Freedom Mortgage Corporation v. Brody
- Vincent Briccetti
- 7:19-cv-08938
- U.S. District Court · Southern District of New York
- 2
In Freedom Mortgage v. Brody, Judge Briccetti dismissed the foreclosure action without prejudice after a bankruptcy court confirmed the debtors’ repayment plan.
Freedom Mortgage Corporation’s foreclosure action against Sheindy Brody was closed. The dismissal was without prejudice, so the opinion allowed refiling if Freedom Mortgage’s right to foreclose later became apparent.
What happened
Freedom Mortgage Corporation brought a residential foreclosure action against Sheindy Brody. During the case, Brody and non-party Chaim Brody filed for Chapter 13 bankruptcy, which automatically paused the foreclosure proceeding.
The bankruptcy court later confirmed a repayment plan requiring payments to Freedom Mortgage, including post-bankruptcy payments and payments toward the pre-bankruptcy arrears. Freedom Mortgage asked to keep the foreclosure case open for five years while the debtors made the plan payments.
Judge Briccetti declined that request because the confirmed plan changed the circumstances underlying the foreclosure claim. He dismissed the case without prejudice, allowing Freedom Mortgage to refile if its right to foreclose later becomes apparent, and directed the Clerk to close the case.
The detailed version
- Freedom Mortgage Corporation v. Brody · No. 7:19-cv-08938
- Vincent Briccetti
- Aug. 6, 2020
Background
Freedom Mortgage Corporation filed a residential foreclosure action against Sheindy Brody on September 26, 2019. The court later received notice that Brody and non-party Chaim Brody had filed a Chapter 13 bankruptcy petition. The bankruptcy filing automatically stayed, or paused, the foreclosure case.
On June 15, 2020, the bankruptcy court confirmed the co-debtors’ Chapter 13 plan of reorganization. According to the plan, the co-debtors were to make post-petition payments of $2,640.87 to Freedom Mortgage and pay $31,256.00 in pre-petition arrears through monthly payments of $500 for 30 months and $860 for 30 months.
Parties’ Positions
Because the plan had been confirmed, the court questioned whether a live case or controversy remained based on the allegations in the foreclosure complaint. The court asked Freedom Mortgage whether the action should be dismissed without prejudice. Freedom Mortgage requested that the case remain open until the co-debtors completed all anticipated Chapter 13 plan payments, which counsel described as taking five years.
Court’s Analysis
The court declined to keep the action open. It explained that a confirmed Chapter 13 plan acts as a contract between debtors and creditors and binds them to the plan’s provisions. Because the plan had been confirmed, the court stated that any future foreclosure action would appear to require not only a default under the note and mortgage, but also a failure to make required payments under the Chapter 13 plan.
Disposition
The court dismissed the foreclosure action without prejudice because there appeared to be no ground for the action to proceed at that time, while recognizing that there might never be a future basis for proceeding. The dismissal was without prejudice to refiling if Freedom Mortgage’s right to foreclose again becomes apparent. The Clerk was instructed to close the case. Judge Vincent L. Briccetti signed the order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.