Roman v. CitiMortgage, Inc. (In re Roman)
| Decision Date | 02 October 2018 |
| Docket Number | ADV. PROC. NO. 14-00255 (ESL),CASE NO. 14-03686 (ESL) |
| Parties | IN RE: MANFREDITO LAGUER ROMAN Debtor MANFREDITO LAGUER ROMAN Plaintiff/Debtor v. CITIMORTGAGE, INC. Defendant |
| Court | U.S. Bankruptcy Court — District of Puerto Rico |
This case is before the court upon Defendant's Motion for Summary Judgment (Docket No. 19), Plaintiff's Motion for Summary Judgment (Docket No. 28) and Defendant's Opposition to Plaintiff's Request for Summary Judgment (Docket No. 30). For the reasons stated below, the Plaintiff's Motion for Summary Judgment is denied, Defendant's Motions for Summary Judgment is granted, and the instant case is dismissed.
The Court has jurisdiction pursuant to 28 U.S.C. §§1334(b) and 157(a). This is a core proceeding pursuant to 28 U.S.C. §§157(a) and (b). Venue of this proceeding is proper under 28 U.S.C. §§1408 and 1409.
On May 11, 2012, Manfredito Laguer Roman ("Debtor" or "Plaintiff") filed a voluntary chapter 13 petition, case no. 12-03692 ("First Case"). On August 30, 2012, CitiMortgage Inc. ("Citi") filed proof of claim 01-1, asserting a secured debt of $25,350.59, with arrears in the amount of $8,713.81; and stating, as basis for perfection: "Security Instrument." Citi attached the following documents to the claim: 1) Escrow Account Disclosure Statement; 2) Note payable to order of CMFC, Inc. issued on October 18, 2006, and signed by Debtor; and 3) Title Study.
The Chapter 13 Trustee, Jose Ramon Carrion Morales, objected proof of claim no. 01-1 filed by Citi on December 26, 2012, stating: The Trustee objects proof of claim 01-1 pursuant to Fed. R. Bankr. P. 3001(e); since it lacks of evidence of endorsement of Mortgage Note to demo[n]strate that CITIMORTGAGE INC has the right to receive payments under the plan. (Secured Mortgage). On February 11, 2013, the objection filed by the Trustee was granted as unopposed (First Case, Docket No. 28). On June 28, 2013, the Debtor requested an Entry of Order to Trustee not to make any disbursement to POC 1 (First Case, Docket No. 32) which was granted as unopposed on July 8, 2013 (First Case, Docket No. 33). On January 17, 2014, the Debtor was granted a discharge, upon the completion of the chapter 13 plan. (First Case, Docket No. 42).
On May 5, 2014, the Debtor filed a second chapter 13 bankruptcy petition (Lead Case No. 14-03686, Docket No. 1). On October 29, 2014, the Debtor filed the instant Adversary Proceeding pursuant to11 USC § 506(d), to determine the secured status of Citi, alleging that, to the extent that a lien which secures a claim against the Debtor is a disallowed claim, such lien is void. (Adv. Proc. 14-00255, Docket No. 1).
On February 13, 2015, during the preliminary pretrial and scheduling conference, the parties agreed that the issue presented in the adversary proceeding was legal in nature, and therefore, the parties were granted time to file dispositive motions (Adv. Proc., Docket No. 8).
On May 1, 2015, Citi filed a Statement of Uncontested Facts as to which there is no genuine Issue to be Tried (Adv. Proc., Docket No. 17); Motion Submitting Documents: Exhibits (Adv. Proc., Docket No. 18) and Motion for Summary Judgment (Adv. Proc., Docket No. 19). Citi emphasizes that it is the holder in due course of a mortgage note payable to CMFC Inc. or order, in the principal sum of $30,000.00 (Adv. Proc., Docket No. 17, p. 2, ¶ 1). Citi claims that the Note is secured by a mortgage deed executed on October 18, 2006 before the notary public Fernando Luis Melendez, Esq., deed number 440 ("Mortgage Deed") and that the Mortgage deed is recorded at volume number 294 of Morovis, fourth entry, in the Puerto Rico Property Registry, Manati Section, property number 8,327 .
Citi asserts that on December 30, 2009, a collection of money and mortgage foreclosure action was filed at the State Court of Puerto Rico, Ciales Part, State Court Case No. TD2009-571, since the Debtor defaulted on the Note (. The Debtor and Citi filed a Stipulation in the state court and pursuant to it, the state court entered a judgment, incorporating the agreements of the parties. (Adv. Proc., Docket No. 17, p. 4 ¶ 8, 11)1. Citi asserts that the First Case Court had no jurisdiction to disallow proof of claim 01-1, as it was impeded by the Rooker-Feldman doctrine, and, therefore, such disallowance is void. Citi alternatively alleges that valid liens generally pass through bankruptcy cases unaffected.
