Ihejurobi v. Wells Fargo Bank N.A.
MEMORANDUM OPINION. Signed by Judge Stephanie A. Gallagher on 10/11/2019. (bmhs, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
JOHN KELLY IHEJUROBI,
WELLS FARGO BANK, N.A.,
Civil Case No.: SAG-19-1391
(Appeal from Bankruptcy Case
Appellant John Kelly Ihejurobi, a debtor in the underlying bankruptcy case (“Debtor”),
appeals an Order entered by United States Bankruptcy Judge Robert A. Gordon on May 6, 2019
(“the Order”), overruling Debtor's objection to a claim filed by secured creditor Wells Fargo Bank,
N.A. (“Wells Fargo”). ECF 7. The facts and legal arguments are adequately presented in the
briefs and record, rendering oral argument unnecessary. See Fed. R. Bankr. P. 8019(b)(3); Loc.
R. 105.6 (D. Md. 2018). For the reasons that follow, the Bankruptcy Court's Order will be
Following several prior bankruptcy petitions, on March 14, 2018, Debtor filed a voluntary
petition, under Chapter 13 of the bankruptcy code, in the United States Bankruptcy Court for the
District of Maryland. ECF 2-1. He filed his Chapter 13 Plan (“the Plan”) on April 6, 2018. ECF
2-26. Specifically, in the section of Schedule D calling for a list of creditors who have claims
secured by property, the Debtor identified an “unknown” creditor with a claim secured by 11405
Hunt Crossing Court, Ellicott City, Maryland, 21042 (“Hunt Crossing”). ECF 2-19. The Debtor
asserted that the amount of the “unknown” creditor’s claim, and the value of Hunt Crossing, were
both $1.7 million. Id. He noted that the claim was incurred in March, 2008, and that it was related
to an agreement “such as a mortgage,” but further noted that the claim was “disputed.” Id.
On April 24, 2018, Wells Fargo filed an objection to the Plan, because it did not provide
adequate protection to Wells Fargo as a secured creditor. ECF 2-38. On May 1, 2018, the Debtor
filed an Amended Schedule D, still listing the claim as “disputed” and the creditor as “unknown,”
but reducing the declared value of Hunt Crossing to only $900,000.00. ECF 2-39. Nine days later,
Wells Fargo filed a Proof of Claim (“POC”), asserting a total indebtedness of $1,765,680.27 for
the mortgage on Hunt Crossing, and a total pre-petition arrearage of $739,698.87. ECF 2-140 at
On July 24, 2018, the Debtor filed an objection to Wells Fargo’s POC. ECF 2-63. The
Court filed a deficiency notice, ECF 2-64, and eventually struck the objection following Debtor’s
failure to correct the deficiency, ECF 2-70. The Bankruptcy Court held hearings relating to the
POC on November 14, 2018, ECF 2-112, and December 14, 2018, ECF 2-120. Following those
hearings, the Bankruptcy Court issued an Opinion (“the Opinion”) and Order on May 6, 2019.
ECF 2-140; 2-141.
On May 9, 2019, Debtor noted the instant appeal from the Order. ECF 1. Debtor filed his
opening brief on July 8, 2019, ECF 7; Wells Fargo filed a responsive brief on August 2, ECF 9;
and the Debtor filed a reply on August 23, ECF 10.
STANDARD OF REVIEW
The district court reviews a bankruptcy court’s findings of fact for clear error, and its
conclusions of law de novo. See In re Official Comm. of Unsecured Creditors for Dornier Aviation
(N. Am.), Inc., 453 F.3d 225, 231 (4th Cir. 2006). “The Supreme Court of the United States has
held that ‘[a] finding is “clearly erroneous” when although there is evidence to support it, the
reviewing court on the entire evidence is left with the definite and firm conviction that a mistake
has been committed.’” In re Fitzwater, No. 2:11–cv–00934, 2012 WL 4339559, at *2 (S.D. W.
Va. Sept. 21, 2012) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)); In re
Broyles, 55 F.3d 980, 983 (4th Cir. 1995). On questions of law, this Court makes “an independent
determination of the applicable law.” In re Fabian, 475 B.R. 463, 467 (D. Md. 2012) (quoting In
re Jeffrey Bigelow Design Grp., Inc., 127 B.R. 580, 582 (D. Md. 1991)). With respect to the
bankruptcy court's application of law to the facts, the standard of review is abuse of discretion. Id.
(citing In re Robbins, 964 F.2d 342, 345 (4th Cir. 1992)).
According to Debtor, who is represented by the same counsel who represented him in the
Bankruptcy Court, the sole issue presented on appeal is, “Did the bankruptcy court err in ‘allowing
a claim’ which was earlier discharged in a Chapter 7 case?” ECF 7 at 4. Debtor argues, without
citing any case law to support the proposition, that his discharge following his Chapter 7 filing in
September, 2015, in which Wells Fargo was listed as a creditor, barred the POC Wells Fargo filed
in his 2018 Chapter 13 petition. Id. at 5-6. He concludes: “The appellee is not entitled to any
payment in the current Chapter 13 plan. Appellee [sic] claim is barred pursuant [sic] 11 U.S.C. §
524 and § 727. Bankruptcy Court made an err [sic] by allowing a discharged claim.” Id. at 6.1
Counsel for Debtor raised the same contention repeatedly before the Bankruptcy Court. At
the first hearing, on November 14, 2018, when Counsel argued that the debt had been discharged,
the Court responded: “[Wells Fargo] has a lien against the real estate. The lien doesn’t get
The Debtor’s reply brief is also devoid of any citations to case law supporting its asserted
position. ECF 10.
discharged. . . . Don’t make ridiculous arguments.” ECF 2-112 at 9:5–9. At the second hearing,
on December 14, 2018, the Bankruptcy Court expressly rejected the argument as frivolous, stating:
You said the debt has been discharged in his prior bankruptcy. Which is the same
thing that you said before and that objection was stricken because you didn’t follow
through on what the deficiency notice told you to do. . . . Say because it is
discharged. Stop saying that. . . . This discharge argument is completely frivolous.
