Sweatmon v. Wells Fargo Bank, NA

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Case 04-02186 Doc 21 Filed 04/05/05 Page 1 of 10

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

JANISE ROSE SWEATMON

Appellant,

OCWEN FEDERAL BANK, FSB,
Appelice.

JANISE ROSE SWEATMON™
Appellant,

vy,

WELLS FARGO BANK, N.A.

Appellec.

*+ £ £ 8 &£ &£ & & +

© £

+ 4+ * * &

vane HED ENTERED
ne LODGED RECEIVED

MAR 17 2005

GAEENBELT.
GLE aks. DISTRICT COURT

DISTRICT OF MARYLAND 5 uTY

SY

Civil No. PJM 05-264
[CM-ECF Exempt]

Civil No. PIM 05-26% ie
|CM-ECF Exempt] Se MS

MEMORANDUM OPINION

Janise Rose Sweatmon, a debtor into her fourth Chapter 13 bankruptcy proceeding,

appeals two Orders of the Bankruptcy Court, one lifting the automatic stay and pennitting, Wells

Fargo Bank, N.A. 10 initiate foreclosure proceedings against her residenec, the other granting

Oewen Federal Bank FSB’s Motion to Dismiss Sweatmon’s bankruptcy petition with prejudice,

She also appeals a decision of the Bankruptcy Court denying her request to continue her plan

confirmation hearing. Having considered the briefs of the parties, the Orders and decision of the

Bankruptcy Court will bo AFFIRMED),

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AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

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Il.

Sweatmon is the owner of a residence located at 1204 Clovis Avenue, Capitol Heights, |
Maryland 20743.! When she purchased her home in 1991, First Washington Mortgage |
Corporation was the numed beneficiary of the First Deed of Trust and Note. First Washington’s
interest was later transferred to G.FE. Capital Mortgage, Inc. ("GE"), which in turn transferred it to
Wells Fargo.

Sweatmon also placed a second licn on her home, executing 4 Note and Second Deed of
Trust in favor of City Federal Funding & Mortgage Corporation which, after a series of wansfers,
was succeeded by Chemical Bank.’ Oewen is currently the servicing agent on the Note and
Second Deed of Trust.

Afier Sweatmon defaulted on both toans, Wells Fargo and Ocwen sought foreclosure of
their respective interests.

1, Prior Chapter 13 Filings

‘To say that Sweatmon’s recourse to the bankruptcy process has been excessive is an

understatement. A brief summary of her history before the Bankruptcy Court follows:’

)
‘The property was sold at Wells Fargo's fifth foreclusure sale on February 15, 2005, ‘The sale is currently awaiting
ral fication by the Circuit Court for Prince George's County.
2
City Federal assigned the Note and Deed of Trust to Cityscape Corporation in 1996, Cityscape that same year
assigned the Note and Deed of Trust to Harris ‘rus: and Savings Bank, Harris Trust and Savings assigned 1s
interest to Chenucal Bank in June 2004,
3
Sweatmon has also had an extensive history of litigation with her mortgagees before the District and Circuit Courts
for Prince Gicorge's County. In August 2000, she filed a suit against Ocwen and GE in District Court, alleging that
they manipulated the locks of her home, which the District Court dismissed. In December 2000, she Med a simular
suitin the Circuit Court, which was also dismissed. In September 2002. she sued Oewen in District Court alleging
that her Joan had been “written off," asserting that Ocowen had no right to collect, whuch the court dismissed, In
January 2003, she filed a similar suit in the District Court, which was dismissed and in which Sweatmon was

2

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In February 1998, faced with foreclosure by GE, Sweatmon filed her first Chapter 13
petition in the U.S. Bankruptcy Court for this District. The court terminated and dismissed the
petition with prejudice, leaving Sweatmon incligible to rcfile for bankruptcy unhl September
1999. GE set its first foreclosure sale for April 1999, but that sale was cancelled when
Sweatmon applied for a workout pjan. When that repayment plan failed, the Joan was again
placed in foreclosure status.

