Genrette v. Bank of N.Y. Mellon Tr. Co. (In re Genrette)

IN RE: ANDREA GENRETTE, Debtor.

ANDREA GENRETTE, Appellant, v. BANK OF NEW YORK MELLON TRUST COMPANY, N.A., Appellee.

Bankr. Case No. 15-11738 (BLS)

C.A. No. 19-1664 (MN)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

September 25, 2020

Chapter 13

MEMORANDUM ORDER

At Wilmington, this 25th day of September 2020:

I. INTRODUCTION

Presently before the Court is an appeal from a Bankruptcy Court order, dated August 28, 2019 (Bankr. D.I. 169)¹ ("Order Denying Amended Objection to Proof of Claim") by pro se appellant Andrea Genrette ("Appellant"), which denied and overruled Appellant's Amended Objection to Proof of Claim (Bankr. D.I. 156) ("Amended Objection to Proof of Claim") for the reasons set forth on the record by the Bankruptcy Court at the hearing held on August 28, 2019 (Bankr. D.I. 181, 8/28/19 Hr'g Tr.). For several years, Appellant has filed direct litigation, multiple emergency motions, appeals to this Court, and appeals to the U.S. Court of Appeals for the Third Circuit ("Third Circuit") raising the same arguments put forth again in thisappeal. For the reasons set forth herein, and in the Court's prior rulings, the Court will affirm the Order Denying Amended Claim Objection.

II. BACKGROUND

A. Chapter 13 Case

1. On June 21, 2004, Appellant and George McClone ("McClone") obtained a mortgage loan from Mercantile Mortgage Company ("Mercantile") (D.I. 12, Exh. B) ("Note"). To secure the loan, Appellant and McClone gave a mortgage to Mortgage Electronic Registrations Systems, Inc. ("MERS") as nominee for Mercantile ("Mortgage") as to property located at 4 Westbury Drive, New Castle, Delaware ("Property") (id., Exh. C). On October 1, 2010, Appellant entered into a Non-Hamp Loan Modification Agreement (id., Exh. D) ("Loan Modification Agreement"). MERS, as nominee for Mercantile, assigned the mortgage to appellee Bank of New York Mellon Trust Company, N.A. ("BONY Mellon") on October 1, 2015 (id., Exh. E) ("Assignment of Mortgage"). The Note is endorsed to appellee BONY Mellon. (See id., Exh. B).

2. On August 19, 2015, Appellant commenced a Chapter 13 case. (Bankr. D.I. 1). Appellant filed two amended plans in connection with the bankruptcy. The second amended plan ("Plan"), dated October 21, 2015, contained a provision by which Appellant proposed to cure the pre-petition mortgage arrears owed to BONY Mellon and continue to make post-petition payments. (Bankr. D.I. 30). The Bankruptcy Court confirmed the Plan on October 26, 2015. (Bankr. D.I. 34). On September 13, 2016, BONY Mellon filed a proof of claim ("Proof of Claim") claiming pre-petition arrears of $5,761.01. (D.I. 13, Exh. F). Appellant did not object to BONY Mellon's Proof of Claim for more than a year and half, and only did so after BONY Mellon sought relief from the stay. On March 22, 2018, Appellant filed an Objection to Proof of Claim claimingit 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 to BONY Mellon as explained below. (Bankr. D.I. 96). The Bankruptcy Court also noted that the Court saw no prejudice to Appellant from any alleged delay in the filing of BONY Mellon's Proof of Claim. (Id.).

B. Lift Stay Order and Appeal

3. On June 29, 2017, BONY Mellon filed a Motion for Relief from Stay (Bankr. D.I. 52) ("Stay Relief Motion") following Appellant's failure to pay more than a year of the required post-petition payments under the Chapter 13 plan, including payments for the months of July 2016 through June 2017. (Id. ¶ 1). Appellant filed an Answer to the Stay Relief Motion in which she admitted the post-petition arrears. (Bankr. D.I. 54). Rather than litigate that decision, however, determination of the Stay Relief Motion was stayed by agreement of the parties per a signed stipulation (Bankr. D.I. 59) ("the Stipulation"). Under the terms of the Stipulation, Appellant (i) acknowledged BONY Mellon's calculation of post-petition arrearages and costs, (ii) agreed to file, within 30 days, a modified Chapter 13 plan to provide a cure for the post-petition arrears, then totaling $14,197.58 (id. ¶¶ 10-12); and agreed 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, potential 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). The Stipulation further provided that, if Appellant failed to comply with any of the provisions of the Stipulation, a Notice of Non-Compliance could be filed on ten days' notice wherein relief from the stay would be granted without further hearing of theBankruptcy Court. (Id. ¶ 15). On October 3, 2017, the Bankruptcy Court approved the Stipulation (Bankr. D.I. 60).

