457 F. App'x 193
3d Cir.2012Background
- Scarborough filed Chapter 13 in 2001 and initiated a first adversary to bifurcate Chase Manhattan's mortgage claim under 11 U.S.C. § 506(a).
- Bankruptcy Judge Carey denied bifurcation; the main case was dismissed in 2005 for feasibility issues; Scarborough appealed.
- In 2006 the Third Circuit held that mortgage modification could be permitted under §1322(b)(2) for multi-unit property and remanded for further proceedings; jurisdiction issues were noted.
- Chase sought relief from the automatic stay; the bankruptcy court later denied confirmation and dismissed Scarborough's plan, with controversy over timing and tolling.
- Scarborough filed a second adversary in 2008 seeking an injunction and damages for stay violations; sheriff's sale occurred during pendency; the bankruptcy court dismissed the second adversary.
- In 2010–2011 the district court consolidated the appeals and upheld the bankruptcy court’s decision; Scarborough appeals again challenging the stay retroactivity and plan feasibility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactivity of the stay during the gap period | Scarborough argues stay was retroactively restored after remand and foreclosures violated it. | Chase contends there was no stay in effect during the gap. | No retroactive stay; foreclosure proceeded during gap not stayed. |
| Remand scope and jurisdiction to follow appellate mandates | Scarborough contends remand commanded hearings on secured amount and feasibility before further actions. | Chase argues the remand scope was proper and within jurisdiction. | District/Bankruptcy remand lacked proper jurisdiction; cannot enforce an erroneous mandate. |
| Feasibility and confirmability of Scarborough's Chapter 13 plan | Scarborough asserts plan could be confirmed given valuation and potential bifurcation outcomes. | Chase contends five-year term and ability to comply defeat feasibility; valuation inadequacies persist. | Bankruptcy court’s and district court’s denial of confirmation affirmed; plan not feasible under §1325(a)(6) and related limits. |
Key Cases Cited
- Scarborough v. Chase Manhattan Mortg. Corp. (In re Scarborough), 461 F.3d 406 (3d Cir. 2006) (modification of mortgage under §1322(b)(2) permissible; need not decide modification)
- In re Scarborough, 212 F. App’x 89 (3d Cir. 2006) (lacked jurisdiction over contingent order on remand)
- Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943 (3d Cir. 1985) (law-of-the-case and jurisdiction on remand limitations)
- In re Exide Techs., 607 F.3d 957 (3d Cir. 2010) (clear-error standard for mixed questions of law and fact)
- JELD-WEN, Inc. v. Van Brunt (In re Grossman’s Inc.), 607 F.3d 114 (3d Cir. 2010) (en banc treatment; standard for factual findings and legal application)
- Knop v. McMahan, 872 F.2d 1132 (3d Cir. 1989) (waiver of issues not raised below)
- In re Taylor, 81 F.3d 20 (3d Cir. 1996) (automatic-stay-related interpretations; timing considerations)