No Presumption of Validity for Payment Changes under Rule 3002.1

Posted by NCBRC - May 6, 2013

The bankruptcy court for the Northern District of Mississippi differentiated between the shifting burdens of proof under Rule 3001, which deals with proofs of claim generally, and Rule 3002.1, relating to notice of changes to mortgage payments on debtor’s residence. In re Taylor, No. 12-11463 (March 27, 2013).

The debtor objected to GMAC’s proof of claim on the grounds that GMAC had miscalculated arrearages by failing to credit debtor’s payments on the mortgage, including several payments made by the chapter 13 trustee in debtor’s previous bankruptcy. The debtor also challenged GMAC’s notice of change of payments as seeking to recover escrow shortages including force-placed insurance. The evidentiary hearing on both motions established that GMAC had made numerous errors as to what had been paid and when, and that it did not become aware of those errors until eight months after it had filed its proof of claim and shortly before the hearing on the objection. The debtor also presented evidence that she had purchased the necessary insurance beginning in March of 2012.

Although a properly filed proof of claim enjoys a presumptive prima facie validity under Rule 3001(f), GMAC’s errors were sufficient to subvert that prima facie case. In attempting to meet its increased burden of persuasion, GMAC brought in a senior litigation analyst whose testimony was based on GMAC’s computer generated documents whose previous inaccuracy had caused undisputed errors in calculating debtor’s payments. Because the analyst failed to establish that the records were now accurate, the court disallowed certain disputed portions of the proof of claim. It did, however, credit GMAC’s evidence of properly incurring the costs of force-placed insurance prior to March, 2012.

When it came to determining whether the payment changes should be allowed under Rule 3002.1, the debtor challenged the inclusion of force-placed insurance, and court found that GMAC failed to even get off the starting block. Rule 3002.1(d) specifies that the notice of payment change “is not subject to Rule 3001(f)” which gives a properly filed proof of claim prima facie validity. “The Debtor, therefore, has no evidentiary burden to overcome because the burden of proof remains with GMAC to establish the allowability of the amounts changed.” Without the presumption of validity afforded a properly filed proof of claim, GMAC’s acknowledged and unexplained errors with respect to its previous calculation of arrearages, including force-placed insurance, led the court to disallow the payment change without requiring the debtor to present evidence that he had continued to maintain the insurance after March 2012.

Taylor opinion

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