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Jones v. U.S. Bank, N.A.

United States District Court, M.D. Pennsylvania

October 11, 2019




          ROBERT D. MARIANI United States District Court Judge.

         I. Introduction

         Appellant Lloyd Allen Jones ("Jones") filed the pending motion to stay the Bankruptcy Court's March 22, 2018 order pending appeal. (Doc. 5). The motion arises out of a pending appeal before this Court from an order granting summary judgment to Appellees U.S. Bank, N.A., and America's Servicing Company by Middle District of Pennsylvania Bankruptcy Court Judge John J. Thomas on March 22, 2018. (Doc. 1-1). For the reasons that follow, the Court will deny Appellant's motion.

         II. Procedural History

         Appellant and Debtor Lloyd Allan Jones ("Jones") filed a Chapter 13 Bankruptcy case on May 25, 2016 with the United States Bankruptcy Court for the Middle District of Pennsylvania. (Doc. 7, at 1). On that same day, Jones also filed an original proposed Chapter 13 plan. (Id.). On September 29, 2016, Appellees filed a secured proof of claim of a mortgage, establishing that the amount of debt owed by Appellant to U.S. Bank as of the petition date was $446, 812.25. (Doc. 2, at 53). In addition to the proof of claim, Appellees attached a Mortgage Proof of Claim Attachment (Official Form 410-A) (to indicate that the mortgage is secured by the Debtor's principal business), an adjustable rate note, a mortgage, an assignment of the mortgage, a loan modification agreement, and an escrow account disclosure statement. (Id. at 53-67).

         On November 4, 2016, Appellant filed a First Amended Chapter 13 Plan, wherein Appellant proposed payments equal to the fair market value of the property plus interest at 5.5% per annum. (Id. at 70-77). On December 12, 2016, U.S. Bank objected to confirmation of the First Amended Plan. (Id. at 78-79).[1] On March 6, 2017, Appellant then initiated an adversary proceeding, out of which this appeal arises, against U.S. Bank to seek declaratory relief to: (1) value the property of the petition date at $136, 000 and to determine that the U.S. Bank had a secured claim in the amount of $136, 000 and an unsecured claim for all additional amounts owed by the debtor in excess of $136, 000; (2) declare void the amount of the lien which exceeded $136, 000, to the extent that U.S. Bank held a lien against the property that was greater than $136, 000; and (3) declare that the Second Amended Plan could be confirmed by arguing that Section 1322(b)(2) and Nobelman v. American Sav. Bank., 508 U.S. 324 (1993), did not apply to Debtor's case because the First Amended Plan did not propose "to 'modify' U.S. Bank's mortgage or claim, but rather to satisfy it." (Id. at 1-14).

         In the Bankruptcy Court, after the close of discovery, Appellees moved for summary judgment (Id., at 167-72). On March 20, 2018, oral argument was held on the motion for summary judgment. (Doc. 3). On March 22, 2018, the United States Bankruptcy Court for the Middle District of Pennsylvania entered an order granting summary judgment in favor of Appellees. (Doc. 1-1). In that order, the Bankruptcy Judge: (1) valued the Debtor's residence at $136, 000 (as agreed by the parties); (2) allowed the U.S. Bank Secured Claim to have a secured claim in the Debtor's underlying bankruptcy case in the amount of $136, 000 and unsecured claim for all sums due under the Loan Documents as of the Petition Date that are in excess of $136, 000; (3) declined to declare void the amount of the lien which exceeded $136, 000; (4) held that Appellant was not entitled to declaratory relief because the First Amended Plan's proposed treatment of Appellees' secured claim violated 11 U.S.C. § 1322(b)(2) and the Supreme Court's holding in Nobelman; (5) denied confirmation of the First Amended Plan because it did not comply with 11 U.S.C § 1322(b)(2); and (6) directed Appellant to file a Third Amended Chapter 13 Plan within thirty days of the date of entry of the Summary Judgment Order that did not modify U.S. Bank's rights and otherwise complied with the Bankruptcy Code. (Id.).

         In the Bankruptcy Court, Appellant moved to stay the summary judgment order pending appeal, but that motion was denied on June 5, 2018. (Doc. 5-2). Moreover, Appellant has yet to file the Third Amended Plan required as by the March 22 order.

         On April 19, 2018, Appellant filed a notice of appeal regarding the March 22 order. (Doc. 7, at 2). Appellant attempted to have the appeal heard directly by the United States Court of Appeals for the Third Circuit, however, that appeal and a subsequently-filed motion for stay of order pending appeal were both denied by the Third Circuit. (Doc. 5-3). On August 23, 2018, the appeal was brought before this Court. (Doc. 1). Thereafter, on September 5, 2018, Appellant filed this motion. (Doc. 5).

         III. Analysis

         Appellant argues that a motion for stay pending appeal should be granted because "the appeal presents 'sufficiently serious questions going to the merits to make them fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor.'" (Doc. 7, at 3) (quoting In re Gen. Credit Corp., 283 B.R. 658, 659 (S.D.N.Y. 2002)). For the following reasons, the Court disagrees and will deny Appellant's motion for stay pending appeal.

         As a threshold matter, as Appellees argue (Doc. 6, at ¶ 6), Appellant's motion is deficient in providing this Court with necessary information in compliance with the Federal Rules of Bankruptcy Procedure. Fed.R.Bankr.P. 8007(b)(2) states that "[t]he motion must ... if a motion was made in the bankruptcy court, ... state that the court has ruled and set out any reasons given for the ruling." Appellant's motion (Doc. 5) provides no basis on which the Bankruptcy Court denied the motion for stay pending appeal and thus fails to comport with this requirement. Further, Fed.R.Bankr.P. 8007(b)(3)(B) provides that "the motion must also include affidavits or other sworn statements supporting facts subject to dispute." Appellant's motion failed to include an affidavit that incorporates sufficient detail for several facts which Appellees dispute, such as the establishment of the fact that Appellant has made payment of $ 59, 220 to the Chapter 13 Trustee in the underlying bankruptcy case, and establishment of the fact that the Debtor would lose his home if the March 22, 2018 Order is not stayed. (See Doc. 5).

         Notwithstanding Appellant's failure to comply with Fed.R.Bankr.P. 8007, which alone provides ample basis for denying Appellant's motion, see, e.g., Minix v. Stone (In reMinix), 2019 WL 1676007, at *2 (E.D. Ky. 2019) (citing In re Hake, 2017 Bankr. LEXIS 4382, at *3 (B.A.P. 6th Cir. 2017)), the Court also finds that Appellant's underlying appeal is from an interlocutory order of the Bankruptcy Court, as to which Appellant has not filed a motion for permission to appeal pursuant to 28 U.S.C. ยง 158(a)(3) and Fed.R.Bankr.P. 8004(a)(2). As the Supreme Court has noted, an order denying confirmation of a plan is "not final, so long as it leaves the debtor free to propose ...

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