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Brown v. Bank of America

United States District Court, W.D. Pennsylvania

September 5, 2014

JUDY D. BROWN, Appellant,
BANK OF AMERICA, Appellee. Bankruptcy No. 09-25942



I. Introduction

Pro se Appellant Judy D. Brown ("Brown") appeals the Order of the Honorable Carlotta H. Bohm of the United States Bankruptcy Court for the Western District of Pennsylvania ("Bankruptcy Court") dated March 13, 2014, denying her motion to reopen her closed Chapter 7 bankruptcy case and for a finding of contempt and the imposition of sanctions against Appellee Bank of America ("BOA") and its counsel. (Docket No. 1). The pending appeal has been fully briefed, with the parties' submission of appellate briefs and Brown having been permitted to make numerous additional submissions to which BOA has responded.[1] ( See Docket Nos. 2, 5, 7, 8, 10, 11, 12, 13, 15, 17, 19, 20). Accordingly, Brown's appeal is now ripe for disposition. Upon consideration of all of the parties' arguments, the record before the Bankruptcy Court, and for the following reasons, the Order of the Bankruptcy Court will be AFFIRMED.

II. Background

As recounted by the Bankruptcy Court, the relevant facts are as follows:

[BOA] is the authorized servicing agent for the holder of the mortgage on [Brown's] residence located at 2017 West Washington Street, New Castle, PA 16101 (the "Property") [, which consists of a trailer and the underlying land]. The loan secured by the mortgage was insured by the Federal Housing Administration ("FHA"). A mortgage foreclosure action was commenced in 2007 against [Brown] in the Court of Common Pleas in Lawrence County, Pennsylvania. Judgment was entered in favor of the lender.

In re Brown, 481 B.R. 351, 354 (Bankr. W.D. Pa. 2012). Said Judgment was entered via default as Brown failed to timely respond to same. Id. Later, in December of 2007, BOA filed a motion seeking to equitably convert the trailer to real estate in state court. (Docket No. 7-2). Brown again did not timely respond and the state court entered an order equitably converting the trailer to real estate. ( Id. ).

Subsequently, on August 14, 2009, [Brown] commenced her bankruptcy case. According to [Brown], she filed the bankruptcy case to force the completion of the foreclosure. Shortly thereafter, the holder of [Brown's] mortgage, Bank of New York as Trustee for the Certificateholders of CWMBS 2003-R4, filed a motion for relief from the automatic stay. On October 7, 2009, a default order was entered modifying the automatic stay and permitting the movant "to foreclose on its mortgage or take any legal or consensual action for enforcement of its right to possession of, or title to, said premises (such actions include but are not limited to the signing of a deed in lieu of foreclosure or entering into a loan modification agreement)...." The case proceeded with little activity. [Brown] was granted her discharge on December 2, 2009, and the case was closed.

Brown, 481 B.R. at 354-55. The discharge Order entered by the Bankruptcy Court states that:

The discharge prohibits any attempt to collect from [Brown] a debt that has been discharged.... However, a creditor may have the right to enforce a valid lien, such as a mortgage or security interest, against [Brown's] property after the bankruptcy, if that lien was not avoided or eliminated in the bankruptcy case.

Brown, 481 B.R. at 357-58 (quotation omitted).

In 2012, Brown and BOA litigated a similar motion to reopen before the Bankruptcy Court, which granted Brown's motion and found "that [BOA] violated the discharge injunction by sending mortgage statements to [Brown] which sought payment of a discharged debt, and [BOA] is found to be in civil contempt. Sanctions in the amount of $3, 000.00 are appropriate as compensation to [Brown]." Brown, 481 B.R. at 364. This Order was not appealed by BOA and the sanctions imposed by the Bankruptcy Court were paid.

Despite the facts that Brown defaulted on her mortgage in 2007 and judgment was entered against her around that time, Brown remains in the residence and the foreclosure still has yet to be completed. (Docket No. 3). No activity was taken in the foreclosure proceeding for a period of years. ( Id. ). Recently, the litigation in Lawrence County concerning the property has been revived and, in early 2014, Brown sought to reopen her bankruptcy case a second time in order to seek additional sanctions against BOA resulting from activities during that litigation. ( Id. ). The Bankruptcy Court permitted briefing, held a hearing, accepted evidence from the parties and issued the challenged Order denying Brown's second request for sanctions against BOA, finding that she had not demonstrated sufficient cause to reopen the case pursuant to 11 U.S.C. § 350. (Docket Nos. 1-1, 3). Among other things, the Bankruptcy Court held that:

• [Brown] failed to demonstrate any potential violation of the discharge injunction or any other reason why ...

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