In re Residential Capital, LLC
522 B.R. 458
| Bankr. S.D.N.Y. | 2014Background
- ResCap Borrower Claims Trust objected to Claim No. 960 filed by Boyd, seeking to disallow based on res judicata from Boyd’s Chapter 13 confirmation.
- Boyd’s loans are Soquel and Lakebird, both secured by Plaza Home Mortgage, with servicing transfers to Ocwen in 2013.
- Boyd filed California Action in 2011 seeking to invalidate liens; action dismissed with prejudice in 2012 and affirmed on appeal in 2014; petition for rehearing pending.
- Boyd’s Chapter 13 petition was filed in 2011 and confirmed on May 14, 2014, providing for arrears and ongoing loan payments.
- Trust argues the confirmed Chapter 13 Plan bars Boyd’s claim via res judicata, while Boyd argues dismissal of California Action is not final and thus no preclusion; Trust’s objection is premature.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars Boyd’s claim based on the Chapter 13 confirmation | Boyd argues plan confirmation cannot preclude as California Action pending | Trust contends plan confirmation can preclude if liens resolved | No final merits judgment from plan confirmation; premature objection |
| Does pending California Action preclude res judicata from the Chapter 13 confirmation | Boyd asserts ongoing California Action forecloses relying on res judicata | Trust: pending action prevents finality required for res judicata | Pending California Action defeats res judicata on liens at issue |
| Did the Chapter 13 Plan constitute a final judgment on the merits for res judicata purposes | Boyd: plan not final on lien validity; not adjudicated | Trust: plan final judgment under certain circumstances | Plan not a final judgment here because lien validity contested in California Action |
Key Cases Cited
- Layo, In re (Celli v. First Trust Nat’l Bank of N.Y.), 460 F.3d 289 (2d Cir. 2006) (final judgment on the merits for lien challenges; but depends on adversary proceedings availability)
- Cen-Pen Corp. v. Hanson, 58 F.3d 89 (4th Cir. 1995) (limits of plan preclusion when liens remain disputed)
- Sure-Snap Corp. v. State St. Bank & Trust Co., 948 F.2d 869 (2d Cir. 1991) (preclusion in bankruptcy context considerations)
- Corbett v. MacDonald Moving Servs., Inc., 124 F.3d 82 (2d Cir. 1997) (bankruptcy plan effect on reorganization)
- In re Howe, 913 F.2d 1138 (5th Cir. 1990) (question of whether claims could have been asserted earlier in proceedings)
- Taylor v. Sturgell, 553 U.S. 880 (Supreme Court 2008) (definition and scope of res judicata)