In Re Pierre
468 B.R. 419
Bankr. M.D. Fla.2012Background
- Debtor Senayda Pierre and non-debtor spouse Maurice Pierre own investment property as tenants by the entirety encumbered by CitiMortgage.
- Pierre files a Chapter 13 to value/strip down CitiMortgage’s lien; Maurice Pierre is not a debtor in this case and recently discharged in a separate Chapter 7.
- Issue presented: whether a sole TBE co-owner can strip down or strip off a partially unsecured lien in Chapter 13 when the other co-owner is not a debtor.
- Property value subject to CitiMortgage’s lien is disputed; Pierre asserts value around $77,000, CitiMortgage contends value may be higher but not exceed loan balance.
- Maurice Pierre’s Chapter 7 discharge creates a potential barrier: §1328(f) generally prevents another discharge within the look-back period, affecting ability to strip.
- Court holds that a prerequisite to lien modification under §1322(b)(2) is that both co-owner spouses must be debtors in the same Chapter 13 and each must be eligible for a Chapter 13 discharge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can one spouse in TBE property strip a lien when the other spouse is not a debtor? | Pierre argues lien strip is permissible against jointly owned property. | CitiMortgage contends TBE ownership requires joint action; non-debtor spouse cannot participate in discharge-related modification. | No; both co-owners must be debtors in a single Chapter 13 and receive a discharge. |
| If one co-owner cannot obtain a Chapter 13 discharge, can either strip the lien anyway? | Pierre would benefit from lien modification even without the other’s discharge status. | CitiMortgage relies on §1328(f) and case law restricting modifications where discharge is unavailable. | No; because Maurice cannot obtain a Chapter 13 discharge, neither party may strip/down CitiMortgage’s lien. |
Key Cases Cited
- In re Hunter, 284 B.R. 806 (Bankr.E.D.Va. 2002) (TBE co-owners must both be debtors to allow lien modification)
- In re Erdmann, 446 B.R. 861 (Bankr.N.D.Ill. 2011) (co-debtors must both be eligible; Chapter 20 modifications barred)
- In re Sadala, 294 B.R. 185 (Bankr. N.D. ) (creditor protection when discharge timing affects lien modification)
- In re Strausbough, 426 B.R. 243 (Bankr.E.D.Mich. 2010) (self-executing §506 strip not allowed without discharge)
- In re Gerardin, 447 B.R. 342 (Bankr.S.D.Fla. 2011) (en banc treatment of cramdown related to discharge necessity)
- Beal Bank, SSB v. Almand & Assoc., 780 So.2d 45 (Fla. 2001) (state law about ownership and dispositions of entireties property)
- Hunt v. Covington, 200 So. 76 (Fla. 1941) (early Florida treatment of entireties and joint action required)