In re: Barretta
ORDER: The order of the Bankruptcy Court is hereby AFFIRMED for the reasons set forth in the attached document. The Clerk shall close this case. Signed by Judge Alvin W. Thompson on 8/29/17. (Mata, E.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
IN RE: FRANCES ANN BARRETTA, :
FRANCIS ANN BARRETTA,
WELLS FARGO BANK, N.A.,
CIVIL CASE NO. 3:16CV1781(AWT)
Bky. Petition No. 15-30751(JAM)
RULING ON BANKRUPTCY APPEAL
Appellant Frances Ann Barretta (“Barretta”) appeals from an order
entered in her Chapter 7 bankruptcy proceeding granting a motion filed
by appellee Wells Fargo Bank, Inc., N.A. (“Wells Fargo”) from relief
from the automatic stay pursuant to 11 U.S.C. §§ 362(d)(1) and 363
"The bankruptcy court's decision on a motion to lift the automatic
stay is reviewable only for an abuse of discretion." Mazzeo v. Lenhart
(In re Mazzeo), 167 F.3d 139, 142 (2d Cir. 1999). This court reviews
the Bankruptcy Court's “conclusions of law de novo, and findings of
fact under a clearly erroneous standard.” In re Ionosphere Clubs, Inc.,
922 F.2d 984, 988 (2d Cir. 1990). "This [clearly erroneous] standard
precludes this Court from reversing the Bankruptcy Court's decision
if its account of the evidence is plausible, even if this Court is
convinced that it would have weighed the evidence differently." In re
B. Cohen & Sons Caterers, Inc., 108 B.R. 482, 484 (E.D. Pa. 1989)
(citation omitted). A finding is clearly erroneous when “the reviewing
court on the entire evidence is left with the definite and firm
conviction that a mistake has been committed." Dist. Lodge 26, Int'l
Ass'n of Machinists & Aerospace Workers, AFL-CIO v. United Techs.
Corp., 610 F.3d 44, 51 (2d Cir. 2010) (citation and internal quotation
In November 2012, Wells Fargo commenced a foreclosure action
against Barretta in Connecticut Superior Court with respect to property
located at 73 Lori Lane, Meriden, Connecticut (the “Property”). In
September 2014, Wells Fargo moved for summary judgment. Barretta did
not oppose the motion, and summary judgment entered in favor of Wells
Fargo. In December 2014, Wells Fargo filed a Motion for Judgment –
Strict Foreclosure, which was accompanied by an appraisal. Barretta
did not oppose the motion, and it was granted on December 22, 2014.
The state court entered a Judgment of Strict Foreclosure in favor of
Wells Fargo in the amount of $270,014.60 and at that time determined
that the fair market value of the Property was $255,000.00, i.e. less
than the amount of the judgment. Barretta did not timely appeal the
judgment or file a motion to open the judgment.
On May 7, 2015, Barretta filed a petition for relief pursuant to
Chapter 13 of the Bankruptcy Code. In that petition she listed her
monthly income and expenses, and her monthly expenses were $1,985
greater than her monthly income. In a schedule filed with her petition,
Barretta listed the value of the Property as $255,000, and in another
schedule she listed Wells Fargo as a secured creditor with an undisputed
debt in the amount of $270,014.60. Barretta filed amended schedules
on May 18, 2015, but did not amend the valuation of the Property or
the amount of Wells Fargo’s secured debt. Barretta filed a proposed
Chapter 13 plan on July 7, 2015. In that plan Barretta again represented
that Wells Fargo was owed a debt of $270,014.60 secured by the Property,
and she again placed a value on the Property of $255,000. Barretta was
unable to confirm the Chapter 13 plan and her case was converted to
a Chapter 7 proceeding in August 2015.
In October 2015, Wells Fargo filed a motion for relief from the
automatic stay. Wells Fargo argued to the Bankruptcy Court that
Barretta lacked equity in the Property, pointing to the valuation in
the debtor’s schedule filed with her petition. It argued further that
payments were not being made to protect Wells Fargo’s interest in the
Property, that the Property was not necessary to an effective
reorganization, and that cause otherwise existed for relief from the
Barretta filed an objection to the motion, arguing that the town
had valued the Property at $278,100 in 2014 and 2015, that a statement
she had received indicated that her unpaid principal balance as of the
date she had defaulted was $204,108.45, and that it was not plausible
that the total amount due had grown to $270,014.60, i.e. the number
reflected in the state court judgment.
Based on the record here, this court cannot conclude that the
appellant has met the standard of demonstrating the Bankruptcy Court’s
decision was clearly erroneous. This court does not have a definite
and firm conviction that a mistake has been committed. Rather it appears
to this court that the Bankruptcy Court’s analysis and conclusion were
The Bankruptcy Court’s decision is supported by the repeated
statements the appellant made prior to Wells Fargo filing its motion
for relief from the automatic stay, which reflected that she owed a
debt to Wells Fargo, that the debt was secured by the Property, and
that the amount of the debt exceeded the value of the Property. This
fact, together with the fact that Barretta was unable to confirm her
Chapter 13 plan, supports the Bankruptcy Court’s conclusion that the
requirements of Section 362(d)(2) had been satisfied.
As to Section 362(d)(1), which provides that the stay can be lifted
“for cause, including the lack of adequate protection of an interest
in property of such party in interest”, the focus of the argument before
the Bankruptcy Court was adequate protection. See Debtor’s Objection
to Wells Fargo Bank, N.A.’s Motion for Relief from Automatic Stay (Real
Property) (Doc. No. 15-1) at 45-47 of 71. Thus, the appellant’s argument
that the Bankruptcy Court erred because its order did not explicitly
address the Sonnax factors (see In re Sonnax Industries, Inc., 907 F.2d
1280, 1286 (2d Cir. 1990)) is unavailing. See Appellant’s Opening Brief
(Doc. No. 15) at 20-23 of 31. Section 362(d)(1) explicitly provides
that lack of adequate protection is “cause”, and the facts that support
the Bankruptcy Court’s conclusion with respect to Section 362(d)(2),
together with Barretta’s statements in her petition with respect to
her monthly income and expenses, supports the Bankruptcy Court’s
decision with respect to Section 362(d)(1).
Based on the foregoing, the court concludes that the Bankruptcy
Court’s decision to grant relief from the automatic stay was not an
abuse of discretion under either Section 362(d)(2) or 362(d)(1).
Accordingly, the order of the Bankruptcy Court is hereby AFFIRMED.
The Clerk shall close this case.
It is so ordered.
Signed this 29th day of August, 2017 at Hartford, Connecticut.
Alvin W. Thompson
United States District Judge
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