GE scheduled its second foreclosure sale for August 2000. However, four days prior to
that sale, Sweatmon filed her second Chapter 13 petition, which was terminated and dismissed in
January 2001,

GE then scheduled a third foreclosure sale for August 2001. Again, just a few days prior
to the salc, Sweatmon filed a third petition for rclief under Chapter 13. Both Wells Fargo, as
successor to GE, and Ocwen moved for relief from the automatic stay. Although the Bankruptcy
Court lifted the stay, Sweatmon thereafter moved for a partial hardship discharge, which the

court granted,‘

2. Fourth Chapter 13 Filing

Wells Fargo scheduled a fourth foreclosure sale for June 2004. At that point, Sweatmon

tnoved to have the partial hardship discharge modified and have her case "reaffinned," which the

ordercd to pay sanctions owing 0 the frivolousness of the suit. In October 2003, Swearmon filed suit agains!
Ocwen, its counsel, and City Scape Corporation in the Circuit Court, which the court dismissed~also sanctioning
her and barring her from filing any further actions against Ocwen based on any of the grounds alleged or claimed in
ber prior actions.

In the third bankruptcy proceeding, Sweatmon admitted that Oowen was a secured creditor, which she had uot done
previously, Judge Mannes clearly advised Sweatmon that, despite the fact that Qowen might have written off her
loan for bookkeeping purposes, she was still abligated to repay if.

3

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court declined to do. Accordingly, on the day prior to the scheduled foreclosure sale, she filed
her fourth Chapter 13 petition. On October 24, 2004, Wells Fargo moyed for relief from the
automatic stay and Ocwen filed an Objection to Confirmation of Sweatmon’s Plan,

Wells Fargo’s Motion to lift stay was based on the fact that it had received no post-
petition payments from Sweatmon since the inception of her Chapter 13 petition, When the
Bankruptcy Court scheduled a hearing on this motion for November 22, 2004, Wells Fargo
served all relevant documents pertaining to the motion on Sweatmon at her Jast known address.
Sweatmon filed no objection to the motion.

On November 18, 2004, after the deadline for fling her Opposition to Wells Fargo’s lift
slay motion had passed, Sweatmon filed a "Request for Rescheduling of Hearings" and "Notice
to Creditors filed by Debtor Janies R. Sweatmon re: Request for Rescheduling of Hearings." In
it she alleged that she and her son had come down with the flu and therefo.e needed to have the
hearing continued until February 2005. Sweatmon’s request for a continuance was denied.

Occur had a separate bone to pick with Sweatmon. Apparently because she still harbored
the belief that she owed no debt to Ocwen, Sweatmon failed to list it as a secured creditor in the
schedule accompanying her petition, naming it instead as an unsecured creditor to which she only
owed $1.00. In consequence, her Chapter 13 Plan provided for no payment of post-petition

arrearages or regular post-petition monthly payments to Ocwen, and in any cvent Sweatmon

made no such post-petition payments. Ocwen therefore filed an Objection to Confirmation of her

Plan, accompanied by a timely Proof of Claim for approximately $42,000 (which included the
attorney’s fees Oewen incurred in defending its kien and the many prior cases filed by

Sweatmor).

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At the hearing on November 19, 2004, Sweatmon's Chapter 13 Plan was demed without
leave to amend, The Bankruptcy Court also ordered that if Sweatmon's case was nol converted
to a Chapter 7 procecding or voluntarily dismissed within 14 days of the court's Order, the case
would be dismissed by the court, under 11 U.S.C. §109(g), by reason of her failure to prosecute
the case properly and in order to avoid abusive multiple or successive filings. Sweatmon took no
action cither to convert the case to a Chapter 7 or to voluntarily dismiss her petition,

On December 14, 2004, because Sweatmon failed to make any post-petition payments to
Wells Fargo, the Bankruptcy Court lifted the stay as to it ("Order No, I"), Wells Fargo then
scheduled its fifth foreclosure sale for February 15, 2005S.

Sull Sweatmon took no action to convert or voluntary dismiss her case. Ocwen then
filed a Motion to Dismiss, On December 16, 2004, after hearing argument by counsel, the
Bankruptcy Court entered an Order dismissing Sweatmon’s fourth petition with prejudice, with
the provision that she be prevented {rom filing another bankruptcy petition for 180 days (“Order
No. 2").

Approximately two weeks before the fifth foreclosure sale was to take place, Sweatmon
filed "Requests for Injunction/Equity Relief in the Circuit Court for Prince George's County,
stating that she had appealed the Order granting relief from the stay. The Circuit Court denied the
"Requests."

