Richard W Briana

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Case 08-12770 Doc70 Filed 10/29/08 Entered 10/30/08 09:44:21 Desc Main
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UNITED STATES BANKRUPTCY COURT
FOR THE
DISTRICT OF MASSACHUSETTS

LOLOL OOO OOOO OOO OOO OPO oar

Inre
RICHARD W. BRIANA, JR., Chapter 13
Debtor Case No. 08-12770-RS

ORDER
Whereas, the Debtor filed a Chapter 13 petition on April 17, 2008; and
Whereas, on the same day, the Debtor filed Schedules, a Statement of Financial
Affairs, a Chapter 13 Statement of Current Monthly Income and Calculation of
Commitment Period and Disposable Income; and
Whereas, on Schedule A-Real Property and Schedule D-Creditors Holding Secured
Claims, the Debtor listed interests in two properties owned as a tenant by the entirety with
his non-debtor spouse: a single family home located at 63 High Street, Revere,
Massachusetts (the “ High Street property”), witha value of $350,000, subject to a mortgage
held by Washington Mutual [sic] in the sum of $152,028; and a three-family home located
at 17 Barrett Street, Revere, Massachusetts (the “Barrett Street property”), with a value of
$350,000, subject to three mortgages in the following amounts: $33,972, $10,436, and

$152,664;'

"The Debtor did not disclose the priority of the mortgages on the Barrett Street
property in his Schedules. On Schedule D, he disclosed that Beal Bank Ssb [sic]
assigned the two smaller mortgages to LPP Mortgage LTD.

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AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

