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Jodway v. Fifth Third Bank

United States District Court, E.D. Michigan, Southern Division

May 31, 2017

Timothy M. Jodway and Alaina M. Zanke-Jodway, Appellants,
v.
Fifth Third Bank, Servicer for Fifth Third Bank Mortgage Company, Appellee.

          Mona K. Majzoub United States Magistrate Judge

          OPINION AND ORDER AFFIRMING BANKRUPTCY COURT'S DECISION TO DENY APPELLANTS' MOTION TO REVOKE THE ORDER CONFIRMING CHAPTER 13 PLAN

          Gershwin A. Drain United States District Court Judge

         I. Introduction

         This matter is before the Court as an appeal from the Bankruptcy Court for the Eastern District of Michigan. Appellants filed a motion before the bankruptcy court, seeking to revoke the order confirming the Chapter 13 Plan. The bankruptcy court denied that motion and the Appellants appeal. For the reasons that follow, the Court AFFIRMS the bankruptcy court decision.

         II. Facts

         Both Parties unnecessarily complicate the issues in this appeal. As best as the Court can, it will simplify the facts and arguments made by the Parties.

         The Jodways are well-known to this Court and have a lengthy history before the bankruptcy court. See Jodway v. Fifth Third Mortg. Co., 557 B.R. 560 (E.D. Mich. 2016). On August 3, 2005, Tim Jodway and Alaina Zanke-Jodway (collectively “the Jodways”) took out a mortgage to finance the $649, 000 purchase price of a house. Appellants' Br., Dkt. No. 6, p. 8 (Pg. ID 763). The home is located in Boyne City, Michigan and is not the Jodways' primary residence. On January 20, 2011, the mortgage was assigned to Appellee, Fifth Third Mortgage Company. Jodway, 557 B.R. 560, 562. Eventually, the Jodways failed to meet their mortgage obligations and the Appellee referred the matter to foreclosure. On June 26, 2014, Tim Jodway filed for Chapter 13 relief to stay the foreclosure proceedings. Bankruptcy R., Dkt. No. 5, p. 291 (Pg. ID 303). On April 10, 2015, Tim Jodway signed a Chapter 13 Plan, which required payment of about $7000 per month for 60 months. Id., p. 37 (Pg. ID 51). On May 12, 2015 Bankruptcy Judge Mark Randon accepted the Plan and issued an order confirming the Plan (hereinafter the “Order Confirming Plan”). Id., p. 56 (Pg. ID 68).

         According to the Jodways, on February 26, 2016, they learned that Mr. Jodway's payments (then-totaling $153, 562.66) were being held in a suspense account, rather than being credited to the debt. Id., pp. 410, 416 (Pg. ID 422, 428). The suspense account is the centerpiece of this appeal.

         On June 25, 2016 the Jodways filed a motion to revoke the Order Confirming Plan. Id., p. 452 (Pg. ID 464). Judge Randon heard oral argument on the motion on August 10, 2016. Id., p. 410 (Pg. ID 422). Ruling from the bench, Judge Randon denied the Jodways' motion for revocation of the Order Confirming Plan. Id., p. 421 (Pg. ID 433). Judge Randon followed up his decision with a written order, which states:

IT IS HEREBY ORDERED that this Court finds the order of confirmation was not procured by fraud and Debtor and the non-filing co-debtor's Motion is untimely under Fed.R.Bankr.P. 9024 and 11 U.S.C. §1330(a).

Dkt. No. 5, p. 4 (Pg. ID 16).

         On September 8, 2016, the Jodways filed a notice of appeal from Judge Randon's order denying the motion for revocation of the Plan. Dkt. No. 1. Tim Jodway is represented by his co-debtor, non-bankruptcy-filing spouse, Alaina Zanke-Jodway, who is licensed to practice law in Michigan.

         The only issue on appeal is whether the bankruptcy court erred when it denied the Jodways' motion to revoke the Order Confirming Plan.

         III. Standard of Review

         On appeal of a bankruptcy decision, this court applies the clearly erroneous standard of review to findings of fact, and reviews questions of law de novo. Keeley v. Grider, 590 F. App'x 557, 559 (6th Cir. 2014). Therefore, the judgment of the bankruptcy court shall be reversed only if the ruling is based on “an erroneous view of the law or a clearly erroneous assessment of the evidence.” U.S. v. Dotson, 715 F.3d 576, 582 (6th Cir. 2013) (quoting U.S. v. Semrau, 693 F.3d 510, 520 (6th Cir. 2012)).

         IV. Overview of ...


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