Applications for Payment of Unclaimed Funds Filed

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
In re: 	: 	Case No. 07-11180-JCM
:
RODNEY O. DOUGHTY and 	: 	Chapter 13
BRENDA H. DOUGHTY, 	:
:
Debtors. 	:
:
In re: 	: 	Misc. Pro. No. 25-207-GLT
:
APPLICATIONS FOR PAYMENT OF 	:
UNCLAIMED FUNDS FILED IN 	:
VARIOUS CASES BY SYLVESTER 	:
CUFFY ON BEHALF OF OPTION ONE 	:
MORTGAGE CORPORATION AND 	:
BLUEKAP ASSETS RECOVERY INC., 	: 	Related to Dkt. Nos. 50, 51, 52, 53, 55, 58
:
MEMORANDUM OPINION
Fifteen years ago, Chase Home Finance failed to timely deposit roughly $17,000
disbursed by the chapter 13 trustee under a confirmed plan filed by Rodney and Brenda Doughty.
Those funds were paid into the Court’s registry in accordance with section 347(a) of the
Bankruptcy Code 1 after the Doughtys received a discharge. Now, Royal Investment Acquisitions,
LLC (“Royal”), doing business as Dynamic Recovery Processing and acting through its non-
lawyer managing member, seeks to reopen the Doughtys’ case and claim the funds. 2 Royal does
not purport to be a successor of Chase Home Finance, but an assignee of the Doughtys following
the recording of a mortgage satisfaction piece by JPMorgan Chase Bank, N.A. 3 	Indeed, Royal
1 	Unless expressly stated otherwise, all references to “Bankruptcy Code” or to specific sections shall be to the
Bankruptcy Reform Act of 1978, as thereafter amended, 11 U.S.C. § 101, et seq. All references to
“Bankruptcy Rule” shall be to the Federal Rules of Bankruptcy Procedure.
2 	See [Amended] Motion to Reopen Case and For Payment of Unclaimed Funds, Misc. Pro. No. 25-207-GLT,
Dkt. No. 52 (amending Dkt. No. 50); Application for Payment of Unclaimed Funds, Misc. Pro. No. 25-207-
GLT, Dkt, No. 51.
3 	See Application for Payment of Unclaimed Funds, Misc. Pro. No. 25-207-GLT, Dkt, No. 51 at 3-11.
FILED
CLERK
U.S. BANKRUPTCY
COURT - :'3$
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asserts that Chase Home Finance has been satisfied and is no longer entitled to the funds, rendering
them a surplus owed to the Doughtys.
The United States Trustee filed a response noting that Royal shared a business
address with Bluekap Assets Recovery, Inc., an entity sanctioned for serially filing frivolous
applications for unclaimed funds. 4 Because the Trustee argued that Royal must show that it is not
subject to the filing bar imposed against Bluekap, these matters were considered within the prior
miscellaneous proceeding. 5 	Royal subsequently filed a response indicating that Bluekap and
Royal are unrelated entities with a common Florida-based registered agent. 6
On this record, the Court concludes that Royal should not be subject to any filing
injunctions against Bluekap. 	That said, the Court finds that Royal’s motion to reopen and
application for unclaimed funds must both be denied without prejudice. 	Even assuming that an
application for unclaimed funds is the appropriate procedural vehicle to establish a surplus claim
through satisfaction, Royal has not proven an entitlement to the funds. Furthermore, the legal and
procedural deficiencies in Royal’s request betray its pro se machinations as the unauthorized
practice of law.
I. 	JURISDICTION
This Court has authority to exercise jurisdiction over the subject matter and the
parties under 28 U.S.C. §§ 157(a), 1334, and the Order of Reference entered by the United States
4 	Response of the United States Trustee to the Motion to Reopen and Application for Payment of Unclaimed
Funds filed by Royal Investment Acquisitions, LLC d/b/a Dynamic Recovery Processing, Misc. Pro. No. 25-
207-GLT, Dkt. No. 55 at ¶¶ 13-16.
5 	Id. at ¶¶ 17-18.
6 	Response of Royal Investment Acquisitions, LLC d/b/a Dynamic Recovery Processing to the United States
Trustee Response to Motion to Reopen and Application for Payment of Unclaimed Funds, Misc. Pro. No. 25-
207-GLT, Dkt, No. 58.
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District Court for the Western District of Pennsylvania on October 16, 1984. 	This is a core
proceeding under 28 U.S.C. § 157(b)(2)(A).
II. 	DISCUSSION
The local rules of this district required a request for the disbursement of unclaimed
funds be accompanied by a motion to reopen to if, as here, the case is closed. 7 	Under section
350(b), “[a] case may be reopened in the court in which such case was closed to administer assets,
to accord relief to the debtor, or for other cause.” 8 The burden is on the moving party to establish
cause to reopen. 9 The court enjoys broad discretion in making this determination, 10 but “[w]here
it is futile or a waste of judicial resources to reopen the case, including when the movant cannot
ultimately obtain the substantive relief [sought], there is no reason to grant the motion.” 11 That
means “cause” to reopen turns on the strength of Royal’s claim to the funds at issue.
Section 	347(a) 	requires 	a 	trustee 	to 	pay 	“into 	the 	bankruptcy 	court” 	any
distributions payable to a creditor that the creditor does not timely accept. 12 Unclaimed funds are
deposited with the Treasurer of the United States in the name of the court. 13 	Thereafter, the
“rightful owners” 14 of the funds may petition the depositing court to disburse them “upon . . . full
proof of the right thereto.” 15 	A claimant must show its proper ownership of the funds by a
7 	W.PA.LBR 3011-1(a). As of July 1, 2026, a motion to reopen is no longer required. See W.PA.LBR 3011-
1(b).