. . . The lien is still attached to the property and [Wells Fargo has] the right to
enforce it. And the case law on that is absolutely legion, it is beneath Bankruptcy
ECF 2-120 at 5:6–6:4. The Bankruptcy Court’s May 6, 2019 Opinion and Order allowed Wells
Fargo’s POC and granted Wells Fargo relief from the stay. ECF 2-140; 2-141. The Opinion noted
that the Claim Objection the Debtor filed after the November hearing included the same “frivolous
assertion that because the indebtedness included in the POC had been discharged, the POC was
filed in contempt and was ‘unenforceable.’” ECF 2-140 at 7. The Opinion described the
contention as “wholly and completely without merit,” cited the governing Supreme Court decision,
and noted that it “has been settled bankruptcy law for over twenty-seven (27) years.” Id. at 7 n.13
(citing Johnson v. Home State Bank, 501 U.S. 78, 84 (1991)). Ultimately, the Bankruptcy Court
ruled as follows:
Debtor’s Counsel was told repeatedly that this contention [was] completely 
frivolous and that assessment has not changed. . . . Barring a non-frivolous
challenge from the Debtor, Wells Fargo had every right to enforce its claim and
lien in this case. In the unlikely event that the Debtor had the ability to pay the
debt, and thereby retain Hunt Crossing through a confirmed plan, he would have to
pay the full balance due. . . . Hence, the filing of the POC was not only legitimate,
it was necessary to that end as a claim must be filed in order for Wells Fargo to be
paid through the Plan.
Id. at 17-18.
This Court concurs with the Bankruptcy Court’s repeated admonition that the Debtor’s
contention is frivolous. Section 502 establishes the procedure for allowance of a claim in
bankruptcy. 11 U.S.C. § 502 (2012). The Bankruptcy Court “shall allow” any claim, unless the
claim “implicates any of the nine exceptions enumerated in § 502(b).” Travelers Cas. & Sur. Co.
of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 449 (2007); see § 502(b). The Debtor does not cite
§ 502, or any of its exceptions, in his briefing (or in his earlier arguments to the Bankruptcy Court).
Moreover, as the Bankruptcy Court stated, long-settled case law supports Wells Fargo’s filing of
a POC in the Debtor’s Chapter 13 case, because even after the Chapter 7 discharge, Wells Fargo
retained its security interest and lien on Hunt Crossing. See, e.g., Johnson, 501 U.S. 78 at 84 (“[A]
bankruptcy discharge extinguishes only one mode of enforcing a claim – namely an action against
the debtor in personam – while leaving intact another – namely, an action against the debtor in
rem.”); In re Davis, 716 F.3d 331, 332 (4th Cir. 2013) (noting that the Chapter 7 process
“culminates in a discharge, which eliminates personal liability for debts not excepted from
discharge, but leaves intact in rem claims”); Mickerson v. Am. Brokers Conduit, Civil No. TDC17-1106, 2018 WL 1083640, at *7 (D. Md. 2018) (“[C]reditors retain rights to mortgaged property
even after the borrower’s Chapter 7 bankruptcy discharge. . . . [The] bankruptcy discharge did not
extinguish [the creditors’] right to enforce the Note through foreclosure.”).
As noted above, the Debtor cites no case law or other authority to support the position he
espouses, which runs contrary to the binding precedent cited above. His decision to press forward
with his position, despite the absence of any authority, and the repeated admonitions from the
Bankruptcy Court that the position is frivolous, lead to the inescapable conclusion that the appeal,
also, is frivolous.
REQUEST FOR SANCTIONS
Wells Fargo seeks sanctions pursuant to Federal Rule of Bankruptcy Procedure 8020(a),
citing the Debtor's “blatant refusal to abandon the arguments contrary to well-settled precedent,
and despite repeated warnings from the Bankruptcy Court.” ECF 9 at 14. Rule 8020(a) provides:
“If the district court or BAP determines that an appeal is frivolous, it may, after a separately filed
motion or notice from the court and reasonable opportunity to respond, award just damages and
single or double costs to the appellee.” Given the ruling herein, the dearth of supportive argument
or case law provided for the Debtor’s appeal, and the resulting determination that the Debtor’s
appeal is frivolous, the Court will entertain a separate motion for Rule 8020(a) sanctions. The
separate motion will provide the Debtor an opportunity to contest the appropriateness of such
sanctions and the amount of sanctions, if any, to be awarded. Wells Fargo must file any motion
for sanctions on or before November 1, 2019.
For the reasons explained above, the Bankruptcy Court’s decision is AFFIRMED. A
separate Order follows.
Dated: October 11, 2019
Stephanie A. Gallagher
United States District Judge
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