In re Baker

321 B.R. 864, 2004 Bankr. LEXIS 2277, 2004 WL 3234342
CourtUnited States Bankruptcy Court, N.D. Ohio
DecidedOctober 15, 2004
DocketNo. 02-35578
StatusPublished

This text of 321 B.R. 864 (In re Baker) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Baker, 321 B.R. 864, 2004 Bankr. LEXIS 2277, 2004 WL 3234342 (Ohio 2004).

Opinion

DECISION AND ORDER

RICHARD L. SPEER, Bankruptcy Judge.

Before this Court is the Motion of the Creditor, HomEq Servicing Corporation, for Relief from Judgment. After conducting an evidentiary hearing on the matter, the Court took the matter under advisement. The Court has now had the opportunity to fully consider the matter, and based upon a review of the arguments made by the Parties, together with the evidence presented, the Court finds that Relief from Judgment should be Granted to the extent provided for in this Decision.

The salient facts of this case are a part of the record, and thus are not in dispute. On August 22, 2002, the Debtor, Rita Baker, filed a petition in this Court for relief under Chapter 13 of the United States Bankruptcy Code. (Doc. No. 1). Not long thereafter, the Creditor filed a Proof of Claim, asserting its status as the holder of a secured claim in the amount of $63,481.39, inclusive of a $6,400.29 arrear-age. In said claim, the Creditor listed an address in California as to where notices should be sent.

On October 14, 2003, the Debtor filed an objection to the Creditor’s proof of claim. [866]*866A hearing on the matter was then set by the Court, with notice thereof being sent to the Creditor at the California address as well as to its business address in the State of Minnesota. After holding a hearing on the matter, at which the Creditor did not appear, the Court entered an order sustaining the Debtor’s objection. In this Order, the Court set the Creditor’s allowed secured claim at $61,016.50, with an ar-rearage of $3,935.40. Notice of this order was then sent by the Court to both the California and Minnesota addresses.

On October 16, 2003, just after filing its objection to the Creditor’s claim, the Debt- or also filed a Motion for an Accounting Statement from the Creditor. A hearing on the matter was then set by the Court, with notice thereof being sent to the Creditor at the California address as well as to the address in Minnesota. On November 11, 2003, after holding a hearing on the matter, at which the Creditor again did not appear, the Court entered an order granting the Debtor’s Motion to Provide an Accounting. Notice of this order was then sent by the Court to both the California and Minnesota addresses.

On January 6, 2004, after the Creditor had failed to provide the appropriate accounting under this Court’s order, the Debtor filed a Motion to Show Cause as to why it should not be held in Contempt. A hearing on the matter was then set by the Court, with notice thereof again being sent to both the Creditor’s California and Minnesota addresses. After failing to appear at this Hearing, the Court entered an order sanctioning the Creditor by “directing the release of [its] Note and the Mortgage” it holds against the Debtor’s residence and entering judgment “in favor of Debtor for attorney fees and expenses in the amount of $1,601.80.” (Doc. No. 30, at pg. 2). Notice of this Order was then sent to the Creditor at its Minnesota address.

Less than one year after the Court entered its order for sanctions, the Creditor filed its Motion for Relief from Judgment. Prior to the time of the Hearing held on this matter, the Creditor, in compliance with this Court’s prior orders, provided the Debtor with an accounting statement and also remitted a check in the amount of $1,601.80 to Debtor’s counsel, Randy Reeves.

ANALYSIS

In accordance with Bankruptcy Rule 9024, the Creditor’s Motion for Relief from Judgment is governed by Federal Rule of Civil Procedure 60(b). As the matter underlying the Creditor’s Motion involves an objection to a claim, which is deemed a core proceeding, this Court has been conferred with the jurisdictional authority to enter a final order in this matter. 28 U.S.C. §§ 157(b)(2)(E) & 1334.

Federal Rule of Civil Procedure 60(b) sets forth six different grounds by which a court may relieve a party from a judgment. In this matter, the Creditor cites to two of the 60(b) grounds as the basis for its Motion: First, as set forth in subpara-graph (1), for “mistake, inadvertence, surprise, or excusable neglect[.]” Second, as contained in subparagraph (5), when “the judgment has been satisfied, released or discharged ... [.]”

With respect to Rule 60(b)(1), the Creditor put forth that its failure to first respond and then to comply with this Court’s orders was due to both “surprise” and “excusable neglect.” On these grounds, surprise by its very nature requires something unexpected. And, as put forth by the Supreme Court of the United States, excusable neglect looks to considerations such as “whether it was within the reasonable control of the movant ...” Pioneer Investment Services Co. v. Brunswick [867]*867Associates L.P., 507 U.S. 380, 395, 113 S.Ct. 1489, 1499, 123 L.Ed.2d 74 (1993). Here, the Court agrees with the logic put forth by the Debtor, as set forth below, that neither of these standards has been met:

The court docket shows that none of the notices sent to the [Creditor] were returned and that [the Creditor] failed to respond to all notices and orders. In addition to the last Order that [the Creditor] admits receiving it also received the original notice of Commencement of the Case, as it filed a proof of claim, and has received arrearage payments from the Trustee in this proceeding The [Creditor] next considers the possibility that it received all previously mentioned notices and claims mistake or excusable neglect. The critical mistake made by the Movant is that it expects this Court to entertain the idea that Movant received the notices it benefited [sic] from and none of the nine notices or motions that were to it’s [sic] detriment. To give any credibility to [the Creditor’s] motion or affidavit would indicate that the Court system is seriously flawed in it’s [sic] ability to serve it’s [sic] own documents. Such a proposition is preposterous and an insult to the reasons. If the Court system is not seriously flawed then it must be [the Creditor’s] internal system for which there can be no excuse for ignoring the orders of this Court with such selective notice acceptance practices.

(Doc. No. 36, at pg. 2)

As it pertains to setting aside this Court’s order for sanctions under Rule 60(b)(5) — for the reason that the judgment has been satisfied — the Creditor submitted that, in effect, the conditions contained in this Court’s order have been met “because it provided the accounting statements and remitted the attorneys [sic] fees as ordered by this court.” (Doc. No. 42, at pg. 3). This position, however, simply cannot be reconciled with this overall facet of this Court’s order for sanctions: the cancellation of the Creditor’s lien interest in the Debtor’s property was not in anyway conditioned on it providing the Debtor with an accounting or compensating the Debtor for her legal expenses; they are instead entirely independent of one another. Thus, in contrast to the Creditor’s argument, a successful Rule 60(b)(5) action in this matter would require that the Creditor, pursuant to this Court’s order, cause its lien interest to be removed against the Debt- or’s property.

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Bluebook (online)
321 B.R. 864, 2004 Bankr. LEXIS 2277, 2004 WL 3234342, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-baker-ohnb-2004.