GPO

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Whereas, on May 5, 2008, MGC Mortgage, Inc. (“MGC”), as servicer for 	LPP
Mortgage, Ltd. (“LPP”), filed two proofs of claim: one in the sum of $34,296.42 secured by
a second mortgage on the Barrett Street property and the other in the sum of $70,030.74
secured by a third mortgage on the Barrett Street property; and
Whereas, on May 5, 2008, the Debtor filed a Chapter 13 Plan and amended
Schedules I and J-Current Monthly Income and Expenditures of Individual Debtor(s); and
Whereas, pursuant to his Chapter 13 plan, the Debtor proposed to pay mortgage
arrears totaling $21,510.00 to Beal Bank Ssb [sic] on account of a second mortgage on “17
Barre” [sic] and a third mortgage on “73 Bar”[sic]; and
Whereas, pursuant to his Chapter 13 plan, the Debtor also proposed to make regular
monthly mortgage payments directly to Countrywide Home Lending on account of a first
mortgage on the 17 Barrett Street property and to Washington Mutual on account of a first
mortgage on the High Street property; and
Whereas, pursuant to his Chapter 13 plan, the Debtor further proposed a 0.05%
dividend to holders of general unsecured claims in the sum of $85,251.42, as well as on
account of the claims of Beal Bank Ssb [sic] in the sum of $19,480.42 and $63,336.74, totaling
$82,817.16, as “undersecured claims arising after lien avoidance/cramdown;” and
Whereas, on June 2, 2008, LPP filed an Opposition to confirmation of the Debtor’s
Chapter 13 plan on the ground that the Debtor failed to provide for full payment of its two
fully secured claims; and
Whereas, in support of its Opposition, it referenced its proofs of claim in the
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amounts of $70,030.74 and $34,296.42, which total $104,327.16; and
Whereas, June 2, 2008, the Debtor objected to the proofs of claim filed by LPP,
stating that MGC is the servicer for LPP; that on September 10, 2007, MGC obtained a
judgment in the amount of $70,000 from the Suffolk Superior Court, Department of the
Trial Court; that from November 15, 2007 through March 2008, the Debtor, through his
counsel, attempted to negotiate a settlement with MGC; that MGC agreed to a settlement
in principal, but that it proposed different settlement terms on April 16, 2008 which,
according to the Debtor, were unfair and unreasonable; and that the proofs of claim filed
by MGC on behalf of LPP are “outrageous and unfair and unreasonable;” and
Whereas, MGC, on behalf of LPP, filed a Response to the Debtor’s Objection to its
proofs of claim in which it averred that LPP’s claims arose from loans originally granted
by the Small Business Administration (“SBA”) to the Debtor in connection with the
Debtor’s business that were secured by second and third mortgages on the 17 Barrett Street
property, which, at the time, was in the name of Paul Chicarello, as Trustee of the 17 Barrett
Street Realty Trust (the “Trust”); that the SBA granted the Debtor’s request to discharge the
mortgages to enable him to refinance the first mortgage on the 17 Barrett Street property;
that “either by fraud or malfeasance, [the] Debtor conveyed the Property from the Trust
to himself and his wife prior to recording the new Mortgage, which ran from the Trust to
the SBA;” that, as a result, the mortgages were outside the chain of title and unenforceable
against the Property; that on or about June 29, 2001 and July 17, 2001,the SBA assigned the
loans to the LPP; that the Debtor defaulted in his payments in October of 2005; that LPP
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commenced an action in the Suffolk Superior Court in December of 2006; that the Superior
Court entered an order reforming the mortgages on August 23, 2007 and awarded damages
to LPP in September of 2007; that the Debtor failed and refused to pay the debt to LPP; that
LPP scheduled a foreclosure sale for April 17, 2008; that, as of April 15, 2008, the Debtor
owed LPP a total of $93,328.34; and that there was no enforceable agreement between the
parties; and
Whereas, on September 4, 2008, the Court conducted a hearing on LPP’s Objection
to confirmation of the Debtor’s Chapter 13 plan and the Debtor’s Objection to LPP’s proofs
of claim; and
Whereas, at the hearing, Debtor’s counsel represented that the Debtor would amend
his Chapter 13 plan after his Objection to the proofs of claim filed by MGC was resolved,
Now, therefore, the Court sustains the LPP’s Objection to confirmation of the
Debtor’s plan and overrules the Debtor’s Objection to the proofs of claim filed by MGC on
behalf of LPP.
The Debtor’s plan is unconfirmable as the Debtor cannot both cure arrears owed to
LPP and cramdown its fully secured claims. There is no factual or legal justification for
cramdown of a fully secured claim. See 11 U.S.C. §§ 506, 1325(a)(5). With respect to the
Debtor’s Objection to the proofs of claim filed by MGC, upon review of the exhibits
attached to the pleadings filed by both the Debtor and LPP, the Court finds that no valid
and binding settlement agreement existed between the Debtor and LPP. Accordingly, the
Debtor’s assertion that LPP’s claim is limited to the amount of a purported settlement
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agreement is without evidentiary support.
Pursuant to Fed. R. Bankr. P. 3001(f), “[a] proof of claim properly executed and filed
in accordance with these rules shall constitute prima facie evidence of the validity and
amount of the claim.” Pursuant to 11 U.S.C. § 502(a), “[a] claim . . . proof of which is filed
under section 501 of this title, is deemed allowed, unless a party in interest . . . objects.”
“The interposition of an objection does not deprive the proof of claim of presumptive
validity unless the objection is supported by substantial evidence.” 	In re Hemingway
Transp., Inc., 993 F.2d 915, 925 (1st Cir.1993). The Debtor failed to support his Objection
with substantial evidence. At most the Debtor established that the parties had reached the
stage of “imperfect negotiation.” 	They did not finalize a settlement of LPP’s secured
claims. See generally In re Harvey Probber, Inc., 50 B.R. 292, 296 (Bankr. D. Mass. 1985).
Accordingly, LPP’s proofs of claim were not deprived of their presumptive validity and
LPP met its ultimate burden of persuasion.
By the Court,
Joan N. Feeney
United States Bankruptcy Judge
Dated: October 29, 2008
cc: Peter J. Martino, Jr., Esq., David W. Robinson, Esq., James C. Fox, Esq., Carolyn
Bankowski, Esq.
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