Crowell Motion to Compel(2)

8/3/2019 Crowell Motion to Compel(2)

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William Novotny (#004239)[email protected] J. Plati (#016705)[email protected],WEEKS,MCINTYRE

&FRIEDLANDER, P.A.

2901 North Central Avenue, Suite 200Phoenix, Arizona 85012-2705Phone: (602) 285-5000Fax: (602) 285-5100

Special Litigation Counsel for Deutsche Bank

Leonard McDonald (#014228)[email protected]

TIFFANY & BOSCO, P.A.2525 East Camelback Road, Third Floor

Phoenix, Arizona 85016-4237Counsel for Deutsche Bank

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF ARIZONA

In re

CHARLES AND CHRISTA CROWELL,

Debtors.

Chapter 11

Case No. 4:09-bk-07333-JMM

DEUTSCHE BANK NATIONAL TRUSTCOMPANYS MOTION TO ENFORCE

DEBTORS SECOND AMENDED

CHAPTER 11 PLAN

Deutsche Bank National Trust Company, as Indenture Trustee for New Centur

Alternative Mortgage Loan Trust 2006-ALT1 (Deutsche Bank), by and through its counse

hereby moves the Court for an Order enforcing the terms of the Second Amended Chapter 1

Plan filed by the Debtors, Charles and Christa Crowell (Debtors). This Motion is support

by the accompanying Memorandum of Points and Authorities.

Case 4:09-bk-07333-JMM Doc 282 Filed 10/14/11 Entered 10/14/11 14:58:43 DescMain Document Page 1 of 81


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MEMORANDUM OF POINTS AND AUTHORITIES

I. BACKGROUNDA. The Previous Lien Priority Dispute.In March 2006, New Century Mortgage Corporation (Deutsche Banks assigno

provided Debtors with a $417,000 loan secured by a deed of trust (Deutsche Bank DOT) o

real property located at 2977 Las Palmeras in Sierra Vista, Arizona (Property). Th

Deutsche Bank DOT was recorded in the Cochise County Recorders Office on Septemb

13, 2007. [Exhibit 1].

In July 2006, J&J and A&A, LLC (J&J) provided Debtors with a $1,090,000 loa

secured by the Property and other parcels of real estate (J&J DOT). The J&J DOT w

recorded in the Cochise County Recorders Office on July 12, 2006, and was re-recorded o

January 5, 2007. [Exhibit 2 (Exh. A thereto)].

Debtors ultimately defaulted on the loans relating to both the J&J DOT and th

Deutsche Bank DOT, and then filed their Chapter 11 petition. After Deutsche Bank and J&

each asserted senior lien priority regarding the Property, litigation on that issue w

commenced in Adversary Proceeding No. 4:10-ap-00156-JMM (Adversary Proceeding).B. The Chapter 11 Plans Treatment of the Competing Liens.On December 16, 2009, the Debtors filed their Second Amended Chapter 11 Pla

[Docket No. 219] (Chapter 11 Plan). The Chapter 11 Plan was confirmed by this Court o

March 26, 2010, by that Order Confirming Second Amended Plan [Docket No. 256

(Confirmation Order).1

With respect to the secured claims of Deutsche Bank and J&J relating to the Propert

the Chapter 11 Plan and Confirmation Order required the following joint treatment

1 Pursuant to Article VI of the Chapter 11 Plan, the Court retained jurisdiction to adjudica

any and all disputes arising underthe Plan and enforce all orders . . . entered in connectiowith the case.



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Deutsche Banks and J&Js secured claims on the Property: (1)payment by the Debtors of th

total principal amount of $375,000.00, by (2) monthly payments with interest at 5.5% over 3

years commencing on May 1, 2010, with (3) a balloon payment for all remaining amoun

due 6 years from the date of the Confirmation Order (collectively, Payments).2

All oth

loan terms for both J&J and Deutsche Bank were to remain the same. [Docket No. 256, at pp

6-7].

