Keech v. Pennington (In re Pennington)

644 B.R. 312

IN RE: Robyn E. PENNINGTON, Debtor.

Hollis Homer Keech, and Cynthia Jo Kopper, Plaintiff(s),

v.Robyn E. Pennington, Defendant.

Case No. 21-10464-TPA

Adversary No.: 21-01016-TPA

United States Bankruptcy Court, W.D. Pennsylvania.

Signed October 5, 2022

Hollis Keech, Cynthia Kopper, pro se, for the Plaintiffs.

Christopher Antalics, Esq., for the Defendant.

MEMORANDUM OPINION

Thomas P. Agresti, Judge

INTRODUCTION

This Court's dealings with the Debtor/Defendant, Robyn E. Pennington span several years before the filing of this adversary.¹ Between April 2013 and December 2015, the Debtor — formerly known as Robyn Lundgren — filed four Chapter 13 bankruptcies. The current matter under consideration is the Amended Motion for Adversary (Doc. No. 19) (hereinafter, "Complaint"), which stems from the Defendant's most recent filing.²

FACTS

The Defendant filed her current Chapter 13 bankruptcy on August 21, 2021, in an apparent attempt to cure the outstanding balance on her residence and stay a pending ejectment action in McKean County, Pennsylvania. Because this is the Defendant's fifth bankruptcy, pursuant to its long-standing policy, the Court immediately issued an Order to Show Cause (Doc. No. 9) for the Defendant to personally appear and explain to the Court why this case should be allowed to proceed. At the October 7, 2021, hearing on the Order to Show Cause , the Defendant articulated her "good-faith" intentions to complete a successful Chapter 13 plan. The Court accepted those representations as true and vacated the Order to Show Cause — after admonishing the Defendant and making clear that any future failure to strictly abide by her Chapter 13 duties and responsibilities would result in dismissal of her case with a two-year bar to refiling.

Parallel to the Defendant's personal bankruptcy, this Adversary Proceeding arises from the debt relating to the installment land contract ("Land Contract") entered between the Defendant and the Plaintiffs, Hollis H. Keech and Cynthia Jo Kopper. The Plaintiffs are the current legal title owners of the subject real property located at 67 East Main St., Mount Jewett, Pennsylvania, 16740 ("Property"). The installment land contract was initially between the Defendant and the previous owners in fee simple, with the legal title later transferred to the Plaintiffs subject to the Land Contract. In the Complaint , as best the Court can determine, the Plaintiffs allege they are entitled to immediate possession of the Property with no right to cure due to all of the Defendant's prior defaults (hereinafter for convenience, "Count I") and relief from stay for similar reasons (hereinafter for convenience, "Count II").³

This dispute between the Plaintiffs and the Defendant is long and contentious, but the relevant facts include dealings with the prior Property owners — James and Jennifer McDonald (collectively, the "McDonalds"). In July 2017, the Defendant and Wade Pennington⁴ (collectively, the "Penningtons"), entered the Land Contract with the McDonalds to purchase the Property. The purchase price was $13,900.00 with $3,000.00 payable upon execution, with the balance to be paid at $500.00 per month until paid in full.

On July 26, 2018, the Penningtons and the McDonalds signed an addendum to the Land Contract, which provided the Penningtons the option to purchase the Property outright for $2,900.00 — payable in three separate installments ("Addendum"). The Penningtons never made these installment payments. The Penningtons also failed to make successive monthly payments toward the Land Contract. Accordingly, the McDonalds posted five separate eviction notices on the Property noting past-due rent. The eviction notices were posted on: (1) July 5, 2018, for past-due rent and late charges; (2) July 26, 2018, for past-due rent and late charges; (3) September 4, 2018, for failure to make payments on the Addendum; (4) September 9, 2018, for failure to make payments on the Addendum; and (5) for past-due balances and to notify the Penningtons that an action for eviction would be initiated if they remained in the Property beyond October 5, 2019.⁵

On September 11, 2019, the McDonalds transferred their interest in the Land Contract to the Plaintiffs. The Plaintiffs were aware the Property was subject to the Land Contract but were unaware of the Addendum. Following the transfer, the Plaintiffs notified the Penningtons of the purchase and ordered them to vacate the Property. The Penningtons refused and remained at the Property, despite not making payments. Like with the McDonalds, the Plaintiffs allege the Penningtons never made a payment to them under the Land Contract after they purchased the Property from the McDonalds.

