IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE WESTERN DISTRICT OF PENNSYLVANIA 

In re: 

BARBARA LEE MONTELEONE, 

 Debtor. 

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Case No. 15-23649 

Chapter 13 

Doc. No. 

MEMORANDUM OPINION 

The matter before the Court is a Rule to Show Cause as to Why This 

Case Should Not Be Dismissed. This matter is a core proceeding pursuant to 

28 U.S.C. §§ 157(b)(2)(A), (L) and (O). Because no plan payments have been 

made in this case, and because the proposed Chapter 13 Plan is not feasible, 

the Court concludes that dismissal without prejudice is warranted pursuant to 

11 U.S.C. § 1307(c). As such, an Order consistent with this Memorandum 

Opinion shall be entered by the Court.

I. 

At the time of the filing of this Chapter 13 Bankruptcy Case, Barbara Lee 

Monteleone, Debtor, resided at 235 Claremont Drive, New Kensington,1

Westmoreland County, Pennsylvania (the “Residence”). The filling of this 

Chapter 13 Bankruptcy Case was intended to thwart a Sheriff’s Sale of the 

1 The Petition lists “New Kensington,” but other court filings indicate the Residence is located in 

“Lower Burrell.” 

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Residence set for October 5, 2015. The Chapter 13 Plan (the “Plan”)2 filed by 

the Debtor proposed to obtain a “reverse mortgage” from which Plan payments 

would be made.3 On October 22, 2015, the Mortgagee (as hereafter defined) 

filed a “Motion to Dismiss and/or Terminate the Automatic Stay (“Relief from 

Stay Motion”).4 After a hearing, the Court granted Relief from the Automatic 

Stay to allow the Mortgagee to continue with its Mortgage Foreclosure Action 

(as hereafter defined), but did not grant a dismissal of this Bankruptcy Case at 

that time.5 

To date, the Plan has not been confirmed and no Plan funding has been 

made by or on behalf of the Debtor. The proceedings before the Court of 

Common Pleas reflect that the Sheriff’s Sale of the Residence has occurred. 

Because the central purpose of Plan, as proposed, was to save the Residence 

from foreclosure, the Plan is no longer feasible. As such, the Court finds cause 

to dismiss this Bankruptcy Case without prejudice to the re-filing of a case 

under Chapter 7. 

II. 

This case was commenced by the filing of an emergency Chapter 13 

Bankruptcy Petition by Barbara Lee Monteleone, on October 4, 2015 (“Petition 

Date”). On the Petition Date, Clearview Federal Credit Union (formerly known 

2 Dkt. No. 13. 

3 Plan at p.1. 

4 Dkt. No. 10, refiled at Dkt. No. 18. 

5 Dkt. No. 29. 

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as A-K Valley Federal Credit Union) (“Mortgagee”), held a first mortgage on the 

Residence. 

 Previously, the Debtor had filed a Voluntary Petition for Relief under 

Chapter 13 of Bankruptcy Code with this Honorable Court on February 26, 

2010, at Case No. 10-21195-JKF (“2010 Chapter 13 Bankruptcy Case”). 

Prior to the filing of 2010 Chapter 13 Bankruptcy Case, the Mortgagee had filed 

an Action in Mortgage Foreclosure with the Court of Common Pleas of 

Westmoreland County, Pennsylvania, Civil Division, at Docket No. 14119 of 

2008 (“Mortgage Foreclosure Action”). The Mortgagee alleged in the 

foreclosure action that the Defendant had defaulted in her obligations under 

the Mortgage covering the Residence and under the Mortgage Note executed in 

2006. 

On April 20, 2009, following the filing of the Mortgage Foreclosure 

Action, a default judgment in mortgage foreclosure in the amount of 

$229,241.82 was entered against the Debtor in the Office of the Westmoreland 

County Prothonotary at the above referenced docket number. On May 22, 

2009, the Debtor filed a Petition to Re-Open Judgment in the Mortgage 

Foreclosure Action and requested issuance of a Rule, directed to the Mortgagee, 

to show cause why the judgment should not be opened. After briefing and 

hearings, the Westmoreland Court of Common Pleas entered an Order, dated 

October 28, 2009, dismissing the Petition to Re-Open and/or Strike the Default 

Judgment in Mortgage Foreclosure. 

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Thereafter, the Debtor filed her 2010 Chapter 13 Bankruptcy Case. After 

a period of more than three (3) years in her 2010 Chapter 13 Bankruptcy Case, 

the Debtor was unable to obtain confirmation of a Plan that included mortgage 

modifications sought by the Debtor.6 In those proceedings, the Mortgagee 

obtained an Order dated May 3, 2013 from U.S. Bankruptcy Judge Judith K. 

