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Jager v. Infirst Bank

United States District Court, W.D. Pennsylvania

December 5, 2019

ROBERT W. JAGER and MARGARET M. JAGER, Appellants,
v.
INFIRST BANK and NORMA HILDENBRAND, Appellees.

          MEMORANDUM AND ORDER OF COURT

          STEPHANIE L. HAINES UNITED STATES DISTRICT JUDGE.

         This case is before the Court on appeal from an interlocutory order of the United States Bankruptcy Court for the Western District of Pennsylvania. That order, entered on February 13, 2019, by Bankruptcy Judge Jeffery A. Deller, denied Appellants relief from a previous order of the bankruptcy court that lifted an automatic stay authorized under 11 U.S.C. § 362(a) relating to Appellants encumbered real properly. In re Jager, 597 B.R. 796 (Bankr. W.D.Pa. 2019). By order of The Honorable Kim R. Gibson[1] entered on July 10, 2019, this appeal was stayed pending additional proceedings in the underlying bankruptcy matter.

         On September 5, 2019, the Bankruptcy Court entered an order dismissing the underlying bankruptcy case with prejudice [Doc. 187 at Bankr. No. 18-760541-JAD]. Appellants' motion for reconsideration of that order was denied by Judge Deller on November 25, 2019 [Doc. 214 at Bankr. No. 18-760541-JAD].

         On December 4, 2019, [2] Appellants filed in this Court a motion for an emergency stay of the sheriffs sale of the subject property that is scheduled for December 5, 2019, in Clearfield County, pending appeal of the Bankruptcy Court's order denying Appellants' motion for reconsideration of the order dismissing his bankruptcy case with prejudice [Doc. 15].

         Because Appellants' underlying bankruptcy case has been dismissed with prejudice, their appeal from the interlocutory order lifting the automatic stay in that case will be dismissed as moot, and this case will be closed. Moreover, because Appellants' motion for an emergency stay is not properly before the Court, it will be denied.

         I. Background

         On January 31, 2012, Appellant Margaret M. Jager executed a commercial promissory note whereby Appellee InFirst Bank agreed to lend to Ms. Jager the sum of $300, 000 for the purchase of real property. [Doc. 110, p. 2 at Bankr. No. 18-760541-JAD]. To secure the loan, Mrs. Jager granted to InFirst Bank a mortgage on certain real property and improvements [Id.]. The property is an approximately 5 5-acre tract of land comprised of two separate tax parcels with several buildings, including a two-story farmhouse, a two-bedroom ranch-style house and a barn [Id.].

         On September 15, 2015, the Pennsylvania Department of Environmental Protection ("PA DEP") issued an order requiring that action be taken with respect to approximately 400 tons of manure located on the property [Id.]. Additional orders were entered by the Commonwealth Court of Pennsylvania on July 27, 2016, and February 1, 2017, directing that remediation occur [Id.]. The February 1 order also found Appellants in contempt of their court-ordered responsibilities [id.].

         On June 26, 2015, InFirst Bank confessed judgment against Mrs. Jager [Id.]. On November 3, 2016, Mrs. Jager married Mr. Jager, and on November 18, 2016, Mrs. Jager transferred the property to herself and Mr. Jager as tenants by the entireties [Id.]. InFirst Bank subsequently sought to execute judgment by scheduling a sheriffs sale, which was enjoined by Mrs. Jager's filing of a chapter 7 bankruptcy case in the United States Bankruptcy Court for the Eastern District of New York [Id.]. On May 25, 2018, InFirst Bank was granted relief from the automatic stay by the New York Bankruptcy Court, and a sheriffs sale was scheduled for August 2, 2018 [Id. at 3].

         On July 30, 2018, Appellants commenced the underlying chapter 11 bankruptcy proceeding in the Western District of Pennsylvania Bankruptcy Court. Following an evidentiary hearing, Judge Deller entered an order lifting the automatic stay as to the subject property under 11 U.S.C. § 362 [Doc. 79 at Bankr. No. 18-760541-JAD]. Appellants filed a motion for reconsideration. Following another hearing, Judge Deller denied the motion for reconsideration on February 13, 2019 [Doc. 110 at Bankr. No. 18-760541-JAD]. Appellants then filed the pending appeal from that interlocutory order with this Court.

         On June 28, 2019, a hearing was held before Judge Deller in the underlying bankruptcy matter. On July 2, 2019, Judge Deller granted Appellants sixty days to remediate certain environmental issues identified by the PA DEP [Doc. 166 at Bankr. No. 18-70541-JAD]. Appellants were advised that if the PA DEP determined that they had failed to remediate the issues, Appellants' underlying bankruptcy case would be dismissed with prejudice [Id.]. In light of Judge Deller's order, Judge Gibson stayed the pending appeal from the interlocutory order on July 10, 2019 [Doc. 12].

         On September 5, 2019, Judge Deller entered an order dismissing the underlying bankruptcy case with prejudice based on Appellants' failure to completely remediate the environmental issues as required by the July 2, 2019, order [Doc. 187 at Bankr. No. 18-70541-JAD]. A hearing on Appellants' motion to reconsider that order was held on November 15, 2019, following which Judge Deller denied the motion on November 25, 2019 [Doc. 214 at Bankr. No. 18-70541-JAD].

         II. Analysis

         A. ...


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