In re Andrade-Garcia, Case No.: 17-15277-abl

627 B.R. 158

IN RE: Antonia ANDRADE-GARCIA, Debtor.

Case No.: 17-15277-abl

United States Bankruptcy Court, D. Nevada.

Signed March 31, 2021

Richard E. Hawkins, Las Vegas, NV, for Debtor.

Rick A. Yarnall, Las Vegas, NV, Trustee, pro se.

MEMORANDUM AND ORDER SUSTAINING DEBTOR'S CLAIM OBJECTIONS AND AWARDING ATTORNEY'S FEES UNDER NRS 18.010

Honorable August B. Landis, United States Bankruptcy Judge

This matter came on for hearing before the Court on March 4, 2020, pursuant to three separate claim objections¹ filed by debtor Antonia Andrade-Garcia ("Debtor"). The Objections were directed to Claim Nos. 4-1, 5-1, and 6-1 (collectively "Claims").² All of the Claims were filed by creditor LVNV Funding, LLC ("LVNV").

At the conclusion of the March 4, 2020 hearing on Debtor's Objections, the Court set this matter over for additional argument on March 17, 2020. Attorney Richard E. Hawkins appeared and argued for Debtor at both hearings. Attorney Steven L. Yarmy appeared and argued for LVNV at both hearings. At the conclusion of the March 17, 2020 hearing, the Court closed the record and took this claim dispute under submission.

The Court takes judicial notice of the official court docket and claims register in Debtor's case to the extent appropriate under and permitted by FED. R. EVID. 201(b) and (c). In preparing this Memorandum, the Court has reviewed Debtor's Objections, LVNV's replies to the Objections,³ and Debtor's omnibus response to LVNV's replies.⁴ The Court has also considered the arguments of counsel at the March 4 and 17, 2020 hearings. The issues presented by this claim dispute are fully submitted. Based upon the record before it, the Court enters the following findings of fact and conclusions of law.

FINDINGS OF FACT

This case commenced on September 29, 2017, when Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code.⁵ Debtor subsequently filed a motion seeking conversion of her case to proceedings under Chapter 13 of the Code. The Court's order granting her conversion motion was granted on December 6, 2017.⁶ Her case has been administered under Chapter 13 of the Code at all times since then.

On February 13, 2018, the Claims were filed by LVNV in writing on Official Form 410. LVNV is not the original creditor on any of the accounts that are referenced in the Claims. All of the Claims identify "LVNV Funding, LLC its successors and assigns as assignee of Arrow Financial Services, LLC" as the current creditor. More particularly:

• Claim 4-1: Identifies LVNV as assignee of Arrow Financial Services, LLC, with documents including a bill of sale, assignment, declaration of account transfer, and limited power of attorney attached in support at pages 5-12 of 12.

• Claim 5-1: Identifies LVNV as assignee of NCOP Capital II, LLC, with documents including a bill of sale, assignment, declaration of account transfer, and limited power of attorney attached in support at pages 5-13 of 13.

• Claim 6-1: Identifies LVNV as assignee of North Star Capital Acquisition LLC, with documents including a bill of sale, assignment, declaration of account transfer, and limited power of attorney attached in support at pages 5-10 of 10.

An Account Detail form is also attached to each of the Claims which confirms that the underlying account is in the Debtor's name.⁷ The Account Detail forms attached to the Claims also plainly show that both the charge off date by the original credit provider, and the last transaction on the relevant account, occurred more than a decade prior to the commencement of Debtor's case on September 29, 2017. More specifically, the Account Detail forms appended to the Claims reveal the following information:

• Claim 4-1:	Charged off:Last transaction date:	January 30, 2004September 28, 2006
• Claim 5-1:	Charged off:Last transaction date:	September 1, 2002December 16, 2003
• Claim 6-1:	Charged off:Last transaction date:	April 21, 2003December 17, 2003

A review of the docket confirms that the Chapter 13 trustee overseeing the administration of Debtor's bankruptcy case did not object to any of LVNV's Claims. On January 7, 2020, Debtor filed the Objections asserting that LVNV's Claims were all filed at a point in time when they were obviously barred by the applicable Nevada statute of limitations. See NRS 11.190(1)(a), NRS 11.190(2)(a), and (b).⁸ On February 6, 2020, LVNV filed replies to each of Debtor's Objections, citing the United States Supreme Court's decision in Midland Funding, LLC v. Johnson, ––– U.S. ––––, 137 S. Ct. 1407, 197 L.Ed. 2d (2017) as supporting authority.⁹

