JOHN P. GUSTAFSON JUDGE
Chapter 13
ORDER DENYING REVISED OBJECTION TO PROOF OF CLAIM BY SELENE FINANCE LP [DOC. #108] FOR CLAIMS NO. 7-1/7-2 OF U.S. BANK
JOHN P. GUSTAFSON JUDGE
This cause comes before the court on Debtor's Revised Objection to Proof of Claim By Selene Finance LP. [Doc. #108]. The proofs of claim at issue are No. 7-1 and No. 7-2, which list in response to the question: "Who is the current creditor?": "U.S. Bank Trust National Association, not in its individual capacity but solely as owner Trustee for RCAF Acquisition Trust." Just below the line listing "U.S. Bank Trust National Association, not in its individual capacity but solely as owner Trustee for RCAF Acquisition Trust" (hereinafter "U.S. Bank" or "Creditor") as the creditor, is the additional clarifying language: "Name of the current creditor (the person or entity entitled to be paid for this claim." [Proofs of Claim 7-1, p. 1 & 7-2, p. 1].
For the sake of the clarity of the record, U.S. Bank also filed a second proof of claim (as owner trustee for RCF 2 Acquisitions) for a different mortgage securing a larger loan on a separate piece of property. Debtor has not objected to that proof of claim. See, [Proof of Claim 4-1].
The Proofs of Claim in issue - 7-1 and 7-2 - both list the debt owed as being in the amount of $113,393.25. Copies of the note and mortgage were attached to the original proof of claim, 7-1. [Proof of Claim 7-1, pp. 10-12 & 20-44]. They were also attached to the amended proof of claim. [Proof of Claim 7-2, pp. 12-39]. Both the original and amended proofs of claim state that notices and payments are to be sent to Selene Finance, LP, the servicer for the mortgage. [Proofs of Claim 7-1, p. 1 & 7-2, p. 1]. The proofs of claim were filed by Attorney David J. Demers, who checked the box indicating that he was the creditor's attorney or authorized agent. [Proofs of Claim 7-1, p. 3 & 7-2, p. 3].
Presumably, the Debtor's Objection also applies to Amended Claim, 7-2, which was filed for the same amount. There are some differences between the two proofs of claim. Under Box 9, the "Basis for perfection" 7-1 states "Recordation of Lien" while 7-2 lists "Note, Mortgage Deed of Trust." Additionally, the line for "Amount necessary to cure any default as of the petition date" is also different, showing $13,880.81 needed to cure the default in 7-1, in comparison to $12,909.29 as the amount needed in 7-2. The Amended Proof of Claim also includes the Assignment Of Mortgage by NewRez LLC to U.S. Bank on July 8, 2024. [Proof of Claim 7-2, pp. 42-43].
Debtor filed three Objections to Proof of Claim 7-1. [Docs. ##61, 79, 108]. A Response to the second Objection was filed by Creditor. [Doc. #90]. The court ordered that a second Amended Objection to Claim be filed by Debtor. [Doc. #99]. The "Revised Objection to Chapter 13 Proof of Claim by Selene Finance LP" was filed by Debtor. [Doc. #108]. A Response to the Revised Objection was filed by Creditor. [Doc. #117].
While the court will accurately recite the caption of Debtor's Revised Objection's reference to the claim "by Selene Finance LP", as previously noted, the proof of claim lists the creditor as U.S. Bank Trust National Association, not in its individual capacity but solely as owner Trustee for RCAF Acquisition Trust. The note and mortgage at issue were assigned to the listed entity, not Selene Finance, LP. Both parties have filed copies of the same assignment as exhibits. [Doc. #108, Exhibit B-2, p. 5; Proof of Claim 7-2, p. 43]. In the proof of claim and amended proof of claim at issue, Selene Finance LP is listed as both the party to receive notice, and as the address for payments. [Proofs of Claim 7-1, p. 1 & 7-2, p. 1].
