UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION ) IN RE: ) ) CHAPTER 13 KIMBERLY R. STRICKLAND, ) ) CASE NO.

: 11-37785-DOT Debtor. ) ) ) _________________________________________ )________________________________________ ) PNC MORTGAGE, A DIVISION OF ) PNC BANK, NA, SUCCESSOR BY ) MERGER TO NATIONAL CITY ) CONTESTED MATTER MORTGAGE, A DIVISION OF ) NATIONAL CITY BANK, ) ) Plaintiff/Movant, ) v. ) ) HENRY SHEALEY, Debtor ) ADAM M. GOODMAN, Trustee, ) ) Respondents. ) RESPONSE/OBJECTION TO MOTION FOR RELIEF FROM AUTOMATIC STAY FOR LACK OF STANDING AND MEMORANDUM OF LAW IN OPPOSITION THERETO Debtor Kimberly R. Strickland, files this her Response to and Objection to Movant PNC Mortgage a division of PNC Bank N.A. Successor by merger to National City Mortgage, a division of National City Bank's Motion for Relief from the automatic stay and as grounds therefore states as follows: 1. Debtor denies that this Honorable Court has jurisdiction over this party, Movant PNC Mortgage and over this motion for relief from the automatic stay due to a lack of standing of this movant to file and bring this motion before the court and to seek the relief requested. 2. Debtor admits that she filed a petition for relief under Chapter 13 of the Bankruptcy Code on

December 10, 2011. 3. Movant's allegation that co-debtor is jointly and severally liable on the Note is a legal conclusion and not an allegation of fact and is therefore denied by debtor. 4. Admitted that debtor and co-debtor own the subject property. 5. Debtor denies that Movant is the holder of the subject loan, and would affirmatively state that this Movant has not established standing on the record in this case. Debtor denies that Movant holds a security interest in the Debtor's property. The documents filed of record do not establish standing on behalf of Movant PNC Mortgage. 6. Debtor is not in default to this movant in that movant has not established on the record it's right to receive payments under the note, which note was executed in favor of National City Mortgage, or any security interest in the property including the Deed of Trust filed of record in the public records of Pohawtan County, Virginia. Unless and until this movant establishes that it has legal standing to collect payments on the subject note or to foreclose the security interest in this property there can be no finding of a default under the terms and conditions of the Promissory Note and the Deed of Trust. Therefore, Debtor denies that any payments have been missed. 7. Debtor denies the amount of the unpaid principal balance and total balance. 8. Debtor denies Plaintiff's opinion as stated in paragraph 8. 9. Debtor denies each and every allegation not specifically admitted herein and demands strict

proof thereof. WHEREFORE, Debtor respectfully prays that this Honorable Court deny movant's motion for relief from the automatic stay due to movant's lack of standing, and that the Court grant such other and further relief as the Court deems equitable, appropriate and just. MEMORANDUM OF LAW IN OPPOSTION TO MOVANT'S MOTION FOR RELIEF FROM THE AUTOMATIC STAY Debtor Kimberly R. Strickland submits this her Memorandum of Law in Opposition to movant's motion for relief from the automatic stay based upon the following facts and legal authorities. ISSUE PRESENTED Has Movant PNC Mortgage established on the record of this case that it has legal standing to seek relief from the automatic stay in this case? FACTS SHOWING A LACK OF STANDING BY MOVANT PNC MORTGAGE 1. On or about December 10, 2011 Debtor Kimberly R. Strickland filed her petition for relief under Chapter 13 of the Bankruptcy Code. 2. Just prior to the Debtor filing her petition in bankruptcy, Debtor received a Substitution of Trustee dated November 14, 2011. Attached hereto and made a part hereof is a copy of the Substitution of Trustee as Debtor's Exhibit A. 3. Subsequent to the Substitution of Trustee referenced above, Debtor received a Notice of Transfer of Mortgage Loan from movant PNC Mortgage. In said notice Debtor is informed that pursuant to section 131 of the Federal Truth in Lending Act, that movant is required to inform Debtor of the transfer of the mortgage loan to movant. The Notice is dated and the transfer effective May 01, 2012, some six (6) months after Debtor filed her petition. A copy of the subject Notice of Transfer of Mortgage is attached as Debtor's Exhibit B.

