*1 misappropriation trade se- claim for
crets. MANSARAY- Janica
RUFFIN, Debtor. Capital,
SLW LLC
v. Mansaray-Ruffin;
Janica William Miller, Mansaray-
C. Janica
Ruffin, Appellant.
No. 05-4790. Appeals,
United States Court of
Third Circuit.
Argued Dec.
Filed: June *2 Scholl, Act Region- Truth-in-Lending of violations Esq., [Argued], A. David seq., et (“TILA”), 15 U.S.C. con- Bankruptcy Center of Southeastern al PA, with the initial execution of the Square, Coun- nection Pennsylvania, Newtown mortgage. Mansa- Counsel clear in the let- Debtor-Appellant Janica made sel for *3 that, violations, based on Mansa- ter these ray-Ruffin. ray-Ruffin asserting right was “a to re- Banks, Banks Esq., [Argued], B. David transaction, to 15 pursuant scind the Banks, PA, Philadelphia, Counsel for & TILA, hereby § 1635 of she U.S.C. which CAPITAL, LLC. Plaintiff-Appellee SLW (App.30-31.) ap- It does not exercises.” that EMC to this GREENBERG, pear responded ever RENDELL, Before: n ANTWERPEN, letter. Judges. and VAN Circuit 13, 2002, August On OPINION OF THE COURT voluntary filed a Chapter RENDELL, Judge. Circuit reorganization and a petition Chapter 13 Bankruptcy plan with the United States appeal requires us to determine This Pennsyl- Court for the Eastern District of whether the debtor in a 13 bank- schedules, and, vania in the accompanying a lien ruptcy successfully case invalidated disputed listed EMC as secured creditor. providing her for as on included following regarding The plan, claim in unsecured her EMC: initiating without by the of Bank- required Federal Rules addition, the Debtors shall file adver-
ruptcy agree Procedure. We sary proceedings seeking to rescind lienholder, as well as with the part otherwise avoid in whole or in Court, and the District Court claims mort- arising secured from the question According- answer to is no. against gagee held her residential real- ] ly, we will AFFIRM. However, ty by EMC.... the Debtor anticipate does on the making payments
I. larger directly of first these loans of protect EMC outside the Plan to her 26, 1996, November Mansa- On Janica proceed- interests that the event $25,600 ray-Ruffin borrowed from United (“Unit- ings entirely are successful. Companies Lending Corporation ed”) and, loan, as collateral for that execut- Debtor.) (Original Chapter 13 Plan On of mortgage against ed a of favor United 31, 2002, August mailed notice EMC was primary Girard residence—5101 West Mansaray-Ruffin’s including the plan, Avenue, Philadelphia, PA The filing claim. EMC proof deadline mortgage was a first lien recorded as proof did not file a before of claim—either against later as- property. United or after December 2002 bar date. mortgage signed Mortgage to EMC February 2003, Mansaray-Ruffin On (“EMC”), and, in- Corporation after the copy filed an amended of which she filed, appeal assigned stant day had mailed EMC the before. (“SLW”), mortgage Capital, to SLW LLC plan replaced above-quoted amended making the proper appellee. SLW with the language following: February 2002, Mansaray-Ruf- On EMC, planned a further fin’s counsel sent claim- The Debtor to file letter adversary in whole ing that United had committed a number to avoid by filing “Complaint to Determine allegedly the secured claim Court part or in mortgage the first held arising from Secured Status Pursuant realty by [EMC]. § her residential sought 506.” EMC a determination proof not filed a EMC has that, However under Federal Rule of in this case. The claim 7001(2), only Procedure a lien could proof file a will therefore Debtor through adversary proceed- invalidated on behalf in the amount of claim $1000 that, therefore, mortgage con- EMC, will resort to an tinued unaffected confirmation. only in the proceeding against EMC Mansaray-Ruffin countered with a motion successfully that EMC amends event dismiss, contending that the confirmed *4 larger or a that claim and asserts Bankruptcy was final under the Code Debtor has been secured claim. The and that EMC had.to live with the conse- regular mortgage payments the paying quences objecting of not to her treatment in outside of the the event to EMC of its claim. challenge of the claim of EMC her 2004, 6,May Bankruptcy On the Court entirely successful. How- would not be Mansaray-Ruffin’s denied motion to dis- ever, in upon plan, confirmation of this miss, concluding that “neither the Debtor’s which the claim of EMC will be fixed as claim, EMC, proof of filed on behalf of nor in an unsecured claim the amount of plan, the Debtor’s amended nor both taken unless it is to this able $1000 together, are sufficient to avoid EMC’s claim, pay- making the Debtor will cease 6, 2004, July (App.2.) lien.” On the Court EMC, obliged and EMC will be ments up followed its denial of the motion to satisfy mortgage against the Debt- by issuing dismiss an order that “EMC upon discharge or’s home of its debt shall retain its first mortgage lien on the as filed or allowed. ..., Debtor’s residence that said mortgage (App.34.) day, Mansaray-Ruffin That same shall be unaffected con- Debtor’s of claim on proof filed unsecured behalf Reorganization firmed Plan of and that $1,000, amount of of EMC the mortgage pass through said shall following notation: “ALLEGED MORT- bankruptcy unaffected to the full extent of (App.32.)1 GAGE-RESCINDED.” outstanding balance due in con- EMC Neither EMC nor other creditor underlying mortgage nection with the objections plan, filed and it was (App.4.) loan.” 25, Thereafter, confirmed on March 2003. 