Month: August 2017

Bankr. E.D.N.C.: In re Hutton- Perfection of Judgment Lien against Motor Vehicle Following Levy

Summary:

Mr. Hutton’s vehicles were seized in a levy by the Onslow County Sheriff’s Department in executing on a judgment obtained by Principis. After filing bankruptcy, Mr. Hutton sought turnover of the vehicle and asserted that the possessory lien held by Principii had not been perfected by recordation with the North Carolina DMV.

In narrowly construing and distinguishing several decisions from the North Carolina Supreme Court and Court of Appeals, the bankruptcy court rejected the argument by Principis that recordation is required to perfect a lien under N.C.G.S. § 20-58 only if there is a “security interest” as defined in N.C.G.S.… Read More

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N.C. Court of Appeals: In re Clayton- Surviving Spouse not a Borrower under Reverse Mortgage Note

Summary:

After the death of her Melvin Clayton, Wells Fargo accelerated the reverse mortgage note and sought to foreclose on the residence still owned by Mrs. Clayton. The Court of Appeals held that even though Mrs. Clayton was identified as a “borrower” on the Deed of Trust, Melvin Clayton was “the only contemplated borrower to the reverse-mortgage agreement, as he alone executed [those] documents and was obligated under them.” Mrs. Clayton was, due to her age, ineligible to be a borrower under the reverse mortgage, which, pursuant to N.C.G.S. § 53-257(2), must be 62 years of age or older.

Commentary:

The successor in interest rules under the Dodd-Frank Act would not apply here, as this is a reverse mortgage.… Read More

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Bankr. E.D.N.C.: In re Green – Determination of Noncontingent and Liquidated Debts for Eligibility under 11 U.S.C. § 109(e)

Summary:

In determining whether Mr. Green was eligible, under 11 U.S.C. § 109(e), to be a Chapter 13 debtor due to debt limitations, the bankruptcy court reviewed several types of claims to determine whether each was “noncontingent” or “liquidated”.

While determination of whether a debt is “noncontingent” or “liquidated” is a question of law, See In re Goralnick, 81 B.R. 570, 571 (9th Cir. BAP 1987) the amount of a debt is a question of fact. “[A] debt is noncontingent if all of the events necessary to give rise to liability for it take place prior to the filing of the petition.” In re Sappah, No.… Read More

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4th Circuit: Rusnack v. Cardinal Bank, N.A.- Recoupment and Statutes of Limitation

Summary:

Mr. Rusnack and his then-wife, opened a home equity line of credit (HELOC) with Cardinal Bank in August 2003. Between 2003 and 2006, the Rusnacks periodically drew on the HELOC using checks issued by Cardinal Bank. On June 22, 2006, shortly after the Rusnacks separated, Mr. Rusnack directed Cardinal Bank in writing to freeze further advances from the HELOC and Cardinal Bank acknowledge such freeze. Despite this, Cardinal Bank honored two checks each in the amount of $10,000 from Ms. Rusnack on July 26, 2006, and September 12, 2006. Cardinal Bank sought repayment from Ms. Rusnack, but she did not comply.… Read More

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4th Circuit: Daughtery v.  Ocwen Loan Servicing- Evidence and Excessive Damages for FCRA Violations4th Circuit: Daughtery v.  Ocwen Loan Servicing- Evidence and Excessive Damages for FCRA Violations

Summary:
The Daughterys purchased their home in 1999, with a 15-year balloon note payable in July 2014 in the amount of $82,666.36.  In 2012, the Daughterys had fallen $6,128.39 behind on the regular payments and Ocwen, who had become the mortgage servicer after the first default by the Daughterys, commenced foreclosure, reporting accurately the delinquency and foreclosure proceeding.  Using retirement savings, the Daughters brought the mortgage current within one month with the foreclosure be discontinued.
During this period, Ocwen had discovered that its predecessor had inaccurately reported the origination date of the note and submitted information to correct this error.  Equifax  mistook this for a separate account, creating a new, duplicate trade line for Mr.… Read More

