IN THE UNITED STATES BANKRUPTCY COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION IN RE: SHERYL LYNN

N PIGG XXX-XX-2683 1217-A GOODLOE DRIVE NASHVILLE, TN 37215 DEBTOR, SHERYL LYNN PIGG, PLAINTIFF, V. BAC HOME LOANS SERVICING, LP C/O CT Corporation System 800 S Gay Street Suite 2021 Knoxville, TN 37929 USA BANK OF AMERICA, N.A. 9000 Southside Blvd. Building 700 Jacksonville, FL 32256 BELLE MANAGEMENT CORP. C/O Dana Tiblier Suite 201 7091 Old Harding Pike Nashville, TN 37221 DEFENDANT. PLAINTIFFS TRIAL BRIEF The Facts The circumstance from which this adversary proceeding has arisen is a clash between the Debtor and creditors with the prize being a basic element of personal consumer Bankruptcy, a fresh start. There will be little, if any, testimony in this trial. The parties have made every effort to stipulate all of the relevant facts. The stipulations include documents such as the Debtors Bankruptcy Petition, Schedules and Statement of Financial Affairs. From this information, it is clear the Debtor is a single, professional woman who lived in and was purchasing a condominium in the Bellevue area of Nashville, Tennessee. The first mortgage on the property ADV. PROC. NO. 3:10-ap-00642 CASE NO. 10-10168-GP3-7 CHAPTER 7 JUDGE GEORGE C. PAINE II

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was with Bank of America/BAC Home Loans Servicing in the amount of $97,500.00. The second mortgage was with the Bank of Nashville in the amount of $67,500.00. The value of the property before the great Nashville flood of May 1 and May 2, 2010, was approximately $200,000.00. The Debtor estimates its current value is $55,000.00. It is stipulated the value is less than the balance on the first mortgage. Bank of Nashville recognizes it is an unsecured creditor and asked not to be included in this lawsuit. The Debtors condominium was flooded by the Harpeth River to the ceiling of its first floor. The Debtor was rescued by boat from a second story window on Sunday, May 2. She lost almost all of her personal property including family heirlooms. She sought shelter from friends, salvaged as much of her personal property as possible and ultimately rented a small house in which to live. The last payment she made on either mortgage was in April 2010. In keeping with the directions of the homeowners association, the Debtor working with volunteers removed everything from the condominium, stripped off all wallboard and removed all insulation. The condominium remains gutted to the studs. Almost immediately she sought legal assistance. She was referred to the firm of Garfinkle, McLemore & Young as a flood victim by the Tennessee Attorney Generals Office. After missing one monthly payment, Bank of America Home Loans mailed to the Debtor a document entitled Notice of Intent to Accelerate dated June 16, 2010. It correctly informed the Debtor her loan was in default. In addition it said: If the default is not cured on or before July 16, 2010, the mortgage payments will be accelerated with the full amount remaining accelerated and becoming due and payable in full, and foreclosure proceedings will be initiated at that time. Ultimately, the Debtor filed a Chapter 7 proceeding with this Court September 21, 2010. Foreclosure has never been initated. Meanwhile, a company identifying itself as BAC Field Services Corporation changed the locks on the Debtors condominium and posted a sign in the front window which said in part ENTRY BY UNAUTHORIZED PERSONS IS STRICTLY PROHIBITED. The Debtor stated in the Notice of Intent attached to her Bankruptcy Petition that she would not renew her obligation with either BAC or Bank of Nashville. Through counsel she has asked BAC to proceed with foreclosure. Through counsel she has offered to execute a deed in lieu. Through counsel she has furnished BAC with the name and phone number of an investor who purchased the adjacent condominium and has expressed an interest in buying the subject condominium, all to no avail. The homeowners association has notified the Debtor she is liable for all post-petition homeowners association dues. Real estate taxes continue to accumulate as well as other smaller charges such as the condominiums share of a community water supply for landscaping. By refusing to initiate foreclosure, BAC is denying the Debtor a fresh start following bankruptcy.

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The Argument Does an Ownership Interest Remain in the Debtor? Legal Title The Bankruptcy Code specifically excludes from discharge at 11 U.S.C. 523(a)(16) post petition homeowners association fees for the Debtor who has legal title, possession or equitable title to the subject property. It is the Debtors position she no longer has any of the three and therefore is not subject to further collection activity for any post-petition expense generated by the property including real estate taxes. Legal title to the property was conveyed December 5, 2001 to PRLAP, Inc. Trustee. This is spelled out in the Deed of Trust (page 3) under the heading TRANSFER OF RIGHTS IN THE PROPERTY where it is stated in part as follows: This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrowers covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following property located in the County of Davidson [property description is inserted at this point] TO HAVE AND TO HOLD, the aforedescribed property, together with all the hereditaments and appurtenances thereunto belonging to, or in anywise appertaining, unto the Trustee, its successors in trust and assigns, in fee simple forever. (emphasis added). The conveyance language in fee simple forever transfers legal title. Just because the transferee is a Trustee does not make the conveyance any less. Additional language in the deed of trust establishes when various rights of the Trustee are engaged. For instance as long as the grantee makes her payments pursuant to the note referenced in the deed of trust she has a right of possession, the Trustee does not. Possession In May 2010 flood waters made occupancy of the condominium impossible for the Debtor, but she still had possession of the property. For several days her personal property floated in the first floor area. But, as days turned to weeks, she removed her property and made a decision never to return to the condominium to live. She abandoned the property. She abandoned BACs collateral. She stopped making monthly payments and defaulted on the note. Ultimately she filed Bankruptcy, stated under oath that she was surrendering the property and discharged the debt to BAC. In response to one, two or all of those actions, BAC exercised its rights pursuant to the provisions of the deed of trust and took possession of the property. It changed the locks and posted the property. It did not give the Debtor a key nor did she want one. The Debtor no longer has possession of the property and has not had possession for many months.