On February 13, 2020, Debtor filed an omnibus response to LVNV's replies to the Objections, noting that LVNV had conceded in its replies that all of the Claims were time barred under Nevada law when they were filed; that LVNV Funding had been afforded plenty of time to withdraw the Claims since they were filed on February 13, 2018 and Debtor's Objections were filed almost two years later on January 7, 2020 ; and that if Debtor's Objections were sustained, Debtor was entitled to recover the attorney's fees she had incurred in successfully prosecuting the Objections from LVNV - - not as a sanction, but as the prevailing party under a Nevada state law fee shifting statute, NRS 18.010(2)(b).¹⁰ While Debtor's Objections to LVNV's Claims were pending, the Court entered its confirming Debtor's Chapter 13 plan on March 11, 2020.¹¹

CONCLUSIONS OF LAW

A. Jurisdiction; Venue; Core Proceeding

The Court has jurisdiction over Debtor's Chapter 13 bankruptcy case. 28 U.S.C. §§ 1334(a) and 157(a), and LR 1001(b)(1).¹² Venue of Debtor's Chapter 13 bankruptcy case is proper in the District of Nevada under 28 U.S.C. § 1408(1). Debtor's Objections to LVNV's Claims are statutorily core proceedings. 28 U.S.C. § 157(b)(2)(a) and (b). Debtor's Objections to LVNV's Claims are also constitutionally core proceedings because they arise under Section 502 of the Code. See Certain Underwriters at Lloyds v. GACN, Inc. (In re GACN, Inc.), 555 B.R. 684, 692–93 (9th Cir. BAP 2016), appeal dismissed, No. 16-60079, 2017 WL 4513499 (9th Cir. May 10, 2017) (noting that the phrase "arising under title 11" as used in 28 U.S.C. § 157(a) and (b) is a term of art meaning a proceeding that "presents claims for relief created or controlled by title 11."), citing Wilshire Courtyard v. Cal. Franchise Tax Bd. (In re Wilshire Courtyard), 729 F.3d 1279, 1285 (9th Cir. 2013).

B. Controlling Statutory Provisions

The analytical starting point in resolving Debtor's Objections to LVNV's Claims is the statutory text of the Code and NRS. It is well established that when the language of a statute is plain, the sole function of the courts, at least where the disposition required by the text is not absurd, is to enforce it according to its terms. Dale v. Maney (In re Dale), 505 B.R. 8, 11 (9th Cir. BAP 2014), citing Lamie v. U.S. Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004).

1. As to Claims Disputes in Bankruptcy Cases Generally

Section 502 of the Code governs Debtor's Objections to LVNV's Claims and provides in pertinent part:

Section 502. Allowance of claims or interest

(a) A claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest, including a creditor of a general partner in a partnership that is a debtor in a case under chapter 7 of this title, objects.

(b) Except as provided in subsections (e)(2), (f), (g), (h) and (i) of this section, if such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim in lawful currency of the United States as of the date of the filing of the petition, and shall allow such claim in such amount, except to the extent that —

(1) such claim is unenforceable against the debtor and property of the debtor, under any agreement or applicable law for a reason other than because such claim is contingent or unmatured [.] (emphasis added)

The Federal Rules of Bankruptcy Procedure¹³ further inform the analytical calculus. Rule 3001 addresses the requisite content and evidentiary effect of a properly filed proof of claim, and reads in relevant part:

Rule 3001. Proof of Claim

(a) Form and Content. A proof of claim is a written statement setting forth a creditor's claim. A proof of claim shall conform substantially to the appropriate Official Form.

[.....]

(c) Supporting Information.

(1) Claim Based on a Writing. Except for a claim governed by paragraph (3) of this subdivision, when a claim, or an interest in property of the debtor securing the claim, is based on a writing, a copy of the writing shall be filed with the proof of claim. If the writing has been lost or destroyed, a statement of the circumstances of the loss or destruction shall be filed with the claim.

[.....]

(3) Claim Based on an Open-End or Revolving Consumer Credit Agreement.

(A) When a claim is based on an open-end or revolving consumer credit agreement – except one for which a security interest is claimed in the debtor's real property – a statement shall be filed with the proof of claim, including all of the following information that applies to the account:

(i) the name of the entity from whom the creditor purchased the account;

(ii) the name of the entity to whom the debt was owed at the time of an account holder's last transaction on the account;

(iii) the date of an account holder's last transaction;

(iv) the date of the last payment on the account; and

(v) the date on which the account was charged to profit and loss.

[.....]

(f) Evidentiary Effect. A proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim.

2. As to the Relevant Statute of Limitations Under Nevada Law

The statute of limitations for commencing an action based on contract in Nevada is set forth in NRS 11.190, which reads in relevant part:

NRS 11.190. Periods of limitation. Except as otherwise provided in NRS 125B.050 and 217.007,

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