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In re Genrette

United States District Court, D. Delaware

September 30, 2019

IN RE ANDREA GENRETTE, Debtor.
v.
BANK OF NEW YORK MELLON TRUST COMPANY, Appellee. ANDREA GENRETTE, Appellant,

          MEMORANDUM ORDER

          Maryellen Noreika, United States District Judge

         I. INTRODUCTION

         Presently before the Court is an appeal from a Bankruptcy Court order dated November 27, 2018 (B.D.I. 118)[1] (“Order Denying Loan Modification”), entered in the Chapter 13 case of pro se appellant Andrea Genrette (“Appellant”), denying Appellant’s entry into a Loan Modification Agreement with appellee Bank of New York Mellon Trust Company, N.A. (“Bank of New York”). For the reasons set forth herein, the Court will affirm the Order Denying Loan Modification.

         II. BACKGROUND

         A. Chapter 13 Case

          On June 21, 2004, Appellant and George McClone (“McClone”) obtained a mortgage loan from Mercantile Mortgage Company. (See D.I. 13, Note attached as Exhibit B). To secure the loan, Genrette and McClone gave a mortgage to MERS as nominee for Mercantile (“Mortgage”) as to property located at 4 Westbury Drive, New Castle, Delaware (“Property”). (See id., Mortgage attached as Exhibit C). On October 1, 2010, Genrette entered into a Non-Hamp Loan Modification Agreement. (See id., Loan Modification Agreement attached as Exhibit D). MERS as nominee for Mercantile assigned the mortgage to Bank of New York on October 1, 2015. (See id., Assignment of Mortgage attached as Exhibit E).

         On August 19, 2015, Appellant commenced a Chapter 13 case (Bankr. D.I. 1). On October 26, 2015, the Bankruptcy Court entered an order confirming Appellant’s Chapter 13 plan. (See Bankr. D.I. 30, 34). On September 13, 2016, Bank of New York filed a proof of claim (“Proof of Claim”) claiming pre-petition arrears of $5, 761.01. (D.I. 13, Proof of Claim attached as Exhibit F). Appellant did not object to Bank of New York’s Proof of Claim for over a year and half, and only did so after Bank of New York sought relief from the stay. On March 22, 2018, Appellant filed an Objection to Proof of Claim claiming it was filed late and objecting to the amount and validity of the claim. (Bankr. D.I. 77). On August 2, 2018, the Bankruptcy Court overruled Appellant’s Objection to Proof of Claim as moot because relief from the stay had been granted. The Bankruptcy Court also noted that the Court saw no prejudice to Appellant from any alleged delay in the filing of Bank of New York’s Proof of Claim. (Bankr. D.I. 96).

         B. Lift Stay Order

         On June 29, 2017, Bank of New York filed a Motion for Relief from Stay (Bankr. D.I. 52) (“Stay Relief Motion”) based on Appellant’s failure to make the required post-petition payments under the Chapter 13 plan, including 12 post-petition payments for the months of July 2016 through June 2017. (Id. ¶ 1).

         To avoid litigation, determination of the Stay Relief Motion was stayed by agreement of the parties per a signed stipulation (Bankr. D.I. 59) (“Stipulation”). Under the terms of the Stipulation, Appellant acknowledged Bank of New York’s calculation of post-petition arrearages and costs and agreed to file, within 30 days, a modified Chapter 13 plan to provide a cure for the post-petition delinquency of payment of arrearages and costs, then totaling $14, 197.58 (id. ¶¶ 10-12) and additionally to continue to make regular monthly payments in the amount of $1, 242.52 as due beginning with the September 1, 2017 payment (id. ¶ 13). Under the Stipulation, events of default included: Appellant’s failure to file the modified Chapter 13 plan, failure to pay the post-petition arrearages, and failure to make any of the monthly payments. (Id. ¶ 14). Upon occurrence of an event of default, 10 days’ notice to Appellant, and Appellant’s failure to cure, the Stipulation provided that the Stay Relief Motion would be granted without further hearing. (Id. ¶ 15). On October 3, 2017, the Bankruptcy Court approved the Stipulation (Bankr. D.I. 60) (“Stipulated Order”).

         On January 11, 2018, Bank of New York filed a notice of non-compliance. (Bankr. D.I. 65). The notice indicates, and the docket reflects, that Appellant failed to file a modified Chapter 13 plan as required by the Stipulated Order. The notice of non-compliance also stated that Appellant was in default for a total amount of $3, 707.08, which included three regular mortgage payments required on November 2017, December 2017, and January 2018. (Id. at 2).

         On January 16, 2018, Appellant filed the proposed modified Chapter 13 plan, which was approved by the Bankruptcy Court. (Bankr. D.I. 66, 72). On February 1, 2018, Bank of New York filed a notice of default under the Stipulated Order. (Bankr. D.I. 71). The notice of default acknowledged that Appellant had filed, albeit late, a modified Chapter 13 plan, but the post-petition arrears for November 2017 through February 2018 remained unpaid. Appellant filed an objection to the notice of default alleging that Bank of New York was not entitled to stay relief because there was an improper allocation of post-petition payments, erroneous fees were charged during the bankruptcy, and the amount owed was incorrect. (Bankr. D.I. 74). Appellant also filed an objection to Bank of New York’s proof of claim. (Bankr. D.I. 77).

         On April 24, 2018, the Bankruptcy Court held a hearing on pending matters and took them under advisement. (See Bankr. D.I. 98, 4/24/18 Hr’g Tr.). On April 25, 2018, Bank of New York filed a supplemental letter brief with the Bankruptcy Court, which included correspondence from Ocwen, the loan servicer, to Appellant with an account reconciliation in response to questions raised by Appellant. (Bankr. D.I. 84). On April 30, 2018, Appellant filed a response to the supplemental letter brief claiming that Ocwen collected payments and other charges before the loan was assigned to it. (Bankr. D.I. 85). On May 8, 2018, Appellant filed a motion to reinstate the automatic stay. (Bankr. D.I. 87).

         On June 7, 2018, the Bankruptcy Court entered the Lift Stay Order, which (i) denied Appellant’s motion to reinstate the automatic stay, and (ii) granted Bank of New York relief from the automatic stay on the basis that Appellant failed to make the required post-petition payments under the ...


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