After a hearing on January 15, 2025, the Creditor filed Doc. #136 - Certified Copies of State Court Judgment Decree In Foreclosure and Certified Copy of Opinion from the Court of Appeals. The documents filed as part of Doc. #136 are self-authenticating under Federal Rule of Evidence 902(4). See, Cowart v. Countrywide Bank, N.A. (In re Cowart), 2015 WL 6667776 at *2 n.3, 2015 Bankr. LEXIS 3675 at *5 n.3 (Bankr. M.D. N.C. Oct. 28, 2015); In re Hernandez, 2010 WL 5155011 at *1 n.9, 2010 Bankr. LEXIS 4646 at *5-6 n.9 (Bankr. D.N.M. Dec. 14, 2010).
The filed documents reflect that a Judgment Decree In Foreclosure (hereinafter "Foreclosure Judgment") was entered in favor of Plaintiff NewRez, LLC, and against several Defendants, by the Stark County Court of Common Pleas on Plaintiff's Motion for Summary Judgment in case number 2023CV00579. [Doc. #136]. The named Defendants included Kimberly Ann Chapman. [Doc. #136, p. 1, ⁋1]. The Foreclosure Judgment was entered on September 18, 2023. [Id.].
An electronic version of the Foreclosure Judgment can be found at: Newrez LLC v. Kimberly Ann Chapman HTTA Kimberly A. Moulos, 2023 WL 1179944 (Stark County Court of Common Pleas Sept. 18, 2023). While NewRez LLC sought its judgment on both the grounds of default for failure to file an answer, and on summary judgment, the Foreclosure Judgment was based on summary judgment, and the Appellate Court repeatedly relied on Ohio Rule of Civil Procedure 56(E) in its decision, not Ohio Rule of Civil Procedure Rule 55 which applies to default judgments. Finally, the Appellate Court's decision specifically states: "The trial court granted appellee's motion for summary judgment on September 18, 2023, and issued a judgment decree in foreclosure." [Doc. #136, p. 11, ⁋5].
While no answer was filed to the state court complaint [Id., ⁋2], the decision of the Court of Appeal, Stark County, Ohio, Fifth Appellate District (hereinafter "Appellate Court") states that Appellant filed a "judicial notice of failure to state a claim upon which relief can be granted" on May 23, 2023. The Appellate Court further states that: "On Septembers, 2023, appellant filed a document entitled 'judicial notice of tax filing of 1099- C and Form 982 on 1040 filing.'" [Id., p. 11, ⁋4]. It does not appear that Debtor filed any other response to Plaintiff's Motion for Summary Judgment.
Reported at NewRez, LLC v. Chapman, 2024 WL 1403197, 2024 Ohio App. LEXIS 1176 (Ohio App. 5th Dist. April 1, 2024).
The Appellate Court's April 1, 2024 decision affirmed the Foreclosure Judgment in all respects, rejecting each of Debtor's assignments of error.
The Appellate Court's decision was appealed to the Ohio Supreme Court. The Supreme Court entered three Orders on the appeal. The first Order, entered on May 30, 2024, required Appellee to file a response to Appellant's Emergency Motion for Stay. See, NewRez LLC v. Chapman, 174 Ohio St.3d 1491, 234 N.E.3d 526, 2024 Ohio LEXIS 1189 (Ohio May 30, 2024). The Second Order entered by the Ohio Supreme Court denied Appellant's Emergency Motion for Stay. NewRez LLC v. Chapman, 174 Ohio St.3d 1492, 234 N.E.3d 528, 2024 Ohio LEXIS 1196 (Ohio June 3, 2024). The Third Order dismissed the appeal based on the failure to file a Memorandum in Support of Jurisdiction. NewRez LLC v. Chapman, 174 Ohio St.3d 1508, 236 N.E.3d 219, 2024 Ohio LEXIS 1330 (Ohio June 25, 2024).
Debtor's Petition commencing her Chapter 13 case was filed on June 7, 2024. [Doc. #1].
Debtor has asserted a number of arguments as to why the U.S. Bank proof of claim should be disallowed. A copy of the Revised Objection is attached as Exhibit 1 to this Order. See, Exhibit 1 to this Order. While some of these allegations are difficult to understand, almost all of them run afoul of basic legal principles of finality, and the limited role that federal bankruptcy courts have in dealing with a state court judgment in the proof of claim context. These related legal doctrines include Rooker-Feldman, res judicata, the Full Faith and Credit Act, and collateral estoppel.
