Kalmanowicz v. Third National Bank & Trust Co. of Scranton (In re Kalmanowicz)

248 B.R. 249, 1998 U.S. Dist. LEXIS 23074, 1998 WL 1543543
CourtDistrict Court, M.D. Pennsylvania
DecidedAugust 21, 1998
DocketNo. Civ. 98-973
StatusPublished

This text of 248 B.R. 249 (Kalmanowicz v. Third National Bank & Trust Co. of Scranton (In re Kalmanowicz)) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kalmanowicz v. Third National Bank & Trust Co. of Scranton (In re Kalmanowicz), 248 B.R. 249, 1998 U.S. Dist. LEXIS 23074, 1998 WL 1543543 (M.D. Pa. 1998).

Opinion

MEMORANDUM and ORDER

NEALON, Senior District Judge.

The appellants, Anthony K. Kalmanow-icz, Margaret S. Kalmanowicz, and Frances Kalmanowicz, debtors/complainants, (hereinafter debtors) filed this appeal from a ruling of the Bankruptcy Court dismissing debtors’ adversary proceeding in which they sought to overturn a Sheriffs Sale on their mortgage with the Third National Bank (Bank)1 and subsequent sale of the premises to Pocono Downs, Inc. (Pocono Downs). Jurisdiction of this court is based on 28 U.S.C. § 158(a)(1).

I. Background

The parties have submitted a Stipulation of Facts which, in pertinent part, is set forth here.

1. Anthony K. Kalmanowicz and Margaret S. Kalmanowicz filed a voluntary Chapter 11 Petition on October 8, 1992. Under 11 U.S.C. § 362(e), the filing of this petition automatically stayed any foreclosure action against real property owned by the debtors.

2. Prior to filing the petition, debtors owned an interest in common with Frances J. Kalmanowicz (mother of Anthony K. Kalmanowicz) in real estate adjacent to Pocono Downs at 1258 Highway 315, Plains Township, Pennsylvania. (Collec[251]*251tively debtors and Frances Kalmanowicz are referred to as the “Kalmanowiczs”).

3. On or about December 11, 1987, the Kalmanowiczs had executed and delivered a promissory note in the sum of $350,000 secured by a mortgage on the property to the Bank.

4. Debtors defaulted in making their payments under the promissory note and mortgage.

5. On or about February 14, 1992, the Bank filed a judgment in Luzerne County Court of Common Pleas to No. 573-L of 1992 against the Kalmanowiczs, which judgment had originally been entered in the Court of Common Pleas of Wyoming County.

6. On June 17, 1993, the Bank filed a motion for relief from the automatic stay in the Bankruptcy Court in the Kalmanow-icz Bankruptcy.

7. A preliminary hearing on the relief motion was held on July 2, 1993, and a final hearing was scheduled for August 2, 1993.

8. At the August 2, 1993, final hearing, counsel for the Bank represented to the court that an agreement had been reached whereby the stay would be lifted but the Bank would not pursue execution provided the debtor would satisfy certain conditions including monthly payments on the debt of $4,500 per month commencing on October 1, 1993. Debtor’s counsel stated that his client agreed with the terms as orally recited by counsel for the Bank and it was agreed that the stipulation would be reduced to writing and submitted to the court within 15 days. The Bankruptcy Court then issued a proceeding memorandum/order of court marking the relief motion “settled-stip to be filed within 15 days.”

■ 9. On or about August 11, 1993, David Gregory, counsel for the Bank, mailed a Stipulation to Entry of Order Granting Motion for Relief from the Automatic Stay to Robert Seovell, counsel for the debtors.

10. On or about August 11,1993, David Gregory, counsel for the Bank, mailed a Stipulated Order Granting Motion for Relief from the Automatic Stay for Judge Thomas’ signature, to Robert Seovell, counsel for the debtors.

