Kevin Glenn Rogerson and Lynn White Rogerson

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
NEW BERN DIVISION
IN RE:
KEVIN GLENN ROGERSON and
LYNN WHITE ROGERSON,
Debtors. 	Case No. 07-02673-8-JRL
Chapter 13
____________________________________________________________________________
ORDER
This case is before the court on the motion of Branch Banking & Trust Company
(“BB&T”) to set aside the Order Allowing Motion to Value Real Property entered on September
12, 2007. On November 1, 2007, the court conducted a hearing on this matter in Wilson, North
Carolina.
BACKGROUND
On July 24, 2007, the debtors filed for relief under Chapter 13 of the Bankruptcy Code.
The debtors own real property which serves as their residence at 1210 Knox Lane, Williamston,
North Carolina. The property is subject to a first lien held by First South Bank, which is secured
by a promissory note and deed of trust in the amount of $112,113.75. BB&T is the holder of a
second lien on the debtors’ real property, executed by the debtors on November 16, 2005 in the
SO ORDERED.
SIGNED this 05 day of November, 2007.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
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original principal amount of $20,000.00. On August 8, 2007, BB&T filed a proof of claim in the
amount of $19,242.59. On August 3, 2007, the debtors filed a Motion to Value Real Property,
which was served on BB&T at its lockbox address. The debtors’ motion stated that the fair
market value of the property is $109,000.00, which is less than the $112,113.75 the debtors owe
on First South Bank’s first lien on the property. BB&T did not respond prior to the deadline for
responding to the motion and an order allowing the motion was entered on September 12, 2007,
which stated that BB&T’s lien would be treated as wholly unsecured. BB&T asserts that its
failure to timely respond to the debtors’ motion was due to a coding error in BB&T’s account
system. BB&T contends that its failure to respond to the motion is excusable neglect and that it
is likely to succeed on the merits of the underlying case, and therefore requests that the court
grant its Motion to Set Aside Order Allowing Motion to Value BB&T’s claim.
JURISDICTION
This bankruptcy court has jurisdiction over the parties and the subject matter of this
proceeding pursuant to 28 U.S.C. §§ 151, 157, and 1334, and the General Order of Reference
entered by the United States District Court for the Eastern District of North Carolina on August
3, 1984. This is a “core proceeding” within the meaning of 28 U.S.C. § 157(b)(2)(J), which this
court may hear and determine.
DISCUSSION
In order to set aside an order of the court, the moving party must show (1) that his motion
is timely filed, (2) that he has a meritorious defense to the action, and (3) that the opposing party
would not be unfairly prejudiced if the order were set aside. Park Corp v. Lexington Ins. Co.,
812 F.2d 894, 896 (4th Cir. 1987). If such a showing is made, the moving party must also satisfy
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1In order to be successful under Rule 60(b), the moving party need not show that it is
likely to prevail on the merits, but need only make allegations that, if established, would
constitute a valid claim or defense. See Weisel v. Pischel, 197 F.R.D. 231, 239 (E.D.N.Y. 2000).
Here, the court finds that BB&T has met this burden despite the fact that the appraisal presented
by BB&T is two years old.
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one of the six grounds for relief set forth in Rule 60(b) of the Federal Rules of Civil Procedure,
as incorporated by Bankruptcy Rule 9024, which includes “excusable neglect.” Fed. R. Civ. P.
60(b); Id.
Here, BB&T has timely filed its motion to set aside the court’s order within a reasonable
time, as required by Federal Rule of Civil Procedure 60(b). In addition, BB&T has provided
evidence that it will present a meritorious defense by producing an appraisal, dated October 31,
2005, which values the debtors’ property at $165,000.00. 1 The issue, therefore, is whether
BB&T has shown that the order should be set aside based on one of the reasons listed in Federal
Rule of Civil Procedure 60(b). BB&T asserts that it was excusable neglect to fail to timely
respond to the debtors’ motion due to a coding error in BB&T’s account system. BB&T argues
that it is a large institution that receives notices and various documents from hundreds of
bankruptcy cases from numerous states on a daily basis. BB&T has elaborate and
technologically-advanced procedures and systems that is uses to process the large volume of
paperwork it receives to ensure that deadlines are not missed. In this case, however, BB&T did
not timely respond to the debtors’ motion due to a coding error, which, BB&T asserts is an
inevitable oversight due to the sheer volume of documents it receives.
The court finds BB&T’s failure to timely respond to the debtors’ Motion to Value Real
Property is excusable neglect and that the Order Allowing Motion to Value Real Property is set
aside. BB&T is a reputable institution that has sophisticated procedures in place in order to
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handle the large volume of bankruptcy-related paperwork it receives on a daily basis. BB&T’s
failure to respond to the motion was due to a simple coding error which the court finds is an
inevitable result of the large volume of paperwork received by BB&T.
Based on the foregoing, BB&T’s motion is ALLOWED and the court’s order of
September 12, 2007 which called for BB&T’s second lien to be treated as wholly unsecured is
set aside. The court shall set a hearing to hear evidence regarding the valuation of the debtors’
property.
“END OF DOCUMENT”
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