The Appellate Court noted, "[T]o the extent that appellant is making a 'sovereign citizen' argument, we have previously rejected similar 'sovereign citizen' arguments. State v. Farley, 5th Dist. Muskingum Nos. CT2013-0026, CT2013-0029, 2013-Ohio-5517." [Doc. #136, p. 15; NewRez, LLC v. Chapman, 2024 WL 1403197 at *3, 2024 Ohio App. LEXIS 1176 at *6. The Revised Objection also incorporates what appear to be requests for admissions and requests for document production on issues that were decided, or could have been raised and decided, in the state court foreclosure proceeding.
LAW AND ANALYSIS
A. The Rooker-Feldman Doctrine.
The principles set forth in Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), have become known as the Rooker-Feldman doctrine. In each case, where the losing party in state court sought review and rejection of the state court judgment in federal district court based on claims that the judgment violated the loser's federal rights, the United States Supreme Court held that the federal district court lacked subject matter jurisdiction since authority to review a state court's judgment rests solely in the Supreme Court. Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 291, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005); Hall v. Callahan, 727 F.3d 450, 453 (6th Cir. 2013).
In Exxon Mobil Corp., the Supreme Court clarified the scope of the Rooker-Feldman doctrine, holding that it "is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Id. at 284, 125 S.Ct. 1517. But, Rooker-Feldman does not preclude a district court from exercising subject-matter jurisdiction "simply because a party attempts to litigate in federal court a matter previously litigated in state court." Id. at 293, 125 S.Ct. 1517. "If a federal plaintiff 'present[s] some independent claim, albeit one that denies a legal conclusion that a state court has reached in a case to which he was a party ..., then there is jurisdiction and state law determines whether the defendant prevails under principles of preclusion.'" Id. (citation omitted).
In distinguishing between a claim that attacks a state court judgment, which is within the scope of the Rooker-Feldman doctrine, and an independent claim over which a district court may exercise jurisdiction, the Sixth Circuit explained that the inquiry should focus on the source of the injury the plaintiff alleges in the federal complaint. McCormick v. Braverman, 451 F.3d 382, 393-94 (6th Cir. 2006). "If the source of the injury is the state court decision, then the Rooker-Feldman doctrine would prevent the district court from asserting jurisdiction. If there is some other source of injury, such as a third party's actions, then the plaintiff asserts an independent claim." Id. at 393.
Here, the state court Foreclosure Judgment specifically found Debtor liable for the debt secured by the mortgage, found the mortgage valid, and fixed an amount that was owed. Debtor cannot collaterally attack these findings in her bankruptcy court proceeding. This precludes a number of Debtor's attacks on the U.S. Bank proof of claim.
B. Res Judicata or "claim preclusion".
"Claim preclusion prevents subsequent actions, by the same parties or their privies, based on any claim arising out of a transaction that was the subject matter of a previous action." Grava v. Parkman Twp., 73 Ohio St.3d 379, 382, 653 N.E.2d 226, 229 (1995). Claim preclusion also bars subsequent actions whose claims "could have been litigated in the previous suit." Id. The same concept applies in federal courts. Under the doctrine of issue preclusion, "a prior judgment ... foreclos[es] successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment." New Hampshire v. Maine, 532 U.S. 742, 748-749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001).
What this means, in simple terms, is that Debtor is precluded from relitigating claims that she lost on in the state court, and claims she could have brought - but did not bring - in the state court action. This doctrine negates most of Debtor's arguments against allowance of U.S. Bank's proof of claim.
C. Collateral estoppel or "issue preclusion".
Collateral estoppel, otherwise known as issue preclusion in the federal courts, "precludes relitigation of issues of fact or law actually litigated and decided in a prior action between the same parties and necessary to the judgment, even if decided as part of a different claim or cause of action." Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 463 (6th Cir. 1999)(quoting Sanders Confectionery Prods., Inc. v. Heller Fin., Inc., 973 F.2d 474, 480 (6th Cir. 1992))(emphasis added)). "The purposes of collateral estoppel are to shield litigants (and the judicial system) from the burden of re-litigating identical issues and to avoid inconsistent results." Gilbert v. Ferry, 413 F.3d 578, 580 (6th Cir. 2005).
