United States District Court, D. Connecticut
In re WALTER B. REDDY
RULING AND ORDER ON BANKRUPTCY APPEAL
A. BOLDEN, UNITED STATES DISTRICT JUDGE
B. Reddy (“Appellant”), pro se, appeals
three orders of the United States Bankruptcy Court
(“Bankruptcy Court”), Notice of Appeal, ECF No.
1; Mem. and Order on Obj. to Claim 3 and Second Am. Mot. for
Relief from Automatic Stay (“Bankruptcy Court Order on
Claim 3 and Automatic Stay”), In re Reddy,
16-bk-50689 (JAM), Dkt. 130; Order Denying Mot. for Stay
Pending Appeal, id., Dkt. 152; Order Granting
Trustee's Mot. to Dismiss with a One Year Bar to Filing a
Case, id., Dkt. 161.
Reddy alleges that the Bankruptcy Court erred in: (1)
allowing three attorneys, Patricia Davis, Bruce Bennett, and
Benjamin Staskiewicz, to file documents and appear in the
case before filing a formal Appearance on the docket; (2)
refusing to consider the affidavit of an expert, Michael
Porzio; (3) granting relief from the automatic stay to
Deutsche Bank; (4) granting the Chapter 13 trustee's
motion to dismiss the case; and (5) denying a stay pending
his appeal. Statement of Issues to be Presented, ECF No. 8.
reasons set forth below, the Court AFFIRMS
the Bankruptcy Court's orders.
FACTUAL AND PROCEDURAL BACKGROUND
15, 2005, Mr. Reddy obtained a home mortgage for $542,
400.00. Mot. to Reconsider Scheduling of Trial (“Mot.
Reconsider”), In re Reddy, 16-bk-50689 (JAM),
Dkt. 52 ¶ 1. Four years later, Deutsche
initiated a foreclosure action in Connecticut Superior Court.
Mot. Reconsider ¶ 2.
nearly seven years of litigation,  the Superior Court issued a
strict foreclosure judgment in favor of Deutsche Bank in the
amount of $873, 748.17. Mot. Reconsider, Ex. B [Order of the
Superior Court for the Judicial District of Stamford, J.
Povodator (“Superior Court Order” April 11,
2016)], id., Dkt. 52-2, Ex. B.
weeks later, on May 26, 2016, Mr. Reddy filed a voluntary
petition for Chapter 13 bankruptcy. Petition, In re
Reddy, 16-bk-50689 (JAM), Dkt. 1. In that petition, Mr.
Reddy estimated his liabilities to be $100, 001-500, 000 and
his assets to be $500, 001-1, 000, 000. Id. at 6.
August 25, 2016, Mr. Reddy agreed to make payments of $100
per month to his creditors. Debtor's Chapter 13 Plan,
id., Dkt. 22 at 1. He also disputed an
“obligation claimed by the Creditor Deutsche Bank
National Trust Company, As Trustee, for Morgan Stanley
Mortgage Loan Trust 2005-10.” Id.
November 1, 2018, Patricia Davis, counsel for Specialized
Loan Servicing LLC, the servicer for Deutsche Bank National
Trust Company,  filed an objection to Mr. Reddy's
Chapter 13 plan on the grounds that Deutsche Bank has a
“valid secured claim and deserves proper treatment in
the Plan.” Objection to Plan, id., Dkt. 32, at
thereafter, the Bankruptcy Court scheduled a hearing on
Deutsche Bank's claim for December 20, 2016. Notice of
Hearing, id., Dkt. 36.
November 23, 3016, Ms. Davis filed a motion for relief from a
stay on the foreclosure of Mr. Reddy's home, asserting
that Deutsche Bank had a valid interest in the property and
that the property was “not necessary for an effective
reorganization.” Mot. for Relief from Stay,
id., Dkt. 40.
December 7, 2016, Mr. Reddy objected, explaining that he had
“contested the underlying foreclosure matter
vigorously” and did not believe that Deutsche Bank had
a rightful claim to the property, and that Deutsche Bank was
not entitled to relief from the automatic stay. Debtor's
Obj. to Deutsche Bank Nat'l. Trust Co. as Trustee Mot.
For Relief from Automatic Stay, id., Dkt. 42.
December 20, 2016, the Bankruptcy Court held a hearing at
which Mr. Reddy asserted that the note and mortgage submitted
by Deutsche Bank was a fraud. Audio Recording of Hearing,
id., Dkt. 51. He requested an evidentiary hearing
and permission to bring an authentication expert.
Id. The Court granted Mr. Reddy's request and
scheduled a follow-up hearing for January 12, 2017.
December 23, 2016, Ms. Davis filed a motion to reconsider,
arguing that Deutsche Bank had already produced the note and
mortgage to the Superior Court during the foreclosure action,
and proved that [Deutsche Bank] was “entitled to
enforce said documents.” Mot. Reconsider, id.,
Dkt. 52 ¶ 3-4.
January 12, 2017, Ms. Davis filed a Notice of Appearance for
herself and another attorney, Bruce Bennett. Notice of
Appearance and Request for Notice, id., Dkt. 60.
that day, the Bankruptcy Court held another hearing. Audio
Recording of Hearing, id., Dkt. 62. Mr. Reddy
alleged that his expert was unavailable to attend the
hearing. Id. The Court instructed both parties to
file amended briefs related to the disputed stay.
six weeks, the parties filed their amended pleadings. Mot.
for Relief from Stay, id., Dkt. 72; Debtor's
Obj. to Mot. for Relief from Stay, id., Dkt. 80.
March 2, 2017, the Bankruptcy Court held another hearing.
Audio Recording of Hearing, id., Dkt. 86-87. At that
hearing, the Court permitted Mr. Reddy's alleged expert
to testify. Id. Mr. Reddy also produced a 2009
assignment of the mortgage to Deutsche Bank. Id.
Deutsche Bank suggested that another attorney, Benjamin
Staskiewicz, might have additional relevant information about
the assignment. Id. The Court ordered Deutsche Bank
to file the Superior Court foreclosure documents on the
docket. Audio Recording of Hearing. The next day, the Court
ordered Mr. Staskiewicz to appear and testify at an
evidentiary hearing regarding the 2009 assignment. Scheduling
Order, id., Dkt. 88 at 3.
April 4, 2017, Deutsche Bank submitted a 285-page filing,
including the alleged note, title documents, and exhibits
submitted to the Superior Court. Second Am. Mot. for Relief
from Stay, id., Dkt. 94.
2, 2017, the Bankruptcy Court held a status conference. Audio
Recording of Conference, id., Dkt. 107.
31, 2017, the Bankruptcy Court held another hearing. Audio
Recording of Hearing, id., Dkt. 124-26.
8, 2017, the Bankruptcy Court issued an order overruling Mr.
Reddy's objection to Deutsche Bank's claim.
Bankruptcy Court Order on Claim 3 and Automatic Stay at 10.
The Court also waived the automatic stay. Id.
that day, Molly Whiton, the Bankruptcy Trustee, moved to
dismiss Mr. Reddy's case. Mot. to Dismiss Chapter 13
Case, id., Dkt. 129. She alleged that Mr.
Reddy's debt schedules showed a net income of -$1,
970.00, rendering him unable to “make all payments
under the Plan within the meaning of 11 U.S.C.
Court held two hearings on the motion to dismiss. Audio