In re Campora

IN RE: JERRY CAMPORA, JR.

Case No.: 14-70330-AST

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK

October 6, 2014

Chapter 13

DECISION AND ORDER STRIKING DEBTOR'S NOTICE OF TIMELY SATISFACTION, DENYING DEBTOR'S CLAIM OBJECTION, ASSESSING SANCTIONS, AND DISMISSING DEBTOR'S CASE WITH PREJUDICE

The Debtor in this chapter 13 case, Jerry Campora, Jr. ("Debtor"), operates in disbelief of and disregard for the sanctity and propriety of court proceedings. He has exhibited disrespectful conduct before this Court, acted as if he himself is a court and/or judge of his own court, failed to comply with his obligations as a chapter 13 debtor, and unnecessarily multiplied the proceedings before this and other courts. For the reasons to follow, and as stated on the record on June 30, 2014, this Court has determined that Debtor should be sanctioned for raising claims without color of law and acting in bad faith, and/or for acting in bad faith, vexatiously, wantonly, or for oppressive reasons, by (1) making intentionally false representations to the Court, (2) attempting to mislead this Court by representing a fabricated "judgment" to be a judgment of a state court, and (3) blatantly disrespecting the Court and the judicial process. This Court has further determined that Debtor's "notice of timely satisfaction" should be stricken, his objection to a mortgage holder's claim should be overruled, and his chapter 13 case should be dismissed with prejudice to refiling under any chapter of the Bankruptcy Code for a period of one (1) year.

Jurisdiction

This Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 1334(b) and 157(b)(2)(A), (B), (K) and (O) and the Standing Orders of Reference in effect in the Eastern District of New York dated August 28, 1986, and as amended on December 5, 2012, but madeeffective nunc pro tunc as of June 23, 2011. The following constitutes the Court's findings of fact and conclusions of law made in accordance with Rule 7052 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). FED R. BANKR. P. 7052. This written decision memorializes and amplifies the oral ruling that the Court made after the close of evidence at the hearing held on this matter on June 30, 2014 and modifies the oral ruling where indicated below.

Background and Procedural History

Debtor filed a voluntary petition for relief under Chapter 13 of the United States Bankruptcy Code on January 28, 2014 (the "Petition Date"). Thereafter, Marianne Derosa was duly appointed and qualified as the chapter 13 trustee (the "Trustee").

On March 7, 2014, Debtor filed schedules indicating his monthly income to be $6,270.¹ [dkt item 19]

On March 12, 2014, HSBC Bank USA, NA as Trustee for Homestar Mortgage Acceptance Corp., Asset-Backed Pass-Through Certificates, Series 2004-2 (hereinafter "HSBC") filed a secured proof of claim in the amount of $630,130.04, docketed as claim number 3, of which $221,864.70 represents prepetition arrearages and other charges (the "HSBC Claim"). The HSBC Claim states that HSBC holds a debt secured by a first mortgage on Debtor's real property located at One Market Path, Setauket, New York, 11733 (the "Property").

On March 17, 2014, Bank of America, NA ("BOA") filed a secured proof of claim in the amount of $100,423.25, docketed as claim number 4, of which $2,201.44 represents prepetitionarrearages and other charges (the "BOA Claim"). The BOA claim states BOA holds a debt secured by a second mortgage on the Property.

On March 21, 2014, Debtor filed a proposed Chapter 13 Plan (the "Plan"). [dkt item 23] The Plan provides for an overlapping payment schedule as follows:

• $51.00 commencing April 10, 2014 though and including April 9, 2019;

• $63.66 commencing April 10, 2014 through and including April 9, 2019;

• $75.00 commencing April 10, 2014 through and including April 9, 2019.

Paragraph 2 of the Plan states that "Debtor knows of NO secured liens." Plan, ¶ 2. The Plan references two separate state court cases involving HSBC and states that HSBC is a disputed mortgage holder and holder of a "void" judgment. Further, paragraph 4 of the Plan, under the heading of "MORTGAGE LIENS TO BE AVOIDED," states that Debtor intends to avoid a mortgage lien on the Property in the amount of $583,000.00 pursuant to 11 U.S.C. § 544(a)(3), despite the Plan also providing that, to Debtor's knowledge, there are no secured liens. The Plan further provides, in pertinent part, "[t]he Debtor requests the bankruptcy trustee to use the trustee's strong arm powers under 11 U.S.C. § 544(a)(3), or, else abandon [sic] estate to allow debtor to file an Adversary Proceeding." Plan, ¶ 4.

