entered May 23, 2006, Proceeding No. 50.
A status conference was held on June 14, 2006, and a hearing was held on July 26, 2006. The matter was set for trial for December 7, 2006.
On August 23, 2006, the...
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