4. Debtor objects to the substitution of trustee. At the time of the filing of the bankruptcy petition on December 10, 2011 this movant had no standing in that it had not received the transfer of the mortgage until May 01, 2012, as stated in it's own letter. Movant has not filed, shown or established anything of record showing that it has standing to bring this motion for stay relief. DISCUSSION The Court should conclude that movant PNC Mortgage lacks standing to request relief from the automatic stay. A. PNC Mortgage Lacks Standing to Exercise any State Law Remedies Within the context of a bankruptcy proceeding, state law governs the determination of property rights. See Butner v. United States, 440 U.S. 48, 54 (1979) (nothing that absent an actual conflict with federal bankruptcy law, Congress has generally left the determination of property rights in the assets of a bankrupt's estate to state law); In re Morton, 866 F.2d, 866 F. 2d 561, 563 (2d Cir 1989). Movant PNC Mortgage has not established it's standing under the subject Note and Deed of Trust by valid assignment or otherwise. PNC Mortgage has not offered evidence that it owns the original Note, PNC Mortgage lacks standing to foreclose on the Deed of Trust and has therefore failed to demonstrate it is the holder of a claim. US Bank Trust has not supplied the court with any evidence that the Note was physically delivered or assigned pursuant to a written agreement. PNC Mortgage has not presented any evidence that it is in possession of the original Note, or that it received the Note via a valid written assignment. Nor has US Bank presented any valid written assignment of the Deed of Trust. As US Bank has failed to prove it owns the Note and it has failed to present a valid assignment of the Deed of Trust, US Bank Trust has no standing to pursue its state law remedies with regard to the Deed of Trust or Property. Further, movant PNC Mortgage states that it is successor by merger to National City Mortgage, a division of National City Bank, but has not provided any proof of said merger or any document proving when movant acquired this loan, which according to its letter of

transfer did not occur until May 01,2012, six months after Debtor filed her petition in bankruptcy. Unless and untilmovant establishes it's standing on the record, it has no standing to file this motion for stay relief and the court would lack jurisdiction to act on movant's motion. B. Movant PNC Mortgage is Not a Party in Interest and Therefore Lacks Standing to Request Relief From the Automatic Stay Section 362(a) of the Bankruptcy Code imposes an automatic stay on all litigation against the Debtor, as well as any act to create, perfect, or enforce any lien against property of the estate.11 USC Section 362(a). Section 362(d) of the bankruptcy Code provides that [o]n request of a party in interest and after notice and a hearing, the court shall grant relief from the stay.... 11 USC Section 362(d) (emphasis added). The term party in interest is nowhere defined in the Bankruptcy Code. However, the Supreme Court has suggested that when an undefined term is used in bankruptcy law, [i]n determining the term's scope---and its limitations---the purposes of the Bankruptcy Act must ultimately govern. Kokoszka v. Belford, 417 U.S. 642, 645 (1974) (citing Segal v. Rochelle, 382 U.S. 375, 379 (1966). Though courts have interpreted the purposes of the Bankruptcy Act differently, the Second Circuit explained in In re Comcoach, 698 F. 2d 571, 573 (2d Cir. 1983), [b]ankruptcy courts were established to provide a forum where creditors and debtors could settle their disputes.... The Comcoach court went on to find that in order to invoke the court's jurisdiction to obtain relief from the 1 automatic stay, the moving party had to be either a creditor or a debtor. In Support of this assertion the court cited to the Bankruptcy Code's legislative history which suggest that, notwithstanding the use of the term party in interest, it is only creditors who may obtain relief from the automatic stay. Id. (citing H.R. Rep. No. 95-595, (1978, reprinted in 1978 U.S.C.C.A.C. 5787, 6136 (Creditors may obtain relief from the stay if their interests would be harmed by continuance of the stay.). It follows from the Second Circuit's analysis that unless PNC Mortgage qualifies as a creditor, it does not have standing to request relief from the automatic stay.

Section 101(10) of the Bankruptcy code defines a creditor as an: (A) entity that has a claim against a debtor that arose at the time of or before the order for relief concerning the debtor; (B) entity that has a claim against the estate of a kind specified in section 348 (d), 502 (f), 502 (g), 502 (h), or 502 (I) of this title; or (C) entity that has a community claim. 11 U.S.C. Section 101 (10). This definition requires consideration of what constitutes a claim, which conveniently is also a defined term in section 101 (5) of the Bankruptcy Code. Section 101 (5) (A) of the Bankruptcy code defines a claim as the right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured. Even under this broad definition movant PNC Mortgage has not demonstrated its right to payment because, as discussed in the preceding section, it lacks the ability to seek the state law remedy of foreclosure. Johnson v. Home State Bank, 501 U.S. 78, 84 (1991) (finding that a mortgage foreclosure was a right to payment against the debtor). Movant PNC Mortgage's claim did not arise on or before the Order for relief was entered as required because it did not take transfer of the mortgage until six months later. 1 The facts in Comcoach involved a bank, and therefore this language should not be read to exclude from the definition of a party in interest the United States Trustee or other corporate or corporeal entities specifically given standing in the Bankruptcy Code or applicable case law.

C. The Court should have Additional Reservations Regarding the Validity of the Transfer of the mortgage to movant. Standing is a threshold issue in every federal case and cannot be waived; if the litigant does not have standing, the court has no power to hear the case, even if no objection has been raised. Unfortunately, not all courts exercise that affirmative duty, so its up to us as attorneys for the debtor/defendant to ensure that claimants without standing dont slip through. The cases below establish those basic principles. Sprint Communications Co. v. APCC Services, Inc., 554 U.S. 269 (2008): Assignee to claim must hold legal title at the time that it is asserted in action.

