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PLG Win: Bankruptcy Court Affirms Debtor Cannot Modify Plan & Vacate Confirmation Order Nearly Seven Years Later
The United States Bankruptcy Court for the Middle District of Florida solidified that a debtor is unable to modify a plan and vacate a confirmation order, nearly seven years after the plan was confirmed, to strip a mortgage creditor’s lien.
PLG, via its attorney Seth J. Greenhill, Esq., sustained a significant victory for its client in bankruptcy court. On August 3, 2023, the Court issued its published opinion, In re Gilbert, 2023 Bankr. LEXIS 1952, whereby the Court correctly found that the Debtor was unable to use §1329 to modify a plan to strip a junior lien when plan payments were completed; and (2) the Debtor could not use §105(a) to vacate a confirmation order nearly seven years after the order was entered. It is worth noting that PLG took an aggressive approach by taking the Debtor’s deposition (i.e. Rule 2004 Examination) in order to lock in her testimony and show that she knew about the lien, yet failed to include it. This strategy, which Attorney Greenhill has successful deployed in past litigation, proved useful in this case and was, ultimately, advantageous to the Client in that it secured pivotal testimony later used by Creditors’ counsel.
Do You Need to Change Your Monthly Statements? A Recent Ruling May Impact Monthly Statement Formatting
While the Orlansky v. Quicken Loans, LLC, No. NV-22-1181-GCB, 2023 WL 2947616, at *1 (B.A.P. 9th Cir.) (not for publication) case is not published, the Court’s decision is important. The fact that it is not published means that it cannot be cited as precedent. However, that does not mean that debtors will not reference it in an attempt to influence court decisions.
As with many cases that impact the contents of a mortgage monthly statement, this case has very specific facts. After filing a Proof of Claim, Rocket fka Quicken Loans, filed Notice of Post-Petition Fees for the fees associated with the filing of the Proof of Claim and reviewing the Chapter 13 Plan.
In the Winter 2021, I wrote an article about how Edmundson v. Bank of America, 378 P.3d 272 (Wash. Ct. App. 2016) caused the statute of limitations to being to run upon a debtor’s discharge from bankruptcy in Washington. In March 2022, I wrote a follow up article detailing how the Court of Appeals for the State of Washington Division I gave the servicing industry an end to the misunderstanding created by the various interpretations of Edmundson in Copper Creek Homeowners’ Association v. Wilmington, No. 82083-4-I, slip op. (January 18, 2022). On April 24, 2023, the Colorado Supreme Court avoided the disaster that is Edmundson.
In United States Bank N.A. v. Silvernagel, 2023 CO 17, the Colorado Supreme Court circumvented the use of Edmundson in Colorado. In 2006, Silvernagel obtained a second mortgage. In 2012, Silvernagel received a bankruptcy discharge after filing a Chapter 7 bankruptcy. If these facts sounds familiar, they are. They start the same way that Edmundson did as well as all the cases that followed using it as a basis for the holding. In 2019, US Bank allegedly threatened to foreclose. To avoid foreclosure, Silvernagel filed a case seeking declaratory relief on the basis that US Bank’s interest had been extinguished by the statute of limitations. Colorado has a six year statute of limitations like Washington and most of the states in the region.
Padgett Law Group (“PLG”) through its attorney, Seth J. Greenhill, Esq., successfully obtained a rare win for creditors in Federal Court by obtaining sanctions against a pro se litigant who filed a frivolous appeal. This aggressive advocacy on behalf of PLG’s client was necessary to put an end to this vexatious litigation and contributes to building case law that will assist other creditors’ rights attorneys in defense of their clients.
“The key takeaway is that it is critical to establish the record in the original litigation. This provides notice to the pro se appellant,” said Mr. Greenhill. He continued, “This is a requirement in order to have sanctions imposed. In addition, it is vital to review the appellant brief in order to determine if the issues have already been disposed of.”
In an opinion affirming in part and reversing in part, Florida's Second District Court of Appeal found that a Trial Judge’s Order went too far when it forbade the borrower in a foreclosure case, who had surrendered the real property at issue in an earlier bankruptcy, to contest the foreclosure “in any manner” due to that bankruptcy surrender. In reversing in part, the Court of Appeal held that there are circumstances where a borrower may be allowed to challenge some aspects of a foreclosure case; for example, in the amounts due and owing, or other limited circumstances that may have arisen post-bankruptcy. Importantly, however, in affirming, the Second District Court of Appeal also ruled that surrender in a bankruptcy case means that in a subsequent foreclosure case a borrower is not entitled to challenge the lender’s own entitlement to foreclose. “Because the debtor’s interest has been surrendered, the debtor is no longer entitled to challenge the entitlement to foreclose the debtor’s former legal interest.” Note that this opinion is not final yet.
Since the ruling in In re Nazario Hernandez, et al v. Franklin Credit Mgmt. Corp., et al, 19-35719 (9th Cir. 2020), there have been several attempts to unwind the devastation that the interpretation by the Federal Courts of Edmundson v. Bank of America, 378 P.3d 272, 278 (Wash. Ct. App. 2016) created. This was nearly achieved in Brown v. Deutsch Bank N.A. (In re Plastino), Nos. 17-11760-MLB, 20-01012-MLB, 20-01013-MLB, 20 Bankr. LEXIS 3597, at *6-7 (Bankr. W.D. Wash. Dec. 29, 2020). However, the matter settled prior to a ruling on the appeal.
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