United States Bankruptcy Appellate Panel of the First Circuit
JOHN F. BEST, JR., Debtor. JOHN F. BEST, JR., Plaintiff-Appellant,
NATIONSTAR MORTGAGE LLC, Defendant-Appellee
Appeal from the United States Bankruptcy Court for the District of New Hampshire. Bankruptcy Case No. 12-13572-JMD, Adversary Proceeding No. 14-01083-JMD. (Hon. J. Michael Deasy, U.S. Bankruptcy Judge).
John F. Best, Jr., Pro se, on brief for Appellant.
Paula-Lee Chambers, Esq., on brief for Appellee.
Before Tester, Bailey, and Finkle, United States Bankruptcy Appellate Panel Judges.
John F. Best, Jr. (the " Debtor" ) appeals pro se from the bankruptcy court's February 25, 2015 order granting the motion for judgment on the pleadings filed by Nationstar Mortgage LLC (" Nationstar" ) on the Debtor's complaint against Nationstar for alleged violations of the discharge injunction imposed by § 524(a). For the reasons set forth below, we AFFIRM.
The Debtor filed a chapter 13 petition on November 27, 2012. During the course of the bankruptcy case, the Debtor filed two chapter 13 plans in which he identified Nationstar as a mortgagee but claimed that " no assignment of mortgage exists transferring note from GMAC to Nationstar so no debt exists." Nationstar objected
to both plans, asserting that it was the holder of a note secured by a mortgage on the Debtor's property located at 113 Old Derry Road, Londonderry, New Hampshire, and the plan did not identify the pre-petition arrears owed to Nationstar or provide for the payment of pre-petition arrears. The bankruptcy court denied confirmation of both plans.
On February 6, 2013, the Debtor commenced an adversary proceeding against Nationstar contesting the validity of Nationstar's asserted mortgage. The bankruptcy court set discovery deadlines and scheduled a final pre-trial conference for May 20, 2014. The Debtor failed to appear at the final pre-trial conference on May 20, 2014, however, and the bankruptcy court dismissed the adversary proceeding for failure to prosecute.
In the interim, on April 8, 2013, Nationstar filed a proof of claim asserting a secured claim in the amount of $315,442.72. Nationstar attached to its proof of claim: (1) a promissory note dated November 9, 2006, in the amount of $228,750.00, executed by the Debtor in favor of 1-800-East-West Mortgage Company; (2) a mortgage dated November 9, 2006, executed by the Debtor in favor of Mortgage Electronic Registration Systems, Inc., as nominee for 1-800-East-West Mortgage Company (" MERS" ); (3) an allonge to the promissory note dated November 9, 2006, executed by 1-800-East-West Mortgage Company in favor of GMAC Bank; and (4) an assignment of mortgage dated December 7, 2012, executed by MERS in favor of Nationstar. The Debtor did not file an objection to Nationstar's proof of claim.
On January 31, 2014, the Debtor converted the case to chapter 7. On April 29, 2014, the bankruptcy court entered an order discharging the Debtor, and, thereafter, it closed the bankruptcy case.
On July 18, 2014, the Debtor filed a motion to reopen the case, which the bankruptcy court granted on July 24, 2014.
On September 17, 2014, the Debtor again commenced an adversary proceeding against Nationstar, this time seeking damages for alleged violations of the discharge injunction imposed by § 524(a). The Debtor alleged that, after the discharge, he received certified mail from Nationstar on June 27, 2014, June 28, 2014, and June 30, 2014 " demanding money for this discharged alleged debt that never existed . . . ."  He also alleged that Nationstar
contacted him by mail on July 26, 2014, July 28, 2014, and August 21, 2014, for a total of six " contact violations." He asserted that " [t]he alleged debt has been discharged" and that " Nationstar can't now claim that they have a valid lien as a legitimate reason to start harassing and threating me . . . ." In its answer to the complaint, Nationstar admitted it sent the post-discharge letters to the Debtor, but denied that its actions violated the discharge injunction.
On January 26, 2015, Nationstar filed an amended motion for judgment on the pleadings, asserting the post-discharge letters did not violate the discharge injunction because they included disclaimers indicating they were not attempting to collect a discharged debt from the Debtor, and because § 524(j) provides an exception for creditors holding a claim secured by the debtor's principal residence where the creditor's acts are in the ordinary course of business. The Debtor objected,
arguing that Nationstar did not have a valid lien due to its alleged failure to file a proof of claim or object to the chapter 13 plan, which listed Nationstar's mortgage as unsecured, and, therefore, the debt was discharged as an " unsecured debt."
The bankruptcy court held a hearing on February 24, 2015. At the hearing, the bankruptcy court considered the Debtor's arguments that Nationstar was not a secured creditor, but pointed out that, contrary to the Debtor's assertions, the bankruptcy discharge did not impact the presumed validity of Nationstar's lien. The bankruptcy court explained that the bankruptcy discharge relieved the Debtor from any personal liability on the promissory note and that he had no obligation to repay the note. The discharge did not, however, convert a secured debt into an unsecured debt, nor did it render Nationstar's mortgage invalid. The bankruptcy court also explained that neither Nationstar's failure to object to the plan nor its failure to file a proof of claim made the mortgage invalid. The court stated: " Now, the fact that you said something in a [c]hapter 13 plan about their claim, and we'll assume they never objected to it, never did anything on it, . . . unless the plan goes to completion ...