Elk Grove Unified School District v. Newdow, 542 U.S. 1 (2004): Federal court can only exercise jurisdiction when litigant meets both constitutional and prudential standing requirements. Warth v. Seldin, 422 U.S. 490 (1975): Standing is a threshold question in every federal case determining the power of the court to entertain the suit. St. Paul Fire and Marine Insurance Co. v. PepsiCo, Inc., 884 F. 2d 688 (2nd Cir. 1989): Court has independent duty to examine standing. Barhold v. Rodriguez, 863 F.2d 233 (2nd Cir. 1988): Parties cannot consent to waive standing. Constitutional and Prudential Standing in Bankruptcy Courts Numerous U.S. Bankruptcy Court rulings have reaffirmed the general rule that federal court jurisdiction requires that the litigant have both Constitutional and prudential standing. That requirement and what exactly is required to satisfy the standard is elaborated upon in: In re Jackson, 451 B.R. 24 (Bankr. E.D. Cal., June 6, 2011): For a federal court to have jurisdiction, the proponent of a matter must have both constitutional standing, which requires an injury fairly traceable to the defendants allegedly unlawful conduct and likely to be redressed by the requested relief, and prudential standing. In re Veal, 450 B.R. 897 (9th Cir. B.A.P., June 10, 2011): A federal court may exercise jurisdiction over a litigant only when that litigant meets constitutional and prudential standing requirements; constitutional standing requires an injury in fact, which is caused by or fairly traceable to some conduct or some statutory prohibition, and which the requested relief will likely redress; prudential standing embodies judicially self-imposed limits on the exercise of federal jurisdiction; here, Wells Fargo did not establish standing to seek relief from stay, as it did not show that it or its agent had actual possession of the note, so that it could not establish that it was a person entitled to enforce the note under UCC 3-301. In re Burnett, 450 B.R. 589 (Bankr. W.D. Va., April 28, 2011): In order to establish a colorable claim, a movant for relief from stay must satisfy the constitutional limitations on federal court jurisdiction and prudential limitations on its exercise. In re Hill, 2009 WL 1956174 (Bankr. D.Ariz., July 6, 2009): In addition to the procedural real party in interest requirements of Rule 17, a litigant must also have standing to bring a motion; a litigant must have both constitutional standing and prudential standing for a federal court to have jurisdiction to hear the case. Party in Interest Issues in Bankruptcy Courts In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho, July 7, 2009): To obtain stay relief, a movant must have standing and be the real party in interest under Federal Rule of Civil Procedure 17.

Standing of a Servicer In re Alcide, 450 B.R. 526 (Bankr. E.D. Pa., May 27, 2011): To establish its status as a party in interest entitled to seek relief from the automatic stay, a mortgage servicer must demonstrate that (1) the initiation of a stay relief motion is within the scope of authority delegated to the servicer by its principal and; and (2) the principal itself is a party in interest (i.e., the principal is a party with the right to enforce the mortgage). In re Gulley, 436 B.R. 878 (Bankr. N.D.Tex., August 23, 2010): A mortgage loan servicer is considered a creditor with standing to file a proof of claim by virtue of its pecuniary interest in collecting payments under the terms of the note. In re Jacobson, 402 B.R. 359 (Bankr. W.D. Wash., March 6, 2009): Even if a servicer or agent has authority to bring a motion for relief from stay on behalf of the holder, it is the holder, rather than the servicer, that must be the moving party, and so identified in the papers and in the electronic docketing done by the moving partys counsel. Possession of the Note In re Escobar, 457 B.R. 229 (Bankr. E.D. N.Y., August 22, 2011): Where the stay relief movant claims rights as a secured creditor by virtue of an assignment of rights to a promissory note secured by a lien against real property, it must provide satisfactory proof of its status as the owner or holder of the note; here, the movants had met this burden of proof through their uncontroverted affidavit testimony that they were holders of the notes by virtue of possession of the original notes executed with endorsements in blank. In re Veal, 450 B.R. 897 (9th Cir. B.A.P., June 10, 2011): (See Constitutional and Prudential Standing in Bankruptcy Courts) In re Banks, 457 B.R. 9 (8th Cir. B.A.P., Oct. 11, 2011): The bankruptcy court erred in holding that a creditor possessed the right to enforce a note endorsed in blank where the creditor did not establish that it was in possession of the note. Date of Possession In re Ruest, Case No. 08-10512, Adv. Proc. No. 09-1035 (Bankr. D. Vt., August 23, 2011): Even though it was undisputed that loan servicer was in possession of the note and the note was endorsed in blank, the date that the bank came into possession of the note was a genuine issue of material fact sufficient to deny motion for summary judgment. In re Parker, 445 B.R. 301 (Bankr. D.Vt., March 18, 2011): The creditor needed to show that it was the holder of the note on the date of the debtors bankruptcy petition.

CONCLUSION For the reasons set forth above, Movant PNC Mortgage's motion for relief from the automatic stay should be denied for lack of standing. ___________________________________________ Kimberly R. Strickland, Debtor