Velasquez v. Bank of America, N.A. (In re Velasquez)
- Summarized by Lars Fuller , BakerHostetler
- 7 years 3 months ago
- Citation:
- NC-15-1177-TaJuKi (BAP 9th Cir. Aug. 9, 2016) (unpublished)
- Tag(s):
-
- Ruling:
- BAP for 9th Circuit affirmed the ruling of the bankruptcy court (N.D. Cal.) overruling chapter 13 debtors objection to proof of claim. Proof of claim was prima facie evidence of claim's validity and amount, and debtor failed to present adequate evidence to rebut presumption of claim's validity. Despite multiple opportunities to provide evidence contesting bank's accounting of claim, including application of payments received, debtor failed to provide evidence. Bank's accounting was adequately supported by evidence, including declarations and detailed reconciliations.
- Procedural context:
- Creditor asserted proof of claim, and chapter 13 debtor objected. Bankruptcy court overruled objection. Debtor appealed to BAP for 9th Circuit.
- Facts:
- Debtor scheduled an interest in real property located in San Francisco, California (the “Property”). Bank of America, N.A. filed proof of claim secured by a lien against the Property for $35,732.30 in arrearages as of the petition date. The arrearages consisted of $34,379.24 in prepetition delinquent payments and $1,353.06 in prepetition administrative fees. The $34,379.24 of delinquent payments, in turn, consisted of 34 monthly payments: 19 payments of $960.48; 14 payments of $1,074.63; and 1 payment of $1,085.30. In response, the Debtor filed a “Motion to Deny Bank of America’s Proof of Claim Filed in the Amount of $35,732.30.” He broadly questioned the amount of the arrearage and even asserted that the bank owed him money as a result of overpayment. More specifically, he challenged the number of allegedly delinquent payments and asserted that Bank of America had improperly increased his monthly payment beyond $960.48, the fixed payment
amount set forth in his promissory note. He asserted that he made a large postpetition payment of $26,000 and asserted that this cured any default. Bank of America responded that its proof of claim, signed and executed in accordance with the Federal Rules of Bankruptcy Procedure, was prima facie evidence as to the legitimacy and
amount of the claim. It also acknowledged that the Debtor made payments to the bank prepetition, explained that it applied payments to cure the most remote payment default, and provided a rudimentary spreadsheet regarding the Debtor’s escrow statement and calculation of payments. At a continued hearing on the matter, after the court expressed confusion with the documents submitted by Bank of America in support of its claim, the court directed the parties to mediation. The bankruptcy court asked the Debtor whether he could reconstruct from his records every payment made to the bank beginning from the inception of his loan; the Debtor responded that he could. It, thus, instructed the Debtor to turn over his documentation of payments to the bank’s counsel within two weeks; the Debtor agreed. The bankruptcy court continued the matter. Bank of America subsequently filed a supplemental declaration detailing its accounting for payments and the outstanding obligation. Debtor failed to file further documentation. The bank detailed how payments received by the bank falling short of a full monthly payment amount were placed in a suspense account. Once sufficient funds were accumulated in the account, the bank made a monthly payment. He further explained that payments were made on account of the most distant default. Thus, the bank applied payments received from the Debtor in 2013 against defaulted payments in 2011 or earlier. Finally, the bank further detailed how monthly payments were increased to fund a property tax escrow account, required because the Debtor failed to pay property taxes. Debtor failed to attend a scheduled mediation. At the further continued hearing, the Debtor continued to contest the calculations of his debt owed and the arrearages. However, he provided no evidence regarding payments to Bank of America. The court found that Bank of America had complied with its instructions, while the Debtor had not. The bankruptcy court ultimately found that it was satisfied with Bank of America’s evidence and that it established that its claim for arrearages was valid. Thus, it overruled the Debtor’s objections to the proof of claim.
- Judge(s):
- Taylor, Jury, Kirscher
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