Fitzgerald granting relief from the automatic stay, which stated as follows: 

“Upon entry of the Order of Court, the Movant shall be permitted to take those 

steps necessary to enforce the current judgment in mortgage Foreclosure 

entered with the Court of Common Pleas of Westmoreland County, 

Pennsylvania.”7 Moreover, Judge Fitzgerald stayed the enforcement of the May 

3, 2013 Relief from Stay Order until a hearing on May 29, 2013. On May 29, 

2013, Judge Fitzgerald let the Order stand. After entry of the 2013 Relief from 

Stay Order by Judge Fitzgerald, the Debtor filed a Motion for Reconsideration; 

on September 18, 2013, the Motion for Reconsideration was denied,8 to which 

no timely appeal was filed. 

The Mortgagee then proceeded with the Mortgage Foreclosure Action, and 

the Residence was scheduled for a Sheriff’s Sale in Westmoreland County in 

December 2013. The Debtor then filed her second Petition to Strike the Default 

Judgment previously entered in the Foreclosure Action. The Honorable Judge 

6 Although payments had been made to the Office of the Chapter 13 Trustee towards the 

mortgage debt due and owing the Mortgagee, a Plan which incorporated an alleged Mortgage 

modification attempted by the Debtor was never confirmed. The Plan that was confirmed was 

subsequent to the grant of relief from stay in favor of the Mortgagee. See Case No. 10-21195, 

Dkt. No. 228 and Dkt. No. 239. 

7 Case No. 10-21195, Dkt. No. 177 dated May 3, 2013, see also, Dkt. No. 196 (Motion to 

Enforce Relief from Stay Order). 

8 Case No. 10-21195, Dkt. No. 221. 

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Gary P. Caruso of the Court of Common Pleas of Westmoreland County issued 

a Rule to Show Cause why the Foreclosure Judgment should not be stricken. 

On or about January 29, 2014, Judge Caruso entered an Order denying the 

Petition to Strike Judgment, to which the Debtor filed a timely appeal. On 

February 6, 2015, a three-judge panel of the Pennsylvania Superior Court 

affirmed the Decision and Order of Judge Caruso entered on January 29, 2014. 

The Debtor did not take any further appeals. 

Thereafter the Mortgagee caused the Writ of Execution to be reissued and 

the Sheriff’s Sale was re-set. Based on allegations of ownership and title issues 

regarding the Residence raised by the Debtor, the Mortgagee filed a related 

proceeding – an Action to Quite Title. An Order entering judgment in favor of 

the Mortgagee in the Action to Quite Title was entered by the Honorable Judge 

David Regoli of the Court of Common Pleas of Westmoreland County, at Docket 

No. 14119 of 2008, on June 19, 2015. Thereafter, the Sheriff of Westmoreland 

County scheduled a Sheriff Sale of the Residence for October 5, 2015, at 9:00 

AM. 

As stated above, the Debtor filed this Chapter 13 Case on October 4, 

2015 – a day prior to the then set Sheriff’s Sale. As a result, the Sheriff’s Sale 

was again continued by the Office of the Sheriff of Westmoreland County on 

October 5, 2015 and re-scheduled for January 4, 2016. 

On October 22, 2015, the Debtor filed her Chapter 13 Plan, which 

provided for payments to be made from an expected “reverse mortgage loan.” 

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However, no reverse mortgage was ever obtained and no Plan payments were 

made by or on behalf of the Debtor. 

On October 22, 2015, the Mortgagee filed its Relief from Stay Motion, to 

which the Debtor responded. After a hearing held on December 2, 2015, this 

Court granted Relief from the Automatic Stay, finding the “reverse mortgage 

speculative”9 and the Mortgagee “not adequately protected.”10

 On February 1, 2016, this Court issued a Rule to Show Cause to 

determine why the Chapter 13 Case should not be dismissed because no Plan 

payments had been made.11 A hearing regarding dismissal was held on 

February 12, 201612 and continued to April 20, 2016.13 At these hearings, the 

Court learned that the Foreclosure on the Residence had taken place, a 

Sheriff’s Deed was issued14 and the Sheriff of Westmoreland County was 

seeking to eject the Debtor and others then living at the Residence. The public 

records from the Court of Common Pleas of Westmoreland County confirm that 

the Debtor, among others, was served with a Complaint in Ejectment, from 

which a Writ of Possession issued.15 On or about July 6, 2016, the Debtor was 

ejected from the Residence.16 

9 Transcript from December 2, 2015 Hearing, Dkt. No. 62 at 7. 

10 Id. 

11 Dkt. No. 38. 

12 Transcript from February 12, 2016 Hearing, Dkt. No. 63. 

13 Transcript from April 20, 2016 Hearing, Dkt. No. 64. 

14 Westmoreland County Court Index at the Foreclosure Action indicates a Sheriff Sale was 

conducted and a Sheriff’s Deed was tendered to the Prothonotary on February 2, 2016. 