26, 2005, September On the District however, EMC continued send Mansa- Bankruptcy affirmed the Court’s or- Court statements, ray-Ruffin billing as if the explanation. der without plan’s confirmation had no effect on the mortgage. Mansaray-Ruffin sent EMC II. letters, that, explaining position
two under the terms of the she now owed juris Bankruptcy Court had (not $1,000 unsecured debt 1334, § pursuant diction to 28 U.S.C. $40,000 approximately mortgage-backed jurisdiction pursuant District had Court asserting). balance EMC was 158(a), § juris and we now have 158(d) pursuant an diction 28 U.S.C. December EMC commenced both Bankruptcy conducting and 28 U.S.C. 1291. our argue Although proof timely, it notes in its brief that the SLW does not this should by Mansaray-Ruffin of claim filed was un- factor into our decision. apply. See Fed. R. Bankr.P. 7001- standards as the dures review, the same we use Many derive in Voyages procedures of these In re Am. Classic District Court. (3d Cir.2005). Rules of Co., part whole or in from the Federal Procedure, adversary pro- case are Therefore, giving the issues since Civil nature, ceeding trappings review the decision all the of traditional civ- legal de novo. Id. Bankruptcy litigation. example, Court il For Federal Rule of
Bankruptcy
adopts
Procedure 7003
whole-
III.
sale Federal Rule of Civil Procedure 3 and
filing
complaint
requires
thus
A.
proceeding.
commence
appli-
a discussion of the
begin with
We
Fed-
Adopting
modifying portions
in-
procedure
governing
cable law
Rule of Civil Procedure
Federal
eral
bankruptcy. The Unit-
validating liens in
Rule of
Procedure 7004 re-
prescribes
Court
rules
Supreme
ed States
quires the service of a summons and a
procedure for
practice
complaint.
Federal Rule of
copy of
are
2075. The rules
cases. 28 U.S.C.
provides
Procedure 7012
*5
modify any
“abridge, enlarge, or
not to
days
has 30
to file an an-
the defendant
Pursuant
to this
right.”
substantive
after the issuance of the summons
swer
promulgated
has
authority, the Court
Rule of
Proce-
and makes Federal
Civil
Bankruptcy Procedure.
Federal Rules of
12(b)-(h)
in
applicable
entirety,
dure
12(b)
alia, all
allowing,
thus
inter
of the
Rule of
Procedure
Federal
defenses,
for a
definite
motions
more
may only
7001 sets forth matters
statement,
judgments
plead-
and
on the
“adversary proceed-
through an
resolved
Moreover,
ings.
ing,” including the determination
for
parties
opportunity
offers the
the same
priority, or extent of a lien or
“validity,
discovery
litigation,
civil
as traditional
R.
property.”
other
interest
Fed.
7001(2).2
regarding voluntary and involun-
the rules
adversary proceed-
An
Bankr.P.
dismissals,
tary
judgments,
default
essentially a self-contained trial—
summary judgment are identical as well.
original bankruptcy
within the
case-
still
7026-7037, 7041,
Fed. R. Bankr.P.
panoply
proce-
in which a
of additional
See
(5)
proceeding
provides
entirety:
a
to revoke an order of con-
2. Rule 7001
in its
11,
12,
chapter
chapter
a
or
firmation of
governed by
adversary proceeding is
An
chapter
plan;
13
following are
rules of this Part VII. The
(6)
proceeding
a
to determine
the dis-
adversary proceedings:
debt;
chargeability
aof
(1)
proceeding
money
prop-
a
to recover
or
(7)
injunction
proceeding
a
to obtain an
or
erty,
proceeding
compel the
other than a
relief,
equitable
except
chap-
when a
other
trustee,
debtor to deliver
to the
or
9,
12,
11,
chapter
chapter
chapter
ter
or
554(b)
proceeding
§
a
under
or
725 of
relief;
plan provides for the
Code,
2017,
6002;
Rule
or Rule
(8)
any
proceeding
a
to subordinate
al-
(2)
validity,
proceeding
a
to determine the
interest, except
claim or
when a
lowed
priority, or extent of a lien or other interest
12,
9,
11,
chap-
chapter
chapter
chapter
or
proceeding
property,
subordination;
other than a
under
plan provides
ter 13
4003(d);
Rule
(9)
declaratory
proceeding
a
to obtain a
(3)
approval
proceeding
to obtain
under
judgment
relating
foregoing;
363(h)
for the sale of both
interest of
or
property;
(10)
the estate and of a co-owner in
proceeding
to determine a claim or
(4)
to or revoke
of action removed under 28 U.S.C.
