Thomas v. Federal National Mortgage Association (In re Thomas)
- Summarized by Brandon Bickle , Gable & Gotwals, PC
- 9 years 4 months ago
- United States Bankruptcy Appellate Panel of the 10th Circuit, Appeal No. WO-13-029.
- The BAP affirmed the bankruptcy court's order confirming that Appellee had standing as a "party in interest" to seek a comfort order under 11 U.S.C. section 362(j), reviewing the bankruptcy court's factual findings under the "clearly erroneous" standard of review. Reiterating recent 10th Circuit authority that all that is required to be a "party in interest" for purposes of section 362(j) is a "colorable claim of a lien on property of the estate," the BAP held that "mere physical possession of the authentic note [which, again, was endorsed to bearer] is all that is required for a colorable claim of standing to enforce the note and mortgage and all that is required to seek a section 362(j) comfort order." The BAP held that the bankruptcy court's findings concerning the authenticity of the note in the Appellee's possession were not clearly erroneous, based on: (1) the bankruptcy court's review and analysis, at an evidentiary hearing, of the note in the Appellee's possession, received as a self-authenticating instrument under Federal Rule of Evidence 902(9); (2) the bankruptcy court's comparison of the Debtor's and his wife's signatures on their driver's licenses and other court documents; and (3) testimony received at the evidentiary hearing from the Debtor (who testified that he signed a note that looked identical to the note received into evidence, but could not verify that the note was authentic because of the existence of "sophisticated" copiers), his wife (who testified that the signatures on the note appeared to be authentic), and Appellee's counsel regarding, among other things, counsel's receipt of the original note from his client before the comfort order was sought. The BAP affirmed the bankruptcy court's conclusion that the note is a self-authenticating instrument based on Rule 902(9) and Oklahoma's Uniform Commercial Code section 3-308(a), but held that the note was admissible in any event under Federal Rule of Evidence 901(a). The Debtor's only arguments to refute the bankruptcy court's findings were: (1) that the note's chain of title was not adequately explained; and (2) that it was still theoretically possible, through the use of a "sophisticated copier," that the note could be a fake. The Debtor presented no evidence suggesting that anyone else held the "real" instrument. The BAP held that discrepancies in the note's chain of title are irrelevant in the context of a bearer instrument, and the bankruptcy court's findings concerning the note's authenticity were amply supported by the record.
- Procedural context:
- Appeal from an order of the United States Bankruptcy Court for the Western District of Oklahoma finding and concluding that Appellee Federal National Mortgage Association had standing as a "party in interest" to seek a "comfort order" under 11 U.S.C. section 362(j), confirming that the automatic stay had expired in Debtor/Appellant Clarence Thomas's repeat Chapter 13 bankruptcy case.
- The Debtor filed a Chapter 13 bankruptcy petition in August 2009, which was dismissed in August 2010. The Debtor filed a second Chapter 13 petition in November 2010. Pursuant to 11 U.S.C. section 362(c), the automatic stay terminated automatically in the Debtor's second-filed case. Appellee sought a "comfort order" under section 362(j) to confirm the termination of the stay, which was entered by the bankruptcy court. Following an appeal, in which another panel of the 10th Circuit BAP determined that the bankruptcy court had failed to properly determine that the Appellee had standing to seek the comfort order and remanded the order to the bankruptcy court to determine standing, the bankruptcy court held an evidentiary hearing in which it determined that the Appellee had standing as a "party in interest" under section 362(j). It was undisputed that the note was endorsed in blank, and, under Oklahoma's Uniform Commercial Code, constitutes a bearer instrument enforceable by its holder. The bankruptcy court examined the note in the Appellee's possession and found that the Appellee in fact held the authentic, original instrument. Moreover, the bankruptcy court concluded that the Appellee had standing to assert a claim on the note at the time it sought the comfort order. The Debtor appealed the bankruptcy court's order determining that the Appellee had standing to seek the comfort order.
- Karlin, Romero, and Jacobvitz, Bankruptcy Judges. Opinion by Karlin.
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