15 See Clearview Federal Credit Union v. Barbara L. Monteleone, et.al. Westmoreland County 

Court of Common Pleas, Case No. 16CJ00518. 

16 Id. 

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III. 

The statutory authority for dismissal of a chapter 13 case lies within 

section 1307 of the United States Bankruptcy Code. Specifically, sub-part (c) 

of this section states that: “A court may dismiss a case for cause when it is 

deemed to be in the best interests of creditors and the estate.” 11 U.S.C. § 

1307(c) (italics added for emphasis). Section 1307(c) further provides a nonexhaustive list of factors that may constitute a basis for dismissal. In re Lilley, 

91 F.3d 491, 494 (3d Cir. 1996). 

For the purpose of this Bankruptcy Case, the Court identifies three 

enumerated factors which could serve as the basis for case dismissal: (a) 

unreasonable delay by the debtor that is prejudicial to creditors; (b) failure to 

commence making timely plan payments; and (c) denial of confirmation of a 

plan (and denial of a request made for additional time for filing another plan or 

a modification of a plan). See 11 U.S.C. §§ 1307(c)(1), (4) and (5). 

 During the hearings held on February 12, 2016 and April 20, 2016 

before this Court, the only defense to dismissal proffered on behalf of the 

Debtor was a challenge by the Debtor’s son as to the soundness of both the 

Foreclosure Action Judgment and the Sheriff’s Sale conducted before the 

Westmoreland County Court of Common Pleas. However, it is clear from the 

state of the record that the Foreclosure Action Judgment implicitly and 

conclusively established that the Mortgagee was entitled to that Judgment, and 

that this Court lacks the jurisdiction to reexamine that issue pursuant to the 

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Rooker-Feldman Doctrine. Indeed, “The cases so holding are legion. See, e.g., 

In re Washington, 469 B.R. 587 (Bankr. W.D. Pa. 2012) (Rooker-Feldman 

doctrine prevented debtor from challenging the standing of mortgagee to file a 

proof of claim when the state court had already entered a foreclosure judgment 

in favor of that mortgagee); In re Stewart, 473 B.R. 612, 630-31 (Bankr. W.D. 

Pa. 2012) (it would be impossible for bankruptcy court to hold that mortgagee 

did not have claim secured by debtors’ property without reviewing or rejecting 

state foreclosure judgment).” Rushmore Loan Mgmt. Servs., LLC v. Kohar (In 

re Kohar), 525 B.R. 248, 253, (Bankr. W.D. Pa. 2015). 

 Under Pennsylvania law, the prior owner in a mortgage foreclosure sale 

has no right to redeem property after the sale occurs. Rather, under 41 Pa. 

Stat. and Cons. Stat. Ann. § 404, the prior owner may only “cure” any default 

under the mortgage up until “one hour prior to the commencement of bidding 

at a sheriff sale or other judicial sale on a residential mortgage obligation.” 

As discussed in In re Townsville, 268 B.R. 95 (Bankr. E.D. Pa. 2001): 

Under Pennsylvania law, a mortgagor has the right to redeem mortgaged 

property until the fall of the hammer at an originally scheduled sheriff's 

sale. Once the hammer has fallen at the sheriff's sale, the mortgagor has 

no right to redeem. The purchaser at the sheriff's sale obtains equitable 

ownership of the property and upon settling with the Sheriff, the right to 

compel delivery of the deed. . . . Thus, at the fall of the hammer, the 

mortgagor loses rights and the purchaser acquires rights and obligations. 

