Kenneth Gene Wilkinson

• Court: United States Bankruptcy Court, E.D. California
• Decided: September 16, 2025
• Docket: 24-24334
• Status: Unknown

Opinion

1 NOT FOR PUBLICATION 2 POSTED TO THE WEBSITE 3 UNITED STATES BANKRUPTCY COURT 4 EASTERN DISTRICT OF CALIFORNIA 5 6 In re: Case No. 24-24334-A-13 7 KENNETH G. WILKINSON, Memorandum Regarding Motions for 8 Contempt (Stay Violation by PHH Mortgage), ECF No.170 9 Debtor.

10 11 12 13 Argued and submitted on September 9, 2025 14 15 at Sacramento, California 16 Honorable Fredrick E. Clement, Bankruptcy Judge Presiding 17 18 19 Kenneth Wilkinson, in propria persona; Appearances: Kelly G. Wilkinson, in propria persona; 20 Jillian Benbow, Aldridge Pite LLP for Aldridge Pite LLP; and Kathryn A. Moorer 21 and Arnold Graff, Wright, Finley & Zalk, LLP for PHH Mortgage Corporation, Western 22 Progressive Trustee, LLC; Bank of New York 23 Mellon Trust Company, N.A.; JP Morgan Chase, as Trustee for Residential Asset 24 Mortgage Products, Inc; Mortgage Asset- Backed Pass-Through Certificates, Series 25 2003-RP-1; and Wright, Finlay & Zak, LLP 26

27 1 Section 362(a) protects the debtor, property of the estate and 2 property of the debtor property from collection efforts during the 3 bankruptcy. Kenneth Wilkinson owns real property subject to a note 4 and deed of trust in favor of PHH Mortgage. The note and deed of 5 trust were taken by Wilkinson’s now deceased wife. After Wilkinson 6 filed a Chapter 13 bankruptcy, PHH sent five written communications to 7 Wilkinson’s deceased spouse. Did PHH Mortgage violate the stay? 8 I. FACTS 9 Kenneth G. Wilkinson and Kelly G. Wilkinson (“plaintiffs 10 Wilkinson”) are engaged in a dispute with the holders of the note and 11 deed of trust against the home in which they reside, 3961 Nugget Lane, 12 Placerville, California (“the property”). The Wilkinsons reside on 13 the property.1 14 Lei Anne Wilkinson acquired the property. Ex. A & B, Mot. 15 Dismiss Compl. ECF No. 14. In 1999, Lei Anne Wilkinson executed a 16 promissory note in the amount of $136,000 and a deed of trust against 17 the property in favor of BYL Bank. Id. at Ex. C. Over time, the 18 promissory note and deed of trust were assigned to other financial 19 institutions, terminating with the Bank of New York Mellon Trust 20 Company. Id. at D-I. 21 In March 2020, Lei Anne Wilkinson died. Findings and 22 Recommendations 2:12, Wilkinson v. PHH Mortgage Corporation et al., 23 No. 2:24-cv-1416 (E.D. Cal. February 20, 2025), adopted Order ECF No. 24 31. Her ashes are scattered on the property. Kelly Wilkinson decl. 25

