Soriano v. Wells Fargo Bank, N.A. (In re Soriano), Case No. 15–14341–JDL

• Decision Date: 18 June 2018
• Docket Number: Case No. 15–14341–JDL,ADV 17–01018–JDL
• Citation: 587 B.R. 371
• Parties: IN RE: Michael Angelo SORIANO, Debtor. Michael Angelo Soriano, Plaintiff, v. Wells Fargo Bank, N.A., Defendant.
• Court: U.S. Bankruptcy Court — Western District of Oklahoma

587 B.R. 371

IN RE: Michael Angelo SORIANO, Debtor.Michael Angelo Soriano, Plaintiff,

v.Wells Fargo Bank, N.A., Defendant.

Case No. 15–14341–JDL

ADV 17–01018–JDL

United States Bankruptcy Court, W.D. Oklahoma.

Signed June 18, 2018

B. David Sisson, Norman, OK, for Plaintiff.

Mark E. Hardin, Pierce Couch Hendrickson Baysinger, Tulsa, OK, April D. Kelso, Pierce Couch Hendrickson Baysinger & Gre, Oklahoma City, OK, for Defendant.

OPINION AND ORDER GRANTING PARTIAL MOTION FOR SUMMARY JUDGMENT

Janice D. Loyd, U.S. Bankruptcy JudgeArising out of litigation history extending back nearly a decade, in this multi-pronged adversary brought by the Debtor against his residence mortgagee, he seeks the judgment of this Court (1) disallowing the mortgagee's proof of claim on the basis that the mortgagee does not have standing to assert the same, (2) disallowing the mortgagee's proof of claim by virtue of the mortgagee's proof of claim having been denied in one of Debtor's previous bankruptcies, (3) the state court foreclosure judgment is unenforceable and the mortgagee has no interest in the Debtor's property, the mortgage or the state mortgage foreclosure judgment, and (4) recovering actual and punitive damages for the mortgagee's alleged violation of the automatic stay. Mortgagee has moved for summary judgment on the basis that (1) its failure to respond to the Debtor's objection to its claim in the prior bankruptcy only barred its right to be paid in accordance with the Chapter 13 plan but had no effect upon its in rem claim on the mortgage, (2) it is the holder of the Note and Mortgage and is entitled to enforce the same, (3) the state court foreclosure judgment in mortgagee's favor precludes the bankruptcy court from reconsidering mortgagee's standing to enforce the judgment under the Rooker–Feldman Doctrine, (4) if there was a technical violation of the stay in attempting to collect amounts awarded by the plan, the mortgagee reversed such charges before any funds were actually collected, and (5) even if the stay was violated, the Debtor is barred by the doctrine of laches from asserting the same.

Before the Court for consideration are (1) Defendant Wells Fargo Bank, NA's, ( "Wells Fargo") Motion for Summary Judgment (the "Motion") [Doc.19], (2) Plaintiff's Objection to Defendant's Motion for Summary Judgment (the "Objection") [Doc. 21] and (3) Defendant Wells Fargo Bank, NA's, Reply to Debtor's Response to Wells Fargo's Motion for Summary Judgment (the "Reply") [Doc. 24]. The below constitutes the Court's findings of fact and conclusions of law pursuant to Fed.R.Bankr.P. 7052 and 9014.

I. Jurisdiction

This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334(b) and 157(a)¹ and the Order of Reference issued by the United States District Court for the Western District of Oklahoma as Local Rule LCvR 81.4(a). Plaintiff consented to the jurisdiction of this Court and to this Court's ability to enter a final order herein in its Amended Complaint pursuant to Fed.R.Bankr.P. 7008. [Doc. 4]. Defendant has consented to the jurisdiction of this Court and its ability to enter a final order by virtue of its filing of the Jury Trial and Jurisdictional Acknowledgment and Consents form. [Doc.14]. Venue is proper pursuant to 28 U.S.C. § 1409. This is a core proceeding arising under 28 U.S.C. § 157(a)(2)(A), (B) and (O).

II. Material Facts As to Which There Is No Dispute

1. On November 29, 2006, Plaintiff/Debtor Michael A. Soriano ("Soriano") executed a Promissory Note in favor of Wells Fargo in the principal amount of $400,000 with an annual interest rate of 6.125%. [Doc.19–1].²

2. As part of the execution of the Promissory Note and to secure payment of the Note, Soriano executed and delivered to Wells Fargo a real estate Mortgage in writing covering the real property at issue. [Doc.19–2]. The Mortgage was acknowledged and recorded in the office of the County Clerk of Cleveland County, Oklahoma, on December 6, 2006, and recorded in Book 4272 at pp. 879–899. [Doc.19–2].

3. On November 12, 2007, Soriano was notified by Wells Fargo that the loan was in default and two monthly payments were past due. [Doc.19–3]. On January 14, 2008, Soriano was notified that the loan, with a balance due of $407,862.46, had been accelerated and placed with a law firm for collection. [Doc.19–4].