. . . Therefore, I conclude that, under the law of Pennsylvania, property is 

sold at a foreclosure sale on the date the sale is held. Id. at 118-19 

(citations omitted). Thus, at the conclusion of a mortgage foreclosure 

sale, the prior owner has no right to redeem property and the purchaser 

‘obtains vested equitable ownership of the property.’ In re Donovan, 183 

B.R. 700, 701 (Bankr. W.D. Pa. 1995) (first citing Butler v. Lomas & 

Nettleton Co., 862 F.2d 1015 (3d Cir. 1988); then citing Pa. Co. v. Broad 

St. Hosp., 354 Pa. 123, 47 A.2d 281, 283 (Pa. 1946)). ‘Upon 

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acknowledgment and delivery of the deed, legal title, too, passes to the 

purchaser.’ In re Brown, 75 B.R. 1009, 1012 (Bankr. E.D. Pa. 1987) 

(citing In re Rouse, 48 B.R. 236, 240-41 (Bankr. E.D. Pa. 1985)). In sum, 

when property is sold in a mortgage foreclosure sale, the prior owner 

loses all right to redeem the property and holds bare legal title and a 

right to possess such property until legal title passes to the purchaser 

upon acknowledgement and delivery of the deed. The purchaser, on the 

other hand, possesses a vested equitable interest in such property at the 

time of the sale and absolute title upon acknowledgement of the deed. 

In re Pittman, 549 B.R. 614 (Bankr. E.D. Pa. 2016). 

Given this state of the record, the Court is powerless to re-examine the 

Mortgage Foreclosure Judgment and the Sheriff’s Sale of the Residence by 

virtue of the Rooker-Feldman doctrine. See Great W. Mining and Mineral Co. v. 

Fox-Rothschild, LLP, 615 F.3d 159, 166 (3d Cir. 2010) (setting forth test to 

determine when Rooker-Feldman doctrine applies); Rushmore Loan Mgmt. 

Servs., LLC v. Kohar (In re Kohar), 525 B.R. 248, 253, (Bankr. W.D. Pa. 2015). 

Of course, whether cause exists to dismiss a bankruptcy case and, if so, 

whether the chapter 13 case should be dismissed or converted to chapter 7, are 

issues within the discretion of the bankruptcy court. As one court observed: 

Section 1307(c) provides a Bankruptcy Court with the power to 

dismiss a bankruptcy case for ‘cause.’ 11 U.S.C. § 1307(c). A 

Bankruptcy Court has considerable discretion in determining 

whether “cause” exists and whether dismissal is the appropriate 

remedy. E.g., In re Orawsky, 387 B.R. 128, 137 and n. 15 (Bankr. 

E.D. Pa. 2008) (citing cases); 8 Collier on Bankruptcy, ¶ 1307.04[4] 

(15th ed., rev.) (‘As under the other subsections of section 1307(c) 

[i.e., sections other than § 1307(c)(4)], the court’s power to dismiss 

or convert is discretionary.’). See also In re Dixon, Slip Op., 2009 

WL 151688, *2 (Bankr. E.D. Pa., 2009); In re Henry, 368 B.R. 696, 

699 (N.D. Ill. 2007) (same). In re Pierson, 2009 WL 1424472, *2 

(E.D. Pa. May 19, 2009); see, e.g., In re Mallory, 476 Fed. Appx. 

766, 767 (5th Cir. 2012); In re Dempsey, 247 Fed. Appx. 21, 25 

(7th Cir. 2007); see also In re Myers, 491 F.3d 120, 125 (3d Cir. 

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2007) (‘We review the Bankruptcy Court's decision to dismiss the 

bankruptcy case as a bad faith filing for abuse of discretion.’). 

In re Soppick, 516 B.R. 733, 745 (Bankr. E.D. Pa. 2014). 

In reviewing the totality of the circumstances, “cause” exists to dismiss 

this bankruptcy case because the Debtor’s Plan cannot serve as a vehicle to 

collaterally attack the state court judgments that were rendered against the 

Debtor. “Cause” also exists warranting dismissal because no payments have 

been made for the benefit of creditors under the proposed Plan, and the 

feasibility of this Chapter 13 case has not been demonstrated by the Debtor. 

Dismissal is therefore appropriate under these circumstances. Such dismissal, 

however, shall be without prejudice to the Debtor’s pursuit of a bankruptcy 

discharge under Chapter 7 of the United States Bankruptcy Code. 

IV. 

For the reasons set forth above, the Court shall enter an Order that 

dismisses this bankruptcy case without prejudice to the Debtor filing a new 

case under Chapter 7 if, and to the extent, the Debtor wishes to pursue a 

discharge under Chapter 7 of the United States Bankruptcy Code. 

Date: July 19, 2016 __________________________________________

 Jeffery A. Deller 

 Chief U.S. Bankruptcy Judge 

Cm: Debtor, Jeffrey Monetleone, Chapter 13 Trustee, Counsel for the Debtor, 

and Office of the United States Trustee 

10 

FILED

CLERK

U.S. BANKRUPTCY

COURT - 

7/19/16 11:22 am

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