[00:00:00] Speaker 02:
Good morning, Mr. Khanna. Would you like to reserve any time for rebuttal?

[00:00:04] Speaker 01:
Yeah, may it please the panel? I'll reserve three to four minutes.

[00:00:08] Speaker 02:
All right.

[00:00:09] Speaker 02:
Please begin. Sure.

[00:00:10] Speaker 01:
Thank you.

[00:00:13] Speaker 01:
So, judges, this is a Rule 56 procedural appeal. I'm not asking the panel to calculate my HELOC payment or decide the ultimate payment amount. I'm asking whether the bankruptcy court could enter a sua spunti summary judgment for U.S. Bank while denying the time and discovery necessary to test U.S. Bank's asserted payment amount.

[00:00:41] Speaker 01:
The court denied my motion for a summary judgment, then invoked Rule 56, Subsection F, to enter judgment for the non-movement. It gave me nine days. I requested an extension, filed a Rule 56, Subsection D declaration identifying the precise bank-held records needed to respond. The court denied the extension because facts were supposedly undisputed. It denied discovery because facts supposedly will not change the analysis.

[00:01:12] Speaker 01:
That is closed rule. The bank's asserted amount became undisputed only because I was denied the opportunity or denied the discovery needed to dispute it. The remedy I'm requesting or asking is narrow, vacating, and remanding back to the lower court.

[00:01:33] Speaker 02:
All right. And so what would happen in the bankruptcy court? Let's say remanded. What relief would you be seeking in the bankruptcy court?

[00:01:44] Speaker 01:
Your Honor, I would be seeking proper timeline for Rule 56F for my response, and then allowing me proper discovery under Rule 5060, which is on record under ER 118-121. All right. All right.

[00:02:10] Speaker 02:
Thank you. Do you want to reserve the rest of your time, or do you have more that you would like to say?

[00:02:16] Speaker 02:
Any questions from anyone? No. All right. So we'll let you reserve. Then you can respond to what the appellee has to say. All right. Thank you.

[00:02:30] Speaker 00:
Good morning, Your Honor.

[00:02:32] Speaker 00:
Your Honor, James Lewin appearing for the mortgage law firm on behalf of U.S. Bank National Association.

[00:02:40] Speaker 00:
Your Honor, I guess responding immediately to Mr. Khanna's A statement regarding discovery that was needed. I would stay for the record that Mister con is objection to the notice of payment change was filed March. 4th of 2025 and the hearing.

[00:03:04] Speaker 00:
on the motion for summary judgment was not held until August 1st of 2025.

[00:03:10] Speaker 00:
So it appears that Mr. Khanna had four months within which to conduct discovery if he needed it on the issues that were raised because the motion for summary judgment, which was ultimately granted in favor of U.S. Bank National Association, was essentially the same as the issues that were raised in his objection to the notice of payment change and his motion for summary judgment.

[00:03:41] Speaker 00:
That would be the first.

[00:03:45] Speaker 00:
I think that the record adequately supports Judge Novak's decision under Rule 56F because the debtor's confirmed plan is in effect, and pursuant to Section 8, or paragraph eight of the confirmed plan. The treatment of U.S. Bank's HELOC loan is unimpaired.

[00:04:13] Speaker 00:
Essentially, the plan provides that the terms of the note and deed of trust will remain unimpaired, and the plan does not intend to modify U.S. Bank's rights as to payments under the terms of the contract.

[00:04:30] Speaker 00:
That's in Class 8 of the plan. Class 8 of the plan, yes.

[00:04:34] Speaker 00:
Class 8 of the plan, basically it's the Northern District form plan. Class 8 are secured claims on which the debtor was not in default on the petition date. Debtor does not intend to modify the claimant's rights. Treatment of the claimant will retain its lien until the underlying debt is paid in full under non-bankruptcy law. the debtor or third party shall make all regularly scheduled contractual payments due post-petition.

[00:05:03] Speaker 00:
So I believe that in this case, the regular payments that were due post-petition were essentially the payments which started to accrue after the end of the HELOC draw period, because the maturity date of the note is not until February 15th of 2045.

[00:05:25] Speaker 00:
So the payment did change and the debtor is responsible for making the changed payment amount pursuant to his confirmed plan.

[00:05:36] Speaker 00:
One of the other issues that was raised by the debtor was 11 USC 1322 C2, which provides if the last payment honorable.

[00:05:47] Speaker 00:
On the original payment schedule secured by the debtors principal residence is due before the final payment under the plan the debtor may pay as modified pursuant to twenty two section thirteen twenty five eight five.