Plaintiff also filed a Motion for Summary Judgment on May 14, 2015 (Docket No. 28). Plaintiff requests the Court to do a "plain text analysis" of 11 U.S.C. § 506(d), which states that "[t]o the extent that a lien which secures a claim against the debtor that is not an allowed secured creditor, such lien is void". Plaintiff sustains his allegations on National Capital Management, LLC v. Gammage-Lewis, 523 Fed. Appx. 254 (4th Cir. 2013) (per curiam). National Capital affirmed a district court's determination that a security interest became void after the Court allowed the trustee's objection to a claim and granted a discharge in a Chapter 13 bankruptcy case. The Appellate Court affirmed "for the reasons stated by the district court". The District Court understood that § 506(d) provided for an avoidance where the Trustee objected creditor'ssecured claim for failure to attach proper documentation indicating that it had a perfected security interest in Debtor's vehicle and where the Creditor failed to respond. Nat'l Capital Mgmt., LLC v. Lashauna Change Gammage-Lewis, 2012 U.S. Dist. LEXIS 114395 (E.D.N.C., Aug. 14, 2012). The Court stated that the objection was a suitable substitute for an adversary proceeding where the claim objection, in line with Rule 7001(2), "gives clear notice that the debtor is challenging the validity, priority, or extent of the lien and seeks to abrogate a creditor's right to look to its collateral, and the debtor complies with procedural safeguards set forth in Part VII of the Federal Rules of Bankruptcy Procedure." Nat'l Capital Mgmt., at *8 citing In re Kleibrink, No. 3:07-CV-0088-K, 2007 U.S. Dist. LEXIS 63974, 2007 WL 2438359, at *6 (N.D. Tex. Aug. 28, 2007)). Therefore, the Court concluded that, pursuant to 11 U.S.C. § 506(d), the lien was void.
On May 19, 2015, Citi filed a Motion submitting documents: Certified Translations, and on May 29, 2015, Citi opposed Plaintiff's request for Summary Judgment, incorporating the allegations of their motion for summary judgment and re-alleging that, even if the First Case Court's determination of disallowance was valid, Citi still held an in rem claim against the Debtor's residence (Dockets No. 29 and 30).
On June 10, 2015, The Court requested the parties to supplement their legal memoranda to discuss the applicability of the Supreme Court's decision on Bank of America v. Caulkett (Docket No. 31). On July 15, 2015, Citi filed Motion in Compliance with Order dated June 10, 2015 as did Plaintiff on July 30, 2015 (Dockets No. 37 and 40). Through Opinion and Order dated October 9, 2015, the Court concluded that the Caulkett decision applied only to chapter 7 cases and was not dispositive of the pending cross motions for summary judgment filed by Plaintiff and Defendant (Docket No. 41).
During a status conference held on June 3, 2015, Plaintiff and Defendant were granted time to brief the Court in relation to the impact of the 9th Circuit determination at In Re Bleindheim 13-35354 to the case at hand. Citi and Plaintiff complied with the Court's order (Dockets No. 76 and 79).
Fed. R. Civ. P. 56, applicable in bankruptcy proceedings through Fed. R. Bankr. P. 7056, provides that summary judgment should be entered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See also In re Colarusso, 382 F.3d 51 (1st Cir. 2004), citing Celotex Corp. v. Cartrett, 477 U.S. 317, 322-23 (1986). "The summary-judgment procedure authorized by Rule 56 is a method for promptly disposing of actions in which there is no genuine issue as to any material fact or in which only a question of law is involved." Wright, Miller & Kane, Federal Practice and Procedure, Civil 3d, Vol 10A, § 2712 (2013). "Rule 56 provides the means by which a party may pierce the allegations in the pleadings and obtain relief by introducing outside evidence showing that there are no fact issues that need to be tried." Id. at 202-203. Summary judgment is not a substitute for a trial of disputed facts; the court may only determine whether there are issues to be tried, and it is improper if the existence of a material fact is uncertain. Id. at 205-206.
Summary judgment is warranted where, after adequate time for discovery and upon motion, a party fails to make a showing sufficient to establish the existence of an element essential to its case and upon which it carries the burden of proof at trial. Celotex, 477 U.S. at 322. The moving party must "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c).
For there to be a "genuine" issue, facts which are supported by substantial evidence must be in dispute, thereby requiring deference to the finder of fact. Furthermore, the disputed facts must be "material" or determinative of the outcome of the litigation. Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir. 1975), cert. denied, 425 U.S. 904 (1976). When considering a petition forsummary judgment, the court must view the evidence in the light most favorable to the nonmoving party. Poller v. Columbia Broadcasting Systems, Inc., 368 U.S. 464, 473 (1962); Daury v....
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