463 B.R. 320
Bankr. E.D. Pa.2011Background
- Debtor Shirlene R. Wells owns the property at 180 Walton Drive, Morrisville, PA and filed a chapter 13 case on Sept. 8, 2010.
- PE-NC, LLC filed a secured proof of claim on Feb. 16, 2011 asserting a note secured by a mortgage with $309,714.99 total and $137,529.12 pre-petition arrears.
- An evidentiary hearing on the Objection was held July 6 and Sept. 20, 2011; post-hearing memos were filed through Oct. 24, 2011.
- The court sustained the Objection in part, allowing PE-NC’s pre-petition arrears in the amount of $92,586.34.
- The mortgage chain of assignment runs MorEquity -> Private Capital Group (PCG) -> Plaza Equities -> PE-NC; Plaza assigned to PE-NC on Nov. 10, 2010.
- The arrears include delinquent installments, taxes, forced-placed insurance, and legal expenses; $20,000 of insurance proceeds held in suspense were deducted from the claimed arrears.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PE-NC’s arrears claim is properly supported and allowable. | PE-NC’s claim reflects the debt and arrears with breakdown. | Debtor argues the breakdown is not credibly itemized. | Partial allowance; $92,586.34 allowed. |
| How to apportion and calculate delinquent installments and late charges. | Missed payments and late charges should be included. | Debtor contests precise calculation; may rely on mortgage terms. | 65-69 months delinquent; $82,979.95 for delinquent installments and late charges allowed. |
| Allowance of unpaid real estate taxes. | Taxes paid in the arrears were validly charged. | Taxes may be contested or misattributed. | $10,209.70 allowed. |
| Allowance of legal expenses and post-petition fees in the arrears calculation. | Attorney’s fees and expenses were incurred in foreclosure and case-related matters. | Some fees are unsupported or improper; some post-petition fees may be treated differently. | Total allowable pre-petition legal expenses $6,002.80; post-petition Hoegen fees partially allowed totaling $3,847.27; overall allowable $9,850.07; $100.00 and $52.50 disallowed. |
Key Cases Cited
- In re Sacko, 394 B.R. 90 (Bankr.E.D.Pa.2008) (burden-shifting proof-of-claim framework; Rule 3001(f) applied to mortgage arrears components)
- In re Allegheny Int'l, Inc., 954 F.2d 167 (3d Cir.1992) (burden of production and ultimate burden of persuasion on claimants)
- In re Holm, 931 F.2d 620 (9th Cir.1991) (ultimate burden on claimant to prove validity of claim)