Michael James Fisette v. Jasmine Z. Keller
695 F.3d 803
8th Cir.2012Background
- Fisette filed a Chapter 13 plan to strip off second and third residential liens; bankruptcy court refused.
- BAP reversed, allowing lien-stripping of wholly unsecured junior liens when the homestead value is less than senior debt, and remanded for plan compliance issues.
- Trustee appeals, joined by amici curiae Minnesota Bankers Association and TCF National Bank.
- BAP held Chapter 20 debtor may strip off liens and that junior lienholders may be treated as unsecured nonpriority claims on remand.
- BAP, six days after initial brief, revised its opinion removing the third issue and remand directive; the reviewing court later held the order non-final and dismissed the appeal for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Chapter 13 allows stripping off wholly unsecured junior liens on a homestead. | Fisette | Trustee | BAP's ruling on lien-stripping was not affirmed; appeal dismissed for lack of jurisdiction |
| Whether Chapter 20 debtors may strip off liens when discharge is unavailable. | Fisette | Trustee | BAP held it permissible; but jurisdictional dismissal follows |
| Whether junior lienholders may share in unsecured distributions on remand. | Fisette | Trustee | BAP instruction to treat as unsecured claims remanded; final disposition deferred; jurisdictional dismissal remains |
Key Cases Cited
- In re Zimmer, 313 F.3d 1220 (9th Cir. 2002) (unsecured lien treatment under Chapter 13)
- In re Lane, 280 F.3d 663 (6th Cir. 2002) (lien-stripping implications in residential liens)
- In re Pond, 252 F.3d 122 (2d Cir. 2001) (liens and Chapter 13 treatment considerations)
- In re Tanner, 217 F.3d 1357 (11th Cir. 2000) (interplay of §506 and anti-modification)
- In re Bartee, 212 F.3d 277 (5th Cir. 2000) (lien-stripping standards in circuits)
- In re McDonald, 205 F.3d 606 (3d Cir. 2000) (lien-stripping and unsecured claims discussion)
- In re Millard, 404 F. App’x 804 (4th Cir. 2010) (unpublished; related lien treatment)
- In re Griffey, 335 B.R. 166 (BAP 10th Cir. 2005) (lien-stripping and unsecured treatment)
- In re Mann, 249 B.R. 831 (BAP 1st Cir. 2000) (preference for certain lien-treatment outcomes)
- Assocs. Commercial Corp. v. Rash, 520 U.S. 953 (1997) (relevance to Chapter 13 discharge and lien treatment)
- Nobelman v. Am. Sav. Bank, 508 U.S. 324 (1993) (anti-modification provision protecting entire junior claim when partially secured)