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Equitable Title It is difficult to imagine what interest the Debtor might still maintain in the property if she has deeded away fee simple ownership, abandoned the property and been notified by signage in the window that the property is in control of BAC Field Services Corp. acting in accordance with the deed of trust. In Martha A. Harris v. J.D. Mason, 120 Tenn. 668, 115 S.W. 1146 (1908) the Tennessee Supreme Court adopted the following definition of equitable title: Again, equitable title is defined to be the right in the party, to whom it belongs, to have the legal title transferred to him. No way remains for the Debtor to compel the transfer of legal title to her, not even the tender of sufficient funds by the Debtor to pay the note in full to BAC. Without regard to the fact the Debtor is incapable of paying the note and the Debtor is bankrupt, the time for renewal of the Debtors obligation to BAC after bankruptcy passed with the issuance of the Debtors discharge January 3, 2011. The relationship between the Debtor and BAC is contained in two basic documents, the note and the deed of trust. The Bankruptcy Code is clear on the enforceability of those instruments absent the execution and filing with the Court of a renewal of obligation after bankruptcy. 11 U.S.C. 524(c) states in part as follows: An [reaffirmation] agreement between a holder of a claim and the debtor, the consideration for which, in whole or in part, is based on a debt that is dischargeable in a case under this title is enforceable only to any extent enforceable under applicable nonbankruptcy law, whether or not discharge of such debt is waived, only if--(1) such [reaffirmation] agreement was made before the granting of the discharge under section 727, 1141, 1228 or 1328 of this title; The Debtor never executed a reaffirmation agreement. When the Debtor filed her Bankruptcy petition September 21, 2010, her equitable title in the condominium passed to Robert Waldschmidt, Trustee. When he closed her case as a no asset matter November 28, 2010, equitable title revested in the Debtor. For a few weeks she had the right to have legal title transferred to her. Theoretically, she could have purchased a lottery ticket, won $500,000.00 and paid BAC in full. BAC could not have refused the tender of her payoff. But, when the date for executing and filing a reaffirmation agreement passed on the Debtors discharge date, the note and the underlying deed of trust became unenforceable. The Debtor could no longer enforce their provisions against BAC and PRLAP, Inc., Trustee, nor could BAC and PRLAP, Inc. enforce their provisions against the Debtor. Instantly the Debtors equitable title to the condominium passed to PRLAP, Inc. whose conduct is now governed by the deed of trust. In short, PRLAP, Inc., Trustee pursuant to the provisions of the deed of trust, can maintain the property and convey fee simple title by foreclosure sale.

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BAC may now share equitable title to the condominium because it has the authority to inform PRLAP, Inc. there has been a default on the note and instruct it to commence foreclosure proceedings. The Discharge Injunction This is not a case in which witnesses from the executive offices of BAC and PRLAP are going to be paraded through the courtroom to explain their conduct. And, the motivation for their conduct is really not relevant. It should be clear to anyone examining the Debtors situation that Sheryl Lynn Pigg is not the only Debtor in the United States whose post petition real estate related creditors are attempting to hold liable. And, it should be equally clear that mortgage holders want to avoid liability for home owners association dues, real estate taxes and other obligations associated with real estate ownership for as long as possible. It is the position of the Debtor that she no longer has possession of the condominium and has not since May 2010, nor does she hold either legal or equitable title to the property. Nonetheless, as a direct result of BACs refusal to foreclose, she is being held liable by post petition, real estate related creditors. By pushing this debt onto the Debtor, BAC is violating the discharge injunction as set out in 11 U.S.C. 524(a). The same is true for Belle Management Corp. Because the Debtor no longer holds possession or any ownership interest in the condominium, its post petition charges are not excepted from discharge pursuant to 11 U.S.C. 523(a)(16). It is the Debtors prayer that the Court enter an order confirming the Debtor no longer holds possession or any ownership interest in the condominium and directing Belle Management Corp. to cease collection activity. The Debtor has further asked the Court to order BAC to initiate foreclosure immediately or in the alternative reopen the Bankruptcy proceeding for further administration, reappoint Robert Waldschmidt, Trustee, and direct him to proceed with sale of the subject property, pay his administrative costs and commissions, all taxes, home owners association dues and other accumulated real estate related expenses and distribute the remainder of the funds to BAC. DATED this 27th day of May, 2011. Respectfully submitted, GARFINKLE, McLEMORE & YOUNG, PLLC /s/ John C. McLemore John C. McLemore, Tn. Bar No. 3430 2000 Richard Jones Road, Suite 250 P.O. Box 158249 Nashville, Tennessee 37215-8249 (615) 383-9495 (phone) (615) 292-9848 (fax) jmclemore@gmylaw.com Attorneys for Debtor

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