26 1 For the most part, the motions are supported by relevant evidence. See Kenneth G. Wilkson decl., ECF No. 29; Kelly G. Wilkinson decl., ECF No. 28. 27 The court has gleaned the following facts from the record and ancillary filings. For the purpose of context only, the court takes judicial notice of 1 ¶¶4, 6, ECF No. 28: Kenneth Wilkinson ¶ 2, ECF No. 29. Thereafter, 2 the property passed to the plaintiffs Wilkinson. Findings and 3 Recommendations 2:12, Wilkinson, 2:24-cv-1416. 4 In 2021, the loan went into default for non-payment. Id. at 5 2:13-14. In 2023, Western Progressive, LLC, acting as the trustee, 6 issued its Notice of Default and Election to Sell. Ex. J., Mot. to 7 Dismiss Compl., ECF No. 14. 8 In April 23, 2024, Western Progressive, LLC recorded its Notice 9 of Trustee’s Sale. Ex. K, Mot. Dismiss Compl. ECF No. 14. The sale 10 was scheduled for May 23, 2024. 11 In May 2024, Kenneth G. Wilkinson and Kelly G. Wilkinson filed 12 an action in district court against PHH Mortgage Corporation and 13 Western Progressive LLC. Compl. ECF No. 1. The complaint contended 14 that defendants PHH Mortgage Corporation and Western Progressive LLC 15 were “attempting to enforce a void mortgage contract” and included 16 causes of action for breach of contract, breach of the covenant of 17 good faith and fair dealing, injunctive relief, and quiet title. Am. 18 Compl., ECF No. 10. Defendants PHH Mortgage Corporation and Western 19 Progressive LLC moved to dismiss the complaint. Finding a lack of 20 standing on the part of Kenneth G. Wilkinson and Kelly G. Wilkinson, 21 the district court dismissed the complaint without leave to amend. 22 Findings and Recommendations 2:12, Wilkinson v. PHH Mortgage 23 Corporation, No. 2:24-cv-1416 (E.D. Cal. February 20, 2025), adopted 24 Order ECF No. 31. 25 On September 26, 2024, Western Progressive, LLC conducted the 26 foreclosure sale for the property and the holder of the note and deed 27 of trust, Bank of New York Mellon Trust Company was the successful 1 On September 27, 2024, Kenneth Wilkinson filed a Chapter 13 2 bankruptcy petition. Schedule A/B listed 3961 Nugget Lane, 3 Placerville and described its value as $325,000. Schedule A/B, ECF 4 No. 20. Schedule D listed a secured debt against the property of 5 $267,302 in favor of PHH Mortgage Corporation. Schedule D, ECF No. 6 20. Western Progressive LLC and Bank of New York Mellon were also 7 listed as secured creditors. Notwithstanding the foreclosure sale on 8 the day prior to filing bankruptcy, Kenneth G. Wilkinson answered “No” 9 to the question: “Within 1 year before you filed for bankruptcy, was 10 any of your property repossessed, foreclosed, garnished, attached, 11 seized, or levied?” Statement of Financial Affairs No. 10, ECF No. 12 21. The debtor has proposed, but not confirmed, a plan. 13 On December 5, 2024, Western Progressive, LLC recorded the 14 Trustee’s Deed Upon Sale in favor of the Bank of New York Mellon Trust 15 Company. Ex. L, Mot. Dismiss Compl. ECF No. 14. 16 On May 16, 2025, the plaintiffs Wilkinson brought an adversary 17 proceeding against PHH Mortgage Corporation; Western Progressive, LLC; 18 Wright, Finlay & Zak, LLP, Bank of New York Mellon Trust, and Aldridge 19 Pite LLP. The complaint pleads causes of action for declaratory 20 relief; unconscionable contract, violation of the Fair Debt 21 Collections Practices Act, failure of consideration, and violation of 22 the stay. The defendants have moved to dismiss the complaint under 23 Rule 12(b)(6); the plaintiffs oppose those motions, which remain 24 pending. 25 Subsequent thereto, PHH and/or NewRez sent five different 26 communications to the 3961 Nugget Lane Property: (1) a Corrected 1099- 27 A Internal Revenue Tax Form addressed to “Lei Wilkinson,” date known; 1 June 30, 2025; (3) a letter requesting hazard insurance information 2 addressed to “Lei Wilkinson,” dated July 7, 2025; (4) a letter 3 outlining mortgage assistance options addressed to “Lei Wilkinson,” 4 dated July 8, 2025; and (5) a Monthly Mortgage Statement addressed to 5 “Lei Wilkinson,” dated July 17, 2025. All except the IRS 1099-A 6 contain the verbiage, “Our records show that you are a debtor in 7 bankruptcy. We are sending this statement to you for informational 8 and compliance purposes only. It is not an attempt to collect a debt 9 against you” or words to similar effect. 10 II. PROCEDURE 11 The Wilkinsons move for an order of contempt against PHH Mortgage 12 for “five separate and distinct [one for each letter] post-petition 13 violations of the automatic stay.” Mot. 2:18-20, ECF No. 170. PHH 14 Mortgage opposes the motion. 15 III. JURISDICTION 16 This court has jurisdiction. 28 U.S.C. §§ 1334(a)-(b), 157(b); 17 see also General Order No. 182 of the Eastern District of California. 18 The matter falls within the bankruptcy court’s core jurisdiction, 28 19 U.S.C. § 157(a) (arising “under title 11”); 28 U.S.C. § 157(b)(G),(O). 20 IV. DISCUSSION 21 Stay violations may be redressed by a motion for contempt. In re 22 Goodman, 991 F.2d 613, 619-620 (9th Cir. 1993); see FRBP 9020; In re 23 Rainbow Magazine, Inc., 77 F.3d 278, 284-285 (9th Cir. 1996). Actual 24 knowledge of the stay is required. Matter of Hailey, 621 F.2d 169, 25 172 (5th Cir. 1980); Matter of Carter 691 F.2d 390, 391 (8th Cir. 26 1982). The movant carries the burden of proof. In re Dyer, 322 F.3d 27 1178, 1190–91 (9th Cir. 2003) (“[t]he moving party has the burden of 1 a specific and definite order of the court,” citing Bennett, 298 F.3d 2 at 1069). 