cause
discharge;
26-37, 41,
liens,
cial status to
(making
allowing
pass
Fed.R.Civ.P.
them to
7055-7056
adversary pro-
applicable
See,
through bankruptcy
and 55-56
e.g.,
unaffected.
ceedings).
Bullard,
617, 620-21,
Long v.
117 U.S.
(1886).
S.Ct.
Next, Mansaray-Ruffin
in a
a lien—
provision
treat
can invalidate
in her confirmed
provision
run
the Rules but not
operated
unsecured
which would
afoul of
claim as
ing EMC’s
lien. She re
mortgage
any specific provision of the Code itself—
invalidate EMC’s
permitted liens
that have
and have ruled that
this “substantive
lies on cases
§
506
pursuant
provision”
catch-all
does not leave courts
“stripped,”
Code,
plan.
of a
through the confirmation
disregard
McKay,
the Rules.
732
free
Bennett,
See,
B.R. 843
e.g., In re
McKay,
F.2d at 48. In
two debtors filed
Dickey,
(Bankr.W.D.Ky.2004); In re
bankruptcy plans, both of
Chapter 13
(Bankr.M.D.Pa.2003); In re Hud
B.R. 360
provided that “Debtor avoids liens
which
(Bankr.W.D.Mich.2001);
son,
522(f).”
B.R. 421
avoidable under
(Bankr.D.N.J.
B.R. 98
Wolf,
522(f),
at 45. Section
which is not
issue
1993).
Mansaray-Ruf
problem
with
here,
certain
allows for the avoidance of
cases is that
fin’s reliance on these
advantage
exemptions.
to take
liens
stripping”
“lien
is related to
concept of
Pennsylvania’s Department of Public Wel-
collateral,
validity
a
not the
valuation of
(“DPW”),
debtors,
fare
creditor of both
lien, and,
acknowledged
she has
her
objected
to the confirmation of each
challenges
she
argument,
brief and at oral
522(f)
arguing that
lien avoidance could
itself,
validity
the lien
not the valua
through
achieved
the confirmation
not be
securing
collateral
it. There
tion of the
process because it involved the determina-
fore,
on
bearing
these cases have no
“validity,
priority,
tion of the
or extent of
Mansaray-Ruffin could invalidate
whether
thus fell
now Rule
lien” and
under what is
by using
to that
EMC’s lien
7001(2).
Id. at 46. The
court
effect
plans, notwithstanding
confirmed both
objection.
appeal,
agreed
On
Mansaray-Ruffin also cites
number
reversed, “holding]
that where
DPW
successfully
fixed
cases which
debtor
judicial
a debtor seeks to avoid a
lien
at an
the amount of a secured claim
522(f),
adver-
by pursuant to U.S.C.
amount less than the creditor asserted
*7
sary
by the
proceedings
adopted
amount in her
rules
providing for such lesser
(3d Bankruptcy
apply, and that the debt-
plan.
