[00:00:00] Speaker 00:
Last madam clerk number three Trevor Robbins council for appellant Sharon Robert Neil right Sharon Elizabeth Neil All right good morning I'm not going to ask you whether you want to reserve any time for rebuttal because you're the only one here, so please begin

[00:00:31] Speaker 03:
May it please court, thank you for granting me the opportunity to appear on behalf of my client, Sharon Neal, the appellant and accreditor in this matter.

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I'm not a specialist in bankruptcy law, but I am familiar with its fundamentals and appreciate the chance to present the issues that are, in our view, critically important to the case.

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I've represented Sharon for many years in state court in connection with this debtor, the subject property, and my client's judgment lien.

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Since 2019, we've endured multiple bankruptcy filings by the debtor, each of which were aimed at frustrating the enforcement of my client's judgment lien.

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For a quick background, this debtor is unfortunately someone who's learned how to manipulate and abuse the civil process.

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She can afford an attorney but remains prosaic, continues with unabated frivolous filings.

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number of faceless motions follow state court appeals and bankruptcies.

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These files over the past five years have been astounding.

[00:01:44] Speaker 02:
Council, why don't you just move to the issues which are at stake in this appeal rather than give us the history that you've just described?

[00:01:53] Speaker 03:
Sure.

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Fundamentally, the debtor entered into a

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The debtor, after confirmation of the Chapter 13 bankruptcy plan, entered into a state court, stipulated judgment, restoring her fee ownership in the property and also

[00:02:34] Speaker 03:
uh, her mortgage and did not, did not disclose that to the bankruptcy court, the trustee, anybody, even though that was an express provision of, uh, the, the plan and, uh, and, uh, and it was also, but council, the, the mortgage had been disclosed in the schedules.

[00:03:01] Speaker 02:
At the time the bankruptcy case was filed, she owned property that was subject to the lien that the bank, U.S.

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bank held or the mortgagee held.

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The mortgagee moved for stay relief.

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The mortgagee was granted stay relief.

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That resulted in a foreclosure that wiped out your client's lien.

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It also took title from the debtor.

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When she confirmed the plan, the court didn't allow her to list the property because at that time she had been foreclosed from the property.

[00:03:34] Speaker 02:
But the debt was always disclosed.

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When she entered into the stipulated judgment, this wasn't a new debt.

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This was an unknown property.

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Correct?

[00:03:46] Speaker 03:
Correct.

[00:03:47] Speaker 03:
Um, but, uh, there was, there were provisions in the, uh, confirmation, the plan that was confirmed, um, that required debtor couldn't incur a new debt without disclosure.

[00:04:03] Speaker 02:
The court found that she'd made full disclosure.

[00:04:08] Speaker 03:
Well, I think that there's a difference between.

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getting to the point where you anticipate a foreclosure, the bankruptcy court acts in reliance on that foreclosure happening.

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And then a year later, with no disclosure whatsoever, reinstating that debt and that lien

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Did the bankruptcy court find that you violated that there was there was cause to take any action against her when when your client raised the issue?

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I believe that's why we are here today that the bankruptcy court did not agree that that was a that was a substantial violation of the plan and

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And we think it certainly affected us.

[00:05:17] Speaker 02:
It didn't affect you because your client has an unsecured claim in the case, which was allowed.

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Your client has no lien because it was foreclosed by the bank under a foreclosure action the court authorized.

[00:05:30] Speaker 02:
So the fact that she signed on or made a stipulated judgment with a secured credit didn't affect your client, did it?

[00:05:40] Speaker 03:
Absolutely.

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It was a spam.

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It was not in good faith.

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It was a year or more delay.

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It was a multiple year delay.

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I mean, we've had an order for sale for over five years.

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It certainly affected us and

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in just in what you just said.

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What could you sell if you didn't have a lien that had been foreclosed during the bankruptcy case?

[00:06:17] Speaker 03:
Well, under organ law, a stipulated judgment based on to to restore property fee title and property based on not

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Non-notice of the council doesn't your remedy lie with the state court then?

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In other words if you believe that the state court acted improperly you go back to the state court and say you couldn't remove my lien because we didn't get notice We didn't act in accordance with state law.

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That's where your remedy is it isn't with the bankruptcy court Is it?

[00:07:02] Speaker 03:
I think it is.

[00:07:04] Speaker 03:
Well, I think that there's definitely, I mean, we're definitely pursuing our remedies in state court as well, but I think that the decision to or the interpretation of that stipulated judgment in bankruptcy court as stripping away our

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lien is incorrect under order in law.

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A flawed trustee sale is void of an issue.

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So it's not like we had this.

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But counsel, you had a state court judgment

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that was entered initially that foreclosed everyone, including your client and the debtor.

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And then there was a stipulated judgment entered by the state court.

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The Bankruptcy Court is simply implementing what the state court has previously ordered, isn't it?

