672 B.R. 693
Bankr. E.D. Mich.2025Background
- Wells Fargo Bank acquired title to 16781 Huntington Road, Detroit, via foreclosure in 2016 and has faced continual litigation from various individuals seeking to delay eviction.
- At least eight separate bankruptcy cases have been filed since 2017 by Harold Jon Jackson, Jr., Doshia Banks, Otis Williams III, and others, each staying Wells Fargo’s state court eviction proceedings.
- The bankruptcy filings were repeatedly dismissed for failure to prosecute, failure to pay fees, or failure to make required payments, with none resulting in confirmed plans or discharges.
- Parallel, often frivolous, state and federal court actions (including quiet title suits) have also failed to disturb Wells Fargo's ownership, with courts consistently ruling for Wells Fargo.
- Wells Fargo filed a motion for in rem relief from the automatic stay, arguing the serial bankruptcies constituted a bad-faith scheme to hinder, delay, or defraud its ability to obtain possession of the property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Relief from automatic stay for cause (362(d)(1)) | Debtor has no legitimate interest; bankruptcies are abusive | Claims tenancy/equitable interest or leasehold | Relief granted; debtor is a squatter with no valid interest |
| Relief from stay—no equity, not necessary (362(d)(2)) | No equity, not necessary for reorganization | No argument on necessity or equity | Relief also warranted on this basis |
| In rem relief for scheme to hinder/delay (362(d)(4)) | Repeated filings by debtors to prevent eviction constitute scheme | Denies scheme; claims first bankruptcy, disputes bad faith | Pattern proved; in rem relief granted |
| Use of § 105(a) for in rem relief for non-creditor | Court can supplement to prevent abuse, even if not a "creditor" | No specific argument on § 105(a) | Relief proper under § 362(d)(4) and § 105(a) for property owner |
Key Cases Cited
- Local Loan Co. v. Hunt, 292 U.S. 234 (1934) (summarizes the fundamental purpose of bankruptcy law: giving honest but unfortunate debtors a fresh start)
- Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007) (Bankruptcy relief is not for debtors acting in bad faith)
- Grogan v. Garner, 498 U.S. 279 (1991) (Addresses the requirement for honest conduct in bankruptcy)
- El-Seblani v. IndyMac Mortgage Servs., 510 Fed. Appx. 425 (6th Cir. 2013) (Foreclosure purchaser’s title rights under Michigan law)
- Pepper v. Litton, 308 U.S. 295 (1939) (Bankruptcy court’s broad equitable powers)
- Laguna Assocs. Ltd. P’ship v. Aetna Cas. & Sur. Co., 30 F.3d 734 (6th Cir. 1994) (What constitutes "cause" for stay relief)
- Garzoni v. K-Mart Corp., 35 Fed. Appx. 179 (6th Cir. 2002) (Factors for bankruptcy courts stay relief to allow non-bankruptcy litigation)
- In re Lee, 467 B.R. 906 (B.A.P. 6th Cir. 2012) (Affirms in rem stay relief for serial, bad faith bankruptcy filings)