Академический Документы
Профессиональный Документы
Культура Документы
STATEMENT OF FACTS
This appeal is the result of proceedings on the second bankruptcy filing within one year
by Appellants. There is no dispute that the Appellants did not move to reinstate the automatic
stay in the pending case. This case and the previous case were filed with deficiencies. The
Appellants concede that the same emergency Petition was filed in both cases, with the same
creditor matrices. The Appellants concede that the second Petition did not list the previous
Petition because the Western District of Wisconsin Bankruptcy Court gives immediate E.C.F.
notice of previous bankruptcy filings. Appellant’s counsel concedes that the amended Petition
to include the information of the previous bankruptcy filing, which she generally does when an
emergency filing is followed by the bankruptcy court data showing previous filing, was
apparently not filed. There was no intent to conceal the second filing from any creditor or
potential claimant in the proceedings. See Docket Entries 6, 7, and 8. Docket 7 and 8 are the
Letter and Proof of Service of Intent to Amend the Petition to disclose the prior bankruptcy filing
but the Amended Petition was evidently not successfully filed with the Court as clearly intended.
Notice of both filings were given to all creditors. Although the Appellee did not argue
the deficiency in the filing which did not contain the case number and date of filing of the
immediately preceding bankruptcy in the proceedings from which this appeal is undertaken,
Appellants stipulated to the augmentation of the record to include the second filing because it is
relevant to their appeal arising from the second bankruptcy filing. They did not include Appellee
on either the first or second creditor matrix in either case, because they know that Deutsche
Bank National Trust Company does not own the first mortgage rights on the subject premises.
Appellants and did not know that it owns the promissory note to the second mortgage until the
motions for relief from the automatic stay were filed in the second case. (Docket 79 and 79-1)
They subsequently discovered that Deutsche Bank National Trust Company had, at some point,
acquired the second mortgage when it sought to obtain relief from the automatic stay in the
second case attaching the promissory note to the second mortgage and claimed that it was proof
Appellee disputes the inclusion of its two attempts to seek relief from the automatic stay
which documents were included in the record in a separate portion of the record after hearing on
the designation of the record on appeal. (Docket 162, footnote page 2 and Docket 162-1.) The
motions and responses to motions (Docket 79, 82, 85, and 86) are entirely relevant to the
Appellants responded to Appellee’s attempts to lift the automatic stay on the merits
because the first attempt to lift the automatic stay claimed that the Appellants owed the Appellee
the sum of $131,316.05 (Docket 82), which might be the balance of the first mortgage on the
subject premises and attached the second mortgage as proof thereof. (Docket 79-1) Appellee
2
then amended its motion for relief from the automatic stay at Docket 85 and attached a bar-
coded document purporting to represent that the promissory note for the first mortgage was “lost”
and referred to a “Lost Note Affidavit” which Affidavit was not attached but the first mortgage
Conceding to the Appellants’ demand that the motion at Docket 85 be withdrawn (Docket
86) Appellee’s counsel cleverly withdrew its prosecution of the second motion for relief from the
automatic stay under 11 U.S.C. §362(c) (Docket 92.) Believing it would not have to prove
standing if it changed its strategy to seeking confirmation or termination of the automatic stay
under 11 U.S.C. §362(b)(3), it then moved under the latter statute for termination of the
Appellants issues on appeal are exclusively issues of standing, which were raised at the
hearing on the termination of the automatic stay (Docket 152: Transcript, page 6, line 21 to page
11, line 18) and the standing issue was partially ruled upon by the bankruptcy court at the hearing
on March 15, 2010 and entered it Order in writing on April 1, 2010 as Docket 135.
MEMORANDUM OF LAW
Because the Appellants’ issues on appeal are exclusively issues of standing, were raised
at the hearing on the termination of the automatic stay and ruled upon by the bankruptcy court,
Exhibits C, D, E and F, are properly before this court in accordance with In re Green, 252 B.R.
769 (BAP 8th Cir. 2000) and Neshaminy Office Bldg. Associates, 62 B.R. 792 (E.D. PA, 1986.)
