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Combs v. FV-1, Inc.

United States District Court, Fourth Circuit

December 16, 2013

CRYSTAL COMBS, Appellant,
v.
FV-1, INC., Appellee.

MEMORANDUM OPINION

WILLIAM D. QUARLES, Jr., District Judge.

Crystal Combs appeals the decision of the Bankruptcy Court for the District of Maryland lifting the automatic bankruptcy stay[1] to allow FV-1, Inc. ("FV-1") to proceed with a foreclosure sale on a property owned by Combs. ECF No. 1. Pending is Combs's motion to stay the Bankruptcy Court's decision pending resolution of her appeal. ECF No. 2. No hearing is necessary.[2] For the following reasons, the motion will be denied.

I. Background

Combs owns a home at 9904 Doubletree Lane in Marlboro Heights, Maryland (the "Doubletree Property"). ECF No. 1-15 at 1. FV-1 is allegedly the "current payee of a promissory note secured by a deed of trust" on the Doubletree Property.[3] ECF No. 1-27 at 1. The monthly mortgage payment on the property is $901.66. ECF No. 2-2 at 68. Since December 2009, Combs has been in default of her mortgage payments on the Doubletree Property. See id. at 31. Combs has not lived at the Doubletree Property since November 2012 and since that time has unsuccessfully attempted to lease the home. Id. at 68. She initially tried to rent the home for $2, 100 per month but was unable to secure a tenant. Id. at 69. She lowered the rent to $1, 900 but was still unable to secure a tenant after about three months listing at that price.[4] Id.

Between December 2009 and April 2013, Combs accrued over $57, 000 in arrearages on the promissory note for the Doubletree Property. Id. at 11. A foreclosure sale was scheduled for April 23, 2013. ECF No. 1-27 at 3. On that day, Combs filed, pro se, a voluntary petition for relief under Chapter 13 of Title 11 of the United States Bankruptcy Code, which stayed the foreclosure. See ECF Nos. 1-3, 1-27 at 3.

On May 16, 2013, Combs filed a proposed Chapter 13 plan. ECF No. 1-18. On May 29, 2013, FV-1 moved to lift the automatic stay to allow the foreclosure sale. ECF No. 1-27. On July 13, 2013, after an evidentiary hearing, Bankruptcy Judge Wendelin I. Lipp denied Combs's proposed Chapter 13 plan with leave to amend. ECF Nos. 1-78, 1-81. On July 25, 2013, the Bankruptcy Court held a preliminary hearing on the motion to lift the stay. ECF No. 1-95. At the hearing, an interim ruling for adequate protection[5] was made, requiring Combs to make interest, tax, and insurance payments to protect the lender.[6] ECF Nos. 1-80, 2-2 at 61-62, 133-34.

On September 13, 2013, Combs filed an amended Chapter 13 proposed plan. ECF No. 1-93. This plan obligated Combs to make monthly payments of $246.27 to the Chapter 13 trustee. See id.; ECF No. 2-2 at 89, 134.

On October 24, 2013, the Bankruptcy Court held a final hearing on the motion to lift the stay. ECF No. 2-2. After the presentation of evidence, Judge Lipp found that Combs had not made any post-petition mortgage payments or payments to the Chapter 13 trustee. Id. at 133-34. Although Combs attempted to comply with Judge Lipp's previous ruling requiring her to provide the lender with adequate protection, Judge Lipp found that her compliance was faulty, and the lender was not adequately protected.[7] See id. Judge Lipp also found that the success of Combs's Chapter 13 plan depended on her securing a tenant for the Doubletree Property.[8] See id. at 135-36. Given that Combs had not located a tenant in the six months since she filed her amended plan, Judge Lipp found that no Chapter 13 reorganization was "in prospect." See id. Judge Lipp concluded that the bankruptcy stay should be lifted, but noted that Combs could return to the court for relief from the order lifting the stay when she located a tenant and began making plan payments. See id. at 136.

After Judge Lipp's ruling, Combs orally moved for reconsideration on the basis that Combs's parents were willing to pay the full monthly mortgage payments and Combs's plan payments. Id. at 136, 141. Judge Lipp denied the motion, reasoning that Combs's parents had the opportunity to help her make plan payments before the hearing but did not, and the plan's success depended on Combs finding a tenant for the Doubletree Property. Id. at 144-45.

Combs then orally moved for a stay of Judge Lipp's ruling pending appeal under Federal Rule of Bankruptcy Procedure 8005. Id. at 146. Judge Lipp denied the motion. Id. at 151.

On November 2, 2013, Combs tendered a certified check to Shapiro & Burson, FV-1's counsel, for $6, 307, representing seven monthly payments of $901.00, ostensibly to belatedly satisfy the Bankruptcy Court's requirement from the July 25, 2013 hearing that she adequately protect the lender during the duration of the bankruptcy stay. ECF Nos. 2-3, 2-4.

On December 12, 2013, almost two months after the hearing, and with the foreclosure sale of the Doubletree Property scheduled for December 17, 2013, Combs filed an emergency motion in this Court under Rule 8005 to stay Judge Lipp's order lifting the automatic stay pending resolution of her appeal of the order. ECF No. 2. On December 16, 2013, FV-1 opposed the motion. ECF No. 5. The same day, Combs replied. ECF No. 6.

II. Analysis

Under Federal Rule of Bankruptcy ...


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