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Bankr. E.D.N.C.: In re Taylor- Private Citizens Enforcing Federal Statutes Not Exempt from the Automatic Stay as Governmental Units

Summary:

In a case involving a hog farm and related claims of environmental pollution, Sound Rivers, Inc.’s and Waterkeeper Alliance, Inc. sought an order confirming that the automatic stay does not apply or, in the alternative, for relief from the automatic stay in order to continue their lawsuit filed in the federal district Court. The Movants contended that the automatic stay does not apply with respect to the district court lawsuit under the governmental regulatory exclusion to the stay at § 362(b)(4), which provides that the automatic stay does not preclude the continuation of an action “by a governmental unit…to enforce such governmental unit’s … police and regulatory power….” While admittedly not “governmental units in the most narrow and traditional definition,” the Movants argue that private citizens bringing compliance suits pursuant to a government unit’s “police power” may constitute “governmental units” for purposes of §362(b)(4) if the law giving rise to the action are for the “public safety and welfare,” See Universal Life Church, Inc. Read More

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Bankr. E.D.N.C.: In re Regenhardt- Homestead Exemption for Adjacent Property

Summary:

Mr. and Mrs. Regenhardt sought to claim their residence and the adjacent property as fully exempt under the available homestead exemption, with the Trustee asserting that the adjacent property was not part of the homestead and only partially exempt using their wildcard.

In reviewing the case law from the district, specifically In re Stox, No. 10-08123-8-RDD, 2011 WL 5902882, at *6 (Bankr. E.D.N.C. May 27, 2011) and In re Rogers, No. 16-02884-5-JNC, 2016 WL 5794707, at *4 (Bankr. E.D.N.C. Oct. 3, 2016), the bankruptcy court reiterated that the controlling facts in determining whether adjacent property was part of the homestead “was the actual use of the subject properties through and as of the petition date, not a past simultaneous acquisition in one deed.” Based on testimony from Mr.… Read More

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W.D.N.C.: Deal v. Trinity Hope Associates, LLC- Default Judgment under FDCPA

 

Summary:

Default Judgment was entered in favor of Ms. Deal for violations of the FDCPA by Trinity Hope Associates, which failed to respond to the Complaint.

Commentary:

The only aspect that is interesting is that this is a 10-page opinion finding default, where the defendant did not answer.

For a copy of the opinion, please see:

Deal v. Trinity Hope Associates, LLC- Default Judgment under FDCPA Read More

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E.D.N.C.: Mungo-Craig v. Navient Solutions- Student Loan Servicer not a Debt Collector

Summary:

Ms. Mungo-Craig brought suit against Navient, first in state court and then after removal in federal district court, alleging violations of the FDCPA and North Carolina Debt Collection Act. The district court denied her motion to remand, finding that it did have federal question jurisdiction to hear claims brought under the FDCPA and supplemental jurisdiction for the other state law claims, as they arose from the same common nucleus of facts. It then granted the Motion to Dismiss brought by Navient finding that Ms. Mungo-Craig had not alleged sufficient facts and could not, in fact, show that Navient, as there was no showing that it had commenced servicing of the student loans after to default, was a “debt collector” under the FDCPA.… Read More

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Bankr. E.D.N.C.: Burgess v. Citimortgage, Inc. – Rooker-Feldman Doctrine & Collateral Estoppel Effect of Foreclosure

Summary:

Mr. Burgess, who had previously been the president of the mortgage lender that originated the loan at question in this case, sought to avoid the mortgage, challenging the chain of assignments, on the basis that an unauthorized party endorsed the note, that eventually lead to Citimortgage foreclosing on his residence and asserting claims in his Chapter 11 case.

In ruling on the Motion to Dismiss filed by Citimortgage, the bankruptcy court first addressed questions of whether the Rooker-Feldman doctrine deprived it of jurisdiction, particularly in light of recent opinions by the North Carolina Supreme Court in In re Lucks, — N.C.… Read More

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