Here, collateral estoppel prevents Debtor from relitigating the facts found either in the Foreclosure Judgment, or in the decision of the Appellate Court. This is an additional reason that many of Debtor's assertions in support of her Objection to the U.S. Bank proof of claim are not viable legal arguments.
D. The Full Faith and Credit Act.
The first version of the Full Faith and Credit Act was enacted in 1790, and is today codified at 28 U.S.C. §1738. Under 28 U.S.C. §1738, a federal court must accord a state court judgment the same preclusive effect the judgment would have in the courts of that state. Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. at 374, 105 S.Ct. 1327; Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 81, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984); Corzin v. Fordu (In re Fordu), 201 F.3d 693, 703 (6th Cir. 1999); Bay Area Factors, Inc. v. Calvert (In re Calvert), 105 F.3d 315, 317 (6th Cir. 1997); In re Hunter, 535 B.R. 203, 216 (Bankr.N.D.Ohio 2015). Issue preclusion will apply to state court judgments where (1) the law of issue preclusion in the state in which the issue was litigated would preclude relitigation of such issue and (2) the issue was fully and fairly litigated in state court. In re Markowitz, 190 F.3d at 461. Here, the court must apply Ohio issue preclusion principles to the state court proceedings.
This statute is to be distinguished from the Full Faith and Credit Clause of the U.S. Constitution, Article IV, Section I, which is applicable to state courts, but is not binding on federal courts. See, U.S. v. Lewis, 609 Fed.Appx. 890, 891 (8th Cir. July 20, 2015)(citing Univ. of Tenn. v. Elliott, 478 U.S. 788, 799, 106 S.Ct. 3220, 3226, 92 L.Ed.2d 635 (1986)).
Under Ohio law, four elements must be met in order to apply the doctrine of issue preclusion: "(1) The party against whom estoppel is sought was a party or in privity with a party to the prior action; (2) There was a final judgment on the merits in the previous case after a full and fair opportunity to litigate the issue; (3) The issue must have been admitted or actually tried and decided and must be necessary to the final judgment; and (4) The issue must have been identical to the issue involved in the prior suit." In re Hunter, 535 B.R. at 216 (citing Cashelmara Villas Ltd. P 'ship v. DiBenedetto, 87 Ohio App.3d 809, 814, 623 N.E.2d 213 (1993)(quoting Monahan v. Eagle Picher Indus., Inc., 21 Ohio App.3d 179, 180-81, 486 N.E.2d 1165 (1984)); see also, Sill v. Sweeney (In re Sweeney), 276 B.R. 186, 189 (BAP 6th Cir. 2002); but cf. State ex rel. Davis v. Pub. Emps. Retirement Bd., 120 Ohio St.3d 386, 392, 899 N.E.2d 975, 982 (2008)(citing Thompson v. Wing, 70 Ohio St.3d 176, 183, 637 N.E.2d 917, 923 (1994)(doctrine stated as having three factors, applying "when the fact or issue (1) was actually and directly litigated in the prior action, (2) was passed upon and determined by a court of competent jurisdiction, and (3) when the party against whom collateral estoppel is asserted was a party in privity with a party to the prior action."))).
While it might be argued that res judicata and collateral estoppel should not apply because the appeal was not "final" at the time the bankruptcy case was filed - because the Ohio Supreme Court had not yet issued its order dismissing Debtor's appeal - that is not the law. See generally, Commodities Export Co. v. U.S. Customs Serv., 957 F.2d 223, 228 (6th Cir. 1992):
[I]t is well established that a final trial court judgment operates as res judicata while an appeal is pending.
Huron Holding Corp. v. Lincoln Mine Operating Co.,
312 U.S. 183, 188-89,
61 S.Ct. 513,
85 L.Ed. 725 (1941);
Southern Pac. Communications Co. v. AT & T Co.,
238 App. D.C. 340,
740 F.2d 1011, 1018 (D.C.Cir.1984);
Refior v. Lansing Drop Forge Co.,
134 F.2d 894, 896 (6th Cir.1943).
See also [RESTATEMENT (SECOND) OF JUDGMENTS], § 13 cmt. f [ (1982) ]; 18 [CHARLES A. WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE], § 4433, at 308, 311 [ (1981) ]; 1B [JAMES W. MOORE, MOORE'S FEDERAL PRACTICE], para. 0.416[3], at 521 [ (1991) ]. Nor does the preclusive effect of the [trial court's]
determination depend upon the correctness of the decision, for even erroneous judgments are accorded res judicata effect.
