United States Bankruptcy Appellate Panel of the First Circuit
SHAWN L. BENOIT, Debtor.
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee For Residential Asset Securitization Trust Series 2007-A1 Mortgage Pass-Through Certificates Series 2007-A, Appellee. SHAWN L. BENOIT, Appellant,
from the United States Bankruptcy Court for the District of
Maine (Hon. Michael A. Fagone, U.S. Bankruptcy Judge)
F. Shehan, Jr., Esq., on brief for Appellant.
F. Cech Samole, Esq., Ari Newman, Esq., and Stephanie L.
Varela, Esq., on brief for Appellee.
Deasy, Tester, and Finkle, United States Bankruptcy Appellate
FINKLE, U.S. BANKRUPTCY APPELLATE PANEL JUDGE.
L. Benoit (the "Debtor") appeals from the
bankruptcy court's June 28, 2016 order dismissing his
chapter 13 case (the "Order"). We find no abuse of
discretion and AFFIRM the Order.
Debtor commenced a chapter 13 bankruptcy case on September
26, 2013. On his Schedule A-Real Property, the Debtor
disclosed that he owned property in Corea, Maine (the
"First Property"). He valued the property at $300,
000 and indicated it was subject to a secured claim of
approximately $550, 000. The Debtor also indicated on Schedule A
that he held a $108, 000 mortgage on the neighboring property
(the "Second Property"). He noted by way of
explanation: "Debtor initiated foreclosure proceedings.
Mortgagor filed bankruptcy. The foreclosure needs to be
re-initiated in [s]tate court." On Schedule B-Personal
Property, he further disclosed that he had a contingent and
unliquidated counterclaim against "Deutsche Bank
National Trust, " which he valued at $850, 000. In his
Statement of Financial Affairs, the Debtor reported that
pre-petition "Deu[t]sche Bank National Trust
Company" had commenced a foreclosure proceeding relating
to the First Property.
appellee, Deutsche Bank National Trust Company, as Trustee
for Residential Asset Securitization Trust Series 2007-A1
Mortgage Pass-Through Certificates Series 2007-A
("Deutsche"), filed a proof of claim reflecting an
approximate $813, 000 indebtedness secured by its mortgage on
the First Property and a payment arrearage in the approximate
amount of $315, 000 as of the petition date. Deutsche
designated in the proof of claim that all notices and
payments should be sent to OneWest Bank, FSB
("OneWest"). In March 2014, Ocwen Loan Servicing,
LLC ("Ocwen") filed a Transfer of Claim, indicating
it had received a transfer of a claim from OneWest in the
approximate amount of $813, 000.
withdrawing two prior proposed plans, the Debtor submitted a
Third Proposed Chapter 13 Plan (the "Plan") on June
11, 2014, in which he disputed Deutsche's claim and
proposed to pay it $710 monthly, on account of its claim
pending resolution of the matter. This sum was substantially
less than the contractual monthly installment payment due on
the indebtedness. In a "special provision" of the
Plan, the Debtor further proposed to "begin the
foreclosure of [the mortgage on the Second Property] . . .
within 60 days after approval of the [P]lan." He also
indicated that he intended to "hire a civil litigation
attorney to pursue lender liability claims against
Deutsche" within "180 days after approval of the
21, 2014, the bankruptcy court entered an Interim Order
Confirming Chapter 13 Plan and Setting Deadlines for Certain
Actions (the "Interim Order"), explicitly providing
that it "d[id] not constitute final confirmation of the
[P]lan . . . ." The Interim Order incorporated the
deadlines the Debtor proposed in the Plan, including: (1) the
commencement of an adversary proceeding against Deutsche
within 180 days; (2) the filing of a complaint to foreclose
the mortgage on the Second Property within 60 days; (3) the
filing of a motion to allow or disallow claims within 90 days
of the government claims bar date; (4) the filing of any
applications to employ the necessary professionals to
prosecute such actions within 30 days; and (5) the filing of
a motion to avoid liens within 30 days. The Debtor did not
comply with any of these deadlines.
30, 2014, the bankruptcy court issued an Order to Show Cause,
directing the Debtor to appear in court on August 21, 2014,
to demonstrate why the case should not be dismissed for
failure to prosecute the Plan, as the Debtor had failed to
timely file a motion to allow or disallow claims. Prior to
the hearing, the Debtor filed the required motion (the
"Claim Motion") and a proposed order. In that
motion he objected to "Ocwen's" claim on the
grounds it had engaged in predatory lending practices, and
proposed to treat that claim as follows: "Debtor will
file an adversary proceeding against claimant. Until that is
resolved Debtor requests that the Chapter 13 Trustee pay
claimant $710 per month." The chapter 13 Trustee (the
"Trustee") objected to the Claim Motion and asked
the bankruptcy court to continue the "interim
confirmation, " pending the outcome of the Debtor's
contemplated adversary proceeding against Deutsche.
the Debtor withdrew the Claim Motion and filed an amended
motion to allow and disallow claims (the "Amended Claim
Motion"), seeking to modify the Plan by increasing his
monthly payments to $800. He represented he could not afford
to pay a greater amount due to his poor health and
anticipated lay-off during the winter months.
filed an objection to the Amended Claim Motion, arguing the
Debtor's chapter 13 plan: (1) failed to "fully
account" for Deutsche's mortgage arrearage; (2)
failed to "provide for payment of the contractually due
mortgage payments"; and (3) was "not confirmable as
a matter of law." Deutsche maintained that its right to
repayment of the principal in monthly installments was
"protected from modification by §
1322(b)(2)." The Trustee likewise objected to the
Amended Claim Motion.
hearing conducted on March 26, 2015, the bankruptcy court
granted the Amended Claim Motion and directed the Debtor to
submit a "[r]evised [p]roposed [o]rder" on the
motion by April 2, 2015. The Debtor's failure to comply
with that deadline prompted the bankruptcy court to enter
another order-this time directing him to submit the ...