JPMorgan Chase Bank, N.A. v. Johnson

8th Cir. (Court of Appeals - Eastern District of Arkansas - Jonesboro - July 9, 2013) Case Nos. 12-2370, 12-2686 and 12-3049
AFFIRMING the district court's ruling that JP Morgan Chase ("JP Morgan") is authorized to do business in Arkansas and may avail itself of the benefit of the Arkansas Statutory Foreclosure Act ("SFA").
Procedural context:
The bankruptcy court held that JP Morgan was not entitled to fees under the SFA for foreclosure proceedings since it was not an entity authorized to conduct business in Arkansas. JP Morgan appealed the decision, and removed it to the federal court. The three associated bankruptcy cases, and two separate non-bankruptcy cases were consolidated at the District Court because they turned on one legal issue. The District Court ruled in JP Morgan's favor and, the debtors and non-bankruptcy borrowers all appealed.
JP Morgan attempted to use the SFA to foreclose on homes belonging to Daniel and Susan Johnson, Tracy Estes, and Tammy Renae Peeks, each of which filed a petition for relief under Chapter 13. In their cases, the debtors attempted to repay JP Morgan default through their plan of reorganization. However, JP Morgan objected arguing that the debtors failed to include in their plans the fees and costs incurred by JP Morgan in pursuing the foreclosures, thereby stating the arrearage provided in the plan was too low. To determine whether JP Morgan was entitled to such fees, the bankruptcy court had to determine whether the use of SFA foreclosure proceedings were available to JP Morgan.
Bye, Mellow and Smith.

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