More or less simultancously, Sweatmon also appealed Orders No. | and 2 of the
Bankruptcy Court to this Court. In the weeks leading up to the fifth foreclosure sale, she .
papered the record with multiple motions secking to stay the sale pending the ontcome of this

appeal, viz, a "Motion for Relief Stay Pending Appeal," "Request for Extension of Time,"

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"Emergency Debtor's Additional Defenses to Support Need for Stay Pending Appeal and Law,”
"Emergency Expeditious to Stop Foreclosure Sale,” and "Emergency Debtor Request to the Court
to Waive Supersedeas Appeal Bond for Good Cause Shown."

Sweatmon even attempted to stop the fifth foreclosure sale by filing a fifth Chapter 13
petition, although she had been barred from doing so until June 15, 2005 per 11 O.S.C. § 109(g). |
The next morning Sweatmon’s petilion was dismissed summarily. The foreclosure sale
procecded to take place as scheduled.

Ih.

The district court reviews factual determinations of the bankruptcy court on the basis of
clear error and reviews conclusions of law de novo, Fed. R. Bank. P. 8013; dre Stanley, 60
F.3d 664, 667 (4th Cir. 1995); Deutchman v. internal Revenue Service (In re: Deutchman), 192
F.3d 457, 459 (4th Cir. 1999).

Sweatmon argues that the Bankruptcy Court in this case erred by (1) denying her request
for a continuance of all hearings until February 2005; (2) terminating the automatic stay in favor ;
of Wells Fargo by Order No. 1 dated December 14, 2004; and, (3) dismissing Debtor’s
Bankruptcy case with prejudice by Order No. 2 dated December 16, 2004.

(1) Whether the Bankruptey Court Erred in Not Granting Sweatmon’s Request for

a Continuance,

Sweatmon's request to reschedule the hearing on Wells Fargo’s motion to lft the stay
while dated two days before the scheduled hearing, was apparently filed on the day of the
hearing, but in any event after the deadline to oppose Wells Fargo’s Motion for Relicf had

passed. Her sole ground for requesting a two-and-a-half month continuance was that she and her

G

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son had come down with the flu, leaving her unable to prepare for the hearing or obtain counsel,
Other than copies of prescriptions for medications from CVS pharmacy, prescribed for a one
week treatment-not two months-she adduced no further evidence in support of her request for a
continuance.

Giver her long history of dilatory tactics, the Court finds it was not clear error for the

Bankruptcy Court to deny the continuance.

(2) Whether the Bankruptcy Court Erred When it Terminated the Fourth

Bankruptcy Stay in Favor of Wells Fargo.

Sweatmon docs not dispute that she made no post-petition payments to Wells Fargo, nor
has she offered any evidence that Wells Fargo is adequately protected. 11 U.S.C. § 362(d)(1)
provides (hat "[o]n request of a party in interest and after notice and a hearing, the court shall
grant relief from the stay ... (1) for cause, including the lack of adequate protection of an interest
in property of such party in interest."

Wells Fargo filed its motion to lift stay in compliance with 11 U.S.C. §§ 361 and 362,
alleging lack of adequate protection, forwarding all the information required by Local
Bankruptcy Rule (L.B.R.) 4001-1.

Its Motion contained:

(1) adetailed statement of the debt owed to it (L..BR. 4001-1CO)C1));

(2) a description of the amount in arrears (L.B.R. 4001-1(b)(2));

(3) 4 description of the property encumbered (1..5.R. 4001-1(b)(3));

(4) a description of the sceurity imterest involved (L.B.R. 4001-1(b)(4);

(5) a statement of the basis for the relief claimed (J..B.R. 4001-1(b)(5), and

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(6) the specific nature of the relief from stay that was requested (L.B.R. 4001-1(0)(7).

Wells Fargo also complied with ..B.R. 4001-I(c) with regard to the hearing date,
selecting an available presct hearing date and serving its motion and notice of hearing on
Sweatmon and the Chapter {3 Trustee. Although Sweatmon claims she did not receive the
notice, the record plainly refutes her claim.

