909 F.3d 1306
11th Cir.2018Background
- Debtor Mildred Dukes filed Chapter 13 in 2009; plan confirmed in 2010. At filing she had two mortgages with Suncoast Credit Union (first and second); she was current then but later defaulted.
- The confirmed plan authorized Debtor to make mortgage payments directly to the Credit Union rather than through the Chapter 13 trustee; the plan did not set repayment terms, schedules, or otherwise modify the mortgages.
- Credit Union filed a proof of claim only for the second mortgage; it did not file for the first mortgage. The trustee’s plan payments did not pay down the Credit Union mortgages.
- Debtor completed plan payments in 2012 and received a §1328(a) discharge of “all debts provided for by the plan.” Debtor had stopped mortgage payments in 2011.
- Credit Union foreclosed on the second mortgage in 2013 and sought a deficiency judgment on the first; it moved to reopen the bankruptcy and sought a determination that the first-mortgage personal liability was not discharged.
- Bankruptcy and district courts granted summary judgment for Credit Union, holding (1) the first mortgage was not “provided for” by the plan and so was not discharged, and (2) even if provided for, discharge would violate the antimodification rule of §1322(b)(2). Debtor appealed.
Issues
| Issue | Dukes' Argument | Credit Union's Argument | Held |
|---|---|---|---|
| Whether the first mortgage was "provided for" by the Chapter 13 plan for purposes of §1328(a) discharge | Mere reference that payments would be made "outside the plan" is enough to show the plan "provided for" the mortgage and thus it was discharged | A plan must "make a provision for" or "stipulate to" a debt (affecting repayment terms); mere reference to payments outside the plan does not provide for the debt | The plan did not "provide for" the mortgage; mere statement that payments are made outside the plan is insufficient, so mortgage not discharged under §1328(a) |
| Whether discharge would violate the antimodification bar of §1322(b)(2) (mortgage on principal residence) | Discharge is a statutory injunction removing only in personam liability and therefore is not a prohibited modification; non‑objection by creditor implies consent | Discharge would strip lender’s rights under original loan instruments (including right to deficiency judgment) and thus modify protected rights under §1322(b)(2) | Even if the mortgage were "provided for," discharge would modify creditor’s rights (e.g., deficiency remedy) and thus is barred by §1322(b)(2); mortgage nondischargeable |
| Whether failure to file a proof of claim for the first mortgage discharged the mortgage | Because Credit Union did not file a proof of claim for the first mortgage, the claim was disallowed and thus discharged under §1328(a) | Issue was not raised in bankruptcy court (waived); in any event, lien/rights survive nonfiling and antimodification protects in personam liability | Argument was waived on appeal; on the merits, failure to file did not discharge the mortgage—secured lien and in personam liability survive (antimodification) |
| Preservation / standard of review for newly raised arguments on appeal | Issue is a pure question of law and may be considered for first time on appeal | Issues not raised below are generally waived unless exception applies; Dukes did not preserve and no miscarriage of justice shown | Dukes waived the proof‑of‑claim argument by not raising it below; appellate court declined to consider it further |
Key Cases Cited
- Rake v. Wade, 508 U.S. 464 (Supreme Court 1993) (interprets “provided for” in Chapter 13 context as to “make a provision for” or “stipulate to” a debt)
- Nobelman v. Am. Sav. Bank, 508 U.S. 324 (Supreme Court 1993) (§1322(b)(2) protects mortgagee’s rights under loan documents, including deficiency remedies)
- Universal Am. Mortg. Co. v. Bateman (In re Bateman), 331 F.3d 821 (11th Cir. 2003) (mortgagee’s claim survives where modification would violate §1322(b)(2))
- Southtrust Bank of Alabama v. Thomas (In re Thomas), 883 F.2d 991 (11th Cir. 1989) (secured creditor’s lien survives even if creditor fails to file proof of claim)