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Straker v. Wells Fargo Bank, N.A.

United States District Court, Middle District of Pennsylvania

December 18, 2014

ALLISON STRAKER, Appellant,
v.
WELLS FARGO BANK, N.A., as Trustee for ABFC 2006-OPT1 TRUST, ABFC ASSET-BACKED CERTIFICATES, SERIES 2006-OPT1, Appellee.

MEMORANDUM OPINION

ROBERT D. MARIANI, UNITED STATES DISTRICT JUDGE.

I. Introduction

Presently before the Court is a pro se bankruptcy appeal brought by Appellant Allison Straker ("Straker" or "Appellant") pursuant to 28 U.S.C. § 158(a). Straker appeals the Bankruptcy Court's October 6, 2011 Order denying her motion to vacate (Doc. 11, Ex. II). Straker sought to vacate the Bankruptcy Court's June 17, 2009 Order (Doc. 1-1) granting a motion for relief from stay filed by Appellee Wells Fargo Bank, N.A., as Trustee for ABFC 2006-OPT1 Trust, ABFC Asset-Backed Certificates, Series 2006-OPT1, or its Successor or Assignee ("Wells Fargo" or "Appellee"). (Doc. 1). For the reasons set forth below, the Court will affirm the Bankruptcy Court's October 6, 2011 Order.

II. Statement of Relevant Facts and Procedural History

On June 19, 2007, Wells Fargo initiated a mortgage foreclosure action in the Carbon County Court of Common Pleas against Straker's property located at 233A Chestnut Lane Hickory, Penn Forest Township, Pennsylvania 18210. (Doc. 2-12, Ex. B). A default judgment was entered on behalf of Wells Fargo on August 9, 2007. (Doc. 2-12, Ex. C). On February 26, 2009, Appellant filed a voluntary Petition under Chapter 13 of the Bankruptcy Code (Doc. 11, Ex. I), [1] which automatically stayed the state foreclosure action pursuant to 11 U.S.C. § 362(a).

On May 22, 2009, Wells Fargo filed a motion for relief from the automatic stay. (Doc. 2-3). A hearing was held on June 16, 2009. (Doc. 14). Straker did not attend. Counsel for Wells Fargo represented that Straker had proposed to pay $300 per month to her secured creditors in addition to her payments under the proposed bankruptcy plan. (Id. at 2:13-15). Counsel contended that this proposal was insufficient to protect Wells Fargo's interest since Straker owed it approximately $1, 900 per month, was approximately $84, 000 behind on her mortgage, and was not making payments. (Id. at 2:17-3:1). On June 17, s2009, the Bankruptcy Court issued an Order granting Wells Fargo's motion for relief. (Doc. 1-1). The Order modified the automatic stay to permit Wells Fargo "to foreclose its smortgage, and, without limitation, to exercise any other rights it has under the mortgage or with respect to the property located at: 223A Chestnut Lane Hickory, Penn Forest Township, Pennsylvania 18210." (Id.).

On June 23, 2009, Straker filed a motion for reconsideration. (Doc. 2-5). In her motion, she challenged the validity of the state foreclosure judgment. However, she did not address Wells Fargo's motion for relief, aside from asserting that Wells Fargo lacked standing since the state foreclosure judgment was allegedly invalid. (Id. at ¶¶ 8-9). A hearing was held on July 23, 2009. (Doc. 15).