On April 4, 2014, the Trustee filed a motion to dismiss this case pursuant to 11 U.S.C. § 1307(c) for cause based upon various material statutory defects in the Plan, including the failure to cure mortgage arrears under 11 U.S.C. § 1325(a), and Debtor's failure, inter alia, to commence making plan payments and comply with his disclosure obligations required under the Local Bankruptcy Rules. (the "Trustee's Dismissal Motion"). [dkt item 24]

On April 17, 2014, HSBC filed an objection to confirmation of Debtor's Plan based upon Debtor's failure to cure the arrears identified in the HSBC Claim. [dkt item 25] On April 30, 2014, HSBC filed a motion seeking relief from the automatic stay to continue a foreclosure action against Debtor and the Property (the "HSBC Motion"). [dkt item 27] In its Motion, HSBC alleges that it has physical possession of an original note signed by Debtor and a mortgage pledging the Property as security for that note, and that Debtor had not made a payment on the note since February 2014.

On May 1, 2014, Debtor filed an application for an order directing HSBC and BOA to show cause on an emergency basis why they should not, among other things, surrender the original notes evidencing their liens; the Court construed this to be an objection to HSBC's and BOA's claims (the "Claim Objection")². [dkt item 28] The Court denied Debtor's request for a hearing on an emergency basis, but scheduled a hearing on Debtor's Claim Objection for July 10, 2014. Also on May 1, Debtor filed opposition to the Trustee's Dismissal Motion. [dkt item 29]

On May 2, 2014, HSBC filed an affirmation in support of the Trustee's Dismissal Motion and an amended objection to confirmation of Debtor's Plan. [dkt items 30, 32] Therein, HSBC reiterated its prior objections to confirmation and alleged that Debtor had filed this case on the eve of a scheduled foreclosure sale and had not proposed his Plan in good faith. Significantly, attached to HSBC's papers is a judgment of foreclosure and sale entered on October 1, 2013 before the Suffolk County Supreme Court (the "State Court"), Index No. 43034/09, styled as HSBC versus Debtor and others (the "Foreclosure Judgment"). [dkt item 30, Ex. B] The Foreclosure Judgment, inter alia, authorizes the Property to be sold at a foreclosure sale to satisfy a debt owed to HSBC, at that time in the amount of $583,942.95 and secured by theProperty. The Foreclosure Judgment is signed by Hon. Joseph Farneti as Acting Supreme Court Justice.

On May 6, 2014, Debtor filed an amended plan (the "Amended Plan"). [dkt item 34] This amended plan, inter alia, proposes overlapping payments of $51.00 for sixty (60) months, $63.66 for sixty (60) months, and $75.00 for sixty (60) months, again all covering the same sixty (60) month period, April 10, 2014 through March 9, 2019. The Amended Plan also states:

Debtor knows of NO secured liens. HSBC BANK USA, as Trustee (disputed mortgage holder) obtained a VOID judgment in case number 09/43034 in 2010 (order to vacate on the record in case# 12/06874); HSBC BANK USA failed to surrender the note/funds/ security due Jerry Campora Junior as required pursuant to 12 U.S.C. §1813, prior to entry of judgment in case number 09/43034 in 2010 and for the last four years has continued to refuse to surrender the subject note/security/funds.

Amended Plan, ¶ 2. The Amended Plan also contains the same provision as the original Plan for actions to be commenced by the Trustee for the avoidance of the HSBC and BOA liens under § 544(a)(3).

In conjunction with the filing of his Amended Plan, Debtor filed numerous additional pleadings which appear to relate to his Claim Objection³ and which appear to be based on various disjointed and irrelevant theories cobbled together from various statutes and court decisions.

The May 8 Hearing

On May 8, 2014, this Court held a hearing ("May 8 Hearing") on, inter alia, the Trustee's Dismissal Motion. In response to the Court's inquiries and the arguments of the other partiespresent, Debtor made several outbursts and was warned repeatedly to stop interrupting the Court, HSBC's counsel and the Trustee.

As to the legal substance of the matters then before the Court, the Trustee argued that Debtor's Amended Plan had not remedied several of the material statutory defects set forth in her Dismissal Motion, and that Debtor still had not complied with several of his disclosure obligations. As to the possibility of Debtor being able to confirm a plan in this case, the Court questioned Debtor about the Foreclosure Judgment, which had been described in Debtor's Amended Plan and various of Debtor's other pleadings as "void"⁴. In response, Debtor affirmatively represented to this Court that the Foreclosure Judgment had been vacated. In particular, the Court had the following dialogue with Debtor, which is memorialized by the May 8 hearing transcript [dkt item 40]:

THE COURT: Mr. Campora, I am looking at a judgment of foreclosure and sale--

MR. CAMPORA: Okay. And we'll --

THE COURT: -- entered October of 2013 by the state court in Suffolk County.

[May 8 Hearing Tr. at 9:24-25, 10:1-3]

* * *

THE COURT: They have a judgment from a court of competent jurisdiction of Suffolk County, New York. It's in favor of HSBC Bank. That's who is here supporting dismissal of your case. So, if that judgment is void...