Pees v. CitiMortgage, Inc. (In re Crum)
479 B.R. 734
Bankr. S.D. Ohio2012Background
- Debtors Crum filed Chapter 13 with plan providing surrender of the residence at 32185 Cobb-Harriman Rd to CitiMortgage and treatment of any deficiency as unsecured.
- Plan states property of the estate does not vest in Debtors on confirmation but remains estate property until dismissal, conversion, or discharge.
- CitiMortgage held a first mortgage on the Property; its proof of claim post-confirmation asserted a secured claim of about $122k.
- Stay relief was granted for in rem foreclosure; Debtors objected to in personam relief and asserted the plan would allow CitiMortgage to pursue the lien or liquidate with unsecured treatment.
- Foreclosure action in state court was filed; Property ultimately sold and sale proceeds held pending this adversary proceeding.
- Trustee seeks a declaration that the Property remains estate property and/or to avoid CitiMortgage’s lien for the benefit of the estate; CitiMortgage and Trustee move for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does surrender under a confirmed Chapter 13 plan remove property from the estate? | Pees argues property remains estate property despite surrender. | CitiMortgage contends surrender plus confirmation extinguishes the estate's interest. | Court declines to decide complete removal; moot because modification of plan not available. |
| May the Trustee modify the confirmed plan post-confirmation to alter CitiMortgage's secured claim? | Trustee seeks to pursue lien avoidance and modify treatment for estate benefit. | CitiMortgage argues res judicata/judicial estoppel prevent modification after confirmation. | Modification not available; both motions denied as moot due to preclusive estoppel principles. |
| Do judicial estoppel or res judicata bar the Trustee from pursuing lien avoidance post-confirmation? | Trustee had not previously disputed CitiMortgage's lien and property remained estate. | CitiMortgage relies on confirmed plan and earlier actions to show inconsistent positions. | Judicial estoppel (and, alternatively, res judicata) bars the Trustee from pursuing avoidance or modification. |
Key Cases Cited
- In re Adkins, 425 F.3d 296 (6th Cir. 2005) (plan confirmation binds creditors; res judicata considerations apply)
- In re Storey, 392 B.R. 266 (6th Cir. BAP 2008) (1327 precludes modifying a confirmed plan for issues decided or knowable at confirmation)
- In re Layo, 460 F.3d 289 (2d Cir. 2006) (confirmation order res judicata; trustee cannot avoid lien post-confirmation)
- Countrywide Home Loans v. Dickson (In re Dickson), 655 F.3d 585 (6th Cir. 2011) (analysis of lien challenges post-confirmation and standing of debtor/trustee)