JPMorgan Chase Bank, N.A. v. Shack (In re Shack)
| Decision Date | 08 March 2021 |
| Docket Number | CASE NO. 21-50013 (JAM) |
| Court | U.S. Bankruptcy Court — District of Connecticut |
| Parties | IN RE: ADAM C. SHACK, DEBTOR. JPMORGAN CHASE BANK, N.A., MOVANT, v. ADAM C. SHACK AND GEORGE I. ROUEMELIOTIS, CHAPTER 7 TRUSTEE, RESPONDENTS. |
Brian D. Rich, Esq.
225 Asylum Street
Hartford, CT 06103
Brian E. Lambeck, Esq.
P.O. Box 95
Georgetown, CT 06829
On January 11, 2021, Adam C. Shack (the "Debtor") filed a Chapter 7 petition commencing this bankruptcy case. On January 14, 2021, JPMorgan Chase Bank N.A. ("JPMorgan") filed a Motion for Relief from Stay and In Rem Relief and In the Alternative Motion to Dismiss with a Two Year Bar (the "Motion for Relief from Stay," ECF No. 8). Among other things, the Motion for Relief from Stay seeks relief pursuant to 11 U.S.C. §§ 362(d)(1) and (d)(2), and in rem relief pursuant to § 362(d)(4) with regard to the real property located at 433 Stanwich Road, Greenwich, Connecticut (the "Property").
On February 9, 2021, a hearing on the Motion for Relief from Stay was held at which counsel for JPMorgan, counsel for the Debtor, and the Chapter 7 Trustee appeared. During the hearing, the Debtor's counsel objected to the Motion for Relief from Stay and stated that he did not file an objection because of an inability to electronically file documents on the docket of the case. Although a written objection should have been filed prior to the hearing, the Court allowed the Debtor's counsel to file a written objection by 12:00 p.m. on February 12, 2021, and JPMorgan's counsel to file a response to the Debtor's objection by February 17, 2021. On February 12, 2021, the Debtor filed an Objection to the Motion for Relief from Stay (the "Objection," ECF No. 19). JPMorgan then filed a Response to the Objection (the "Response," ECF No. 20).
After reviewing the Motion for Relief from Stay, the Objection, and the Response, and for the reasons set forth below, the Court grants the Motion for Relief from Stay in accordance with 11 U.S.C. §§ 362(d)(1) and (d)(2), and in rem relief pursuant to § 362(d)(4).
1. On May 22, 2007, the Debtor and his spouse, Lauren Shack, executed an Adjustable Rate Note in favor of Washington Mutual Bank, FA in the amount of $3,000,000.00 secured by a Mortgage on the Property (the "Note"), which was properly recorded on the Greenwich Land Records on May 30, 2007. Thereafter, Washington Mutual Bank, FA indorsed the Note in blank.
2. On July 14, 2009, JPMorgan, asserting it was the holder of the Note, commenced a foreclosure proceeding against the Debtor and his spouse in the Connecticut Superior Court regarding the Property (the "State Court Foreclosure Action").
3. On July 22, 2013, the Connecticut Superior Court entered a Judgment of Strict Foreclosure which found that: (i) JPMorgan was the holder and owner of the Note; (ii) the Debtor was in default on the terms of the Note; (iii) the fair market value of the Property was $2,300,000.00; and (iv) the debt owed to JPMorgan was $3,767,674.99. The Judgment of Strict Foreclosure set the law day for October 1, 2013.
4. On August 8, 2013, the Debtor appealed the Judgment of Strict Foreclosure to the Connecticut Appellate Court (the "2013 Appeal").
5. On November 4, 2014, the Appellate Court affirmed the Superior Court's Judgment of Strict Foreclosure and remanded the case for the purpose of setting new law days. See JPMorgan Chase Bank, NA v. Adam C. Shack, et al., 153 Conn. App. 910 (Conn. App. 2014), cert. denied 316 Conn. 901 (2015).
6. On September 11, 2015, JPMorgan filed a Motion to Open Judgment to reset the law days. On October 26, 2015, the Superior Court granted the Motion and set the new law day for February 9, 2016. The Debtor then filed a Motion to Open Judgment, which the Superior Court granted on February 1, 2016, and reset the new law day for June 21, 2016.
7. On June 20, 2016, the day before the reset law day, the Debtor, represented by Attorney Brian E. Lambeck, filed a Chapter 7 voluntary petition in this Court, Case No. 16- 50818 (the "Debtor's 2016 Chapter 7 case"), which resulted in an automatic stay in favor of the Debtor.
8. The Debtor's petition listed his name as "Shack C. Shack," contained a Social Security Number that apparently belonged to his spouse, and listed the Property as his residence. The Debtor failed to file the Statements and Schedules required to be filed by a debtor in accordance with 11 U.S.C. § 521(a)(1).
