Opinion ID: 2656832
Heading Depth: 1
Heading Rank: 3

Heading: facts

Text: On or about December 10, 2004, the Debtor and his non-debtor spouse, Tonya Brown (collectively, the “Appellants”) executed and delivered to Ameriquest Mortgage Company (“Ameriquest”) an Adjustable Rate Note (the “Note”) in the original amount of $340,200. On that same date, in order to secure the repayment obligation under the Note, both the Appellants executed a mortgage (the “Mortgage”) on real property located at 6374 Hermitage Drive, Westerville, Ohio (the “Real Property”) in favor of Ameriquest.1 The Debtor filed his petition in the instant Chapter 7 bankruptcy case on October 24, 2011. According to the Debtor’s Schedule A form, the value of the Real Property is insufficient to pay off the debt that is attached to it. The current value of the Real Property is $131,000. The amount of the secured claim attached to the Real Property is $309,750.35. On December 5, 2011, the Chapter 7 trustee, Larry McClatchey (the “Trustee”), filed a report of no distribution certifying that the Debtor’s bankruptcy estate had been fully administered. No objection to that report was filed. The Bankruptcy Court has explained that, pursuant to the Bankruptcy Code and local rules, the filing of the report of no distribution “signaled [the Trustee’s] intent to abandon the [Real Property], along with other property of the Debtor’s estate . . . to the Debtor upon the closing of the case (see 11 U.S.C. § 554(c)).” Brown v. Kondaur Capital Corp. (In 1 This appeal is only the latest effort by the Appellants to stave off foreclosure on the Real Property. Much of the lengthy factual background to this appeal is discussed in an opinion and order issued by the Bankruptcy Court when it dismissed one of the Browns’ adversary cases. See Brown v. Kondaur Capital Corporation (In re Brown), Bankr. No. 11-60762, Adv. No. 12-2059, 2013 WL 1010359 (Bank. S.D. Ohio, March 13, 2013). 3 re Brown), Bankr. No. 11-60762, Adv. No. 12-2059, 2013 WL 1010359 at  (Bankr. S.D. Ohio, March 13, 2013). The Debtor received his discharge on February 7, 2012. On May 21, 2013, Appellee Florida Coastal Partners, LLC (the “Appellee”) filed a motion for relief from stay regarding the Real Property. The Appellee stated in this motion (1) that it was a secured creditor by virtue of the Note and Mortgage originally given to Ameriquest, and that it had obtained Ameriquest’s interest in the Note and Mortgage via a chain of assignments; (2) that it did not have and was not provided with adequate protection of its interest in the Real Property; (3) that there was no equity in the Real Property; (4) that the Real Property was not necessary to an effective reorganization; and (5) that the Appellee had and would continue to suffer losses and damages if the automatic stay were not modified. In a memorandum that accompanied the stay relief motion, the Appellee described the chain of assignments by which the Appellee had acquired its interest in the Real Property. The Appellee also stated that it had not been receiving payments from the Debtor and that the Debtor had been in default on the Note for seventy-two months. The text in the body of the motion for relief from stay, apparently due to a clerical error, identified the “Movant” as “Midwest Savings Bank,” not Florida Coastal Partners, LLC. (Mot. of Florida Coastal Partners, LLC for Relief from Stay, at 1, ECF No. 36). Together with its motion for relief from stay, the Appellee filed various exhibits relevant to its motion, including the Note, the Mortgage, the Deed for the Real Property, documentation of the chain of assignments under which the Appellee acquired the property, and a “Relief From Stay/Adequate Protection Exhibit and Worksheet” (the “Worksheet”). (Mot. for Relief from Stay Ex. 2, ECF No. 38). According to the Worksheet, the total arrearage on the Real Property was $183,547.60 and the last payment had been made on May 1, 2007. On June 10, 2013, the Appellants filed an objection to the Appellee’s motion for relief from the automatic stay. The Appellants stated two reasons for their objection: (1) that the Appellee’s motion had identified the movant as Midwest Savings Bank, and (2) that the Debtor’s bankruptcy discharge somehow operated to permanently enjoin the Appellee from taking any action against the 4 Real Property. On June 14, 2013, the Appellee filed an amended motion for relief from the automatic stay that corrected the clerical error in the original motion and identified the Appellee as the Movant. The Debtor did not oppose this amended motion. On July 19, 2013, the Bankruptcy Court issued an “Order Granting Motion for Relief from the Automatic Stay” (the “Stay Relief Order”). The Stay Relief Order states that “[s]ervice and notice of the motion were made” pursuant to the relevant local rules and “either (a) no response(s) has been filed, or (b) the response filed failed to state a sufficient reason why the motion should not be granted.” (Stay Relief Order, ECF No. 58.) On July 25, 2013, the Appellants initiated this appeal of the Stay Relief Order by filing a timely notice of appeal to the B.A.P. According to the Appellants’ Pro Se Appellants’ Brief, the Bankruptcy Court failed to apply “state and several bankruptcy laws.” (Pro Se Appellant‘s Br. at 1). The Appellants raise the Appellee’s “standing to be Granted Relief From Stay” as an issue on appeal. (Id. at 2). In the Appellants’ attached “Statement of Facts,” the Appellants contend, among other things, that the Mortgage was not properly executed under Ohio law, and that the Appellee violated the automatic stay by acquiring its security interest in the Real Property from the security interest’s previous holder and by filing its motion for relief from stay. The Appellee’s brief makes a number of responses to the Debtor’s contentions. According to the Appellee, all the requirements for relief from the automatic stay were present, and so relief was proper. The Appellee states that the Debtor is not a bona fide purchaser of the Real Property Mortgage, and therefore cannot attack the Mortgage as improperly acknowledged. The Appellee further argues, among other things, that there is nothing wrong with the Mortgage and that all the requirements of Ohio law have been met. The Appellee points out that filing a motion for relief from stay is not an act that violates the stay, but is in fact expressly permitted under 11 U.S.C. § 362(d). 5