Hanson v. HSBC Bank, USA, National Ass'n ex rel. Wells Fargo Asset Securities Corp. (In re Hanson)

525 B.R. 791, 25 Fla. L. Weekly Fed. B 247, 73 Collier Bankr. Cas. 2d 245, 2015 Bankr. LEXIS 491
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedJanuary 27, 2015
DocketCase No. 3:13-bk-4140-PMG; Adv. No. 3:14-ap-317-PMG
StatusPublished
Cited by4 cases

This text of 525 B.R. 791 (Hanson v. HSBC Bank, USA, National Ass'n ex rel. Wells Fargo Asset Securities Corp. (In re Hanson)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanson v. HSBC Bank, USA, National Ass'n ex rel. Wells Fargo Asset Securities Corp. (In re Hanson), 525 B.R. 791, 25 Fla. L. Weekly Fed. B 247, 73 Collier Bankr. Cas. 2d 245, 2015 Bankr. LEXIS 491 (Fla. 2015).

Opinion

ORDER ON MOTIONS TO DISMISS COMPLAINT

PAUL M. GLENN, United States Bankruptcy Judge

THIS CASE came before the Court for hearing to consider (1) Wells Fargo Bank, N.A.’s Motion to Dismiss Counts II and IV of Plaintiff s Complaint, (2) HSBC Bank USA, National Association, as Trustee’s Motion to Dismiss Counts I, Y, and VI of Plaintiffs Complaint, and (3) Ronald R. Wolfe & Associate, P.L.’s Motion to Dismiss and Request for an Award of Attorney’s Fees and Costs. (Docs.13, 16, 17).

Under 28 U.S.C. § 1334(c)(1), the Court has broad discretion to abstain from a proceeding “in the interest of justice, or in the interest of comity with State courts or respect for State law.”

In this proceeding, the Debtor primarily challenges HSBC’s assertion of a Claim secured by a mortgage on the Debtor’s real property. The issues raised by the Debtor are essentially state law matters that can be resolved in a foreclosure action that was pending at the time that the bankruptcy case was filed. Accordingly, the Court will abstain from hearing the Debtor’s Objection to the Proof of Claim filed by HSBC.

Additionally, the Debtor alleges that the Defendants violated federal law by filing and serving papers in the bankruptcy case, and by failing to furnish him with information related to HSBC’s Claim. The Complaint does not contain sufficient factual allegations to make the causes of action plausible on their face, and the Court will therefore dismiss, without prejudice, the Counts of the Complaint based on the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act, and § 510(c) of the Bankruptcy Code.

Background

On February 12, 2007, the Debtor, John Edward Hanson, II, signed an Initial Interest Note pursuant to which he promised to pay Wells Fargo Bank, N.A., as the Lender, the principal sum of $459,000.00. The Note was secured by a Mortgage on certain real property of the Debtor located at 1017-1019 3rd Street, Neptune Beach, Florida (the Property). (Main Case, Doc. 66, Exhibits A, B).

In 2009, HSBC Bank, USA, filed an action to foreclose the Mortgage in the Circuit Court for Duval County, Florida. (Doc. 1, ¶ 8).

The final hearing in the foreclosure action was initially scheduled for July 3, 2013, and was rescheduled for July 25, 2013, at the Debtor’s request. (Doc. 16, Exhibit C).

On July 2, 2013, shortly before the final hearing in the foreclosure action, the Debt- or filed a petition under Chapter 13 of the Bankruptcy Code. On his schedule of assets in the bankruptcy case, the Debtor listed the Property with a scheduled value of $278,304.00. On his schedule of liabilities, the Debtor listed HSBC Bank, NA, Trustee, c/o Wells Fargo, as a creditor holding a mortgage on the Property in the scheduled amount of $461,813.46.

The Property was listed as the Debtor’s street address on his bankruptcy petition, and HSBC’s foreclosure action was listed as an open proceeding on the Debtor’s Statement of Financial Affairs. (Main Case, Docs. 1, 8). In his Chapter 13 Plan, the Debtor proposed to provide for HSBC’s secured claim by filing a request for Mortgage Modification Mediation. (Main Case, Doc. 11).