4. On January 11, 2018, BONY Mellon 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 Stipulation. 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).

5. 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, BONY Mellon filed a Notice of Default under the Stipulation, indicating that while a modified plan was filed, post-petition arrears for November 1, 2017 through February 1, 2018 remained unpaid. (Bankr. D.I. 71). Appellant filed an objection to the Notice of Non-Compliance and Notice of Default asserting that BONY Mellon was not entitled to stay relief because (a) there was an improper allocation of post-petition payments, (b) erroneous fees were charged during the bankruptcy, and (c) the amount owed was incorrect. (Bankr. D.I. 74).

6. On April 24, 2018, the Bankruptcy Court held a hearing regarding, among other things, the Notice of Non-Compliance and Notice of Default. (See Bankr. D.I. 98, 4/24/18 Hr'g Tr.). On April 25, 2018, BONY Mellon 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 payment 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).

7. 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 BONY Mellon relief from the automatic stay on the basis that Appellant failed to make the required post-petition payments under the Stipulation. (Bankr. D.I. 90 ¶ 2). The Bankruptcy Court further determined:

In subsequent proceedings, including a hearing held on April 24, 2018, [Appellant] has raised challenges to, among other things, [BONY Mellon's] pre-bankruptcy conduct, the amounts due to [BONY Mellon] and the contents of [BONY Mellon's] proof of claim. The terms of the Stipulation are clear, and the record supports a finding that a payment default has occurred. The issues raised by [Appellant], particularly those relating to events that occurred years ago, do not change the fact that [Appellant] failed to make payments in compliance with the Stipulation.

(Id. ¶ 3). On June 21, 2018, Appellant appealed the Lift Stay Order (Bankr. D.I. 93). (C.A. No. 18-920-MN, D.I. 1). Appellant filed a Motion for Emergency Review, which was denied. (Id., D.I. 13, 16). Appellant later filed an Emergency Motion for Temporary Injunction. (Id., D.I. 31). This request was also denied. (Id., D.I. 35). In re Genrette, C.A. No. 18-920-MN, 2018 WL 6696048 (D. Del. Dec. 20, 2018). On February 7, 2019, this Court affirmed the Lift Stay Order. (Id., D.I. 41). On September 27, 2019, this Court entered a Memorandum Order denying Appellant's petition for rehearing en banc. (Id., D.I. 46). In re Genrette, C.A. No. 18-920-MN, 2019 WL 4740053 (D. Del. Sept. 27, 2019). Appellant appealed that ruling to the Third Circuit.² On March 17, 2020, the Third Circuit affirmed. (Id., D.I. 49). In re Genrette, 797 F. App'x 739 (3d Cir. 2020).

C. Order Denying Loan Modification and Appeal

8. While her appeal of the Lift Stay Order was pending, Ocwen offered Appellant a loan modification which required acceptance by July 31, 2018. (See D.I. 13, Exh. A) ("LoanModification Agreement"). Appellant inquired whether she could have an extension to respond to the loan modification until after her appeal was decided. In response, Ocwen advised Appellant she could respond by August 31, 2018, but no later. Rather than forgo the benefit of the loan modification, Appellant accepted the Loan Modification Agreement on August 31, 2018, and voluntarily made payments on the loan modification from August 31, 2018 through November 29, 2018. (See D.I. 12, Exh. A.) Accordingly, on October 11, 2018 BONY Mellon filed a Motion for Approval of Loan Modification Encumbering Property ("Motion To Approve Loan Modification") (Bankr. D.I. 101), which, somewhat surprisingly, Appellant opposed on the basis that the Bankruptcy Court did not have subject matter jurisdiction to hear the motion because BONY Mellon's claim "is being handled by the Federal Court." (Bankr. D.I. 103).

9. As part of Appellant's strategy, she also filed a Motion to Stay seeking to stay her entire Chapter 13 case until the Lift Stay Order appeal was decided. (Bankr. D.I. 105). Appellant filed an objection to the Motion to Approve Loan Modification, on...