Buczek v. KeyBank, N.A.

CourtDistrict Court, W.D. New York
DecidedDecember 8, 2020
Docket1:19-cv-00527
StatusUnknown

This text of Buczek v. KeyBank, N.A. (Buczek v. KeyBank, N.A.) is published on Counsel Stack Legal Research, covering District Court, W.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buczek v. KeyBank, N.A., (W.D.N.Y. 2020).

Opinion

SAVES DISTRICT Gs UNITED STATES DISTRICT COURT Coc va) WESTERN DISTRICT OF NEW YORK pec 8 2020

DEBORAH ANN B UCZEK, ERN DISTR Appellant, v. 19-CV-527 (JLS) KEYBANK, N.A., Defendant.

DECISION AND ORDER

Appellant Deborah Ann Buczek appeals from an order of the United States Bankrupcty Court for the Western District of New York entered on April 1, 2019, and reconsidered on April 22, 2019, terminating the automatic stay that went into effect upon the July 20, 2018 filing of her Chapter 13 bankruptcy case. See generally Dkt. 1. For the reasons below, this Court determines that Buczek’s arguments on appeal are without merit, and the decision of the Bankruptcy Court will be affirmed. BACKGROUND The following facts are taken from the record! of the Bankruptcy Court in

1 Citations to the docket of the underlying bankruptcy case (No. 18-11401) will be cited as “Bankr. Dkt.” Citations to the appellate docket in this case will be cited as “Dkt.”

Buczek’s underlying case. This case? concerns real property located at 7335 Derby Road, Derby, NY 14047. Buczek obtained a home equity line of credit in the amount of $50,000 on October 7, 2008, which was memorialized in a Key Equity Options Agreement. Dkt. 12, at 3; see also Dkt. 11 (Exh. A); Bankr. Dkt. 105-2. Buczek offered as security the real property located at 7335 Derby Road, Derby, NY 14047. After Buczek became delinquent in mortgage payments, KeyBank commenced a foreclosure action in New York Supreme Court, Erie County in 2015. Dkt. 12, at 3. The Judgment of Foreclosure and Sale, signed by the Honorable Sheila A. DiTullio on April 26, 2018 and filed on May 16, 2018, authorized a foreclosure sale of the mortgaged property. Dkt. 7-2, at 19-28; Bankr. Dkt. 146, at 19-28 (Exh. 1). On July 20, 2018, Buczek filed a voluntary petition for relief under the provisions of Chapter 13 of Title 11 of the United States Bankruptcy Code in United States Bankruptcy Court for the Western District of New York. Bankr. Dkt. 1 (Case No. 1-18-11401). This filing resulted in an automatic stay of the foreclosure under 11 U.S.C. § 362. On September 18, 2018, Buczek filed her Chapter 13 Plan. Bankr. Dkt. 42; Dkt. 6-9. KeyBank objected to the plan on October 10, 2018, on the basis that the

2 There are several other pending bankruptcy appeals involving Ms. Buczek, her bankruptcy case No. 18-11401, or this property. See, e.g., Buczek v. Rosicki, et al., No. 19-cv-880-JLS (W.D.N.Y. filed July 2, 2019); Shane Christopher Buczek v. Nationstar Mortgage LLC, No. 19-cv-1402-JLS (W.D.N.Y. filed Oct. 17, 2019); Shane Christopher Buczek v. KeyBank, 20-cv-80 (W.D.N.Y. filed Jan. 22, 2020). This order is limited to the case No. 19-cv-527 appealing the April 1, 2019 order, and therefore the background section will only summarize briefly the facts relevant to this appeal. □

