In re Moehring
485 B.R. 571
Bankr. S.D. Ohio2013Background
- Moehring and spouse signed a $32,800 loan note with SouthStar, endorsed in blank, secured by a mortgage on Moehring's residence held by MERS as nominee.
- The loan and mortgage were securitized into SACO I Trust 2006-3; MERS later assigned the mortgage to Bear Stearns; LaSalle Bank (later BOA) was trustee, with BOA later merging to become successor trustee for the Trust.
- Moehring filed Chapter 13 and schedule D listed a first mortgage to Litton and a second mortgage to EMC Mortgage; the second mortgage relates to the claim U.S. Bank asserts.
- BOA filed a proof of claim on January 20, 2011 asserting the Note and Mortgage; U.S. Bank, as transferee, amended the claim on May 17, 2012 to reflect original balance and to attach the Note, Mortgage, and Assignment.
- Moehring objected to the Claim amount and to the notice of transfer; U.S. Bank moved for summary judgment and asserted Moehring lacked standing to object to the transfer.
- The court held U.S. Bank may enforce the Note, Moehring lacks standing to object to the transfer, the transfer of documents doesn’t impair enforcement, the May 2012 filing may constitute the secured claim, and that the claim must be paid under Moehring’s confirmed Chapter 13 Plan.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. Bank may enforce the Note and Mortgage as holder. | Moehring contends the chain of title and assignments render the claim invalid. | U.S. Bank is holder via transfer and in possession through Chase, so may enforce. | Yes; U.S. Bank may enforce the Note as holder. |
| Whether Moehring has standing to object to the notice of transfer of the claim. | Moehring has standing as party in interest to challenge transfers. | Only the transferor has standing to object to transfer notices. | Moehring lacks standing to object to the transfer notice. |
| Whether the mortgage assignments affect the enforceability of the Note. | Alleged fraud in transfers undermines validity of the Note/Mortgage. | Assignments of mortgage follow the debt and do not affect enforceability of the Note. | Assignments do not impair enforcement of the Note; mortgage assignments do not affect the Note. |
| Whether the May 17, 2012 claim filing by U.S. Bank cures the earlier BOA filing under Rule 3001(e). | Ellington-like rationale prevents curing the wrong filer. | Under Ellington, the cure cannot amend a claim not properly filed by the transferee. | The May 2012 filing establishes an independent secured claim valid for plan distributions. |
| Whether U.S. Bank’s secured claim should be paid under the confirmed Chapter 13 Plan. | Plan provides for full payment; trustee can distribute accordingly. | Rule requirements and timing do not bar payment under the plan; lien survives. | Yes; U.S. Bank’s secured claim is paid in full under the plan. |
Key Cases Cited
- In re Ellington, 151 B.R. 90 (W.D.Tex. 1993) (cure of transferred claim rejected when claimant not owner at filing)
- In re Robert, 171 B.R. 881 (N.D. Cal. 1994) (secured claim allowed when plan provides payment even without timely filing)
- In re Crum, 479 B.R. 734 (S.D. Ohio 2012) (plan treatment governs secured claim; timing issues analyzed)
- In re Nolan, 232 F.3d 528 (6th Cir. 2000) (plan binding effect on creditors; confirmation controls)
- In re Smoak, 461 B.R. 510 (S.D. Ohio 2011) (possession of bearer paper establishes holder status; mortgage follow debt)
- In re Hares, 431 B.R. 796 (S.D. Ohio 2010) (lien survives bankruptcy absent avoidance; proof of claim not always required)
- In re Tarnow, 749 F.2d 464 (7th Cir. 1984) (lien survival and claim treatment in bankruptcy)
- Bateman, 331 F.3d 821 (11th Cir. 2003) (secured creditor may rest on in rem rights if not subject to bankruptcy plan)
- In re Babbin, 160 B.R. 848 (D. Col. 1993) (secured claim treatment in Chapter 13 context)