Reynolds v. Bank of Canton (In Re Reynolds)
455 B.R. 312
D. Mass.2011Background
- Debtors filed a voluntary Chapter 13 petition on Feb 4, 2008, with amended plan objections from the trustee and IRS.
- Bank of Canton filed a secured claim and mortgage on debtors' Alberta Lane property and later sought conversion to Chapter 7.
- A forensic examination of the note supporting the mortgage occurred on Nov 6, 2008; Reynolds approved its authenticity.
- Bank moved to convert in Sept 2008; conversion ordered April 30, 2009 for unreasonable delay and other concerns, and debtors were given an option to dismiss.
- David Madoff was appointed Chapter 7 trustee on May 14, 2010; adversary proceedings followed, including settlements and a sale of the Alberta Lane property; debtors moved to vacate, which was denied.
- The district court affirmed, and four related appeals were decided, with two adversary dismissals affirmed and one appeal dismissed for lack of briefing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Rule 60(b) relief motion was timely | Reynolds argues for relief from final judgment under Rule 60(b) | Bank argues motion untimely under Rule 60(c) and independent bases | No abuse of discretion; motion time-barred under Rule 60(c) |
| Whether the bank had standing to move for conversion | Bank contends it was a party in interest | Reynolds dispute bank’s status as party in interest | Bank had standing under §1307(c); conversion valid regardless of secured status |
| Whether challenges to the bank's secured claim and Alberta Lane sale are moot | Dispute sale and secured status of bank | Settlements and sale final; cannot be reversed absent stay | Moot to the extent raised; affirm sale and secured claim findings |
| Whether trustee had standing and jurisdiction to pursue adversary proceedings | Trustee acted to recover property and to deny discharge | Debtors challenge jurisdiction and scope | Trustee properly had standing; adversaries within jurisdiction; appeals affirm dismissals |
| Whether the fourth appeal should be dismissed for lack of briefs | Appeal meritorious, timely briefing pending | Rule 8009 briefing violation; meritless appeal | Dismissed with prejudice for lack of briefing |
Key Cases Cited
- In re Aja, v. Fitzgerald, 441 B.R. 173 (1st Cir. BAP 2011) (Rule 60(b) context; final order review on abuse-of-discretion standard)
- In re Stadium Mgmt. Corp., 895 F.2d 845 (1st Cir. 1990) (finality and mootness when no stay pending appeal)
- In re Sobczak, 369 B.R. 512 (9th Cir. BAP 2007) (definition of 'party in interest' under §1307(c))