9. On June 21, 2016, a deficiency notice was issued in the Debtor's 2016 Chapter 7 case which provided the Debtor the opportunity to show cause why his case should not be dismissed for failure to list the correct name and signature of the Debtor on the Statement of Social Security Number, and for failure to file the Statements and Schedules required to be filed by a debtor within 14 days of filing of a bankruptcy petition pursuant to Fed. R. Bankr. P. 1007.
10. On July 14, 2016, JPMorgan filed a Motion for Relief from Stay pursuant to 11 U.S.C. §§ 362(d)(1) and (d)(2). The Debtor did not file a response to the Motion for Relief from Stay.
11. On August 6, 2016, the Chapter 7 Trustee filed a Motion to Dismiss Case for Failure to Attend Two Consecutive Section 341 Meetings of Creditors.
12. On August 16, 2016, the Court granted the Motion for Relief from Stay in favor of JPMorgan.
13. On August 23, 2016, the Court dismissed the Debtor's 2016 Chapter 7 case for the failure of the Debtor to file all required documents pursuant to 11 U.S.C. § 521(i).
14. On September 14, 2016, JPMorgan filed another Motion to Open Judgment in the State Court Foreclosure Action. On December 12, 2016, the Superior Court granted the Motion and, for the fourth time, reset the law day for June 20, 2017.
15. On June 20, 2017, the Debtor, again represented by Attorney Lambeck, filed a second Chapter 7 petition in this Court, Case No. 17-50713 (the "Debtor's 2017 Chapter 7 case"). As in the Debtor's 2016 Chapter 7 case, the Debtor failed to file the required Statements and Schedules with his Chapter 7 petition.
16. On June 21, 2017, a deficiency notice was issued to the Debtor notifying him that if he did not file his Statements and Schedules within 14 days of filing his Chapter 7 petition, his case would be dismissed.
17. On July 11, 2017, the Debtor's 2017 Chapter 7 case was dismissed for failure of the Debtor to file all missing documents pursuant to Fed. R. Bankr. P. 1007 and D. Conn. Bankr. L. R. 1007-1 and 1007-2.
18. On July 26, 2017, JPMorgan filed another Motion to Open Judgment in the State Court Foreclosure Action.
19. On September 26, 2017, the Superior Court granted the Motion and reset, for the fifth time, the new law day for February 27, 2018.
20. On February 26, 2018, two days before the reset law day, the Debtor, again represented by Attorney Lambeck, filed a third Chapter 7 petition in this Court, Case No. 18-50220 (the "Debtor's 2018 Chapter 7 case"). The Debtor's petition again contained what appeared to be his spouse's Social Security Number. Also, as was true in his prior two Chapter 7 cases, the Debtor failed to file the required Statements or Schedules with the Chapter 7 petition.
21. On February 27, 2018 a deficiency notice was issued to the Debtor notifying him that if he failed to file the required Statements or Schedules within 14 days of filing his petition, his Chapter 7 case would be dismissed.
22. On March 7, 2018, the Debtor's 2018 Chapter 7 case was dismissed for failure to file all required documents pursuant to Fed. R. Bankr. P 1007, and D. Conn. Bankr. L. R. 1007-1 and 1007-2.
23. On March 28, 2018, the Debtor filed an Amended Motion to Reopen the Debtor's 2018 Chapter 7 case, which was granted on May 2, 2018. The same day the Motion to Reopen was granted, a deficiency notice was again issued to the Debtor notifying him that if he failed to file the required Statements or Schedules within 14 days, his Chapter 7 case would be dismissed.
24. On July 26, 2018, the Debtor's 2018 Chapter 7 case was dismissed for failure to file the required Statements and Schedules.
25. On September 13, 2018, JPMorgan filed a Motion to Reset Law Days in the State Court Foreclosure Action. On October 15, 2018, the Superior Court set, for the sixth time, the new law day for December 11, 2018.
26. The Debtor then filed a Motion to Open Judgment, which the Superior Court denied, but which resulted in the setting, for the seventh time, of a new law day for January 15, 2019.
27. On December 31, 2018, the Debtor filed a Motion to Reargue/Reconsider the Motion to Open Judgment, which the Superior Court denied. The Debtor then appealed the Superior Court order denying the Motion to Reargue/Reconsider on January 14, 2019, the day before the law day (the "January 2019 Appeal"). The Appellate Court dismissed the January 2019 Appeal as "frivolous" in a one sentence decision dated March 13, 2019.
28. After dismissal of the 2019 Appeal, the Superior Court set a new law day for June 25, 2019. On June 17, 2019, the Debtor filed a Motion to Reargue/Reconsider, which the Superior Court denied that same day. The Debtor then filed an appeal of the Superior Court order denying the Motion to Reargue/Reconsider on July 8, 2019 (the "July 2019 Appeal"). The Appellate Court dismissed the July 2019 Appeal as "frivolous" on September 12, 2019.
29. On September 12, 2019, JPMorgan filed a Motion for Order to Reset the Law Days. The...
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