State Bank of Florence v. Miller (In Re Miller), 513 F. App'x 566

Bank of Florence foreclosed Wisconsin mortgage and Michigan properties securing Miller’s debt and sought stay relief in bankruptcy court.
Miller filed Chapter 13 in Wisconsin, then moved to Michigan; automatic stay affected Michigan foreclosure timing and redemption periods.
Michigan sheriff’s sale credit bid by the Bank extinguished Miller’s entire debt, with bid equal to total owed ($413,560.27).
Redemption periods ran, proceeds and surplus handling allegedly favored Miller but Bank did not apply surplus to reduce Miller’s debt.
Bank sought relief from stay and to contest Miller’s third amended Chapter 13 plan; bankruptcy court ruled debt extinguished, stay lifted only to dismiss Wisconsin judgment with prejudice.
BAP affirmed, Bank appealed asserting issues on claim objection, choice of law, and stay relief; this court affirming as to those rulings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Miller’s failure to object to the Bank’s claim fatal?	Miller failed to object; claim should be deemed allowed.	Kontrick applies; Bank’s claim objections were preserved by later filings.	No reversible error; Kontrick used to preserve merits despite delay.
Which state’s law governs the effect of the Michigan credit bid?	Wisconsin law controls due to notes’ Wisconsin law clause.	Michigan law governs foreclosure by advertisement for Michigan property.	Michigan law governs; overbid extinguished entire debt under either Michigan or Wisconsin law.
Is the Bank entitled to relief from the automatic stay?	Bank seeks stay relief for enforcement of Wisconsin judgment.	Overbid extinguished the debt; no need for stay relief to pursue nonexistent claim.	Bank not entitled to stay relief beyond dismissal of Wisconsin judgment; stay lifted for dismissal with prejudice.
Did the Bank have standing to object post-extinguishment of debt?	Overbid left no debt; objection moot.	Bank maintained some interest via setoff against Wisconsin judgment.	Bank lacked enforceable debt; standing to object resolved by extinguishment and setoff finding.

Kontrick v. Ryan, 540 U.S. 443 (U.S. 2004) (timeliness rules cannot override merits if party forfeits timely objection)
Pulleyblank v. Cape, 446 N.W.2d 345 (Mich. Ct. App. 1989) (overbid extinguishes debt under Michigan foreclosure by advertisement)
Wilson v. Craite, 210 N.W.2d 700 (Wis. 1973) (unilateral overbid bears consequences; underbids may be relief-worthy)
Horicon State Bank v. Kant Lumber Co., 478 N.W.2d 26 (Wis. Ct. App. 1991) (Wisconsin equity applies to underbids; overbids enforce bidder’s own risk)
Bank of New York v. Mills, 678 N.W.2d 332 (Wis. Ct. App. 2004) (equitable considerations limited when foreclosure sale overbid occurs)
Chrysler Capital Realty, Inc. v. Grella, 942 F.2d 160 (2d Cir. 1991) (federal court applied Michigan law to mortgagee overbid effects)
In re Jafari, 569 F.3d 644 (7th Cir. 2009) (circuit split on choice-of-law rules; not resolved here)