Woolsey v. Citibank, N.A.
696 F.3d 1266
| 10th Cir. | 2012Background
- Woolseys filed Chapter 13 plan to void Citibank’s lien because collateral has no current value exceeding debt.
- Bankruptcy court rejected the initial plan; district court affirmed the rejection on interlocutory appeal.
- Woolseys appealed to this court despite an anticipated continued litigation; plan amendments followed, bringing proceedings toward a final order.
- Circuit addressed whether it has jurisdiction to hear an interlocutory appeal of an interlocutory appeal and the merits of lien-voiding under §506(d).
- Supreme Court precedent, especially Dewsnup v. Timbs, governs whether a lien may be stripped when value is lacking in Chapter 13.
- Court ultimately affirms the bankruptcy court’s decision to refuse lien removal, applying Dewsnup and not extending §506(d) in Chapter 13.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction to hear an interlocutory appeal | Woolseys contend the panel lacks power to hear an interlocutory appeal of a district court’s order on a bankruptcy matter. | Citibank and lower courts rely on §158(d)(2)(A) to allow direct appeal from bankruptcy orders. | Court holds jurisdiction to reach merits notwithstanding complexities. |
| Whether §506(d) permits voiding Citibank’s lien in Chapter 13 | Woolseys argue lien is not “secured” in value and should be voided under §506(d). | Citibank argues the lien is an “allowed secured claim” under Dewsnup and cannot be stripped. | Dewsnup controls; lien cannot be stripped under §506(d) in Chapter 13. |
| Role of §1322(b)(2) to strip wholly unsecured lien | §1322(b)(2) could permit stripping a wholly unsecured lien in Chapter 13. | Woolseys did not pursue §1322(b)(2); court declines to decide this question here. | Not reached; court declines to decide §1322(b)(2) argument in this case. |
| Applicability of Dewsnup to Chapter 13 vs other Chapters | Dewsnup’s reasoning should adapt to Chapter 13's rehabilitative context. | Dewsnup applies as controlling law for §506(d); extending its meaning would be improper. | Dewsnup remains controlling; do not reinterpret §506(d) for Chapter 13. |
Key Cases Cited
- Interwest Bank v. U.S. Tr. (In re Interwest Bus. Equip., Inc.), 23 F.3d 311 (10th Cir. 1994) (finality of amended plan supports appellate jurisdiction)
- FirsTier Mortgage Co. v. Investors Mortgage Insurance Co., 498 U.S. 269 (Supreme Court 1991) (premature notices of appeal; limits under Rule 4(a)(2))
- Dewsnup v. Timbers, 502 U.S. 410 (Supreme Court 1992) (§506(d) lien-voiding depends on ‘secured claim’ defined by Dewsnup)
- Nobelman v. American Savings Bank, 508 U.S. 324 (Supreme Court 1993) (clarifies secured claim vs value in collateral for Chapter 13)
- Clark v. Martinez, 543 U.S. 371 (Supreme Court 2005) (one meaning of a statutory term must govern all applications)
- Hinton v. City of Elwood, 997 F.2d 774 (10th Cir. 1993) (premature notice of appeal valid if order likely to remain unchanged)
- In re Lane, 280 F.3d 663 (6th Cir. 2002) (lien stripping in Chapter 13 via §1322(b)(2) approach)