Angel v. Bullington, 330 U.S. 183, 187,
67 S.Ct. 657,
91 L.Ed. 832 (1947).
See also,
In re Bodrick, 534 B.R. 738, 744 (Bankr. S.D. Ohio 2015);
El-Amin v. Virgilio, 251 F.Supp. 208, 211 (D.D.C. 2017).
However, it should be noted that Commodities Export Co. v. U.S. Customs Serv. was a decision that dealt with a federal appeal. In dealing with the preclusive effect of state court decisions that are on appeal, federal courts look to state law to determine whether res judicata and collateral estoppel apply. See, 28 U.S.C. §1738; Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 375, 105 S.Ct. 1327, 1329, 84 L.Ed.2d 274 (1985)("Under 28 U.S.C. § 1738, a federal court generally is required to consider first the law of the State in which the judgment was rendered to determine its preclusive effect."); Markowitz v. Campbell (In re Markowitz), 190 F.3d 455, 461 (6th Cir. 1999), cert. denied, 506 U.S. 831, 113 S.Ct. 96, 121 L.Ed.2d 56 (1992). ("Collateral estoppel will apply where (1) the law of collateral estoppel in the state in which the issue was litigated would preclude relitigation of such issue, and (2) the issue was fully and fairly litigated in state court.")(emphasis added); In re Sweeney, 276 B.R. 186, 189 (6th Cir. BAP 2002)("The full faith and credit principles of 28 U.S.C. §1738 require us to look to state law to determine whether the Ohio courts would give preclusive effect to the judgment in question, . . ."); In re Bruce, 593 B.R. 765, 772 (Bankr. S.D. Ohio 2018).
"[I]n Ohio, '[i]t is well settled that the pendency of an appeal does not prevent the judgment's effect as res judicata in a subsequent action.' New York Life Ins. Co. v. Tomchik, 1999 Ohio App. LEXIS 1078, *7, 1999 WL 159227 (Ohio 7th App. Dist. Mar. 17, 1999)(citing Cully v. Lutheran Medical Center, 37 Ohio App.3d 64, 65, 523 N.E.2d 531 (Ohio 8th App. Dist.1987))." Paragon Molding LTD. v. Safeco Ins. Co., 2010 WL 3732126, 2010 U.S. Dist. LEXIS 99129 at *51 (S.D. Ohio June 10, 2010); and see, Libertarian Party of Ohio v. Husted, 831 F.3d 382, 406 (6th Cir. 2016)("And under Ohio law, "[t]he pendency of an appeal ... does not prohibit application of claim preclusion."); United States ex rel. Sheldon v. Kettering Health Network, 816 F.3d 399, 415 (6th Cir. 2016)(citing Cully); Hapgood v. City of Warren, 127 F.3d 490, 494 n.3 (6th Cir. 1997); Firestone v. CitiMortgage, Inc., 2022 WL 33448622 at *7 (N.D. Ohio Aug. 12, 2022)(citing Hapgood and Cully and noting: "Under Ohio law, a state court decree in foreclosure is a final judgment.").
In this case, the court finds that all four elements of collateral estoppel are satisfied regarding Debtor's liability on the debt and validity of the mortgage. Debtor was a party in the state court action, which resulted in a final judgment on the merits under Ohio Rule of Civil Procedure 56. [Doc. #136]. The validity of the debt was actually litigated and judgment was entered against Defendant Kimberly Ann Chapman in the amount of $103,952.98. Further, the validity of the mortgage was also essential to that judgment, as the trial court cited the mortgage and expressly found that "Plaintiff has a valid and subsisting lien on the subject premises . . . ." [Doc. 136, p. 5, ⁋8]. The Foreclosure Judgment was affirmed by the Appellate Court. [Id., pp. 11-22]. Thus, most of the issues relating to the debt's validity here, in connection with U.S. Bank's proof of claim, appear to be issues decided in the state court proceeding.
