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Ekweani v. Thomas

United States District Court, D. Maryland

June 26, 2017



          James K. Bredar United States District Judge

         This is an appeal from the United States Bankruptcy Court for the District of Maryland. The appeal has been briefed (ECF Nos. 12, 14, 15), and no oral argument is necessary, Local Rule 105.6 (D. Md. 2016). For the reasons stated below, the judgment of the Bankruptcy Court is affirmed.

         I. Procedural History

         Appellant Chukwunenye Henry Ekweani filed a Chapter 13 Petition on June 8, 2016. In re Ekweani, No. 16-17776 (Bankr. D. Md.), ECF No. 1. On the same day, he filed Adversary Proceeding No. 16-00277 against Wells Fargo Home Mortgage Corporation (“WFHM”) seeking, inter alia, an injunction preventing WFHM from foreclosing on the home in which Appellant and his nonfiling spouse, Ijeamaka Ekweani, have resided since purchase of the property located at 6604 Sewells Orchard Drive, Columbia, Maryland (the “Property”), on July 29, 1999. Id. ECF No. 6.

         Appellant filed his Chapter 13 Plan in which he proposed to pay $0 per month for a term of 0 months. Id. ECF No. 11. Also, in his Chapter 13 Plan was the following Non-standard Provision: “At the conclusion of the pending Adversary Proceeding Case No.: 16-00277 seeking declaratory judgment concerning Wells Fargo Home Mortgage's anticipated claim, debtor and his wife will obtain financing to pay the amount determined by the Court.” Id. Appellant also filed his calculation of disposable income, which showed Appellant having $0 income and his spouse having gross monthly income of $11, 105.85; further, the form showed their joint monthly disposable income (after subtraction of certain allowable expenses) as $3, 564.62. Id. ECF No. 13. The Court notes that one of Appellant's subtracted expenses was a home mortgage payment of $2, 039.69 per month. Id. Even though the mortgage payments were apparently in arrears, Appellant showed a “cure amount” payable to WFHM of $0. Id.

         The Trustee[1] filed his Objection to Confirmation of Chapter 13 Plan, noting that the proposed Plan called for no payments to the Trustee, even though Appellant has monthly disposable income of $3, 564.62, thus failing to comply with 11 U.S.C. § 1325(b)(1). Id. ECF No. 18. Additionally, the Trustee contended, “The purpose of this case is to unreasonably hinder and delay the efforts of Wells Fargo to foreclose on the real property secured by Debtor's property. . . . The debtor is merely seeking to re-litigate his dispute with Wells Fargo in this Chapter 13 case. This is entirely inappropriate.” Id. Further, the Trustee argued the Plan was not feasible because Appellant had “failed to explain and adequately document how he will obtain financing to pay Wells Fargo if and when he is successful in this litigation.” Id. Finally, the Trustee stated, “This Plan has not been filed in good faith and fails to meet the requirements of 11 U.S.C. § 1325(a)(3). It does not appear that the Debtor can propose a chapter 13 plan that can be confirmed by this Court.” Id. The Trustee concluded by asking the court to deny confirmation of the Chapter 13 Plan without leave to amend. Id.

         Following a hearing, the Bankruptcy Court concluded the proposed plan did not meet the requirements of 11 U.S.C. § 1325 and denied confirmation of the plan but provided Appellant with leave to amend. Id. ECF No. 20. The court also denied Appellant's motion to continue the confirmation hearing. Id. ECF No. 21. Both of these orders were entered August 10, 2016.

         Appellant then filed an Amended Chapter 13 Plan. Id. ECF No. 25. In this proposal, Appellant planned to pay “$0 per month prior to confirmation of this plan, and $1, 388.72 per month after confirmation of this plan, for a total term of 60 months.” Id. He also stated that WFHM's secured claim was “not affected by this plan and will be paid outside of the plan directly by the Debtor.” Id. He continued to include the same Non-standard Provision regarding his plan to obtain refinancing on the mortgage at the conclusion of the adversary proceeding. Id.

         After a second confirmation hearing, the Bankruptcy Court denied confirmation of Appellant's Chapter 13 Plan without leave to amend on September 28, 2016. Id. ECF No. 32. Consistent with the Trustee's Objection, the court concluded that the proposed Plan did “not fulfill the requirements for confirmation set out in 11 U.S.C. § 1325 and that the Debtor [was] unable to file a Plan that is susceptible of confirmation.” Id. Further, the Bankruptcy Court

ORDERED, that if, within fourteen (14) days from the date of entry of this Order, this case is not converted to a case under another chapter or voluntarily dismissed, then this case may be dismissed by the Court on account of Debtor's failure to prosecute the case properly without further notice or hearing.