I. The Appellee lacks standing to obtain relief from the bankruptcy court on the
The bankruptcy court erred as a matter of law in granting the termination of the automatic
3
stay to a party who first filed a promissory note amounting to $21,150.00 payable to Chase Bank
U.S.A., N.A. and then claimed that it had the right to relief by filing a page claiming a “lost note”
with no attached Affidavit. The claim on the first mortgage note with a face value of
$119,850.00 which belongs to the creditor in these proceedings to which notice of filing of the
first and second bankruptcy case was given: Chase Bank U.S.A., N.A. It should be noted that the
first mortgage creditor has not sought relief in the bankruptcy proceedings.
The issue of standing is an issue of law to be reviewed de novo. As this Court held In re
Kelly, 392 B.R. 750 (W.D. Wis., 2007) “In a bankruptcy appeal, issues of law are reviewed de
novo; . . .”
The Appellee is no stranger to the requirements of standing in federal court, as set forth in
the attached order of dismissing fourteen (14) foreclosure cases which Deustche Bank brought as
Plaintiff in the Northern District of Ohio, Eastern Division. (Exhibit A is the Order of Judge
Boyko.) These cases were dismissed without prejudice pending proof of standing by the
Honorable Christopher A. Boyko, in the Order dated October 31, 2007 and filed In Re
Foreclosure Cases, Case No. 1:07-cv-2282 and covering the additional case numbers 07-cv-2532,
Eastern District. One could assume that Deutsche Bank’s initial unsuccessful efforts to establish
standing in this case by initially attaching to its motion for relief from the automatic stay, a copy
of the second mortgage promissory note, which did not support the claim in the amount in
excess of the first mortgage note was an attempt to establish standing. (Docket 79.) Its
subsequent attempt to establish standing by attaching to Docket 85 the bar-coded allonge entitled
4
“Lost Note Affidavit” without attaching a Lost Note Affidavit is an acknowledgment of the
It does not profit the Appellee to convert its strategy to the effort to terminate the
automatic stay, because the Appellee must still have standing to seek relief in the bankruptcy,
“The minimum constitutional requirements for standing are: proof of injury in fact, causation,
and redressability. Valley Forge, 454 U.S. at 472. In addition, ‘the plaintiff must be a proper
proponent, and the action a proper vehicle, to vindicate the rights asserted.’ Coyne, 183 F. 3d
at 494 (quoting Pestrak v. Ohio Elections Comm’n, 926 F. 2d 573, 576 (6th Cir. 1991). To
satisfy the requirements of Article III of the United States Constitution, the plaintiff must
show he has personally suffered some actual injury as a result of the illegal conduct of the
defendant. (Emphasis added). Coyne, 183 F. 3d at 494; Valley Forge, 454 U.S. at 472.
In each of the above-captioned Complaints, the named Plaintiff alleges it is the holder
and owner of the Note and Mortgage. However, the attached Note and Mortgage identify the
mortgagee and promisee as the original lending institution — one other than the named
Plaintiff.”
Standing to seek relief from the bankruptcy court is under federal jurisdiction has no
lesser standard.
II. In order to receive relief from the bankruptcy court the Appellee must establish
The bankruptcy court did not address the issue that a purported creditor must be the real
party in interest. Docket Entries 79, 82, 85, 96, 97 and 125 clearly show that the Appellee
5
cannot establish standing to seek and obtain relief in the Appellants’ bankruptcy proceedings as
As Judge Boyko so wisely stated in the context of the diversity cases before the United
States District Court for the Northern District of Ohio, “The ‘real party in interest’ rule, to which
the Court and is not intended to assist banks in avoiding traditional federal diversity
requirements.” In this case, likewise, to seek relief in the federal courts through bankruptcy
proceedings, whether by relief from the automatic stay or motion to terminate the same, the real
CONCLUSION
The Appellee Deutsche Bank, having failed to establish standing for termination of the
automatic stay based upon it filings with the bankruptcy court, must be denied any relief from the
bankruptcy court. In the alternative, Deustche Bank could reapply for termination of the
automatic stay on the basis of Exhibit X, the second mortgage promissory note, upon notice and
hearing before the bankruptcy court upon remand, should this court choose to remand this case
1. For an Order reversing the Order of the Bankruptcy Court and denying the relief to the
2. In the alternative for remand of these proceedings to the bankruptcy court to hear and
determine the issues pending before it in accordance with the decision of this Court.
6
Dated at Minneapolis, Minnesota this 19th day of July, 2010.