Court Denied Stay Violation Claims Against Servicer Under §362(k) for Insufficient Service of Process and Lack of Evidence

Court Denied Stay Violation Claims Against Servicer Under §362(k) for Insufficient Service of Process and Lack of Evidence

On April 27, 2008, Debtor commenced this bankruptcy case by filing a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. On May 15, 2009, the court entered an order granting relief from the automatic stay as to Chase Home Finance, as servicing agent for MERS, solely as nominee for Resmae Mortgage Corporation relating to the Debtor’s real property.  By order entered on June 11, 2009, Debtor’s bankruptcy case was converted to a case under Chapter 7 of the Bankruptcy Code. On May 3, 2011, the court entered an order for discharge of debt in this bankruptcy case, and on July 8, 2011, the court closed the bankruptcy case.

On February 1, 2017, Debtor filed her original “Motion for Permanent Injunction in Violation of Automatic Stay 11 U.S.C. § 362, and § 501 Discharged Injunction § 524 and Creditors Misconduct” (“Injunction Motion”). On February 3, 2017, the court issued an order on the Injunction Motion, which required Debtor to file a signed signature page for the Injunction Motion on or before February 28, 2017. On February 21, 2017, Debtor filed her motion to reopen the bankruptcy case and her “First Amended Motion for Permanent Injunction in Violation of Automatic Stay 11 U.S.C. § 362, and § 501, Discharged Injunction § 524 and Creditors Fraudulent Misconduct” (“First Amended Injunction Motion”), which included a signed signature page. By order entered on February 28, 2017, the court reopened this bankruptcy case.

Having reviewed Debtor’s motion to reopen the bankruptcy case and the First Amended Injunction Motion and supporting evidence, the court construed the First Amended Injunction Motion as a motion for issuance of an order to show cause under Local Bankruptcy Rule 9020-1 which governs contempt proceedings for violations of court orders or directives, such as the automatic stay under 11 U.S.C. § 362 and the discharge injunction under 11 U.S.C. § 524, and the court issued its order to show cause (“OSC”), ordering MERS, Chase, SPS, U.S. Bank National Association, Stewart, Albertelli Law Group and Quality Loan Service Corporation (“Respondents”) to file a written explanation as to why they should not be held liable for any willful violation of the automatic stay under 11 U.S.C. § 362 and the discharge injunction under 11 U.S.C. § 524 and in civil contempt and set the First Amended Injunction Motion for a hearing on May 16, 2017.

On May 16, 2017, the court conducted a hearing on the First Amended Injunction Motion and heard argument from the parties. The court then took the matter under submission. The court has considered the evidence on the First Amended Injunction Motion, including the contents of the motion as verified by Debtor in the Verification attached to the motion and the exhibits also attached to the motion, the declaration of Mark Syphus, a document control officer for SPS, and SPS’s request for judicial notice and exhibits attached thereto. The court notes that there were no objections to any of the evidence offered by the parties, including the verified motion and the exhibits attached thereto and the declaration of Mr. Syphus, and the request for judicial notice and exhibits attached thereto, and the court has considered all of these evidentiary matters in its consideration of the motion. The authenticity and relevance of the documents relating to Debtor’s loan transaction involving the subject real property, such as the deed of trust, the assignments of deed of trust, notices of trustee’s sale, correspondence between debtor and the loan servicers, are undisputed.

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