446 B.R. 26
Bankr. D. Mass.2011Background
- Debtor Edson Vicente filed Chapter 13 on August 4, 2010, listing the Property at 16 Cannell Place with value $215,287 and secured debt of $540,000, and claimed exemptions under § 522(d)(1).
- Trust moved for relief from stay to permit foreclose of the Property; Debtor objected; preliminary hearing occurred November 3, 2010, with status conference February 9, 2011 following conversion to Chapter 7.
- The case history included conversion from Chapter 13 to Chapter 11 and then to Chapter 7; a Chapter 11 Trustee was appointed and later a Chapter 7 Trustee; an abandonment of the Property was noticed in January 2011.
- Parties agreed there were no disputed facts; four mortgage assignments were at issue, including an assignment from Sutton Funding LLC to FCDB 8020 REO LLC deemed outside the chain of title.
- On February 3, 2011, the Property was abandoned from the estate, but the stay as to liens on the Debtor remained insofar as it protects the Debtor while the case is open or until discharge, under § 362(d).
- The Court held that the Trust had standing to seek relief from stay and that grounds under § 362(d)(1) or (d)(2) were established; consequently, the Trust’s motion for relief from the automatic stay was granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of the Trust to seek relief from stay | Trust has valid assignment; standing to movant for relief from stay. | Assignment to FCDB 8020 REO LLC ineffective; breaks chain of title. | Trust has standing to seek relief from stay. |
| Whether relief from the stay is warranted under § 362(d)(1) or (d)(2) | 35 missed payments show 'cause'; no equity; property not necessary for reorganization. | Debtor contests grounds for lifting stay and argues reorganization considerations. | Relief from stay granted under § 362(d)(1) and (d)(2). |
Key Cases Cited
- In re Hayes, 393 B.R. 259 (Bankr.D.Mass.2008) (standing to seek relief from stay requires party in interest)
- In re Maisel, 378 B.R. 19 (Bankr.D.Mass.2007) (plain language of § 362 requires party in interest)
- In re Adams, 212 B.R. 703 (Bankr.D.Mass.1997) (abandonment does not eliminate lien or stay as to debtor)
- U.S. Bank Nat'l Assoc. v. Ibanez, 458 Mass. 637 (Mass. 2011) (writing and signing requirements for mortgage assignments; transfer timing matters)
- In re Samuels, 415 B.R. 8 (Bankr.D.Mass.2009) (validity of assignments under Massachusetts law controls chain of title)
- Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26 (1st Cir. 1994) (colorable claim to property of the estate concept; abandonment affects standard test)