In re Metzler
530 B.R. 894
Bankr. M.D. Fla.2015Background
- Two related bankruptcy matters: In re Metzler (chapter 13) and In re Patel (chapter 7), both involving mortgage foreclosure actions by Wells Fargo (later U.S. Bank in Patel).
- Metzler confirmed a third amended chapter 13 plan that expressly surrendered her homestead; after confirmation she actively defended the pending state-court foreclosure.
- Patel did not list the West Grace Street property on her chapter 7 schedules or file a §521 statement of intentions because she believed she did not own the property; she received a discharge and the case closed.
- After discharge, Patel’s state-court foreclosure was defended by counsel (without her authorization according to Patel), including filing answers, affirmative defenses, and a summary-judgment motion.
- Wells Fargo/U.S. Bank sought relief in bankruptcy: in Metzler to revoke confirmation for inconsistent conduct; in Patel to reopen the case and compel surrender because Patel neither reaffirmed nor redeemed the debt.
- The core factual commonality: both debtors took affirmative steps in state court opposing foreclosure despite plan/schedule positions that amounted to surrender (or non-administration) of the collateral.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What does “surrender” mean under §§ 521/1325? | Creditor: surrender requires relinquishment of rights and making collateral available. | Debtor (Metzler): surrender means lifting the stay / making collateral available; does not bar defending on state-law grounds. | Court: “Surrender” requires relinquishing rights and refraining from overt acts that impede foreclosure. |
| Did Metzler/Patel surrender their property despite defending foreclosure? | Creditor: affirmative defenses and motions to block foreclosure are inconsistent with surrender. | Metzler: confirming plan surrendered property; she can still litigate state-law defenses; Patel: counsel acted without her consent. | Court: Both debtors failed to surrender because they took overt acts opposing foreclosure; relief granted (revocation/compel surrender). |
Key Cases Cited
- In re Pratt, 462 F.3d 14 (1st Cir. 2006) (defines surrender as making collateral available; debtor must cede possessory rights)
- In re White, 487 F.3d 199 (4th Cir. 2007) (surrender means relinquishment of all rights in collateral, including possession)
- Taylor v. AGE Fed. Credit Union (In re Taylor), 3 F.3d 1512 (11th Cir. 1993) (no ‘‘ride-through’’ option; debtor cannot retain collateral without reaffirmation or redemption)
- In re Plummer, 513 B.R. 135 (Bankr. M.D. Fla. 2014) (discusses limits of "surrender" and rejects requirement of physical delivery)