Fesq,
See In re
It is 3015(f). 9014. Fed. R. Bankr.P. Contest- liti- only through to occur lien invalidation are ed matters more informal than adver- gation in -an —and sary proceedings, by are initiated motion a in a through not —for (not and, by a complaint), unless the court of a lien on'the invalidation , otherwise, is a do by specific require respon- debtor held a creditor directs not a (cid:127) consequence, particularly great pleading. 9014; matter of sive Fed. R. Bankr.P. In applicable legal principles Assocs., in terms of the re Indian Palms Cir.1995). practical (3d result. As discussed and the n. 11 above, adversary proceeding provides procedural “greater
the lienholder with also contends Tenn. Student Assistance protection,” by object failing to the plan after Hood, 440, 451, 124 v. 541 U.S. S.Ct. Corp. mail, a receiving copy of (2004), requiring L.Ed.2d 764 a right challenge plan’s waived its summons, providing for an complaint and a invalidation of its lien. While there is discovery, generally con- answer argument, visceral appeal it does dispositive trial a cluding only after scrutiny. not withstand order for us to motion. Mansaray-Ruffin’s position, credit we would have to find that EMC’s failure to contrast, the Rules establish less constituted a somehow waiver of exacting requirements for the confirmation procedural Rule 7001 and all of the protec a en bankruptcy plan, of a which 7002-7087). (i.e., go tions that itwith Rules virtually procedural tails none of the safe This, By way cannot analogy, do. guards adversary proceeding. of an Un plaintiff attempt were “commence” der Federal Rule of Procedure litigation filing civil motion with the interest,” including “parties credi mailing copy district court and of it to tors, must receive notice mail at least defendant, and the defendant were days filing before the deadline for both fail to file a pleading response, we sure objections and the date of the ly uphold entry would of default required hearing. Crucially, *8 judgment plaintiff. on behalf of the In require not the fil plan confirmation does situation, plaintiff that the has the affirma complaint of a or the service of a duty complaint tive to file a and to serve a Moreover, Chapter summons. in the 13 a copy complaint summons with of the on context, the notice sent need not even in the defendant. See Fed.R.Civ.P. 3-4. copy proposed plan; clude a full duty negated by is not lessened or This the rather, summary, plan a can suffice. 3015(d). Similarly, inaction. Therefore, defendant’s EMC’s Fed. R. Bankr.P. as plan failure to did not do Appeals of for the the United States Court away Mansaray-Ruffin’s duty file a it, recently put Tenth Circuit complaint pursuant and serve EMC require specific plan not notice of a “does 7001, 7003, creditor, Rules and 7004. EMC had the provision’s particular effect on legal right nothing upon to do and insist require nor does it notice to be served 238 final, plan and a com- not feel that the was and that with a summons
being served unjust invalidated. it would be and unfair to those for its lien be plairit order accepted upon had and acted a re- who only issue that remains The organization plan if the court were whether, Mansaray-Ruffin’s plan reopen plan thereafter the and as invalid has been treating EMC’s lien change the conditions which constituted confirmed, final it be deemed should acceptance. the basis of its earlier notwithstanding failure to controlling (internal Szostek, at quota- 1409 follow the Rules. omitted). tion marks that provide Code does The Szostek, However, in the secured credi- binding. plan terms of a confirmed are the argued plan provision setting tor that the Szostek, § 11 In In re we U.S.C. 1327.6 forth the amount to it which was entitled that, § a confir- explained “[u]nder Code, 11 namely, violated the judicata res as to all issues mation order is 1325(a)(5), provision because the failed or which could have been decided decided require payment of interest neces- hearing on confirmation.” F.2d at the 886 sary for the secured creditor to receive the Cir.1989). (3d case, 1405, 1408 that present of value the claim. We examined sought the of secured creditor revocation provision whether this Code was mandato- Chapter plan the debtor’s confirmed ry, stating that provisions of “[i]f plan provide because the failed to for the 1325(a)(5) mandatory, are credi- [the recovery present full of value of its contends, then a cannot be con- tor] debtor, finding'for claim. we in-' require- firmed if it not does meet voked 1327 and the “well settled law ments of that at 1411. section.” Id. We at is final.” Id. concluded that this man- Quoting opinion from our in In 1408-10. datory. while Szostek Co., Transportation re Penn Central importance note finality, does (3d Cir.1985), F.2d emphasized recognizes finality policy must our view that: yield to the principle that a cannot purpose law and the a mandatory provision violate of the Code. - provisions reorganization could not hold that We realized if discharge of debtors mandatory Rule at here is absolute; issue and estab- complete were not that if right specific process provisions courts should relax lishes must law mandatory and facilitate the be afforded. Its nature is assertion of old claims grounded in against discharged reorganized principles of due debtors, Linkous, policy trump “finality.” of the law would be See In re (4th defeated; Cir.1993) (“[W]e par- that creditors would not cannot ticipate reorganization they could defer [a order confirmation] section, prop- 6. This Code titled “Effect Confir- confirmation of vests all of the mation,” provides: erty of the estate in the debtor. (a) (c) provisions Except provided of a confirmed bind as otherwise *9 creditor, the debtor and each whether or confirming plan, the or in the order provided the claim of such creditor is property vesting the in the debtor under by plan, the for and whether or not such (b) subsection of this section is free and to, objected accepted, creditor has has or any any clear of claim or interest of credi- rejected plan. has provided tor for (b) 'Except provided as otherwise 11 U.S.C. .confirming or the order
239
present
their ob-
opportunity
it
result
them an
grounds if would
judicata
on res
added));
314-15,
at
jections.” (emphasis
in violation of
id.
process
of due
in a denial
(“[I]f
regard
of the United States
with due
Fifth Amendment
We
confirmation,
years
Id.
after
Five
process grounds, explaining that “the fact
bankruptcy
discharge
court issued
order.
that a creditor knows of the initiation of
Id. When the debtor then received a state-
reorganization proceedings does not of it-
ment
from
creditor
still included
place
self
burden on the creditor to file
debt,
sought
the student loan
he
a declara-
appearance
proceeding
or claim in the
bankruptcy
tion from the
court that
receiving notice
do
Id.
