Filed: Mar. 03, 2016
Latest Update: Mar. 03, 2016
Summary: ORDER BURTON PERLMAN , Bankruptcy Judge . I. Background. In this chapter 13 case, Debtor has filed a Plan. Creditor Ciras, Inc. (hereafter "Ciras") has filed an objection to the Plan. The matter came on for hearing before the Court at the conclusion of which the Court reserved decision. Debtor is the owner of real estate at 21 Timea Avenue and 35 Ridge Road (collectively, the "Properties"). The question presented to the Court is whether the values of those Properties can be reduced by the
Summary: ORDER BURTON PERLMAN , Bankruptcy Judge . I. Background. In this chapter 13 case, Debtor has filed a Plan. Creditor Ciras, Inc. (hereafter "Ciras") has filed an objection to the Plan. The matter came on for hearing before the Court at the conclusion of which the Court reserved decision. Debtor is the owner of real estate at 21 Timea Avenue and 35 Ridge Road (collectively, the "Properties"). The question presented to the Court is whether the values of those Properties can be reduced by the ..
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ORDER
BURTON PERLMAN, Bankruptcy Judge.
I. Background.
In this chapter 13 case, Debtor has filed a Plan. Creditor Ciras, Inc. (hereafter "Ciras") has filed an objection to the Plan. The matter came on for hearing before the Court at the conclusion of which the Court reserved decision.
Debtor is the owner of real estate at 21 Timea Avenue and 35 Ridge Road (collectively, the "Properties"). The question presented to the Court is whether the values of those Properties can be reduced by the amount of taxes and other charges levied against the Properties in the deciding of treatment of those holdings in the Plan. The issue before the Court calls into question application of O.R.C. § 5721.10 (2011). That statute applies to "the lands and lots described in the delinquent land list for the amount of taxes, assessments, interests, and penalty charged prior to the delivery of such lists."
II. Facts.
The parties have entered into a stipulation of facts which is reproduced here:
This matter is before the Court on the Objection of Creditor Ciras Inc. ("Ciras") to the Amended Chapter 13 Plan proposed by Debtor, Kenneth W. Addison Sr. ("Addison"). In preparation for the hearing scheduled for October 30, 2015, Ciras and Addison have agreed to a stipulation of the following facts:
1. Addison filed this Chapter 13 on May 12, 2015. Addison was a co-debtor in a prior Chapter 13 (Case No. 12-13704) from July 6, 2012 to March 4, 2015. The prior Chapter 13 was dismissed upon Motion of the Chapter 13 Trustee.
2. An Amended Chapter 13 plan was filed on June 18, 2015 and Ciras filed an Objection to the plan on June 23, 2015.
3. The real estate at 35 Ridge Ave., North Bend, Hamilton County, OH is listed as an asset of the Addison bankruptcy with a value of $62,000.00. Ciras holds the first mortgage on the real estate and has filed a proof of claim asserting that it is owed $103,736.66 on the first mortgage.
4. Addison and Ciras agree on a valuation of $62,000.00 for Ridge Ave.
5. The real estate at 21 Timea Ave., Cleves, Hamilton County, OH, is listed as an asset of the Addison bankruptcy with a value of $10,000.00. Ciras holds the first mortgage on the real estate and has filed a proof of claim asserting that it is owed $31,511.70 on its first mortgage.
6. Addison and Ciras agree on a valuation of $14,000.00 for Timea Ave.
7. On the Ridge Avenue property, Addison is proposing to pay $26,672.42 to Hamilton County for taxes and other assessments against the real estate and is proposing to pay Ciras $35,327.58 at 4.75% interest on its secured claim. The balance of the Ciras first mortgage claim is being treated as unsecured.
8. According to the records of the Hamilton County Treasurer, as of May 12, 2015, the property taxes and other assessments against the Ridge Avenue property are broken down as follows:
Taxes-$7,303.99
Delinquent Water Assessment-$1,312.93
North Bend-Renting w/no Permit Assessment-$17,493.64
Storm Water Assessment-$50.23
Total Due: $26,160.79
The amounts are evidenced by an email from the Hamilton County Treasurer, a copy of which is attached as Exhibit A.
9. On the Ridge Avenue property, the $17,493.64 levied by North Bend resulted from Addison's failure to comply with the North Bend ordinance on rental registration. The North Bend levy is evidenced by North Bend Resolution No: 14-11, a copy of which is attached as Exhibit B. Copies of letters from the North Bend file sent prior to assessment by North Bend to Addison about the rental registration requirements and fines are attached as Exhibit C.
10. On the Ridge Avenue property, the delinquent water assessment of $1,312.93 resulted from Addison's failure to pay water bills associated with the property.
11. On the Timea Avenue property, Addison is proposing to pay $4,606.23 to Hamilton County for taxes and other assessments against the real estate and is proposing to pay Ciras $5,393.77 with interest at 4.75% on its secured claim. The balance of the Ciras claim is being treated as unsecured.
12. The agreed valuation of $14,000 increases the Ciras pay amount to $9,393.77.
13. According to the records of the Hamilton County Treasurer, as of May 12, 2015, the property taxes and other assessments against the Timea Avenue property are broken down as follows:
Taxes-$1,923.35
Aquifer Assessment-$10.02
Storm Water Assessment-$26.89
Cleves Delinquent Garbage Assessment-$408.21
Cleves Delinquent Water-$1,559.72
Total Due: $4,336.40
The amounts are evidenced by an email from the Hamilton County Treasurer, a copy of which is attached as Exhibit A.
14. On the Timea Avenue property, the delinquent water assessment of $1,559.72 and the delinquent garbage assessment of $408.21 resulted from Addison's failure to pay water and trash bills associated with the property.
III. Discussion.
The law is settled that real estate taxes constitute a lien ahead of a first mortgage. See In re McCullom, Case. No. 11-12102 (November 21, 2011). The remaining question then is whether the other charges that Debtor proposes to assess ahead of the real estate mortgage are improper. With regard to the Ridge Avenue property, the remaining charges are for water assessments and also an assessment levied by North Bend for renting property without a permit. With respect to the Timea property the charges are for water assessments and also a garbage assessment.
This Court holds that the charges levied against Debtor's properties other than real estate taxes may not be regarded as assessments. The North Bend renting without a permit assessment is not an assessment within the meaning of O.R.C. § 5321.10. For the purposes of O.R.C. § 5721.10 the term "assessment" refers to special assessments levied to pay the costs of public improvements. Homeowners Loan Corp. v. Tyson, 133 Ohio St. 184 (Ohio 1938). The North Bend assessment is not within that definition and may not be charged to reduce the indebtedness to Ciras as Debtor proposes in his plan.
The Court reaches the same conclusion as to water assessments and garbage assessments. To the extent that these are prepetition debts, they are dischargeable. To the extent that these are postpetition debts, they are merely unsecured debts, and there is no basis to give them standing to reduce indebtedness to Ciras.
IV. Conclusion.
Accordingly, the Court holds that the objection of Ciras is sustained and confirmation of Debtor's plan is denied.
SO ORDERED.