Id. No proceedings on the merits have occurred in No. 16-17776 since the denial of confirmation of Appellant's Chapter 13 Plan without leave to amend. As of this writing, the Bankruptcy Court has not exercised its authority to dismiss the case.

         Appellant filed a Notice of Appeal and Statement of Election on October 11, 2016. Id. ECF No. 37. In his notice, Appellant described “the judgment, order, or decree appealed from” as the Order Denying Confirmation of Chapter 13 Plan Without Leave to Amend entered on September 28, 2016. Id.

         Thereafter, on November 8, 2016, Wells Fargo Bank, N.A. (“Wells Fargo”), filed its Motion for Order Confirming No Stay Pursuant to 11 U.S.C. § 362(c)(3)(A) and Granting Relief as to the Bankruptcy Estate and Co-Debtor Stay; the motion was filed as to both Appellant and his spouse, Ijeamaka N. Ekweani. Id. ECF No. 42. After a hearing, that motion was denied without prejudice for failure to demonstrate standing. Id. ECF No. 47 (entered January 26, 2017). On February 23, 2017, Wells Fargo filed a similar motion, indicating the total amount due on the mortgage was $737, 403.62. Id. ECF No. 55. Included as exhibits to the motion were documents establishing the merger of Wachovia Mortgage Corporation (the original mortgagee on the 2007 promissory note at issue) with and into Wells Fargo Bank, National Association, effective May 6, 2011. Id. This time, Wells Fargo's motion was granted, and the court entered an order on April 12, 2017, confirming no automatic stay was in effect with respect to Appellant and lifting the automatic stay of 11 U.S.C. § 362(a) as to the Bankruptcy Estate as well as the Co-Debtor Stay of 11 U.S.C. § 1301(a) so that Wells Fargo could proceed to a foreclosure sale of the Property. Id. ECF No. 61. The court further ordered an equitable servitude for a period of 180 days in the event of a future filing by Appellant, his wife, or any other person or entity claiming an interest in the Property such that either 11 U.S.C. § 362(a)'s automatic stay or 11 U.S.C. § 1301(a)'s co-debtor stay shall not attach to the Property and shall not apply to Wells Fargo's enforcement of its interest in the Property. Id. Appellant filed a notice of appeal as to this order. Id. ECF No. 63. That appeal was docketed as a separate District Court case, Civ. No. JKB-17-1174 (D. Md.), but was dismissed June 12, 2017 (ECF No. 8), for failure to comply with Bankruptcy Rule 8009(a)(1)[2] and the Court's order.

         While the primary Bankruptcy Court case No. 16-17776 was in process, the Adversary Proceeding No. 16-00277 was also moving forward. Wells Fargo filed a motion to dismiss the complaint or, alternatively, to abstain, which the Bankruptcy Court granted on September 1, 2016; after a hearing, the court concluded it should abstain pursuant to 28 U.S.C. § 1334. No. 16-00277 (Bankr. D. Md.) ECF Nos. 8, 18. No notice of appeal was filed from that order. The adversary proceeding was closed March 31, 2017. Id. Dkt. Ent.

         In addition to Appellant's Case No. 16-17776 in the Bankruptcy Court in this District, Appellant and his wife have filed several other bankruptcy proceedings since 2008.

         Ijeamaka Ekweani filed a pro se Chapter 7 petition on May 21, 2008, which was converted to a Chapter 13 petition on December 10, 2008. No. 08-16913 (Bankr. D. Md.) ECF Nos. 1, 72, 77. That case was dismissed on June 18, 2009, because the debtor had “failed to commence making timely payments as required by 11 U.S.C. § 1326.” Id. ECF No. 117.

         On September 29, 2009, Appellant filed a Chapter 7 voluntary petition in the Bankruptcy Court for the District of Arizona. No. 09-24272 (Bankr. D. Ariz.) ECF No. 1. On January 25, 2010, Appellant and his wife filed an adversary proceeding against Wachovia Mortgage Corporation for rescission of the promissory note and deed of trust, claiming Wachovia did not have a valid lien on the Property because Wachovia did not have either a note or deed of trust signed by Appellant or by anyone authorized by Appellant to sign those documents. Adversary Proceeding No. 2:10-ap-00160 (Bankr. D. Ariz.) ECF No. 1.[3] Wells Fargo Bank, N.A., the successor to Wachovia Mortgage Corporation, filed a counterclaim against the Ekweanis. Id. ECF Nos. 17, 59. Wells Fargo then filed a motion for summary judgment as to the Ekweanis' claims and also filed a ...

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