United States District Court, M.D. Tennessee, Nashville Division
DEBORAH L. AKERS, Appellant,
GREGORY FUNDING, LLC, and HENRY E. HILDEBRAND, III, CHAPTER 13 TRUSTEE, Appellees.
Honorable Aleta A. Trauger, Jr., District Judge
REPORT AND RECOMMENDATION
BARBARA D. HOLMES United States Magistrate Judge
before the Court are the Motion for Preliminary Injunction
and accompanying Complaint and Request for Injunction (Docket
Nos. 23 and 24) filed by Appellant Deborah Akers (the
“Appellant” or “Akers”). Appellee
Gregory Funding LLC, as servicer for AJX Mortgage Trust II, a
Delaware Trust, Wilmington Savings Fund Society, FSB, Trustee
(the “Appellee” or “Gregory Funding”)
filed a response in opposition. (Docket No. 25). By Order
entered January 24, 2018, this case was referred to the
Magistrate Judge for case management, decision on all
pretrial, nondispositive motions and report and
recommendation on all dispositive motions under 28 U.S.C.
§ 636(b)(1) and to conduct any necessary proceedings
under Rule 72(b), Fed.R.Civ.P. (Docket No. 14).
reasons set forth below, the undersigned Magistrate Judge
respectfully recommends that Akers' motion (Docket No.
23) be DENIED.
L. Akers is a resident of 543 Richmar Drive, Nashville,
Tennesse, 37211 (“Richmar Property”). Akers seeks
to enjoin AJX Mortgage Trust II, Gregory Funding, LLC, and
Shapiro and Ingle, LLP from carrying through with a scheduled
June 6, 2018 foreclosure of the Richmar Property.
filed a voluntary bankruptcy petition pro se under
Chapter 13 of Title 11 on July 10, 2017. (Docket No. 22-1 at
15-76). The petition was filed on the same day
foreclosure of the Richmar Property was set to occur by the
first lienholder, Gregory Funding, as servicer to AJX
Mortgage Trust II. (Docket No. 22-4 at 607-609). The sworn
summary, schedules, and statement filed by Akers in her
chapter 13 case reflect various values for the Richmar
Property. The Summary of Assets and Liabilities lists the
value of the Richmar Property as $262, 809 (Docket No. 22-1
at 22). On Schedule A, the current value of the property is
stated as $350, 142, with the value of Aker's fee simple
interest as $262, 809 (Docket No. 22-1 at 24). In her claimed
exemptions, Akers again states the value of her interest as
$262, 809 (Docket No. 22-1 at 34). However, it appears from
the record below that Akers may have quitclaimed all of her
interest in the Richmar Property to her non-filing spouse,
James Akers for purposes of hindering the secured
creditor's prior attempt to foreclose on the property.
See Transcript of confirmation hearing (Docket No.
22-5 beginning at page 196) at 5-7 and 17-20. See Tr.
at 45-46, 51-52, and 54-57.
sworn Schedule D includes MBNA America Bank, Radian Services,
Inc., and AJX Mortgage Trustee II, as having claims secured
by the Richmar Property, with the current value of that
collateral as $262, 809 (Docket No. 22-1 at 36-37). These
debts are all scheduled as unliquidated and disputed.
(Id.). Schedule F lists non-priority unsecured debt
totaling $5, 719.14 (Docket No. 22-1 at 41-44). Schedule I
reflects that Akers (and her non-filing spouse) are both
currently retired with monthly Social Security and interest
income totaling $2, 342.98 (Docket No. 22-1 at 45-46). Not
including any mortgage debt service payments, monthly net
income is $201.58 (Docket No. 22-1 at 47-49). According to
the Statement of Financial Affairs, Akers made no mortgage
payments during the 90 days prior to filing her most recent
chapter 13 case (Docket No. 22-1 at 51).
proposed a monthly chapter 13 plan payment of $201.58 and a
plan term of 36 months. (Docket No. 22-1 at 69-76). Akers
further proposed a 38.22% dividend to unsecured creditors and
moved to avoid the lien of MBNA America Bank. (Id.).
The proposed plan requested a valuation of the security held
by Gregory Funding and Dyck-O'Neal, Inc., but did not
provide for any regular payments on the claims.