3 The “metes and bounds of the automatic stay are provided by [11 4 U.S.C. § 362] and systematically applied to all cases[.]” Jove Eng'g 5 v. IRS (In re Jove Eng'g), 92 F.3d 1539, 1546 (11th Cir.1996). 6 (a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this 7 title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a 8 stay, applicable to all entities, of-- 9 (1) the commencement or continuation, including the issuance or employment of process, of a judicial, 10 administrative, or other action or proceeding against the debtor that was or could have been commenced 11 before the commencement of the case under this title, or to recover a claim against the debtor that arose 12 before the commencement of the case under this title; 13 (2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before 14 the commencement of the case under this title; 15 (3) any act to obtain possession of property of the estate or of property from the estate or to exercise 16 control over property of the estate; 17 (4) any act to create, perfect, or enforce any lien against property of the estate; 18 (5) any act to create, perfect, or enforce against 19 property of the debtor any lien to the extent that such lien secures a claim that arose before the 20 commencement of the case under this title; 21 (6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement 22 of the case under this title... 23 11 U.S.C. § 362(a)(1)-(6) (emphasis added). 24 Section 362 protects the debtor, property of the estate, property 25 of the debtor and nothing and no one else. In re Casgul of Nev., 26 Inc., 22 B.R. 65, 66 (9th Cir. BAP 1982). Non-debtors are not 27 protected by the stay. In re Qarni, No. 19-12679-A-13, 2019 WL In re Chugach 1 Forest Products, Inc., 23 F.3d 241, 246 (9th Cir. 1994); United States 2 v. Dos Cabezas Corp., 995 F.2d 1486, 1491-1492 (9th Cir. 1993)) 3 (emphasis added). 4 Section 362(a)(6) (“act to collect, assess, or recover a claim 5 against the debtor”) represents the broadest of stay provisions. Of 6 course, it includes communications that attempt to collect a debt. 7 But not all communications between a debtor and a creditor are 8 prohibited; it is only those designed to coerce payment of a 9 prepetition debt. Morgan Guar. Trust Co. of N.Y. v. Am. Sav. and Loan 10 Ass'n, 804 F.2d 1487, 1491 (9th Cir.1986). The Bankruptcy Appellate 11 Panel for the Ninth Circuit has articulated beautifully the standard: 12 We begin our analysis with the premise that the automatic stay does not prevent all communications between a creditor 13 and the debtor. Whether a communication is a permissible or prohibited one is a fact-driven inquiry which makes any 14 bright line test unworkable. However, case law provides us with some guidance in defining which creditor 15 communications violate the stay. 16 Prohibited communications include those where direct or circumstantial evidence shows the creditor's actions were 17 geared toward collection of a prepetition debt, were accompanied by coercion or harassment, or otherwise put 18 pressure on the debtor to pay. But mere requests for payment and statements simply providing information to a 19 debtor are permissible communications that do not run afoul of the stay. 20 In re Zotow, 432 B.R. 252, 258–59 (B.A.P. 9th Cir. 2010) 21 (citations omitted). 22 Having reviewed the five communications of which debtor Kenneth 23 G. Wilkinson complains the court draws these conclusions. First, none 24 of the five communications are an attempt to enforce a debt “against 25 property of the estate,” 11 U.S.C. § 362(a)(2)-(4), or “property of 26 the debtor.” 11 U.S.C. § 362(a)(5). These communications are in 27 personam. 1 claim against the debtor.” 11 U.S.C. § 362(a) (1), (a) (6). Kenneth 2 Wilkinson has two problems. The stay only protects the “debtor.” 11 3 U.S.C. § 101(13) (the person who filed bankruptcy); Chugach Forest 4 Products, Inc., 23 F.3d at 246; Dos Cabezas Corp., 995 F.2d at 1491- 5 1492, Kenneth Wilkinson is the debtor and is protected by the stay; 6 Lei Wilkinson is not a “debtor” and is not protected by the stay. All 7 communications were directed to “Lei Wilkinson.” 8 Moreover, these communications are of the informational, not in 9 the flavor of coercion and/or harassment. In re Zotow, 432 B.R. 252, 10 259 (B.A.P. 9th Cir. 2010) (recognizing the Chapter 13 debtors need 11 for information for confirmation of a plan). No demand for payment, 12 nor threat is made. And, in fact, each of the communications (except 13 the IRS 1099-A form) include verbiage that specifically state that 14 they recognize the bankruptcy and are not attempting to collect a 15 debt. 16 Vv. CONCLUSION 17 For each of these reasons, the court finds that Kenneth Wilkinson 18 has not made a prima facie case and will deny the motion. An order 19 will issue from chambers. 20 | Dated: September 16, 2025 4S 06-4 22 Fredrick E. Clement 23 United States Bankruptcy Judge 24 25 26 27 28

1 Instructions to Clerk of Court

2 Service List - Not Part of Order/Judgment

3 The Clerk of Court is instructed to send the Order/Judgment or other court generated document transmitted herewith to the parties below. The Clerk of Court will send the document 4 via the BNC or, if checked ____, via the U.S. mail.

6 Debtor(s) Attorney for the Debtor(s) (if any)

7 Bankruptcy Trustee (if appointed in the case) Office of the U.S. Trustee Robert T. Matsui United States Courthouse 8 501 I Street, Room 7-500 9 Sacramento, CA 95814 All Creditors and Interested Parties 10 11

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