Accordingly, this court must give full faith and credit to the state court Foreclosure Judgment, which established the validity of the mortgage on the property located at "848 FRANKLIN RD NE, Massillon,OH", Debtor's liability on the debt, and the amount owed at the time the Foreclosure Judgment was entered, and the applicable interest rate on the judgment. [Doc. #136, pp. 3-9].
[Doc. #136, Exhibit A, "Description of Land", p. 8].
E. Remaining Issues
One issue raised by the Debtor which is not subject to the preclusion doctrines discussed above, is the issue of the assignment of the mortgage (along with "certain note(s)") from NewRez LLC to U.S. Bank that occurred after the state court litigation had concluded, and about a month after Debtor's Chapter 13 case was filed. The assignment from NewRez, LLC to "U.S. Bank Trust National Association, not in its individual capacity but solely as owner Trustee for RCAF Acquisition Trust" is dated July 8, 2024. [Doc. #108, Exhibit B-2, p. 5; Proof of Claim 7-2, p. 43]. Thus, the assignment was after the June 7, 2024 filing date of the above captioned Chapter 13 case.
Debtor cites 15 U.S.C. §1692a(4) to challenge the validity of U.S. Bank/Selene Finance's proof of claim or lien. Section 1692a(4) is a definitional provision within the Fair Debt Collection Practices Act ("FDCPA") that provides:
(4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any
person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.
This definition is clearly relevant in determining whether an entity is a "debt collector" subject to FDCPA restrictions.
Because "debt collector" (as defined in the FDCPA) is confined to persons collecting or attempting to collect a debt "owed or due another," the United States Supreme Court has determined that the FDCPA does not apply to individuals and entities collecting or attempting to collect their own debts. Henson v. Santander Consumer USA Inc., 582 U.S. 79, 137 S.Ct. 1718, 198 L.Ed.2d 177 (2017). Debtor has presented no evidence that U.S. Bank is not a "creditor who offers or extends credit", nor is there any evidence that the assignment of the mortgage (which was in default at the time of the July 8, 2024 assignment) was "solely for the purpose of facilitating collection of such debt for another." See, §1692a(4). Notably, the proof of claim lists the trust entity as being owned by U.S. Bank. [Proofs of Claim 7-1 and 7-2] and Debtor has provided no evidence that the mortgage was ever assigned to Selene Finance, LP, which appears to be U.S. Bank's mortgage servicer.
More importantly, even if Debtor's allegations were true, this definitional provision in the FDCPA does not itself create a cause of action or impose obligations on debt collectors. See generally, Obduskey v. McCarthy & Holthus LLP, 586 U.S. 466, 467, 139 S.Ct. 1029, 1031, 203 L.Ed.2d 390 (2019)(analyzing 15 U.S.C. §1692a to define "debt collector," emphasizing its role in clarifying the Act's scope rather than creating substantive causes of action). If the statute creates no cause of action - in and of itself - any claim based solely on §1692a(4) would not be legally actionable. Debtor cites to no substantive provision of the FDCPA that would allow her to essentially void her mortgage obligations on these facts.
Further, even if there was an FDCPA claim outside of the bankruptcy context, establishing such a claim based on the creditor filing of a proof of claim in a bankruptcy case is, at best, difficult in light of the Supreme Court's decision in Midland Funding, LLC v. Johnson, 581 U.S. 224, 233-235, 137 S.Ct. 1407, 1414-1416, 192 L.Ed.2d 790 (2017). Courts have also held that even when a mortgage servicer is incorrectly identified as the creditor, such a misrepresentation was not material. Cohen v. Rosicki, Rosicki & Associates, P.C., 897 F.3d 75, 85 (2nd Cir. 2018).
Judicial estoppel is an additional potential problem for Debtor's position because no FDCPA claim was listed as an asset on Schedule A/B, in response to Question 33, which requires debtors to list: "Claims against third parties, whether or not you have filed a lawsuit or made a demand for payment." [Doc. #16, p. 12, Question 33]. Questions 34 and 35 were similarly checked as "No". [Id.].