[00:06:00] Speaker 00:
In this case by admission the property is not the debtors principal residence so the statute really does not apply in that sense the key lock note did not mature during the term of the plan.

[00:06:17] Speaker 00:
And as stated previously, the maturity date of the note was February 15th of 2045.

[00:06:26] Speaker 00:
And additionally, as noted in the record, the property is fully secured. The fair market value is $400,000 pursuant to the debtor's schedules. And in an amended schedule he filed later, the fair market value is $350,000.

[00:06:46] Speaker 00:
And finally, the debtor presented no evidence that the payment amount was otherwise incorrect to the court. So movement at this point would submit the matter on that basis unless the court has any questions.

[00:07:03] Speaker 02:
Questions? No questions. All right. Thank you.

[00:07:07] Speaker 00:
Thank you, Your Honors.

[00:07:34] Speaker 01:
So, Your Honor, a couple of direct rebuttals. The first one being the motion for summary judgment was denied, and I conceded Emeryville was not my principal residence. I think the fact here is that U.S. Bank was given 71 days to respond to motion for summary judgment. and I was given nine days for responding to a 56 subsection F notice asking me to defend granting U.S.

[00:08:14] Speaker 01:
Bank the summary judgment in their favor.

[00:08:17] Speaker 01:
I think the question before the court was, did I have all the components that were required to test the payment? I did not.

[00:08:29] Speaker 02:
Well, it's not really about testing the payment, though, right? Because you raised specific objections to their notice of payment change and then filed the summary judgment motion.

[00:08:42] Speaker 02:
you know, the factual bases that were asserted were just found by the court not to be in dispute. You don't own the home. And, you know, you requested some relief that's really not possible on an objection, which I think Judge Novak told you, you know, modification of your plan. You can't modify your plan through an objection to a notice of payment change. You know, you wanted to change the print, change the amount, change the timing of the payments when your plan provided for payments according to the terms of the note.

[00:09:14] Speaker 02:
So the question is, what else could you have needed to respond to entry of summary judgment on facts that are basically the dictated result from the facts that were admitted in your own motion?

[00:09:36] Speaker 01:
Thank you, Your Honor. With respect, the judge or the court did not stop by granting the motion for summary judgment or denying the motion for summary judgment. It went far.

[00:09:51] Speaker 01:
It issued 56 subsection F notice allowing me to file my response against the judge issuing a sua sponte judgment in favor of U.S. Bank I think that's the portion where the time given was less. I requested more time. The time was denied. I filed an appropriate 50-60 declaration or discovery.

[00:10:21] Speaker 01:
That was denied. So that makes it closed loop. So based on the opportunity to develop a record which was not given, the facts were deemed undisputed and the judgment was granted. So I think that's the process where it was closed loop, deny time, deny discovery, in grand judgment on undisputed facts, which were disputed on the record. And most importantly, Judge, even the bank conceded in their own admission in Exhibit of Record 222 and 236 that discovery was needed.

[00:11:02] Speaker 01:
So a non-movement who's being granted the judgment admits that discovery is needed basically reverses the path here and didn't really give me a chance to really test the payment. But the question is that the components that go into the payment are all in banks' possession. And it's laid out in...

[00:11:28] Speaker 01:
it's laid out in ER 246, the note formula. You know, the principal balance, the accrued finance charges, and the interest. So, you know, one of these could have really created a tribal dispute. And I think from a, and from a, Anderson and Liberty Lobby perspective, that's exactly, you know, would have favored, things would have been different, but would have favored an opportunity to test and then allow the judge to make the ruling on a complete record.

[00:12:11] Speaker 02:
All right. Thank you. Did you have anything else that you wanted to add?

[00:12:18] Speaker 01:
Your Honor, the other point which I really want to mention here is the timing.

[00:12:25] Speaker 01:
the 71 days that were given to U.S. Bank versus nine days.

[00:12:29] Speaker 01:
In those 71 days, the judge kept a case management conference and really laid out that the motion for summary judgment would be denied. So that gave U.S. Bank ample time to prepare their documentation or motion or response to the judge's, you know, It's a thought process.

[00:12:57] Speaker 01:
While when I was giving nine days, I asked for more so I could then come back with my proper response and really allow the judge to look at the complete record and then have that outcome that we saw.

[00:13:16] Speaker 02:
All right. Thank you very much for your argument. Okay. Thank you. All right. So this matter will be submitted. We'll issue a decision as promptly as we can. Thank you both very much. Thank you.