525 B.R. 862
Bankr. D. Mass.2015Background
- Debtors filed Chapter 13 relief on Oct 31, 2013; Schedule D lists Chase as second mortgageholder with $43,853.23 and Ocwen as first mortgagee with $230,912.00 owed.
- Debtors proposed plan on Nov 25, 2013 to strip Chase’s second mortgage as wholly unsecured, with Chase listed as unsecured in plan.
- Plan Objection filed by Chase on Jan 10, 2014 alleging valuation/documentation deficiencies and right to interior appraisal; Debtors argued no such filing requirement.
- Local Rules MLBR Appendix 1, §§ 13-8(d)-(e) require conference with objecting party and certification; Chase failed to certify compliance.
- Deadline for filing proofs of claim was Mar 11, 2014; Chase filed its Proof of Claim on Mar 14, 2014, three days late; Debtors objected on untimeliness.
- Court overruled Chase’s Plan Objection for failure to comply with Local Rules; issued ruling on timeliness and equity considerations, sustaining the Claim Objection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a late claim can be treated as an informal claim amended later | Chase argues Plan Objection constitutes informal claim later amendable. | Debtors contend late claim lacks formal basis and plan objection cannot substitute for claim. | No; late claim cannot be equated to an informal claim needing amendment. |
| Whether Plan Objection before deadline can serve as informal proof of claim | Chase asserts Plan Objection pre-deadline identified debt, amount, and intent to hold liable. | Debtors argue Plan Objection failed predicate actions and violates Local Rules. | Plan Objection cannot serve as a valid informal proof of claim given procedural defects. |
| Whether equity permits amendment of Plan Objection to a timely claim | Chase relies on McCoy factors to allow amendment for equity. | Court must consider good faith and local-rule compliance; amendment would be improper. | Equity does not overcome procedural defects; amendment not permitted. |
Key Cases Cited
- In re McCoy Management Services, Inc., 44 B.R. 215 (Bankr.W.D.Ky.1984) (factors for informal proof of claim before deadline and amendment after)
- In re Dow Corning Corp., 142 F.3d 433 (6th Cir. 1998) (informal proof of claim principles in bankruptcy)
- Gens v. Resolution Trust Corp., 112 F.3d 569 (1st Cir.1997) (equity and amendment must not arise from bad faith or dilatory tactics)
- In re Reliance Equities, Inc., 966 F.2d 1338 (10th Cir.1992) (informal proof of claim evaluation factors)
- In re Holm, 931 F.2d 620 (9th Cir.1991) (informal claim concepts across circuits)