Melo v. GMAC Mortgage, LLC (Melo)

496 B.R. 253
CourtBankruptcy Appellate Panel of the First Circuit
DecidedAugust 13, 2013
DocketBAP No. MW 12-086; Bankruptcy No. 12-42304-MSH; Adversary No. 12-04083-MSH
StatusPublished
Cited by10 cases

This text of 496 B.R. 253 (Melo v. GMAC Mortgage, LLC (Melo)) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Melo v. GMAC Mortgage, LLC (Melo), 496 B.R. 253 (bap1 2013).

Opinion

PER CURIAM.

Benjamim A. Melo and Tanya A. Melo appeal from the bankruptcy court order granting summary judgment in favor of GMAC Mortgage, LLC (“GMAC”) on both counts of the Melos’ adversary complaint alleging that GMAC breached its obligation to modify the terms of their loan and to forbear from foreclosing. For the reasons set forth below, we DISMISS this appeal as MOOT.

BACKGROUND

In February 2006, Benjamim A. Meío executed a note in favor of Mortgage Workout Inc., d/b/a Eastpointe Mortgage. To secure the note, the Melos granted a first mortgage on their residence to Mortgage Electronic Registration Systems, Inc., as nominee for Mortgage Workout Inc., d/b/a Eastpointe Mortgage. The note and mortgage were subsequently assigned to GMAC.

In April 2010, the Melos entered into a permanent loan modification agreement with GMAC, whereby the interest rate on the note was reduced from 6.75 percent to 2.0 percent. The Melos soon defaulted under the terms of that agreement and have not made a payment since October 1, 2010.

In August 2011, the Melos filed a voluntary petition for chapter 7 relief. Two weeks later, GMAC sought and obtained relief from stay. The Melos appealed, but after receiving their discharge in November 2011, they voluntarily dismissed their appeal in consideration for GMAC’s agreement to obtain an order that vacated the grant of stay relief.1

After their chapter 7 case was closed, the Melos made several requests for a loan modification. GMAC denied each request. Eventually, GMAC commenced foreclosure proceedings.

The Melos then filed for chapter 13 relief and filed a two-count adversary complaint, pro se, alleging that GMAC breached an agreement to forbear and that GMAC breached the covenant of good faith and fair dealing by commencing foreclosure. They sought to permanently enjoin GMAC’s foreclosure efforts.

GMAC answered and moved for summary judgment, asserting, inter alia: (1) it had considered the Melos’ three loan modification requests prior to proceeding to foreclosure; (2) a mortgagee has no duty to consider a borrower for a loan modification, even under the federal government’s Home Affordable Modification Program (“HAMP”); and (3) even if GMAC did have an obligation to consider the Melos for a loan modification, borrowers do not have a right to bring a private action under HAMP.

In response, the Melos argued that GMAC’s motion should be denied because their loan modification efforts remained ongoing. The court entered an order granting summary judgment to GMAC, specifically ruling as follows:

There are no material facts in dispute in this matter. Based on the affidavits [255]*255submitted in support of and in opposition to defendant’s motion for summary judgment, the matters of record in the main chapter 13 case of the debtor/plaintiffs and their prior now-closed chapter 7 case, I find (i) that in exchange for plaintiffs’ agreeing to dismiss their appeal, defendant agreed to withdraw a pending motion for relief from stay, obtain the vacating of an order granting it relief from stay and consider plaintiffs’ request for a HAMP loan modification, (ii) that in fact in March 2010 defendant approved plaintiffs for a loan modification but plaintiffs defaulted thereunder in October 2010, (iii) that defendant considered plaintiffs for a series of subsequent loan modifications but rejected plaintiffs each time because their existing loan modification already represented the best deal plaintiffs were eligible to receive and (iv) that now defendant has approved plaintiffs for a further loan modification as of November 2012 although as of today plaintiffs have failed to make the first trial plan payment due thereunder. Finally, I find that defendant was within its rights to commence foreclosure of its mortgage as plaintiffs were in default of their commitments under the 2010 loan modification. The repeated futile filings by plaintiffs of application after application seeking a further modification which were all rejected because plaintiffs were not eligible for a modification with better terms than they already had, did not impose on defendant any contractual obligation to refrain from foreclosing.
For the foregoing reasons, defendant’s motion for summary judgment as to both counts of the complaint is ALLOWED.

