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From the findings of fact:

“Based on the foregoing, this case is consistent with the pattern in so-called “hijacked” or “dumping” cases — i.e., cases in which a transferor of property, acting without the debtor’s participation or acquiescence, seeks to implicate the automatic stay for the transferor’s own benefit by purporting to transfer property into a random bankruptcy estate, or by back-dating or falsifying a grant deed to make it appear that such a transfer has occurred.”

The holding:

“Based on the foregoing facts, although it is not appropriate to find that Debtor participated in the scheme, it is appropriate to grant relief of the type set forth in 11 U.S.C. §362(d)(4) (“in rem” relief), …”

As they say, read the whole thing.

Hale Antico

You can access the opinion here.

Judge Zurzolo updated his forms, procedures, and pleadings that he does not want sent to him, as well as various other requirements on his (the court’s) website.

Go the court’s website here, then:  Home; Information;  Zurzolo, Vincent P.; FORMS/PROCEDURES/SELF-CALENDARING.

May 16, 2012

Tentative Ruling:

This is the confirmation of the debtors’ Chapter 13 plan. The Bank of New York Mellon (“bank”) has filed an objection, primarily concerning the attachment of the optional Addendum promulgated by the Central District. The bank argues that the Addendum is superseded as inconsistent with revised FRBP 3002.1 which was adopted by the Supreme Court December 2011.

The bank’s argument is not persuasive on any of its points.

First, the bank argues that FRBP 3002.1(b) and (c) as amended is an Act of Congress. It is not, except insofar as it could be argued that 28 U.S.C. §2075, which requires that changed rules be submitted by the Supreme Court for Congressional review by May 1, becomes an “act of Congress” each year when Congress fails to respond (as here).

Second, it is equally true that no Local Rule can be enacted if it inconsistent with, or duplicative of, either an act of Congress or the Federal Rules of Bankruptcy Procedure. See FRBP 9029. But the court is not persuaded that the Addendum is inconsistent or duplicative of the Rules or any of them. Rule 3002.1 (b) and (c) governs proofs of claim, and the notices required there under are to be given as supplements to the proof of claim. The court is not sure this is quite the same thing as monthly mortgage statements particularly when the plan calls for monthly statements.

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United States Bankruptcy Court Central District of California
San Fernando Valley
Tuesday, March 27, 2012 Hearing Room 302
9:00 am
1:11-15373 David Darzian Chapter 13
Second Amended Motion to avoid junior lien on Principal Residence ***

Docket #: 27
On October 2, 2009, David Darzian (“Debtor”) filed a voluntary chapter 7 petition.  Debtor received a discharge in that case on February 10, 2010. Subsequently on May 1, 2011, Debtor filed a voluntary chapter 13 petition.  This in turn resulted in what is colloquially known as a chapter 20 case.  Now, Debtor has filed a Motion to Avoid (“Motion to Avoid”) the junior lien on his principal residence held by J.P. Morgan Chase Bank, N.A. (“JP Morgan”).  An opposition has not been filed.  At the January 24, 2012 continued hearing, Debtor was instructed to file additional briefing by February 22, 2012 addressing this Court’s previous ruling in In re Winitzky, 2009 Bankr. Lexis 2430 (Bankr. C.D. Cal. 2009).  There, this Court held that chapter 20 debtors are not entitled to avoid junior liens because of their inability to obtain a discharge.  Debtor was asked to address why this Court should permit this chapter 20 debtor to avoid the junior lien of JP Morgan.  The Court noted that subsequent to its ruling in In re Winitzky, several cases have come down and conflicting rulings have been reached. On February 22, 2012, Debtor filed his Brief. Based on an analysis of subsequent cases, the Court will re-consider its position with respect to avoiding junior liens in chapter 20 cases.

Based on an analysis of further discussions of this subject, the court is inclined to agree that the controlling event, then, is not discharge but rather completion of plan payments.  Discharge in chapter 13 and an individual chapter 11 is only granted once the plan payments have been completed.  It is also dispositive that a discharge does not, in and of itself, strip a lien; instead, discharge simply operates as a statutory injunction against the “commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor.”  In re Oksosisi, 451 B.R. 90, (Bankr. D. Ne 2011),  In re Frazier, 448 B.R. 803, 809, and 11 U.S.C. § 524(a)(2).  Other courts, as discussed below, identify the completion of plan payments as the controlling event governing permanence of lien avoidance and modification of rights.

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