[00:08:13] Speaker 03:
Well, there have been... There was a specific...

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Ruling from the bench, ECF has memorialized the ECF 146 explicitly prohibiting the debtor from using her plan or the bankruptcy process to deal with the property.

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But she isn't, the plan doesn't involve the property and the action that she took after the confirmation doesn't involve the plan.

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The plan is just to make payments, specific dollar figures over a specific period of time.

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It doesn't involve the real property.

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The creditor has no right to seek any relief in the bankruptcy case for any failure to make payments.

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There's nothing in the plan that provides for payments to the secured creditor.

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There's nothing that is violative of the plan by virtue of what she entered into with the secured creditor after confirmation.

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Is there?

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Well, I think there is.

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I think that the lower court should follow its own orders.

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So the provision that you're relying upon that says she couldn't incurred new debt,

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Does it have any remedy that suggests that then that constitutes cause for dismissal of the case in that plan provision?

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Well, the specificity of this particular debtor, this particular bankruptcy, this particular situation was that the debtor was expressly

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not allowed to attempt to use the plan or bankruptcy to deal with the foreclosed property.

[00:10:17] Speaker 02:
But she didn't, did she?

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She didn't use the bankruptcy court or the plan to deal with the property.

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She dealt with the creditor outside of the plan.

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And she's not violated the terms of the plan as far as we know to date, has she?

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She's made all the payments under the terms of the plan.

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Trustee hasn't filed a motion to dismiss for failure to make plan payments or delinquent payments.

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I assume that that's correct.

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And yet, it's all masked in pervasive, persistent lies.

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It's not like her

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Her income is sufficiently low to have waived fees in this court.

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I guess more importantly, in the state court proceedings,

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using the confirmed plan to describe our lien as having been foreclosed when in fact

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The foreclosure was void of initio.

[00:11:55] Speaker 02:
It's not just us Why do you say the foreclosure was void ab initio?

[00:12:01] Speaker 03:
The bankruptcy court authorized the foreclosure to proceed when it granted stay relief Right, but then a year later a year after the foreclosure sale the bank and

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the debtor in this bankruptcy entered into a stipulated order just just then not all the I Mean if it's if it's a year later, how does that make the foreclosure void of an issue?

[00:12:36] Speaker 01:
You know what I mean, I mean if something's void of an issue it's because at the moment that it happens it had no effect You're talking you're telling us

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And I understand why your client's not happy.

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I get that.

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But if this was a year later, how does that void anything off an issue?

[00:12:52] Speaker 03:
Well, any substantial deviation.

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So the deviation on which that stipulated judgment was based on was a failure of the fee owner to receive notice of the grantor.

[00:13:14] Speaker 01:
But that was resolved by the people who had the power to resolve it, right?

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The debtor had the power to resolve that, right?

[00:13:26] Speaker 02:
She was the fee owner.

[00:13:26] Speaker 03:
I would say that the debtor has the power to resolve her own, you know, her own lien and not that there is this mechanism where

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a bank and a debtor can do a sort of friendly foreclosure, get the debtor's name off the property.

[00:13:54] Speaker 01:
Well, it didn't get friendly for a year, okay?

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There's sort of a delayed friendliness concept here.

[00:14:02] Speaker 01:
By the argument you're making, it didn't happen for a year.

[00:14:05] Speaker 01:
I mean, I'm not sure where the ab initio part comes into this.

[00:14:12] Speaker 03:
That's just black letter organ law about significant errors in notice.

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It's not like a bank and a debtor can wait any amount.

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I mean, you can't wait any amount of time for our

[00:14:42] Speaker 00:
It seems like your argument is that because of the defects in the foreclosure sale with respect to notice to the debtor, that that means that the foreclosure sale was invalid as to everyone, including junior lien holders.

[00:15:10] Speaker 00:
Is that right?

[00:15:12] Speaker 00:
Yes.

[00:15:13] Speaker 00:
All right.

[00:15:13] Speaker 00:
But again, as Judge Gantz said, it seems like that's an issue for the state court.

[00:15:18] Speaker 00:
I don't see a basis to dismiss a bankruptcy case because that's your argument.

[00:15:24] Speaker 03:
Well, so there's a couple of rulings in the process of this bankruptcy that prohibit this stipulated judgment anyway.

[00:15:38] Speaker 03:
incurring new debt, page nine of her plan, incurring new credit.

[00:15:46] Speaker 00:
We understand those arguments, so I think we've got it, and you're over your time.

[00:15:51] Speaker 00:
Is there anything that you want to say in closing?

[00:15:56] Speaker 03:
No, it's an honor to appear here today.

[00:16:00] Speaker 03:
Thank you.

[00:16:01] Speaker 00:
All right, thank you very much.

[00:16:03] Speaker 00:
The matter is submitted, and that's the end of our calendar, so we're adjourned.

[00:16:09] Speaker 02:
Thank you.