11. No written response was received by the Bank or its counsel to David Gregory’s correspondence of August 11, 1993 to Robert Seovell.

12. David Gregory, counsel for the Bank, mailed a proposed stipulation to Entry of Order Granting Motion for Relief from the Automatic Stay to Robert Sco-vell, counsel for the debtors on or about August 24,1993.

13. David Gregory, counsel for the Bank, mailed a Stipulated Order Granting Motion for Relief from the Automatic Stay for Judge Thomas’ signature, to Robert Seovell, counsel for the debtors on or about August 24,1993.

14. No written response was received by the Bank or its counsel to David Gregory’s correspondence of August 24, 1993.

15. Neither debtors nor Robert J. Sco-vell signed either the August 11 or August 24, 1993 Stipulation to Entry of Order Granting Motion for Relief from the Automatic Stay sent by Gregory.

16. Debtors did not comply with the provisions placed on the record at the August 2,1993 hearing.

17. Neither debtors nor debtors’ counsel requested that the Bankruptcy Court enter an order continuing the Automatic Stay at or any time after the August 2, 1993 hearing.

18. The Bankruptcy Court did not enter any Order continuing the Automatic Stay at or any time after the August 2, 1993 hearing.

19. Neither debtors nor debtors’ counsel filed any motions with regard to the Automatic Stay at or any time after the August 2,1993 hearing.

[252]*25220. On or about October 6, 1993 the Bank filed a complaint in Luzerne County court for confession of judgment, Case No. 2687-L of 1993, against the Kalmanowiezs in the amount of $359,280.77.

21. On October 28, 1993, the Bank, through its attorneys, filed a praecipe for a writ of execution in the case 573-L of 1992, and obtained a writ of execution.

22. On or about October 27, 1993, the Bank, through its counsel, mailed a writ of execution in Case No. 573-L-1992 to the Luzerne County Sheriff along with a check for $2,000.

23. The execution papers filed by the Bank in Case 573-L-1992 were marked by the Prothonotary’s office to execution docket 485-1993-ED.

24. On or about November 2, 1993, the Bank, through its counsel, mailed letters to the debtors’ creditors via certified or first class U.S. mail notifying them of a Sheriffs Sale of the debtors’ property scheduled for January 28,1994.

25. On December 15, 1993, in Luzerne County Court of Common Pleas, the Kal-manowiczs filed a petition to open and/or strike the judgment in cases No. 2687-L-1993 and filed a counterclaim.

26. The Bank filed an answer to the Petition to Strike and/or Open Judgment by Confession and Counterclaim in case 2687-L of 1993 on or about January 7, 1994.

27. The Bank’s answer in 2687-L of 1993 filed on about January 7, 1994, claimed that the Bank obtained relief from the automatic stay as set forth in the Bankruptcy Court transcript of August 2, 1993.

28. Attached to the Bank’s answer in 2687-L of 1993 filed on or about January 7, 1994, was a transcript of the August 2, 1993 bankruptcy court hearing, the August 24, 1993 proposed Stipulation signed by David Gregory but unsigned by any representative of the debtors, an unexecuted notice of stipulation, and the unexecuted stipulated order for the signature of Judge Thomas.

29. On or about January 7, 1994 the Bank filed a motion in the bankruptcy court to convert the debtors’ ease to Chapter 7 or dismiss the debtors’ case.

30. Attached to the Bank’s motion to convert to Chapter 7 or dismiss the debtors’ case filed on or about January 7, 1994, was the August 2, 1993 hearing transcript, the August 24, 1993 proposed Stipulation executed by David Gregory but unexecut-ed by any representative of the debtors, the unexecuted notice of stipulation, and the unexecuted stipulated order for Judge Thomas’s signature.

31.

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248 B.R. 249, 1998 U.S. Dist. LEXIS 23074, 1998 WL 1543543, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kalmanowicz-v-third-national-bank-trust-co-of-scranton-in-re-pamd-1998.