Thull, James v. Wells Fargo Bank, NA
3:17-cv-00390
| W.D. Wis. | Mar 20, 2018Background
- In 2005 Thull obtained a $104,000 mortgage note; the mortgage was assigned to Wells Fargo in 2012 and the note was endorsed in blank.
- Thull filed Chapter 13 bankruptcy in October 2013; Wells Fargo filed a proof of claim as assignee and servicer was identified as Select Portfolio Servicing.
- Thull objected to Wells Fargo’s claim, alleging Wells Fargo was not the true holder and sought production of the original note; the bankruptcy court denied that objection.
- In February 2017 Wells Fargo moved for relief from the automatic stay, alleging post‑petition payment defaults from June 2015–January 2017 and submitted its payment ledger and loan documents.
- The bankruptcy court held two adjourned telephonic hearings to allow Thull to verify Wells Fargo’s records; a third hearing was set for May 9, 2017, which Thull did not attend.
- The bankruptcy court granted relief from the automatic stay; the district court affirmed on appeal, rejecting Thull’s challenges to standing and to adequacy of notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to move for relief from stay | Thull: Wells Fargo is not the true holder of the note/mortgage and thus lacks statutory standing as a party in interest | Wells Fargo: Filed proof of claim and produced note endorsed in blank and loan documents showing a colorable secured claim | Court: Wells Fargo had a colorable claim and thus standing; Thull’s attack was a merits challenge to a previously overruled objection and untimely on appeal |
| Adequacy of notice of May 9, 2017 hearing | Thull: Notice was incomprehensible (no clear date/time, no call‑in number), so he did not understand or attend | Wells Fargo: Hearing was adjourned at April 4 hearing with date/time provided; Thull had participated in prior hearings with same procedure | Court: Notice was adequate; Thull had attended earlier hearings, the adjournment and next hearing date were set at April 4, and he had opportunity to verify records before default ruling |
Key Cases Cited
- Colon v. Option One Mortg. Corp., 319 F.3d 912 (7th Cir. 2003) (automatic‑stay order is a final judgment for appeal purposes)
- Matter of James Wilson Assocs., 965 F.2d 160 (7th Cir. 1992) (standing requires being a person protected by the statute)
- Matter of McGaughey, 24 F.3d 904 (7th Cir. 1994) (abuse‑of‑discretion standard for stay‑relief rulings)
- In re Rinaldi, 487 B.R. 516 (Bankr. E.D. Wis. 2013) (a secured creditor with a colorable claim under a note is a party in interest to seek stay relief)