Beiter v. Chase Home Fin., LLC (In re Beiter)

590 B.R. 446
CourtUnited States Bankruptcy Court, S.D. Ohio
DecidedSeptember 14, 2018
DocketCase No. 09-51303; Adv. Pro. No. 15-02195
StatusPublished
Cited by1 cases

This text of 590 B.R. 446 (Beiter v. Chase Home Fin., LLC (In re Beiter)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beiter v. Chase Home Fin., LLC (In re Beiter), 590 B.R. 446 (Ohio 2018).

Opinion

C. Kathryn Preston, United States Bankruptcy Judge *449I. INTRODUCTION

This matter is the latest development in the legal saga that began almost a decade ago when Rebecca J. Beiter ("Plaintiff") filed for protection under Chapter 13 of the Bankruptcy Code. Since that time, Plaintiff's Chapter 13 plan was confirmed, an order discharging her debts was entered, and her case was closed, only to be reopened for the purpose of filing a class action complaint (the "Complaint") against her home mortgage creditor, JP Morgan Chase Bank N.A. ("Defendant"). In the original Complaint, Plaintiff asked the Court to hold Defendant in contempt for violating the discharge injunction.

In the amended complaint (the "Amended Complaint") filed June 26, 2018, Plaintiff seeks to hold Defendant in contempt for violating not only the discharge injunction, but also the Order Granting Trustee's Motion to Deem Mortgage Current (Doc. # 64) (the "Deem Mortgage Current Order"), and sections 541 and 1306 of the Bankruptcy Code. In addition, she alleges that Defendant violated Rule 3002.1 of the Federal Rules of Bankruptcy Procedure. Defendant filed a Motion to Dismiss First Amended Complaint (Doc. # 170) (the "Motion") on July 17, 2018. Defendant urges the Court to dismiss each count of the Amended Complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure.1

Plaintiff filed her Memorandum in Opposition to Defendant's Motion to Dismiss Plaintiff's First Amended Complaint (Doc. # 175) (the "Response") on August 7, 2018. Defendant filed a Reply Memorandum in Support of its Motion to Dismiss First Amended Complaint (Doc. # 176) (the "Reply") on August 14, 2018. The Court, having considered the record and the arguments of the parties, issues the following opinion and order granting the Motion with respect to Count One but denying the Motion with respect to the remaining claims.

II. JURISDICTION

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and General Order 05-02 entered by the United States District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This is a core proceeding pursuant to 28 U.S.C. § 157(B)(2)(A) and (O). Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. See also Beiter v. Chase Home Finance, LLC (In re Beiter) , 554 B.R. 433, 439-40 (Bankr. S.D. Ohio 2016) ("A contempt proceeding resulting from a violation of an order or injunction may only be maintained in the court that issued the order or injunction that was violated.").

III. BACKGROUND

The Amended Complaint alleges the following facts: On or around May 25, 2004, Plaintiff executed a note and mortgage *450(the "Mortgage Loan") with Defendant. On February 13, 2009, Plaintiff filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code. Plaintiff's Chapter 13 plan was confirmed on April 28, 2009, and pursuant to the confirmed plan, payments on the Mortgage Loan were made by "conduit" through the Chapter 13 Trustee. In 2011, Defendant admittedly misapplied five of Plaintiff's payments, which resulted in significant errors to her Mortgage Loan account. Defendant also "increased Plaintiff's monthly mortgage payment without notifying the Court or obtaining permission" in January, 2014. (Am. Compl. ¶ 45, ECF No. 162).

On March 13, 2014, after completion of the plan and upon motion of the Trustee, the Court entered the Deem Mortgage Current Order. The Deem Mortgage Current Order directed Defendant to adjust the Mortgage Loan balance to reflect the balance delineated in the original amortization schedule as of February 2014. It further ordered that "[a]ny amounts in excess of that balance, including any alleged arrearages, costs, fees or interest" were discharged. (Am. Compl. ¶ 41, ECF No. 162). On March 13, 2014, the Court entered an order granting Plaintiff a discharge pursuant to 11 U.S.C. § 1328(a).

With the exception of one payment in July 2014-which Plaintiff eventually made-Plaintiff made all monthly mortgage payments after the Deem Mortgage Current Order and discharge were entered. Since her discharge, Plaintiff has received incorrect and inconsistent mortgage statements from Defendant every month that contained unexplained late fees and indicated Plaintiff is past due on payment of thousands of dollars on her Mortgage Loan despite having made all of her monthly payments. In October 2014, Plaintiff's bankruptcy attorney directly contacted Defendant to advise that Plaintiff had completed her Chapter 13 plan and received a discharge, and to request that her Mortgage Loan account be updated accordingly. As late as July 2015, Plaintiff's mortgage statements indicated that her Mortgage Loan account was still in "active bankruptcy" and not current, even though she had completed the plan and received her discharge.

On June 26, 2018, Plaintiff purportedly on behalf of herself and others similarly situated, filed the Amended Complaint. Plaintiff alleges that Defendant: (1) violated 11 U.S.C. §§ 541 and 1306 by accumulating funds in her suspense account without notifying her, the trustee, or the Court ("Count One"); (2) violated the discharge injunction imposed by 11 U.S.C. §§ 524 and 1328 by attempting to collect amounts that had been discharged through bankruptcy ("Count Two"); (3) violated the Court's Deem Mortgage Current Order by failing to review the original Mortgage Loan amortization schedule to ensure that the outstanding principal balance reflects the balance reflected on the original amortization schedule ("Count Three"); and (4) failed to comply with Rule 3002.1 of the Federal Rules of Bankruptcy Procedure

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Bluebook (online)
590 B.R. 446, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beiter-v-chase-home-fin-llc-in-re-beiter-ohsb-2018.