proposed plan failed to provide for KeyBank’s claim, which amounted to $62,918.93. Bankr. Dkt. 52; see also Dkt. 6-6 (KeyBank’s Proof of Claim). Buczek opposed KeyBank’s claim (Bankr. Dkts. 97, 99, 117), but the Bankruptcy Court overruled her objections at an April 8, 2019 hearing. Bankr. Dkt. 139; see generally Dkt. 9, Hr’g Tr., Apr. 8, 2019. On March 4, 2019, KeyBank filed a motion for relief from the automatic stay pursuant to 11 U.S.C. § 362(d)(1), citing multiple grounds for the requested relief. Bankr. Dkt. 105; Dkt. 6-138. On March 28, 2019, Debtor filed her response. Bankr. Dkt. 122; Dkt. 6-16. On April 1, 2019, the Bankruptcy Court held a hearing on the motion for relief from the stay. See generally Dkt. 8, Hr’g Tr., Apr. 1, 2019 (hereinafter “Apr. 1 Hr’g Tr.”). At this hearing, Appellant Buczek claimed she was served with KeyBank’s motion, but was not served with a copy of the Broker Price Opinion (“BPO”) that was attached to the motion. Apr. 1 Hr’g Tr. 3:9-19; id. Tr. 6:21-9:6. Judge Bucki granted KeyBank’s motion for relief from the automatic stay for cause under Section 362(d)(1) based solely on Buczek’s failure to pay post-petition mortgage payments. Id. Tr. 18:3-19:3. Judge Bucki specified that whether Buczek was served properly with a copy of the BPO was not relevant to the decision to lift the stay for cause—as the lack of value of the property was only one of multiple grounds KeyBank raised in their motion. Id. Tr. 18:18-19:12; see also id. Tr. 26:10- 27:2 (“I limit my decision to the fact that the post-petition mortgage payments were not paid. If I was going to base my decision on values of property, I would have

required the bank to give you more time to review the broker price opinion but I’m not basing it on that.”). Judge Bucki memorialized this decision in an order signed that day, April 1, 2019. Bankr. Dkt. 126; Dkt. 6-17. On April 8, 2019, Buczek filed a motion for reconsideration, entitled “Emergency Motion for Reconsideration Requiring Emergency Injunction and Temporary Restraining Order,” and similar amended motions on April 15, 2019. Bankr. Dkts. 134, 142, 144; Dkts. 4-8, 4-9. 4-10. KeyBank objected to these motions for reconsideration on April 19, 2019. Bankr. Dkt. 146; Dkt. 7-2. Judge Bucki denied Appellant Buczek’s motion in a hearing held on April 22, 2019. See generally Dkt. 10, Hr’g Tr., Apr. 22, 2019 (hereinafter “Apr. 22 Hr’g Tr.”). Judge Bucki reiterated that his decision was based on Section 362(d)(1) and Buczek’s failure to make post-petition mortgage payments—and quoted the case management order instructing that Buczek was responsible for continuing such payments absent a special agreement. Apr. 22 Hr’g Tr. 28:5-29:20. Judge Bucki further stated that Buczek would have to raise any arguments relating to the validity of the mortgage or the value of the property in state court.’ Id. Tr. 29:21-34:20. On April 22, 2019, Buczek filed the instant appeal, appearing pro se. Dkt. 1. She filed an amended Notice of Appeal on April 25, 2019. Dkt. 3. Buczek’s appeal

3 As Judge Bucki noted at this hearing, KeyBank’s opposition papers included a copy—and informed the Bankruptcy Court for the first time—of a state court order dated May 16, 2018, confirming a referee’s report and granting a judgment of foreclosure and sale to KeyBank. Apr. 22 Hr’g Tr. 16:12-18:1, 24:18-25:3. In light of this order, Judge Bucki stated that many of Buczek’s arguments regarding the loan were already rejected by Judge DiTullio in state court.

purports to raise a number of issues, including the following: violations of due process by KeyBank and the Bankruptcy Court, failure of KeyBank to satisfy the requirements of 11 U.S.C. § 362(d)(1) in requesting relief from the automatic stay, denial of an opportunity to submit a defense to KeyBank’s motion, fraud and conspiracy to defraud, error by the Bankruptcy Court in removing the stay based on failure to make payments—which Buczek argues were not required to be made— and the automatic stay was removed under false pretenses. Dkt. 11, at 5-6. Buczek filed her brief on June 5, 2019. Dkt. 11. KeyBank filed its brief on June 18, 2019. Dkt. 12. Buczek filed a reply, an affidavit, and a supplemental reply on July 3, 2019, July 8, 2019, and July 9, 2019, respectively. Dkts. 13, 14, 15. KeyBank moved to strike, or, in the alternative, for leave to file a surreply on July 22, 2019. Dkt. 16. On April 6, 2020, this Court4 granted KeyBank leave to file a surreply, Dkt. 18, which KeyBank did on April 20, 2020. Dkt. 19.

DISCUSSION I. JURISDICTION & STANDARD OF REVIEW This Court has jurisdiction to hear appeals from bankruptcy courts under 28 U.S.C. § 158

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