Pending the outcome of the lien priority dispute in the Adversary Proceeding, th

Court ordered that the Payments be deposited into an agreed-upon escrow account or with th

Clerk of the Bankruptcy Court [Id.]. Subsequently, and pursuant to the parties stipulatio

the Court directed the Debtors to deposit the Payments with the Clerk of the Court, pendin

the resolution of the lien priority dispute between J&J and Deutsche Bank. [Docket Nos. 25

& 261].

C. The Settlement of the Lien Priority Dispute and Debtors Subsequent NonCompliance with the Plan.

The lien priority dispute between Deutsche Bank and J&J was settled in July 2010.

return for a payment to J&J, J&J released the J&J DOT from the Property and stipulated t

the dismissal of the Adversary Proceeding. [Exhibit 2 at 2.1 to 2.5 and Exhibit 3]. J&

further agreed to allow Deutsche Bank to receive both the Payments on deposit with the Cle

and all future Payments from the Debtors. [Exhibit 2 at 2.4].

Despite a number of patient attempts at accommodations by Deutsche Banks counse

Debtors have failed and refused to stipulate to the release of the deposited Payments and

make future Payments to Deutsche Bank.

II. ARGUMENT.The Chapter 11 Plan and the Confirmation Order required the Payments be made b

the Debtors for the joint treatment of J&J and Deutsche Bank regarding their secured liens o

2 Confirmation Order, Exhibit A, Section D.



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the Property. The lien priority dispute between J&J and Deutsche Bank has since bee

resolved by settlement, with J&J releasing the J&J DOT as a lien on the Property and wi

J&J agreeing that all Payments be made solely to Deutsche Bank.

There is no valid basis for the Debtors to refuse to cooperate in regard to the stipulate

release to Deutsche Bank of the Court-deposited Payments. Nor is there any basis for th

Debtors to fail and refuse to make all future Payments directly to Deutsche Bank. The refus

and non-cooperation of the Debtors are in direct violation of the terms of the Chapter 11 Pla

and the Confirmation Order.

Therefore, the Court should issue its Order directing that:

A. The Payments that have been deposited to date with the Clerk of the Cou

(including any interest accrued thereon) be immediately released to Tiffany & Bosco, P.A. (

co-counsel for Deutsche Bank) upon presentation to the Clerk of the Court of the Court

Order; and

B. The Debtors make all future Payments to and in favor of Deutsche Bank at:

Americas Servicing Company

1 Home CampusMAC X2302-04CDes Moines, IA 50328

III. CONCLUSION.

For the foregoing reasons, the Court should grant this Motion and enforce the Chapt

11 Plan and Confirmation Order regarding the treatment and payment of the secured claims

Deutsche Bank.3

3 As noted above, the Payments only relate to principal and interest owed on DeutschBanks loan and in accordance with the Chapter 11 Plan and Confirmation Order. DeutschBank hereby advises the Court that Debtors also have not paid overdue escrow amounts fo

property taxes and hazard insurance. The total escrow shortage presently totals $22,770.95.



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DATED this 14th

day of October, 2011.

TIFFANY & BOSCO, P.A.

/s/LM

By: _____________________________Leonard McDonaldCo-Counsel for Creditor

Deutsche Bank

MARISCAL,WEEKS,MCINTYRE

&FRIEDLANDER,P.A.

WN/4239

By: ______________________________William NovotnyMichael J. PlatiCo-Counsel for Creditor Deutsche Ban

COPY of the foregoing mailed on October 14, 2011 to:

Nancy March

DE

CONCINIM

CDONALD

YETWIN&LACY,P.C.

2525 East Broadway, Suite 200Tucson, Arizona 85716

Attorneys for Debtors

C.R. HydeLAW OFFICES OF C.RHYDE

182 N. Court AveTucson, Arizona 85701

Attorneys for Creditor J&J

and A&A, L.L.C.

__________________________________

U:\ATTORNEYS\TJT\Fidelity - 11754\Deutsche Bank adv. J&J and A&A - 275\BK Pldgs\Motion Re Pmts to Deutsche v2.doc



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Crowell Motion to Compel(2)