On September 30, 2013, HSBC Bank USA, National Association as Trustee for [794]*794Wells Fargo Asset Securities Corporation (HSBC) filed a Proof of Claim (Claim No. 6) in the Debtor’s bankruptcy case. Claim No. 6 was filed in the amount of $616,378.02, and was filed as a claim secured by a lien on the Property. Attached to the Proof of Claim are copies of (1) a Corporate Assignment of Mortgage from Wells Fargo Bank, N.A. to HSBC Bank USA dated December 18, 2008, and (2) a Corrective Assignment of Mortgage from Wells Fargo to HSBC dated September 13, 2012.

On January 20, 2014, the Debtor filed an Objection to Claim No. 6 in his main bankruptcy case. (Main Case, Doc. 55). Generally, the Debtor asserted in the Objection that he “has never done business with Claimant or received notice that claimant has been assigned the right to bill and collect the debt of any other entity, and does not owe the claimant any money.”

On February 19, 2014, HSBC filed a written Response to the Debtor’s Objection, and asserted that Wells Fargo had assigned the Mortgage to HSBC on or about September 18, 2012, as evidenced by the recorded Corrective Assignment of Mortgage. (Main Case, Doc. 66).

A final evidentiary hearing on the Objection to Claim was scheduled for August 25, 2014. (Main Case, Doc. 114).

The Debtor withdrew his Objection to HSBC’s Claim on August 19, 2014, six days before the scheduled final evidentiary hearing. (Main Case, Doc. 180).

On August 19, 2014, the same date that he withdrew his Objection, the Debtor filed the Complaint that commenced this adversary proceeding. The Complaint initially contained seven Counts. On January 13, 2015, the Court entered an Order dismissing Counts I, II, and III of the Complaint, without prejudice, based on the Debtor’s representation to the Court that he would not pursue those Counts. (Doc. 24).

Discussion

The remainder of the Counts in the Complaint are (1) an action against Ronald R. Wolfe & Associates, P.L. for violation of the federal Fair Debt Collection Practices Act, (2) an action against Wells Fargo Bank, N.A. for violation of the Real Estate Settlement Procedures Act, (3) an Objection to Claim No. 6, and (4) an action for equitable subordination of the Claim. .

The Court will abstain from hearing the Debtor’s Objection to Claim No. 6, because the issues raised by the Objection are essentially state law matters that can be resolved in the foreclosure action that was pending at the time that the bankruptcy case was filed. Additionally, the Court will dismiss the balance of the Counts, without prejudice, because the Complaint does not contain sufficient factual allegations to make the causes of action plausible on their face.

A. Count V

The focus of the Complaint is the Debt- or’s Objection to Proof of Claim No. 6 filed by HSBC Bank USA, National Association, as Trustee (HSBC). In Count V, the Debtor alleges that Claim No. 6 is not a valid debt of the Debtor “due to the complete failure of HSBC and Wolfe to provide statutorily-required notice of assignment to HSBC of the right to bill and collect the alleged debt.” (Doc. 1, ¶¶ 37-39).

In its Motion to Dismiss Count V, HSBC asserts that the Court should dismiss or abstain from the Count, (1) because the Debtor is asking the Court to resolve a pure question of state law, (2) because the Debtor waived his challenge by withdrawing the Objection to Claim in the main case, and (3) because the state notice statute does not apply to the foreclosure of [795]*795residential mortgages. (Doc. 16, pp. 12-19).

The Court will abstain from hearing the Debtor’s Objection to Claim No. 6. Section 1334(c)(1) of title 28 pro-' vides:

§ 1334. Bankruptcy cases and proceedings
(c)(1) Except with respect to a case under chapter 15 of title 11, nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11.

28 U.S.C.

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525 B.R. 791, 25 Fla. L. Weekly Fed. B 247, 73 Collier Bankr. Cas. 2d 245, 2015 Bankr. LEXIS 491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanson-v-hsbc-bank-usa-national-assn-ex-rel-wells-fargo-asset-flmb-2015.