During the hearing, the Bankruptcy Judge stated that a relief hearing was not the proper forum for Appellant to litigate her state foreclosure defenses. (Id. at 3:14-25). Straker contended that Wells Fargo did not have standing because "[a]t the time that they obtained the judgment" in state court, Wells Fargo "did not have assignment of the mortgage[.]" (Id. at 5:8-10). The Bankruptcy Judge interjected, "But they do have a judgment, right?" (Id. at 5:14). He went on to state that the existence of the foreclosure judgment provided a sufficient basis for granting relief. (Id. at 6:20-7:6). The Bankruptcy Judge further observed that Straker had not produced any arguments that would support extending the stay. (Id. at 9:4-12). Instead, he noted,

What you've come up with is all sorts of potential defenses to Wells Fargo's claim. That may very well support your ability to open up the State Court judgment, but it's not necessarily enough for me to continue the automatic stay. Because no matter what I do with regard to the adjudication of this motion for relief [it] cannot - will not alter the fact there's a judgment in State Court. You have to do something else to get that upset. You can't do it through a relief motion
If you've got a battle with this creditor in State Court, and that State Court is capable of either finding there's a proper mortgage or not, then you should go to State Court to get that figured out because that's where the litigation is actually going.

(Id. at 7:12-8:4).

On July 24, 2009, the Bankruptcy Court denied Appellant's motion for reconsideration. (Doc. 2-7). Straker did not appeal either the July 24, 2009 Order or the Bankruptcy Court's June 17, 2009 relief Order. (See Doc. 16 at 10:24-11:5, 13:9-14:2).

On March 23, 2010 and July 8, 2010, the Carbon County Court of Common Pleas amended Wells Fargo's foreclosure judgment nunc pro tunc to reassess the amount Appellant owed. (Doc. 2-12, Exs. D, E). On September 8, 2011, Straker filed an "Emergency Motion to Vacate Order Dated August 9, 2007, and Dismiss Plaintiff Wells Fargo Bank Foreclosure Complaint, and Cancel Sheriff Sale Scheduled for September 9, 2011, and Disqualify Attorneys and the Law Firm of Phelan Hallinan & Schmieg, LLP" in the Carbon County Court of Common Pleas. (Doc. 2-12, Ex. F). On September 9, 2011, the Court of Common Pleas denied the emergency motion. (Doc. 2-12, Ex. G). As a result, Appellant's property was sold in a Sheriffs Sale on September 9, 2011. (Doc. 2-9 at ¶ 14).

On September 12, 2011, Straker filed an emergency motion to vacate the Bankruptcy Court's June 17, 2009 relief Order and sought to reinstate the automatic stay. (Doc. 2-9). A hearing was held on October 6, 2011. (Doc. 16). During the hearing, the Bankruptcy Judge engaged in an extended colloquy with Straker regarding the state foreclosure proceedings. (Id. at 5:20-10:25). Appellant indicated that the Carbon County Court of Common Pleas denied her challenges to the foreclosure proceedings. (Id. at 9:1-18). When asked whether she had appealed the decision of the Carbon County Court of Common Pleas to the Pennsylvania Superior Court, she stated that she had not. (Id. at 9:19-20).

Instead, Appellant stated that she returned to the Bankruptcy Court because she believed it had erred when it granted Wells Fargo's relief motion. (Id. at 17:9-13). As part of her prayer for relief, Straker's motion requested that the Bankruptcy Court "[r]eimpose the automatic stay retroactively as of June 17, 2009 when relief was granted[.]" (Doc. 2-9). The Bankruptcy Judge stated that if Appellant "wanted to challenge" his relief Order, she "could have appealed that [decision] to the District Court" in 2009. (Doc. 16 at 13:12-13). Straker acknowledged that she did not appeal the Bankruptcy Court's June 17, 2009 Order (see id. at 13:9-14:2) or its July 24, 2009 denial of her motion for reconsideration (id. at 11:24-12:5). The Bankruptcy Judge stated that he did not have the authority, over two years later and after the property had been sold, to reinstate the automatic stay. (Id. at 14:16-19).

As a result, the Bankruptcy Court denied Appellant's motion to vacate. (Doc. 11, Ex. II). The Bankruptcy Judge concluded that Straker's motion was untimely insofar as it challenged the June 17, 2009 Order. (Doc. 16 at 25:3-7). The Bankruptcy Court held that her motion was brought in the wrong forum insofar as ...


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