In re Carol Lee Depuydt-Meier
- Case Type:
- Case Status:
- 21-1001 & 21-1002 (9th Circuit, Jun 28,2021) Not Published
- Echoing a similar ruling in a separate case, the U.S. Bankruptcy Appellate Panel of the Ninth Circuit (BAP) affirmed orders (1) overruling the objection by Carol Lee DePuydt-Meier (DR) to a proof of claim filed by U.S. Bank N.A. (USB), as legal title trustee for Truman 2016 SC6 Title Trust (Trust), and (2) granting the Trust’s motion for stay relief so as to allow it to proceed with its prepetition foreclosure against the DR’s residence (Property), issued by the U.S. Bankruptcy Court for the Northern District of California (BC), rejecting the DR’s purely standing-centric appellate arguments.
- Procedural context:
- Soon after the petition’s filing, USB, as the trustee for the Trust, filed its proof of secured claim in the amount of $924,688.73. The DR promptly challenged this proof. Months later, USB filed its motion for relief from the automatic stay under § 362(d)(1) to exercise its remedies under the Deed of Trust (DOT) against the DR’s residence. The DR’s opposition to both the proof and the objection were substantively identical.
Thereafter, the BC adjudicated these motions via two orders issued after two separate hearings.
As for the relief from stay motion, the BC granted it under § 362(d)(1), finding that USB’s evidence was more than sufficient to establish that it held a colorable right under California law to enforce the recorded deed of trust assigned to it. On the very next day the BC held a claim objection hearing at which it weighed the evidence presented by the parties. It ultimately found that the Adjustable Rate Note (Note) promising to repay the loan with interest, signed by the DR, had been indorsed in blank and the USB possessed the note. As such, the USB was entitled to enforce the Note and had standing to file a proof of claim.
- On March 30, 2006, the DR borrowed $600,000 from Downey Savings and Loan Association, F.A. (Downey). In exchange, Meier signed the Note and executed the DOT, which was promptly recorded. Eventually, after the Federal Deposit Insurance Corporation (FDIC) had served as receiver for Downey, the DR’s loan portfolio ended up in the hands of USB.
Having ceased making payments on the Note in or around February 2010, the DR turned to the Code for relief. In what the BAP characterized as an “apparent attempt to impede … [USB]’s efforts to foreclose,” the DR commenced a series of bankruptcy cases—no less than four over the last decade—and state court actions. She filed her latest case, a chapter 13 one, on August 3, 2020. Soon afterward, USB, as the trustee for the Trust, filed its proof of secured claim in the amount of $924,688.73. The Assistant Secretary of Rushmore Loan Management Services (Rushmore) signed the proof of claim on behalf of USB as its servicing agent. Along with the usual proof of claim form, USB attached a copy of the Note, two recorded assignments, other statements and documents required by Bankruptcy Rules, and two allonges. The second, unlike the first, left the “pay to the order of” line blank, meaning no specific named payee was identified.
The DR responded with a claim objection, buttressed by supporting declarations. This document “largely” hinged on a chronological “Loan Analysis” she prepared cataloguing a number of perceived errors, omissions, and defects in the origination of her loan and in the transfer of rights and interests in the Note
- Gary A. Spraker; Robert J. Faris; and Julia W. Brand
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