4. On February 1, 2008, Wells Fargo filed an action in the District Court of Cleveland County, Oklahoma, seeking an in personam judgment against Soriano and a judgment foreclosing Soriano's (and other's) interest in the subject property.³ The state court Petition alleged that Wells Fargo was the "holder of the Promissory Note and the Mortgage entitled to enforce the same." The Promissory Note and Mortgage attached as exhibits to the Petition which named Wells Fargo as the payee/mortgagee did not show any endorsements or assignments of the instruments. On July 9, 2008, the District Court of Cleveland County entered a default foreclosure judgment in favor of Wells Fargo and against Soriano in the principal amount of $396,054.78, with interest at 6.125% per annum from September 1, 2007, until paid; abstract and title expenses in the amount of $750; accrued late charges in the sum of $364.56; escrow advances in the sum of $2,509.22; and the sum of $900 in attorney's fees. [Doc.19–5]. The Journal Entry of Judgment included amongst the Court's findings that "said mortgage owned, held and sued upon by the Plaintiff" (Wells Fargo).

5. On August 25, 2008, Soriano filed for relief under Chapter 13 in the United States Bankruptcy Court for the Western District of Oklahoma, Case No. 08–13655.

6. On December 11, 2008, Wells Fargo filed an Amended Proof of Claim alleging an arrearage of $40,612.19, which included disclosed late charges and attorney's fees. [Doc.19–6]. Soriano did not object to the 2008 Proof of Claim. On February 24, 2009, Soriano's Chapter 13 Plan was confirmed under which ongoing monthly payments would be made at $3,100.10 per month and the stated arrearage paid to Wells Fargo was in the amount of $40,407.19. [Doc.19–7]. On February 27, 2009, Soriano's bankruptcy was dismissed.⁴

7. On June 16, 2009, the Property was sold at sheriff's sale, and the Motion to Confirm Sale was set for hearing for July 7, 2009. On June 25, 2009, Soriano filed his second Chapter 13 in the United States Bankruptcy Court for the Western District of Oklahoma, Case No. 09–13384.

8. On September 14, 2009, Soriano's Chapter 13 Plan was confirmed under which Wells Fargo was to be paid a monthly ongoing payment of $2,576.31 per month. [Case 09–13384, Doc. 22]. Neither the total amount of the Wells Fargo debt nor the amount of any arrearage was indicated.

9. On September 30, 2009, Wells Fargo filed its secured Proof of Claim 17–1 [Case. 09–13384] in the total amount of $414,774.20, which included an arrearage and other charges in the amount of $64,279.23, making the new ongoing monthly payment (including the arrearage) of $3,116.75. [Doc.19–10].

10. On October 16, 2009, Soriano filed Debtor's Objection to Proof Of Claim No. 17 for $414,774.20 filed by Wells Fargo, N.A. [Doc.19–11]. The basis of Soriano's Objection was that the "claim should be disallowed to the extent it would require a different payment from the judgment payment set forth in the confirmed plan" of $2,576.31 per month for sixty months. [Doc.19–11].

11. On January 26, 2010, the Court entered an agreed Order Resolving The Debtor's Objection to Wells Fargo Bank's Proof of Claim [Doc.19–13].⁵ The Order recited that by agreement of the parties (1) Wells Fargo accepted the Chapter 13 Plan as confirmed, (2) Wells Fargo was to receive $2,576.31 in monthly payments from the trustee, (3) Soriano would receive a discharge of the Wells Fargo debt only upon completion of the plan, if he complies with the confirmation order and generally is entitled to a discharge, (4) Soriano was to pay all future insurance and taxes on the real estate and provide Wells Fargo with proof thereof, and (5) Wells Fargo would retain its judgment lien on the property throughout the case, and following completion of the plan, Wells Fargo's mortgage balance would continue to be fully enforceable in rem following completion of the Plan and entry of the order of discharge.

12. On July 29, 2013, Soriano filed another Objection to Wells Fargo's 2009 Proof of Claim of $414,774.20 on the basis that Wells Fargo lacked standing because the Federal Home Loan Mortgage Corporation ("Freddie Mac") was the actual owner of the loan and that Wells Fargo was not entitled to payment. [Doc.19–14]. Wells Fargo failed to timely respond to Soriano's Objection, and on August 16, 2013, the Court entered its Order denying Wells Fargo's claim. [Case 09–13384, Doc. 79]. The Court further ordered that Wells Fargo "disgorge all funds disbursed to it by the Chapter 13 Trustee and return the same to the estate, instanter ." [Case 09–13384, Doc. 79].

13. On August 26, 2013, Wells Fargo filed its Combined Motion and Brief for Relief from Order seeking the Court to grant relief (vacate) from its order of August 16, 2013, disallowing Wells Fargo's Proof of Claim (the "Objection Order") [Doc.19–16]. On December 31, 2014, the Court entered an Agreed Order Resolving Wells Fargo Bank, NA's Motion for Relief from Order. [Doc.19–16]. The Order granted in part and denied in part Wells Fargo's Motion for Relief. It ordered that Wells Fargo (1) shall not be required to disgorge all funds disbursed to it by the Chapter 13 Trustee (emphasis in Order), (2) be required to provide a full payment history to Soriano and his counsel detailing any and all payments received during the pendency of the bankruptcy and the application of the payments to Soriano's account, and (3) that Soriano may pursue a loan modification or other loss mitigation programs offered by Wells Fargo, and Wells Fargo was authorized to work directly with Soriano for loan modification or loss mitigation purposes only. The Order found that the...