On October 11, 2019, the Plaintiffs filed a Complaint in Ejectment against the Penningtons in the Court of Common Pleas of McKean County, PA at Docket No. 10845-2019. The court found that, although the Penningtons defaulted on the Land Contract "by failing to adhere to the requirements in the contract and second addendum," the Plaintiffs did not give proper notice for an eviction. The Complaint in Ejectment was therefore dismissed in July 2020.

On September 16, 2020, the Plaintiffs properly notified the Defendant of her default on the Land Contract via certified mail. The Notice of Default stated the Defendant was delinquent in payment of the real property taxes and that, per the Addendum, $1,900.00 was owed to the Plaintiffs. The Notice of Default also stated that the outstanding amount had to be paid within fourteen (14) days receipt of notice. Further, the Land Contract would terminate forty-four (44) days from the receipt of the notice.

The Defendant did not cure her default and she failed to make the required Land Contract payments. The Plaintiffs requested that the Defendant vacate the Property, but again she refused. Therefore, on January 6, 2021, the Plaintiffs filed an Amended Complaint for Ejectment in McKean County at Docket No. 845-CD-2019. The Defendant then filed her current bankruptcy, staying the ejectment action.

The Defendant included the Plaintiffs among her list of creditors when she filed her current bankruptcy. On October 1, 2021, the Plaintiffs sent the Court a letter requesting they be removed from the list of creditors. The Plaintiffs stated that they were mistakenly included and requested the Court to "void [their] names from the bankruptcy so that [they] may continue with the litigation that is already ongoing in another court...." While not filed in the proper format, the Court decided to treat the letter as a Motion for Relief from Stay . After sending the letter and the Court setting a hearing date of October 7, 2021, the Plaintiffs retained bankruptcy counsel.

In her Response (Doc. No. 32) to the Plaintiffs’ Motion for Relief from Stay , the Defendant stated that it was not a mistake the Plaintiffs were included in her filing. The Defendant emphasized that she filed the bankruptcy with the intent to pay off the remaining debt under the Land Contract and to retain the Property.

After the October 7^th hearing, the Court informed the Plaintiffs they were properly listed as creditors in the Defendant's bankruptcy and allowed her case to proceed. On October 27, 2021, the Plaintiffs filed an Objection to Confirmation of Chapter 13 Plan , and Supplement to Motion for Relief from Automatic Stay . In their Objection , the Plaintiffs emphasized that the Defendant's failure to pay the balance due on the Land Contract following her default terminated her interest in the Property. The Plaintiffs claim, because the Defendant defaulted, the Land Contract was void and the Defendant therefore had no right to cure in a Chapter 13 plan.

A subsequent hearing was held on November 3, 2021, on the Defendant's contested Plan and the Plaintiffs’ Objection . At the hearing, the Court explained to the Plaintiffs that the Objection would be treated as an adversary and directed the Plaintiffs to file the subject Complaint . At some later point, the Plaintiffs determined they could no longer afford the services of an attorney and decided to continue without the assistance of counsel. Accordingly, Counsel for the Plaintiffs withdrew his appearance. The Plaintiffs have since represented themselves in both this Adversary and the Defendant's individual bankruptcy case.

Thereafter, the Plaintiffs, acting pro se , commenced this Adversary Proceeding on December 7, 2021. The Pretrial process was highly contentious, with the Plaintiffs filing several motions containing dozens of photographs claiming the Defendant had abandoned the Property and that their interest in the Property was at risk. Although the photographs were somewhat helpful in evaluating the Property's condition during the time the Defendant claims she lived there, the Plaintiffs failed in their burden and the preliminary motions were denied.

A trial in the Adversary Proceeding took place on September 9, 2022, in the Erie Bankruptcy Courtroom. The Court was disappointed that the Defendant failed to appear — despite having sufficient notice as to the date, time, and location of the trial. The Defendant was thus unable to present direct testimony about her presence at the Property or rebut the Plaintiffs’ claims of abandonment and non-residency, which had become the primary focus of the Plaintiffs’ case. Along with the legal issues present in this Adversary Proceeding, the Court scheduled for the same time matters involving objections to the Defendant's Chapter 13 bankruptcy plan and the Plaintiffs’ Proof of Claim which had previously been consolidated with the trial.⁶

DISCUSSION

From the very beginning of this matter, when the Plaintiffs first sent their letter to the Court, the major thrust of this case has been their desire to obtain relief from stay to allow them to proceed with their pending ejectment action in state court. There is no dispute the Defendant violated numerous provisions of the Land Contract. Still, the Court must...