Debtor did list, under "Government and corporate bonds and other negotiable and non-negotiable instruments" a number of civil case numbers - including 2023CV00579 - as having a value of "$821,736.00". [Doc. #16, at p. 10, Question 20]. It is unclear what this is disclosing, or intended to disclose.
More generally, courts have held that the assignment of a perfected mortgage is not a transfer of property of the estate, and "the owner of a mortgage interest may transfer its interest after the mortgagor files for bankruptcy." Kapila v. Atlantic Mortgage & Investment Corp (In re Halabi), 184 F.3d 1335, 1337-1338 (11th Cir. 1999). The Sixth Circuit has agreed with the reasoning in Halabi, and specifically held that the assignment of an interest in a perfected mortgage is not a violation of the automatic stay. Rogan v. Bank One (In re Cook), 457 F.3d 561, 568 (6th Cir. 2006).
In regards to Debtor's assertion that the original amount of the May 24, 2012 mortgage loan listed on the assignment of $97,241.00 [Revised Objection to Chapter 13 Proof of Claim by Selene Finance LP, Doc. #108, C-1] is somehow contradictory to the payoff figure of $121,415.85 provided to Gary Sarver by letter dated October 18, 2024, the court notes that: 1) the Foreclosure Judgment established the debt as $103,952.98 as of October 1, 2023; 2) both the note and the Foreclosure Judgment provide for interest and the letter lists unpaid interest in the amount of $5,520.64; and 3) while Ohio restricts the inclusion of some costs from being added to a mortgage debt, other costs are allowable, such as real estate taxes paid by the mortgage holder, which appear to be listed under "Escrow Advance" in the payoff letter attached to Debtor's Revised Objection. [Doc. #108, p. 7-8].
This payoff letter [Doc. #108, Exhibit C-1 & 2, pp. 7-8] is not the proof of claim. Proof of Claim 7-1 and Amended Proof of Claim 7-2 attach accounting records in support of the amount claimed to be owed. ["Mortgage Proof of Claim Attachment", Part 5: Loan Payment History from First Date of Default, pp. 4-8; & Amended Proof of Claim 7-2, pp. 4-8]. Debtor has not addressed the accuracy of those records other than through reference to the Sarver payoff letter and the statement in her Revised Objection that: "Clearly we can see by Exhibit C 1-2 that appears to be some semblance of impropriety existing between to alleged debt collectors which would be unlawful according to; 15 U.S. Code §1692a(4) . . . ." [Doc. #108, p. 1]. This is insufficient to overcome Federal Rule of Bankruptcy Procedure 3001(f)'s presumption of validity, as discussed below.
Finally, the court notes that an objection to a claim can properly address three issues: (i) the validity of the debt; (ii) the amount due to the creditor as of the petition date; or (iii) whether the debt falls within a finite list of reasons under §502(b) for which the claim may be denied. In re Diehl, 2018 WL 2670489 at *1, 2018 Bankr. LEXIS 1625 at *2 (Bankr.N.D.Ohio June 1, 2018). "If an objection to a claim posits some other basis, it is not an objection to a claim as set forth in § 502." Id.
Accordingly, for all of the reasons discussed above, Debtor's Revised Objection [Doc. #108] is insufficient to overcome the presumption of validity accorded to a properly filed proof of claim under Federal Rule of Bankruptcy Procedure 3001(f)("(f) Proof of Claim as Prima Facie Evidence of a Claim and Its Amount. A proof of claim signed and filed in accordance with these rules is prima facie evidence of the claim's validity and amount."). See e.g., In re Bauer, 660 B.R. 649, 658-659 (Bankr.N.D.Ohio 2024); In re Harris, 2022 WL 198852 at *6, 2022 Bankr. LEXIS 153 at **17-18 (Bankr.N.D.Ohio Jan. 21, 2022); In re Booker, 301 B.R. 207, 201-211 (Bankr.N.D.Ohio 2003).
Accordingly, it is ORDERED that the Revised Objection to Chapter 13 Proof Of Claim By Selene Finance, LP be, and is hereby, Denied.
(EXHIBIT 1 Omitted)