First American Title Insurance Company et al v. Stevenson et al

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
DEBRA M. STEVENSON,
Debtor.
____________________________
FIRST AMERICAN TITLE
INSURANCE COMPANY, et al.,
Plaintiffs,
v.
DEBRA M. STEVENSON and
EUGENE SMITH,
Defendants.
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Case No. 06-00306
(Chapter 13)
Adversary Proceeding No.
07-10005
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION AND ORDER DENYING
PLAINTIFFS’ MOTION TO PARTIALLY STRIKE ANSWER
The plaintiffs have filed a Motion to Partially Strike
Answer (Docket Entry (“DE”) No. 161), by which the plaintiffs
have asked the court to strike certain defenses set forth in the
defendants’ amended answer to the first amended complaint (DE No.
159). 	Specifically, the plaintiffs have asked the court to
strike all of the defendants’ enumerated defenses, with the
exception of the real parties in interest defense (Second
The document below is hereby signed.
Signed: November 29, 2008.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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Defense). 	As explained in more detail below, the court will deny
the plaintiffs’ motion and will not strike any of the defenses
raised in the defendants’ amended answer to the first amended
complaint.
The amended answer’s enumerated defenses are numbered First
Defense, Second Defense, and so forth. 	The First Defense of
Article III standing is consistent with and related to the issue
of real parties in interest, which the court has permitted the
defendants to continue to assert. 	Accordingly, the court will
not strike the defendants’ Article III standing defense. 	The
Third, Fourth, Fifth, Sixth, Seventh, Eighth, and Ninth defenses
go to defenses that were previously litigated in the disposition,
via summary judgment, of legal and factual issues relating to the
plaintiffs’ claim that they are entitled to equitable subrogation
and to reformation of the deed of trust. 	Although the court will
not permit the defendants to re-litigate the merits of those
defenses, those defenses should be permitted to stand as having
been properly asserted in this adversary proceeding.
In disposing of the plaintiffs’ prior motion to strike the
defendants’ original answer (Motion to Strike Answer, DE No. 145;
Answer, DE No. 142), the court ruled that, other than the real
parties in interest defense, all of the affirmative defenses
raised by the defendants’ original answer are stricken. 	See
Order Denying in Part Plaintiffs’ Motion to Strike Answer 	(DE
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No. 200). 	Specifically, this meant that the following defenses,
which challenged the validity and enforceability of the subject
loan and were raised by the defendants in their original answer
(DE No. 142), were stricken:
Third Defense: Plaintiffs’ attempt to create,
perfect, or enforce a lien on the Subject Property
violates the automatic stay.
Fourth Defense: Plaintiffs’ attempt to possess
and/or control the Subject Property violates the
automatic stay.
Fifth Defense: The Fremont loan to Stevenson is
invalid because Fremont was not licensed as a mortgage
lender in the District of Columbia and was not exempt
from the District of Columbia’s licensing requirement
pursuant to the District of Columbia Mortgage Lender
Broker Act.
Sixth Defense: Stevenson validly rescinded her
loan with Fremont on December 18, 2006 since Fremont
violated the Federal Truth in Lending Act by failing to
provide Stevenson with two copies of her notice of
right to cancel; by failing to disclose financial
charges that understated the actual disclosed finance
charges by more than $35; by failing to provide
Stevenson with a copy of the true and accurate HUD-1
statement disclosing the cost of her loan.
Ninth Defense: Fremont violated the District of
Columbia Consumer Protections Procedures Act in that
Fremont provided a loan to Stevenson that it knew that
Stevenson would be unable to repay and misrepresented
the true cost of the Fremont loan.
Tenth Defense: Fremont violated the District of
Columbia Consumer Lending Laws by providing Stevenson
with a “covered” loan.
Although the defendants continue to take issue with the court’s
ruling in this regard, the defendants did not reassert the above-
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listed defenses in their amended answer (DE No. 159). 	As such,
the defendants have not violated the court’s prior order barring
the assertion of certain defenses. 	It is thus
ORDERED that the Motion to Partially Strike Answer (DE No.
161) is DENIED.
[Signed and dated above.]
Copies to: All counsel and parties of record; Chapter 13 trustee.
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