UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
JOE WALLEN CASE NO. 95-70643
Memorandum Opinion and Order
This matter is before the Court on the Motion to Set Aside, Vacate and Re-Instate Stay filed by the debtor in this matter on January 25, 1999. The matter was originally brought on for hearing before the Court by virtue of a Motion by Secured Creditor for Order Terminating Stay Providing for Abandonment of Property filed herein on December 28, 1998 by Star Bank. That motion was heard before the Court on January 7, 1999. The movant=s attorney appeared and no one appeared in opposition to the motion and it was sustained at the hearing. An order was entered on January 11, 1999 terminating the stay and providing for abandonment of the property. That order was served on the debtor and attorney for debtor on January 13, 1999 pursuant to Local Rule.
On January 25, 1999, debtor=s counsel filed a Motion to Set Aside, Vacate and Re-Instate Stay and noticed that motion for hearing on February 9, 1999. On February 9, 1999, the matter was called for hearing and was continued to March 9, 1999 and debtor=s counsel was directed to renotice the matter for hearing. The February 9 hearing was continued to allow the Chapter 13 trustee to file a report of payments made. That report indicates that as of February 11, 1999, the trustee had paid $7,957.62 in principal and $3,335.65 in interest to claimant, Star Bank. For a reason unknown to the Court, the matter was not renoticed for hearing in March, but was renoticed by the attorney for movant for hearing on April 15, 1999.
This matter was called on April 15, 1999 and the parties were represented by counsel and presented their arguments for the Court. It does not appear to be contested that, at the time of the initial motion for relief from stay filed by the Star Bank, the debtor was in default several payments to the trustee. It appears, however, that subsequent to receiving the Order granting relief, the debtor has made up several payments and is now only approximately one month in arrears in payments.
The debtor argues that, since he is now substantially in compliance with the terms of his plan, the Court should set aside its order granting relief from stay allowing him to proceed with the execution of his Chapter 13 plan and retain his residence. Star Bank argues that this Court may grant relief only pursuant to FRBP 9024 since the order granting relief had become final. Star Bank proceeds to argue that the debtor has not made a case for relief from the Court=s order pursuant to FRBP 9024. An examination of the Rule suggests that only mistake, excusable neglect or the catch-all portion of paragraph (b) Aany other reason justifying relief@ would be applicable if the debtor can make a case for it.
This matter is further complicated by the problem that the attachments to the motion for relief prepared by Star Bank for their counsel appear to misstate the delinquency in the debtor=s account. They contain recitals that the debtor had failed to tender mortgage payments for 27 months when, in fact, the Report of Trustee filed on February 12, 1999 details the payments made on account recited above. These misstatements appear to have been adopted by the attorney by virtue of a mistake made by his client in the calculation of the arrearage on the account.
The Court believes that the statement of indebtedness attached to the motion for relief filed by the movant herein qualifies under FRBP 9024 as a mistake in that it was a mistake of a party that misstated the repayments made by the debtor (or the trustee on his behalf) on the account. It is true that, since the motion was unopposed, neither the Court nor counsel for the debtor focused on this document. However, if this had been called to the Court=s attention at the time the Motion was originally heard, it is the Court=s custom, where the debtor has normally had a good payment record in his payments to the trustee and the arrearage is, in fact, about 90 - 120 days to allow the debtor a period of time within which to cure the post-petition arrearage. As an aside, the Court does not believe that the grounds set forth in the debtor=s motion to set aside the court=s order for relief and re-instate the stay qualify as excusable neglect. However, because of the mistake of the creditor in stating the delinquency in the indebtedness, the Court believes that the debtor should have relief from the order. It is hereby
ORDERED that this Court=s Order Terminating Stay Providing for Abandonment of Property entered herein on January 11, 1999, be, and the same hereby is, SET ASIDE AND HELD FOR NAUGHT; and
IT IS FURTHER ORDERED that the debtor shall have thirty (30) days from the date of this order within which to become current in all payments due to the trustee pursuant to the plan and, in the future, if the debtor becomes more than thirty (30) days delinquent in any such payment, the trustee shall file a notice with the Court and notify the movant herein of such delinquency and tender therewith an order dismissing the within Chapter 13 proceeding without further hearing.
Dated this ____ day of April, 1999.
BY THE COURT
Beverly M. Burden, Esq.
Septtimous Taylor, Esq.
Paul D. Deaton, Esq.