594 B.R. 509
Bankr. D. Me.2018Background
- Debtor Debbie L. Anderson and husband borrowed in 1999; mortgage later held by Wells Fargo, which obtained a foreclosure judgment in 2005.
- Anderson filed five bankruptcy petitions (2005, 2006, 2011, 2014, 2018). Several were filed on the eve of scheduled foreclosure sales and each triggered an automatic stay that impeded the state foreclosure process.
- Wells Fargo repeatedly filed proofs of claim and motions for relief from stay in multiple cases; some cases were dismissed or converted without a confirmed plan and Anderson did not resolve Wells Fargo’s claim treatment.
- Anderson participated in loan-modification discussions and obtained court approval of a trial modification in 2015 but declined to enter a final modification and later defaulted on post-petition payments.
- Wells Fargo moved for in rem relief under 11 U.S.C. § 362(d)(4)(B) in 2018, arguing the 2018 petition was part of a scheme to delay foreclosure; after an evidentiary hearing the bankruptcy court granted the motion.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Anderson) | Held |
|---|---|---|---|
| Whether creditor is secured by an interest in the property | Wells Fargo is holder of recorded mortgage and foreclosure judgment | Not disputed | Court: Creditor is secured; element satisfied |
| Whether property was affected by multiple bankruptcies | Multiple filings each invoked the automatic stay and affected foreclosure | Not disputed | Court: Multiple filings affected the property; element satisfied |
| Whether the latest petition was part of a "scheme to delay, hinder, or defraud" under § 362(d)(4) | The 2018 filing (and prior filings) were strategically timed to stop foreclosure sales; debtor never resolved claim or completed reorganization; pattern shows intent to delay | Anderson said filings were to save her home and pursue loan modifications; asserted bank failed to provide proper accounting | Court: Found an intentional plan to delay foreclosure; inferences drawn from timing, repeated filings, failure to complete reorganizations or accept final modification; element satisfied |
| Whether in rem relief under § 362(d)(4)(B) should be granted | Relief binding in future cases is appropriate to prevent serial stays obstructing foreclosure | Anderson argued no abuse or fraud, and asserted good-faith efforts to modify loan | Court: Granted in rem relief under § 362(d)(4)(B) because all statutory elements were met |
Key Cases Cited
- F.D.I.C. v. Meyer, 510 U.S. 471 (statutory terms given ordinary meaning)
- Minor v. Mechanics' Bank of Alexandria, 26 U.S. (1 Pet.) 46 (early principal on statutory interpretation)
- In re Taal, 520 B.R. 370 (Bankr. D.N.H. 2014) (discussion of § 362(d)(4) elements)
- In re Olayer, 577 B.R. 464 (Bankr. W.D. Pa. 2017) (burden on movant seeking in rem relief)
- In re Wilke, 429 B.R. 916 (Bankr. N.D. Ill. 2010) (construction of "scheme" requiring intent)
- In re Reed, 587 B.R. 202 (Bankr. D. Me. 2017) (use of judicially noticed docket material)