Daniel E. Borkowski
03-35201
Bankr. W.D. Pa.Feb 22, 2011Background
- Debtor Daniel E. Borkowski filed Chapter 13 in 2003 proposing cure and reinstatement of Wells Fargo mortgage.
- Confirmed plan from Nov 18, 2004 provided Wells Fargo monthly payment of $656.11.
- Wells Fargo filed a Notice of Payment Amount in 2006 stating a retroactive increase to $1,554.70, which violated the confirmation order and local procedures.
- Trustee later filed an Application for Final Report and Completion of Chapter 13 Plan; Wells Fargo was served but did not object to the Application or proposed order.
- Judge entered a July 20, 2009 order approving the Application and concluding Wells Fargo’s mortgage was current as of the Trustee’s last distribution.
- Wells Fargo moved to reopen and vacate the July 20, 2009 order approximately 110 days later; motion was denied by this court on February 22, 2011, by memorandum opinion and order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 60 relief is warranted to vacate a final bankruptcy order. | Wells Fargo contends the order was unlawful as no cure occurred. | Borkowski argues final order cannot be vacated; Espinosa controls and denies vacatur. | Rule 60 relief denied; finality preserved. |
| Whether the trustee's filing/notice complied with adversary rules to require vacatur. | Wells Fargo argues lack of proper adversary proceeding service invalidates notice. | Court held due process satisfied; notice by mail and electronic service sufficient. | Due process satisfied; no automatic vacatur for procedural missteps. |
| Whether excusable neglect supports vacatur of the order. | Wells Fargo seeks relief due to excusable neglect. | Equities do not support neglect being excusable given delay and control by Wells Fargo. | No excusable neglect; relief denied. |
| Whether Wells Fargo’s extended inaction prejudiced the debtor or case administration. | None stated beyond delay; Wells Fargo delays unsupported by merits. | Wells Fargo failed to act for years despite notices and final decree. | Prejudice to debtor and finality preserved; no vacatur. |
Key Cases Cited
- United States Supreme Court v. Espinosa, 130 S. Ct. 1367 (2010) (finality of bankruptcy orders; Rule 60 relief not substitute for appeal)
- In re Kalikow, 602 F.3d 82 (2d Cir. 2010) (due process—notice sufficient when attorney served and no response required)
- In re Guterl Special Steel Corp., 316 B.R. 843 (Bankr. W.D. Pa. 2004) (notice to creditor's counsel satisfies due process)
- In re Szostek, 886 F.2d 1405 (3d Cir. 1989) (creditor with notice must take active role to protect its claim)
- In re Venuto, 343 B.R. 120 (Bankr. E.D. Pa. 2006) (distinguished where no final order determined debtor current)