The Court finds the Bankruptcy Court committed no error of fact or Jaw in Jifting the
automatic stay in favor of Wells Fargo,

(3) Whether the Bankruptcy Court erred by dismissing the Fourth Bankruptcy case

with prejudice,

Order No. 2 dismissed Sweatmon’s Chapter 13 petition pursuant to }1 U.S.C. §
1307(c)(5) on the ground that confirmation of her Chapter 13 Plan had been denied withoul leave
to amend. The Bankruptcy Court also found that she had failed to prosecute her casc properly
and that causc existed to prevent her from filing another petition for 180 days to avoid abusive
multiple or successive filings.

Section 1307 of the Bankruptcy Code governs the dismissal of Chapter 13 cases.
Subsection (c) sets out a list of factors that constitute cause for dismissal or to convert a case if
the debtor’s § 1325 plan has been denied confirmation withaut leave to amend. It provides:

[O]n request of a party im interest or the United States trustee and after notice and a

hearing, the Court may convert a case under this Chapter to a case under Chapter 7 of this

title, or may dismiss a case under this Chapter, whichever is in the best interest of the

creditors and the estate, for cause, including _
oe We

(5) denial of confirmation ofa plan under section 1325 of this title and denial of a request
matic for additional ume for filing another plan or a modification of a plan{.]
11 U.S.C. § 1307(c).

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11 U.S.C. § 105(a) gives the Bankruptcy Court the power necessary lo prevent a debtor
from abusing the bankruptcy process with multiple or successive filings by preventing a debtor
from re-filing for 180 days.

Section 1325 of the Bankruptcy Code poverns the confirmation of a Chapter 13 Plan. §
1325(a)(5) provides that the Court shall confirm a Chapter 13 Plan only if, as to cach allowed
secured claim, "the value, as of the effective date of the plan, or property to be distributed under
the plan on account of such ¢laim is not Jess than the allowed amount of such claim." This
provision required Sweatmon to provide Wells Fargo and Ocwen with payments over the life of
the Plan that would total the present value of the allowed secured claim. See United Carolina
Bank v. Hall, 993 F.2d 1126 (4th Cir. 1993). Section 1325(a)(6) further requires that
Swcatmon's Plan be feasible. According (o her Schedule I (Current Income of Individual
Debtor), Sweatmon was receiving no income, which was necessary if she was to fund her Plan.

In her fourth Chapter 13 petition and Plan, although she listed Ocwen as a secured
creditor, Sweatmon alleged that she only owed it $1, Further, her Plan failed to provide for the
payment of post-pelition arrearages and regular post-pelition monthly payments to her secured
creditors. Sweatmon does not dispute that she has made no post-petition payments or that her
Plan failed to provide for such payments. Accordingly, her Plan plainly failed to comport with
the requirements of 11 U.S.C. § 1325(a)(5) and 1325(a)(6), which means that the Bankruptcy
Court acted appropriately in denying the Plan.

As to Order No. 2, which denicd confinnation of Sweatmon’s Chapter 13 Plan without
Icave to amend, the Bankruptcy Court ordered (that in the event the case were not converted or

voluntarily dismissed within fourtecn (14) days of the Order, the cuse would be dismissed subject

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to 11 U.S.C. § 109). Sweatmon never moved to voluntarily dismiss the case or convert the
case to a Chapter 7 proceeding. Apari from that, the Bankruptcy Court could fairly find that
dismissal was jn the best interest of Sweatmon’s creditors because it would enable them to
pursue remedies under state law, including allowing Wells Fargo to proceed with its fifth
foreclosure sale.

The Bankruptcy Court did not err in dismissing Sweatmon’s fourth bankruptcy petition.

ly.

For these reasons, the Court will AFFIRM the Bankruptcy Court’s Order dated December
14, 2004 granting Wells Fargo Bank’s Motion for Relief from the Automatic Stay, its Order
dated December 16, 2004 granting Ocwen Federal Bank’s Motion to Dismiss the Case with
Prejudice, and its decision nol to grant Sweatmon’s request for a continuance of all hearings until
February 2005. All of Sweatmon’s motions, including those to stay the foreclosure sale pending
(his decision, are dcemed MOOT.

A Separate Order wll issuc.

March “ /, 2005 ie t ~

- ERT MESSITTE
UNITED STATES DISTRICT JUDGE