before
so.” We
plan’s
disputed
treatment of the
unequivocally
went on to state
that “a
final.
debt was
Id. The
court
every right to
that he
creditor has
assume
agreed
with
debtor.
sent all the
to which he
will be
notices
is
entitled
the Act.” Id. at 115.
under
Appeals
The United States Court of
statutory
we made clear
there are
Circuit, however,
the Fourth
ruled in the
procedural requirements
directly
that bear
favor, finding
creditor’s
that the debtor’s
party
on the level of
due to a
failure to initiate an
proceed-
particular situation.
ing complete
the complaint,
sum-
—
A
appeals
number of our sister courts of
mons,
process required
and service of
concluded,
pro-
have
based on these due
Rules 7003
7004—overrode
1327’s
that,
principles,
despite
statutory
cess
finality provision.
Id. at 302-03. The
prescription
finality
any knowledge
explained:
agree
court
“We
have,
may
the creditor
a confirmed
generally
court confirmation order
af-
preclusive
has no
effect on issues that
preclusive
forded a
effect. But we cannot
adversary proceeding,
must be raised in an
if it
defer to such
order
would result
brought.
no such
has been
a denial of due
in violation of the
(4th
Banks,
241 id., of Ap- and the United States Court specify Rules and Code order, agreed, con- entry peals of an for the Seventh Circuit required prior notice party cluding entitles a that student loan creditors have generally process due process right an order due not “to act until the specified notice before receive the preclu- adversary for an party will afforded service of summons binding the be Id., quoted approval proceeding apprises prop- them their effect.” sive affected,” Servicing erty rights may Asset id. at 486-87. Baldwin v. Credit Based (8th Mullane, Securitization, 734, Invoking 737 Banks and it rea- 516 F.3d both & Cir.2008). recognize the “Although strong soned: finality policy favoring of confirmation or- (6th Ruehle, 679, 684 In In re ders, process due entitles creditors to the Cir.2005), discharge- another heightened provided by notice case, the United States by-declaration Rules, and the dic- Code for the Sixth Circuit Appeals Court process trump policy argu- tates due ruling that dis- followed Banks’s lead finality.” Id. at ments about 486. through pro- charging student loan debt plan, and without the in a confirmed vision implicate In a context that did not Rule by Rule adversary proceeding required Appeals States Court of United 7001(6), process the creditor’s due violates has for the Ninth Circuit also endorsed the that the creditor It did not matter rights. that, adversary proceed- notion where an process challenge did not raise its required, preclusive effect of a years plan’s after the confirma- until four order is limited. Ene- because, “[e]very explained, the court (9th Cir.2004). tion wally, 368 F.3d pre- entity is entitled to the person Enewally, a creditor held a hen on process of notice for the to be scribed level joint chapter owned 13 debt- only may thereafter the coercive due and and, though ors even Rule 7001 did not against government be used power it, the debtors filed an require (internal quota- them.” Id. at 684-85 creditor, seeking complaint omitted). Because the debtor tion marks modify the lien amount based on the value adversary proceed- failed to commence of the collateral. Id. at 1167-68. While the creditor with a summons ing and serve adversary proceeding pending, was discharge of the dis- complaint, and a court confirmed the debtor’s bankruptcy given debt in the could not be puted When, at in the still- Id. effect. Id. at 684-85. adversary proceeding, the creditor pending challenged later the debtors’ modification (7th Hanson, In In re lien, argued that of its the debtors Cir.2005), slightly differ- the court faced doing so. Id. precluded the creditor from There, the debtor’s did ent situation. Appeals at 1172. The for the Court discharge for the of his stu- provide disagreed on due Ninth Circuit debt, discharge order dent loan but the explained: grounds bankruptcy erroneously approved Here, during plan confirmation and in Banks and court did. Id. at 483-84. As 7001(6) modification, Ruehle, spe- court ignored and no Rule question at issue cifically initiated. reserved the adversary proceeding was ever it had been raised via an adver- years discharge after the Id. at 485. Six an issue must be order, sary proceeding. “[I]f the creditor filed motion through raised bankruptcy court to void it. motion, the confirmation part it is not granted court
and, actually litigated, right provisions confir- and neither did the unless it is preclusive not have a effect.” mation will Chapter Thus a 13 while clear, however, We wish to make adversary proceeding pending an that we do not hold that the failure to judicata effect on the
would not have res every adhere to Rule of Proce adversary proceeding. Rather, implicates process. dure due we Corp., Cen-Pen 58 (quoting Id. at 1173 that, only require hold where the Rules 93-94). F.3d at entails a —which fundamentally different, heightened, deprived it could of its Before be procedural protections' level of resolve —to lien, in its had property interest EMC issue, a a particular creditor has the due process to a level of right constitutional process right not to have that issue re to the nature of the “appropriate that was without solved one. This conclusion fits Mullane, at case.” See 339 U.S. comfortably precedents with the we have above, emphasized 652. As we our S.Ct. discussed from our circuit sister courts.8 regarding determination depends arguing in on the con In that particular policy case Code’s control, piece finality Mansaray-Ruffin text. A crucial of the context here is should binding Federal in opinion Fesq, the existence of Rule of relies on our (3d Cir.1998). directly point Procedure on F.3d 113 She maintains may only seeking nullify clear that a lien that makes because SLW is through proceed part invalidated central of the confirmed it is ing. procedural prescription effectively asking Just as us revoke the Bank- guided confirmation, us in determining ruptcy the statute Court’s order of which, according due to the creditor Harbor Fesq, impermissible 114-15, Storage, proce Tank 385 F.2d at absent fraud. at Id. Fesq, $70,000 prescription guides dural the Rules us creditor judgment held lien on here. Storage, Harbor Tank we found the debtor’s Id. at 114. home. The debt- that a process right Chapter creditor had the due or’s provided “to assume he be sent all the for full satisfaction of w[ould] the creditor’s se- notices to which he single payment entitled under cured claim with a [wa]s $7,050. the Act” before his claim could be barred. was confirmed without Similarly, objection Id. at 115. we now from conclude the creditor. Id. The credi- had process right EMC the due to tor then moved to revoke the confirmation that, order, assume unless blaming objec- com its failure to file an adversary proceeding required menced the a computer glitch tion on that caused its attorney the Rules and served it with a com think the deadline for summons, plaint filing objections and a its lien could not be was two months later than knowledge actually invalidated. Whatever actual was. Id. 114-15. We denied may regarding because, have had plan’s the creditor’s motion under 11 1330(a), treatment of its lien did not Chapter eliminate this U.S.C. a confirmed dissenting colleague pointed authority support 8. Our criticizes our fail- issue or provide guidance proposition long ure to as to whether EMC that nine months was too delayed long too months —after confir- should have barred EMC's claim. and/or —nine Banks, Hanson, Moreover, filing adversary proceeding. mation before and Ruehle all in- that, although Mansaray-Ruffin longer We note much com- volved inaction creditors for plains delay, periods of this she has not briefed this time after confirmation. that relief. I have reached this conclusion on account of only be revoked can though agree majority with the even emphasized at 120. We fraud. reorganization plan finality that her established “Congress fact that law,” dealing and included a with EMC’s goal of important mortgage adopted violation of the Rules holding was consis- that our explained *13 adversary pro- she did not file an 119-20. Id. at goal. with that tent avoid EMC’s lien. The basis ceeding to however, directly confronted never Fesq, notwithstanding that my for conclusion is adversary proceed- the issue of whether adequate had the Rules violation EMC Further, Fesq is dis- necessary. ing was of its lien and an impairment notice of the key in two our case tinguishable from object to adverse opportunity First, not simply, SLW is ways. quite and, accordingly, it re- treatment Bankruptcy of the seeking the revocation constitutionally required ceived the due Rather, it is confirmation order. Court’s it was entitled. There- which the confirmed asking us declare fore, Bankruptcy con- once the Court the lien that it now not invalidate plan did plan, firmed the the confirmation order Second, important- and even more holds. precluded it from obtain- bound EMC ly, not involve determination Fesq did ing post-confirmation relief in the adver- lien or validity of the creditor’s to the sary proceeding that we now consider. requires Rule 7001 matter for which other Rather, it in- adversary proceeding. Mansaray-Ruffin’s plan It is clear that of the fixing the of the amount volved adopted in violation included claim, which, modification like the secured 7001(2) Rule pro- the Rules. the comport with the value of of a claim to proceeding vides that “a to determine the lien-stripping cases dis- collateral validity, priority, or extent of a lien or above, as lien invali- cussed is not same in property” adversary other interest is an Thus, implicate does not Fesq dation. 7001(2). proceeding. Fed. R. Bankr.P. We that animate our de- concerns 7001(2) have determined that under Rule case, it not control in this does cision adversary proceed- initiate an debtor must regard- conclusion reasoning our or either McKay, ing to avoid lien. See us. ing the issues before (3d Cir.1984) (“[Wjhere a debt- judicial pursuant or seeks to avoid a hen IV. 522(f), adversary proceed- 11 U.S.C. conclude light foregoing, ings adopted rules held that properly that the District Court Mansaray-Ruffin did apply....”). Code passed not invalidated and EMC’s lien was not initiate Mansaray-Ruffin’s through but, instead, provided in avoid EMC’s lien AF- Accordingly, we will unaffected. claim would be fixed plan that EMC’s FIRM. $1,000 claim upon as an unsecured proceed- confirmation. Because the plan’s GREENBERG, Judge, Circuit approval of her did ings leading dissenting. 7001, if comply with Rule EMC had objected unsuccessfully to the confirmation clear that due I dissent because plan during the confirmation hear- respect to the elimi- of her process was met with from the confirma- notwithstanding appealed and then EMC’s lien nation of order, that I I have no doubt but of the Federal tion Mansaray-Ruffin’s violation to reverse the order to obtain have voted Bankruptcy Procedure would Rules of (a) proceed- provisions confirming plan. hearing creditor, could not at the confirmation bind the debtor and each
ings for an substitute whether or not the claim of such credi- challenge could which provided plan, tor is validity suggest the lien and do not object- not such whether or creditor has they could do so. to, accepted, rejected ed has or has EMC, course, confir- did not appeal from the
