Francis v. Scorpion Group, LLC (In re Francis)
489 B.R. 262
| Bankr. N.D. Ga. | 2013Background
- Scorpion purchased the Tax Sale Property at 2298 Lancer Rd. for $9,500 to satisfy 2010 taxes; Wells Fargo held a $155k security deed but released it before filing.
- The Debtor owned the Property, which was rental property with estimated equity around $40,700.
- Redemption price to redeem the Property was $14,382.19 as of petition, increasing over time.
- Debtor received a Barment Notice (Sept. 18, 2012 expiration) and filed Chapter 13 on Sept. 17, 2012 proposing to pay redemption in full over 60 months.
- Relief from Stay was granted (property not in estate due to lack of equity) and later re-imposed Stay after Wells Fargo released the security deed.
- Debtor ultimately sought to pay the redemption price directly from the estate and to determine Scorpion’s secured status; the Court classified Scorpion’s interest as a secured claim/property of the estate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Scorpion holds a claim and is secured against the Debtor’s estate | Scorpion holds title; no estate property | Rights and interest remain with Debtor; not estate | Scorpion holds a secured claim in the estate |
| Whether the Debtor’s redemption rights are property of the estate | Redemption rights belong to Scorpion via tax sale | Rights are property of the Debtor or non-estate | Debtor’s equitable redemption rights are property of the estate |
| Whether Scorpion’s claim can be treated under 1322 in Chapter 13 | Yes, as a secured claim to be paid through plan | Plan cannot modify non-claim interests | Scorpion’s claim is treatable under 1322 in Chapter 13 |
| Relation of §108(b) redemption period to bankruptcy plan | 108(b) extension should allow lump sum | 108(b) extension does not negate bankruptcy rights | Plan payment under §1322 allowed; 108(b) period not extended by plan absent confirmation |
| Impact of non-residence and Georgia tax-sale procedures on treatment | Tax sale framework governs redemption | Bankruptcy framework governs treatment | Georgia tax-sale process analyzed; redemption treated via 1322 plan |
Key Cases Cited
- Pennsylvania Dept. of Pub. Welfare v. Davenport, 495 U.S. 552 (1990) (defined breadth of 'claim' and coextensivity with 'debt')
- Johnson v. Home State Bank, 501 U.S. 78 (1991) (lien creates a claim; surviving mortgage interest is a claim)
- In re Bates, 270 B.R. 455 (2001) (section 108(b) extends nonbankruptcy rights; claim can be treated in 13)
- In re Drummer, 457 B.R. 912 (2011) (addressed barment context; not personal residence")
- In re Krawczyk, 201 B.R. 589 (1996) (Georgia tax-sale context; nonresidential property distin)