8 	11 U.S.C. § 350(b).
9 	Burnett v. Janocha (In re Janocha), No. BR 06-20191-JAD, 2015 WL 128152, at *2 (Bankr. W.D. Pa. Jan.
8, 2015) (citing In re Janssen, 396 B.R. 624, 634 (Bankr. E.D. Pa. 2008)).
10 	See In re Lazy Days' RV Ctr. Inc., 724 F.3d 418, 423 (3d Cir. 2013); In re Zinchiak, 406 F.3d 214, 223 (3d
Cir. 2005).
11 	Murphy v. U.S. Dep’t of Educ. (In re Murphy), 547 B.R. 875, 879 (Bankr. W.D. Pa. 2016).
12 	11 U.S.C. § 347(a).
13 	28 U.S.C. § 2041.
14 	Id.
15 	28 U.S.C. § 2042.
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preponderance of the evidence. 16 “Just as obviously, an attorney in fact seeking disbursement of
unclaimed funds on behalf of the true owner must demonstrate the authority to do so.” 17
While the process of claiming unclaimed funds might seem straightforward, there
are traps for the unwary. There is authority from this district that a request for unclaimed funds
constitutes the practice of law and must be made through counsel. 18 	This Court has taken a
measured approach, recognizing that such a request is akin to the filing of a proof of claim which
does not require legal counsel. 19 The Court is also mindful that the cost of an attorney could easily
exceed the claimant’s rightful entitlement. 	If, however, an application (or motion to reopen)
becomes a contested matter, the Court agrees that pressing the claim over an objection is the
practice of law and requires an attorney. 	Regardless, a corporate entity like a limited liability
company can only appear in federal court through counsel. 20
Working backwards, the motion and application have been filed by Royal’s non-
lawyer managing partner, Eli Melse. 	Royal has submitted a corporate resolution and a general
power of attorney evidencing that Mr. Melse is authorized to act on behalf of Royal. 21 Royal, in
turn, is an assignee of Brenda Doughty, while Rodney Doughty passed away two years ago. 22
Therefore, Royal is asserting whatever rights Mrs. Doughty has to the unclaimed funds.
16 	See In re Pena, 456 B.R. 451, 453 (Bankr. E.D. Cal. 2011); In re Parker, 400 B.R. 55, 59 (Bankr. E.D. Pa.
2009); In re Acker, 275 B.R. 143, 144 (Bankr. D.D.C. 2002).
17 	In re Applications for Unclaimed Funds Submitted in Cases Listed on Exhibit “A”, 341 B.R. 65, 69 (Bankr.
N.D. Ga. 2005).
18 	See Citicorp., N.A. v. Henderson (In re Henderson), 426 B.R. 526, 529 (Bankr. W.D. Pa. 2010).
19 	While a proof of claim can be filed without an attorney, this Court has recognized that the preparation of a
proof of claim is not a purely ministerial act for which attorneys’ fees are unreasonable. See Winnecour v.
Pennymac Loan Servicing, LLC (In re Dunn), No. 24-21065, 2026 WL 898422, at *8 (Bankr. W.D. Pa. Apr.
1, 2026).
20 	See United States v. Cocivera, 104 F.3d 566, 572 (3d Cir. 1996).
21 	See Application for Payment of Unclaimed Funds, Misc. Pro. No. 25-207-GLT, Dkt, No. 51 at 16-18.
22 	Id. at 3-5.
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“The ‘rightful owner’ of unclaimed funds paid into the Court under § 347(a) is the
holder of the proof of claim on account of which the trustee made the distribution.” 23 	Namely,
Chase Home Finance. 	Yet neither Chase Home Finance nor its successor is seeking the funds
here. Instead, Royal argues that Chase Home Finance’s claim has been satisfied, creating a surplus
for which it is the assignee. For this theory to succeed, Royal must establish that: (1) JPMorgan
Chase Bank is the successor to Chase Home Finance; (2) Chase Home Finance’s claim has been
fully satisfied; (3) the unclaimed funds held for Chase Home Finance are legally surplus funds to
which the Doughtys would be entitled; (4) Brenda Doughty is the legal heir to Rodney Doughty’s
interest in any surplus funds; and (5) Royal, as assignee to Brenda Doughty, is entitled to the
surplus funds. It is no surprise that Royal’s proof falls short since procedurally this relief is far
beyond that of a mere application for unclaimed funds. 	Indeed, Royal is essentially seeking a
declaratory judgment, which requires an adversary proceeding. 24
None of this is to say that Royal is ultimately wrong or not entitled to claim the
funds as an assignee of Brenda Doughty. But the relief it requests must be pursued through the
appropriate legal process and proven in accordance with the applicable standards. 	So even if a
corporate entity like Royal could proceed without an attorney, the complexity of its ask clearly
requires one.
III. 	CONCLUSION
In light of the foregoing, the motion to reopen and application for unclaimed funds
will be denied without prejudice. 	This opinion constitutes the Court’s findings of fact and
23 	In re Applications for Unclaimed Funds Submitted in Cases Listed on Exhibit “A”, 341 B.R. at 69.
24 	See Fed. R. Bankr. P. 7001(i).
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conclusions of law in accordance with Fed. R. Bankr. P. 7052. 	The Court will issue a separate
order consistent with this opinion.
ENTERED at Pittsburgh, Pennsylvania.
____________________________________
Dated: September 30, 2026 	GREGORY L. TADDONIO
CHIEF UNITED STATES BANKRUPTCY JUDGE
_______________________________	__
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