mation of the (b) Except provided as otherwise taking order. Instead of confirming or the order lien, protect opportunities those all the confirmation of a vests EMC, though on ade- quite inexplicably, *14 of the in the property estate debtor. being notice that its lien was elimi- quate (c) Except provided as otherwise in the nated, adoption in the face of the sat idle plan confirming plan, order the plan. Though recognize of the I that vesting the the debtor under attorney examining plan for the (b) subsection of this section is free and plan lawfully have that the might believed clear of claim or of any interest hen, adversely could not affect EMC’s provided creditor for the why attorney cannot understand the then uncomplicated not have taken the would 11 U.S.C. 1327. step objecting plan to the inasmuch as (3d Szostek, 1827(a) In In re provides pro- 11 U.S.C. that “the Cir.1989), we determined that under plan visions of a confirmed bind the debtor sec- all, experi- plan and each creditor.” After our tion 1327 a confirmed binds creditors attorneys ordinarily ence that plan Bankrupt- teaches us even when the the violates protect are careful to their clients’ inter- cy and provi- Code includes unauthorized attorney not ests and could be certain plan sions. In Szostek the filed a debtors 1327(a) light plan that the of section proposed payments ato secured cred- given preclusive would not be effect even interest, itor propose pay but did not respect to the elimination of EMC’s i.e., value, present on the claim. Id. at objecting, lien.9 But instead of almost 1406. The creditor in Szostek did not nine after confirmation months EMC filed timely object plan ap- to the and did not adversary proceeding leading the to this peal from the confirmation order. Id. at collaterally appeal seeking to attack the Instead, 1407-08. four months after con- Accordingly, confirmed plan. a situation firmation, the creditor mounted a post- any significant that should not raised have challenge confirmation plan, arguing to the procedural problems presents instead the the plan violated divisive issue of whether paying Code not value present Court’s confirmation order binds EMC and his claim. Though Id. the credi- collaterally precludes attacking EMC from respect tor was correct with Code though plan even violated the violation the court neverthe- Bankruptcy Rules. plan less found that the was not revocable. appeal, Id. On the district court reversed provides Code for the rul- binding plans. aspect effect of confirmed court’s Under Code: and vacated confirmation or- below, though Actually, point possible objecting as I out it is not to the even acting rationally perfectly that EMC was eliminated its lien. See n. 6. infra tunity object plan’s plain terms. to this appealed then Id. The debtors der. relating if to. [the debtor’s] Even issues Court. could not liability [the creditor] be under us was whether The issue before through plan confirma- finally resolved order bound the confirmation section contest, ... tion secured [the creditor] though the debtors’ even the creditor ignored process, value of the present for the provide not did opportunity-to and its to confir- by 11 U.S.C. required claim as creditor’s mation, peril. at its 1325(a)(5)(B)(ii). Significantly, (1st Fili, 257 B.R. Cir. recognized considering this issue we BAP2001). bankruptcy law and purpose reorganization could provisions stands for the rule that Szostek debtors discharge if the realized be that would not be confirmable due “plans absolute; that if complete were not appli- that do not conform to provisions of the law provisions relax courts should given cable law will nonetheless be effect of old claims facilitate the assertion objection prior entry is not raised reorganized discharged Bryant, order.” In re the confirmation debtors, of the law would policy (Bankr.E.D.Pa.2005). B.R. *15 defeated; par- would-not that creditors principle tempered only by consid- This they if could reorganization ticipate which, procedural process erations of due final, and that plan that the was not feel course, given concern the notice credi- unjust and unfair to those be would proceedings of the confirmation tors a re- upon and acted accepted who had opportunity their to the terms of if the court were organization the Fifth Amendment Under plan and reopen thereafter life, deprived ... person shall be “[n]o constituted the conditions which change process of liberty, property, without due acceptance. Const, of its earlier the basis The fun- law....” U.S. amend. V. requirements process of due are re Penn Central damental (quoting 1409 Id. at (3d 762, Co., opportunity respond. notice and an 771 F.2d 767 Transportation (3d Brown, 1252, Cir.1985)). 1262 that “if a Martin v. 63 F.3d further stated We Cir.1995). In Hanover Mullane v. Central bankruptcy proceed- ignores creditor Supreme Trust Court peril.” Id. at 1410 Bank & Co. ings, he does so at his 1118, “reasonably that notice must be cal- F.2d 1123 stated (citing Gregory, 705 circumstances, (9th Cir.1983)). culated, under all the “gener- also noted the We pendency apprise parties interested of the acceptance al rule” “the opportu- the action and afford them an can inferred a secured creditor be ” nity present objections.... their at 1413. We objection.” of an absence 306, 314, 652, 657, 94 L.Ed. ... was U.S. S.Ct. that “once the concluded (1950). confirmed, final under 1327 865 it became and, showing of fraud under absent a A with a secured claim has a creditor 1330(a), challenged ... it could not be entitled to interest and thus is present pay [the creditor] for failure to protection before the interest claim.” Id. value of its Bd. may impaired. See Mennonite another opinion citing 791, 795-800,
In an
Szostek
Adams, 462
Missions v.
