653 B.R. 187
Bankr. W.D. Okla.2023Background
- Debtors filed Chapter 13 on April 21, 2017; plan was confirmed and trustee began paying ongoing mortgage payments (including escrow) to servicer Nationstar.
- Nationstar allegedly failed to pay property taxes and homeowners insurance from escrow (2017–2018), causing insurance cancellation and forced‑placed insurance; Nationstar later brought taxes current.
- Nationstar assigned the mortgage to MCLP Asset Company, Inc. in March 2022—years after most allegedly wrongful conduct occurred.
- Debtors sued Nationstar and MCLP for (1) violation of the confirmation order (civil contempt), (2) violation of the automatic stay, and (3) an accounting of escrow/trustee payments.
- MCLP moved to dismiss for failure to state a claim; Debtors did not file a response. The court evaluated the merits and granted MCLP’s motion, dismissing Debtors’ claims against MCLP.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Violation of confirmation order / civil contempt | Debtors: Nationstar received trustee escrow payments and failed to apply them to taxes/insurance in violation of the confirmed plan; MCLP may have benefited after assignment. | MCLP: No involvement until March 2022; alleged violations occurred years earlier under Nationstar; allegations against MCLP are speculative. | Dismissed — allegations do not plausibly connect MCLP to a specific violation of the Confirmation Order. |
| Violation of automatic stay | Debtors: Nationstar’s escrow increase and handling was an attempt to obtain estate property in violation of § 362. | MCLP: Could not willfully violate the stay because it was not involved when the alleged conduct occurred; plaintiffs plead ignorance rather than facts. | Dismissed — Debtors failed to plead that MCLP knew of the stay and intentionally acted to violate it. |
| Accounting (equitable accounting) | Debtors: Nationstar and its successor must account for trustee payments and escrow applications; seek full accounting from Nationstar and MCLP. | MCLP: No allegation of fiduciary relationship, no demand for accounting alleged, and no showing a balance is due. | Dismissed — Debtors did not plead the required elements (confidential/fiduciary relationship, demand/refusal, or balance due) against MCLP. |
| Failure to respond to motion to dismiss | Debtors: (no responsive filing). | MCLP: Sought dismissal on the merits. | Court analyzed merits despite no response (citing authority) and granted dismissal on substantive grounds rather than procedural default. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim to survive dismissal)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for complaints)
- In re Lucre, 365 F.3d 874 (10th Cir. 2004) (elements required to establish civil contempt)
- In re Johnson, 501 F.3d 1163 (10th Cir. 2007) (elements for willful violation of the automatic stay)
- Gilmore v. Weatherford, 694 F.3d 1160 (10th Cir. 2012) (equitable accounting arises under state law and requires specified elements)
- Howell Petroleum Corp. v. Leban Oil Corp., 976 F.2d 614 (10th Cir. 1992) (accounting requires showing a balance is due)
- Issa v. CompUSA, 354 F.3d 1174 (10th Cir. 2003) (court must examine merits even if a party fails to respond to a motion)