Now Updating
In re Barbara Wigley

Summarizing by Bradley Pearce

In re Sergio and Esmeralda Miranda

Case Type:
Business
Case Status:
Affirmed in part and Reversed in part
Citation:
BAP No. CC-19-1206=LGS (9th Circuit, May 07,2020) Not Published
Tag(s):
Ruling:
BAP for 9th Cir. affirmed in part and reversed in part ruling of bankruptcy court (CD Cal.) granting summary judgment to creditors following debtors' claims alleging breach of confirmed chapter 11 plan. Bankruptcy court properly granted summary judgment in favor of one creditor because creditor was not bound by plan. It had no legal or equitable interest in property dealt with by plan. However, bankruptcy court erred in granting summary judgment to other creditor. Evidence raised genuine issue of material fact regarding whether creditor had adequate notice of plan and right to object.
Procedural context:
Debtors commenced adversary alleging creditors violated confirmed plan. Defendants moved for summary judgment and bankruptcy court (CD Cal.) granted motions. Debtors appealed to BAP for 9th Circuit.
Facts:
When Debtors filed their chapter 11 petition, BANA held notes secured by deeds of trust on two of Debtors’ rental properties. Preconfirmation, BANA assigned the deeds of trust to Green Tree Servicing, LLC (“Green Tree”), and Nationstar Mortgage, LLC (“Nationstar”), respectively, and notified Debtors that those entities would be servicing the loans in the future. Although Debtors thereafter made payments to the designated servicers and entered into a loan modification with Nationstar and a stipulation with Green Tree, Debtors identified the creditors in their proposed plan as BANA and “BAC Homes Loans Serv LP aka Bank of America N.A.,” respectively. They served notice of the confirmation hearing on BANA and Green Tree. The parties dispute whether Nationstar was served with notice of the confirmation hearing: no proof of service was filed reflecting such service, but Debtors contend it was served. No party objected to plan confirmation, and the bankruptcy court confirmed the plan. Debtors allege that, about a year after confirmation, they began receiving mortgage statements from the designated servicers that did not reflect the terms of the confirmed plan, and they were unsuccessful in obtaining any explanation from those entities. They sued BANA, Ditech Financial, LLC (“Ditech”)–Green Tree’s successor-in-interest–and Nationstar in state court for breach of contract. After the state court dismissed those claims, Debtors moved to reopen their bankruptcy case to file an adversary proceeding against BANA and Shellpoint Mortgage Servicing, LLC (“Shellpoint”), Nationstar’s successor-in-interest, for breach of contract and declaratory and injunctive relief. trust to Green Tree Servicing, LLC (“Green Tree”), and Nationstar Mortgage, LLC (“Nationstar”), respectively, and notified Debtors that those entities would be servicing the loans in the future. Although Debtors thereafter made payments to the designated servicers and entered into a loan modification with Nationstar and a stipulation with Green Tree, Debtors identified the creditors in their proposed plan as BANA and “BAC Homes Loans Serv LP aka Bank of America N.A.,” respectively. They served notice of the confirmation hearing on BANA and Green Tree. The parties dispute whether Nationstar was served with notice of the confirmation hearing: no proof of service was filed reflecting such service, but Debtors contend it was served. No party objected to plan confirmation, and the bankruptcy court confirmed the plan. Debtors allege that, about a year after confirmation, they began receiving mortgage statements from the designated servicers that did not reflect the terms of the confirmed plan, and they were unsuccessful in obtaining any explanation from those entities. They sued BANA, Ditech Financial, LLC (“Ditech”)–Green Tree’s successor-in-interest–and Nationstar in state court for breach of contract. After the state court dismissed those claims, Debtors moved to reopen their bankruptcy case to file an adversary proceeding against BANA and Shellpoint Mortgage Servicing, LLC (“Shellpoint”), Nationstar’s successor-in-interest, for breach of contract and declaratory and injunctive relief. BANA and Shellpoint each moved to dismiss the claims against them. The bankruptcy court converted the motions to motions for summary judgment and granted both, finding that (1) BANA was not a creditor at the time of plan confirmation and thus was not bound by the terms of the confirmed plan, and (2) Nationstar was not listed in the plan thus its successor-in-interest, Shellpoint, was not bound by the terms of the confirmed plan.
Judge(s):
Lafferty, Gan, Spraker

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