Crowell Motion To Compel

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William Novotny (#004239) william.novotny@mwmf.com Michael J. Plati (#016705) mike.plati@mwmf.com MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012-2705 Phone: (602) 285-5000 Fax: (602) 285-5100 Special Litigation Counsel for Deutsche Bank Leonard McDonald (#014228) ljm@tblaw.com TIFFANY & BOSCO, P.A. 2525 East Camelback Road, Third Floor Phoenix, Arizona 85016-4237 Counsel 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 TRUST COMPANYS MOTION TO ENFORCE DEBTORS SECOND AMENDED CHAPTER 11 PLAN
Deutsche Bank National Trust Company, as Indenture Trustee for New Century Alternative Mortgage Loan Trust 2006-ALT1 (Deutsche Bank), by and through its counsel, hereby moves the Court for an Order enforcing the terms of the Second Amended Chapter 11 Plan filed by the Debtors, Charles and Christa Crowell (Debtors). This Motion is supported by the accompanying Memorandum of Points and Authorities.
Case 4:09-bk-07333-JMM
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MEMORANDUM OF POINTS AND AUTHORITIES I. BACKGROUND A. The Previous Lien Priority Dispute.
In March 2006, New Century Mortgage Corporation (Deutsche Banks assignor) provided Debtors with a $417,000 loan secured by a deed of trust (Deutsche Bank DOT) on real property located at 2977 Las Palmeras in Sierra Vista, Arizona (Property). The
Deutsche Bank DOT was recorded in the Cochise County Recorders Office on September 13, 2007. [Exhibit 1]. In July 2006, J&J and A&A, LLC (J&J) provided Debtors with a $1,090,000 loan secured by the Property and other parcels of real estate (J&J DOT). The J&J DOT was recorded in the Cochise County Recorders Office on July 12, 2006, and was re-recorded on January 5, 2007. [Exhibit 2 (Exh. A thereto)]. Debtors ultimately defaulted on the loans relating to both the J&J DOT and the Deutsche Bank DOT, and then filed their Chapter 11 petition. After Deutsche Bank and J&J each asserted senior lien priority regarding the Property, litigation on that issue was 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 Plan [Docket No. 219] (Chapter 11 Plan). The Chapter 11 Plan was confirmed by this Court on 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 Property, the Chapter 11 Plan and Confirmation Order required the following joint treatment of
Pursuant to Article VI of the Chapter 11 Plan, the Court retained jurisdiction to adjudicate any and all disputes arising under the Plan and enforce all orders . . . entered in connection with the case.
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Deutsche Banks and J&Js secured claims on the Property: (1) payment by the Debtors of the total principal amount of $375,000.00, by (2) monthly payments with interest at 5.5% over 30 years commencing on May 1, 2010, with (3) a balloon payment for all remaining amounts due 6 years from the date of the Confirmation Order (collectively, Payments).2 All other 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, the Court ordered that the Payments be deposited into an agreed-upon escrow account or with the Clerk of the Bankruptcy Court [Id.]. Subsequently, and pursuant to the parties stipulation, the Court directed the Debtors to deposit the Payments with the Clerk of the Court, pending the resolution of the lien priority dispute between J&J and Deutsche Bank. [Docket Nos. 259 & 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. In return for a payment to J&J, J&J released the J&J DOT from the Property and stipulated to the dismissal of the Adversary Proceeding. [Exhibit 2 at 2.1 to 2.5 and Exhibit 3]. J&J further agreed to allow Deutsche Bank to receive both the Payments on deposit with the Clerk and all future Payments from the Debtors. [Exhibit 2 at 2.4]. Despite a number of patient attempts at accommodations by Deutsche Banks counsel, Debtors have failed and refused to stipulate to the release of the deposited Payments and to make future Payments to Deutsche Bank. II. ARGUMENT. The Chapter 11 Plan and the Confirmation Order required the Payments be made by the Debtors for the joint treatment of J&J and Deutsche Bank regarding their secured liens on
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Confirmation Order, Exhibit A, Section D.
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the Property. The lien priority dispute between J&J and Deutsche Bank has since been resolved by settlement, with J&J releasing the J&J DOT as a lien on the Property and with 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 stipulated release to Deutsche Bank of the Court-deposited Payments. Nor is there any basis for the Debtors to fail and refuse to make all future Payments directly to Deutsche Bank. The refusal and non-cooperation of the Debtors are in direct violation of the terms of the Chapter 11 Plan 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 Court
(including any interest accrued thereon) be immediately released to Tiffany & Bosco, P.A. (as co-counsel for Deutsche Bank) upon presentation to the Clerk of the Court of the Courts Order; and B. The Debtors make all future Payments to and in favor of Deutsche Bank at: Americas Servicing Company 1 Home Campus MAC X2302-04C Des Moines, IA 50328 III. CONCLUSION. For the foregoing reasons, the Court should grant this Motion and enforce the Chapter
19 20 11 Plan and Confirmation Order regarding the treatment and payment of the secured claims of 21 22 23 24 25 26 As noted above, the Payments only relate to principal and interest owed on Deutsche Banks loan and in accordance with the Chapter 11 Plan and Confirmation Order. Deutsche Bank hereby advises the Court that Debtors also have not paid overdue escrow amounts for property taxes and hazard insurance. The total escrow shortage presently totals $22,770.95.
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Deutsche Bank.3
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DATED this 14th day of October, 2011. TIFFANY & BOSCO, P.A. MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. WN/4239 By: ______________________________ William Novotny Michael J. Plati Co-Counsel for Creditor Deutsche Bank
/s/LM By: _____________________________ Leonard McDonald Co-Counsel for Creditor Deutsche Bank
COPY of the foregoing mailed on October 14, 2011 to: Nancy March DECONCINI MCDONALD YETWIN & LACY, P.C. 2525 East Broadway, Suite 200 Tucson, Arizona 85716 Attorneys for Debtors C.R. Hyde LAW OFFICES OF C.R HYDE 182 N. Court Ave Tucson, 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

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Confirmation Order, Exhibit A, Section D.

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