(Id.). Akers' proposed chapter 13 plan did,
however, include a secured claim purportedly owed to her
non-filing spouse, James Akers, in the amount of $43, 500
(Docket No. 22-1 at 71), even though no such claim was listed
in Schedule D.
Funding objected to confirmation of the plan alleging that it
was not feasible, that it was not proposed in good faith, and
that it failed to cure the default and maintain payments on
its secured claim. (Docket No. 22-1 at 95). Gregory Funding
also filed motions for relief from the automatic stay and
co-debtor stay to enforce its security interest in the
Richmar Property. (Docket No. 22-1 at 162-169).
Chapter 13 Trustee objected to confirmation as well and
requested that the Bankruptcy Court convert the case to a
case under Chapter 7. (Docket No. 22-3 at 428). The Chapter
13 Trustee also asserted that Akers' proposed chapter 13
plan was neither feasible nor filed in good faith, and
additionally, that it failed to provide present value on
secured claims and to comply with § 1325(a)(4).
(Id.). The Chapter 13 Trustee also filed an
objection to Akers' claim of exemptions. (Docket No. 22-2
October 18, 2017, the Bankruptcy Court held a hearing on
confirmation of Aker's proposed chapter 13 plan and her
objections to the proof of claim and post-petition fee notice
filed by Gregory Funding, as well as the Trustee's motion
to convert, the Trustee's objection to exemptions, and
Gregory Funding's motions for relief from the stay and
co-debtor stay. (Docket No. 22-5 at 854-916). The Bankruptcy
Court entered its written order on November 3, 2017. The
Bankruptcy Court held that Aker's proposed Chapter 13
plan was not feasible and that she did not file the plan in
good faith. (Docket No. 1-2 at 1).
holding, the Bankruptcy Court found that Akers had not made a
mortgage payment on the Richmar Property since December 2016
and that she had no plan to pay her mortgage obligation.
(Id.). After reviewing the original Note and
Allonges with endorsements, the Bankruptcy Court further
found that AJX Mortgage Trust II and Gregory Funding, LLC had
standing to enforce the lien against the Richmar Property.
(Id.). Finally, based on the equity in the Richmar
Property and the bankruptcy estate's interest in a
potential fraudulent transfer action implicated by Akers'
transfer of her interest in the Richmar Property by quitclaim
deed to her non- filing spouse in May of 2015, the Bankruptcy
Court found that conversion to Chapter 7 was appropriate and
in the best interest of the creditors. (Id. and
Docket No. 22-4 at 676-7).
November 17, 2017, Akers filed a Notice of Appeal and elected
to have the appeal heard by this Court. (Docket No. 1). The
subject of Akers' original appeal was the Bankruptcy
Court's Order Denying Confirmation, Converting case, and
Continuing Motion for Relief from Stay and Motion for Relief
from Co-Debtor Stay Filed by Gregory Funding. (Id.).
After Akers' appeal of the November 2017 confirmation
order, the Bankruptcy Court entered an order on February 1,
2018 granting Gregory Funding In Rem Stay Relief
Upon Reconsideration of Amended Motion For Prospective Stay
Relief. (Docket No. 22-5 at 960-2). As a result, Akers later
amended her appeal to include that order. (Docket No. 20).
present Motion for Preliminary Injunction and accompanying
Complaint and Request for Injunction, Akers argues that the
Court should issue a preliminary injunction under
Fed.R.Civ.P. 65 prohibiting the foreclosure of the Richmar
Property pending this Court's decision on her
appeal. In support of her motion, Akers states
that a foreclosure would: result in a financial loss of over
$400, 000; deprive Akers of her legal interest in the Richmar
Property; affect Akers' credit rating; and, leave Akers
and her spouse without financial means to obtain suitable
housing, food, medical care, transportation, and other
Funding opposes Akers' motion. In its response in
opposition, Gregory Funding argues that Akers' motion and
complaint do not conform to the Federal Rules of Bankruptcy
Procedure, that the Bankruptcy Court has already addressed
this matter and allowed the foreclosure to proceed, that
Akers' does not meet the burden for any injunctive type
relief, and that this Court has already denied a similar
request for injunction.