(emphasis in original).

This appeal ensued. On appeal, the parties essentially reiterate the arguments which they presented below.2 The bankruptcy court, however, has subsequently entered an order dismissing the underlying bankruptcy case.

JURISDICTION

A bankruptcy appellate panel is “‘duty-bound’” to determine its jurisdiction before proceeding to the merits, even if not raised by the litigants. Boylan v. George E. Bumpus, Jr. Constr. Co., Inc. (In re George E. Bumpus, Jr. Constr. Co., Inc.), 226 B.R. 724, 725-26 (1st Cir. BAP 1998) (quoting Fleet Data Processing Corp v. Branch (In re Bank of New England Corp.), 218 B.R. 643, 645 (1st Cir. BAP 1998)). A panel may hear appeals from “final judgments, orders, and decrees [pursuant to 28 U.S.C. § 158(a)(1)] or with leave of the court, from interlocutory orders and decrees [pursuant to 28 U.S.C. § 158(a)(3) ].” In re Bank of New England Corp., 218 B.R. at 645. Here, the order granting summary judgment is final [256]*256because it disposed of both counts of the Melos’ complaint. See Frykberg v. JPMorgan Chase Bank (In re Frykberg), 490 B.R. 652, 656 (1st Cir. BAP 2013) (citation omitted). Our jurisdiction, however, does not rest on finality alone, as mootness will deprive us of jurisdiction to review a final order. See GE Capital Franchise Fin. Corp. v. Richardson (In re Newport Creamery, Inc.), 295 B.R. 408, 417 (1st Cir. BAP 2003). We are, therefore, obliged to determine whether the intervening dismissal of the Melos’ bankruptcy case renders this appeal moot.

“The dismissal of a bankruptcy case ‘normally results in dismissal of related proceedings because federal jurisdiction is premised upon the nexus between the underlying bankruptcy case and the related proceedings.’ ” Hamilton v. Appolon (In re Hamilton), 399 B.R. 717, 720 (1st Cir. BAP 2009) (quoting In re Statistical Tabulating Corp., Inc., 60 F.3d 1286, 1289-90 (7th Cir.1995)). This general rule is not without exceptions, however. Id. (quoting In re Statistical Tabulating Corp., Inc., 60 F.3d at 1289-90). “[T]he determination of whether a case becomes moot on the dismissal of the bankruptcy hinges on the question of how closely the issue in the case is connected to the underlying bankruptcy.” United States v. Pattullo (In re Pattullo), 271 F.3d 898, 901 (9th Cir.2001) (internal quotations and citation omitted). “When the issue being litigated directly involves the debtor’s reorganization, the case is mooted by the dismissal of the bankruptcy.” Id. (internal quotations and citation omitted).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Untitled Case
S.D. Alabama, 2026
Sundaram v. Briry, LLC
9 F.4th 16 (First Circuit, 2021)
Ramos v. White
D. Massachusetts, 2020
In Re. West
D. Massachusetts, 2018
Cousins International Food, Corp. v. Aquino Vidal
565 B.R. 450 (First Circuit, 2017)
Neidich v. Salas
783 F.3d 1215 (Eleventh Circuit, 2015)
Travers v. Bank of America, N.A. (In re Travers)
507 B.R. 62 (D. Rhode Island, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
496 B.R. 253, Counsel Stack Legal Research, https://law.counselstack.com/opinion/melo-v-gmac-mortgage-llc-melo-bap1-2013.