U.S.
meaning perfectly:
2709-12,
forth its
court set
Linkous, here as the amended of which EMC complete had notice was less than two inescapable In this the conclusion is case pages length following and included the of due were requirements that the paragraph: prior impairment met of EMC’s lien notwithstanding Mansaray-Ruffin’s viola- planned The Debtor to file a fur- Rules in achieving tion of the ther proceeding to avoid relief from the lien. She mailed notice to or in part whole the sécured claim alleg- upon EMC of her which stated that edly arising mortgage from the first claim confirmation EMC’s would be fixed held her residential realty by $1,000. as an unsecured claim of After (“EMC”). Mortgage Corp. How- notice, receiving multiple EMC had ever, EMC has not filed a proof of claim opportunities on appropri- to be heard in this bankruptcy case. The Debtor Mansaray-Ruffin’s proposed ateness of ac- will therefore file an proof unsecured *16 instance, Mansaray-Ruffin tion. For after claim in the amount of on behalf $1000 proof filed a of claim on behalf of EMC EMC, of and will to an adversary resort claim stated that EMC’s was for proceeding against only EMC $1,000 unsecured, and was EMC could successfully event that EMC amends objected proof have to the of claim and that claim larger and asserts a or a presented position Bankruptcy to the secured claim. The Debtor has been at a hearing. Court See U.S.C. paying regular the mortgage payments appeared plan EMC also could have the plan to EMC of outside the the event objected hearing confirmation and to the challenge her of the claim of EMC plan’s property treatment of its interest. would not entirely be successful. How- 1324(a). See U.S.C. After confirma- ever, upon tion, objections overruled, if its had been which the claim of EMC will be fixed-as appealed EMC could from have the confir- an unsecured claim in the amount mation to the District order Court and object unless it is able to to this $1000 then, if necessary, claim, to this Court. See 28 the making pay- Debtor will cease Moreover, if EMC, EMC believed ments to obliged and EMC will be pro- the confirmation order had been satisfy its mortgage against the Debt- fraud, sought cured it could have or’s upon discharge revo- home the of its debt days cation- of the order within after as filed or allowed. fact, suggestion, parent. they
10. I see practically begged no basis at all for if it In EMC had been made that her to the treatment of its lien Quite attorney guilty of fraud. plan. contrary completely their conduct was trans- really expect much to a creditor receiv- in full too plan quoted I have at 34. App. of one of its ing plan filed behalf opinion. to this on appendix anas to examine the to see wheth- debtors availing itself of its vari- But instead confirmed, er, adversely it will affect its ap- on the heard opportunities ous lien?. action plan’s proposed propriateness lien, not take EMC did respect to its
with controlling event the consider- after nine months until almost any action Congress by providing be that ation must Court finality orders re- for the of confirmation adversary complaint brought it when provisions in that unauthorized quires Significantly, EMC appeal. to this leading Clearly, unless and be enforced. plans proceedings in these contended has not Congress pro- amends section 1327to until and the aware of the that it was not that include un- plans vide that confirmed given lien nor has it treatment of its plan’s will not be provisions lawful lien-avoidance delay nine-month for its any explanation or, alternatively, preclusive accorded effect circum- these challenging ob- expands post-confirmation the basis for afforded due stances, .clearly was fraud jections beyond grounds the narrow pro- received due Because EMC process. we must continue en- section con- impaired, lien was before its cess plans provisions force with such as written precludes binds EMC firmed why should that not be so?11 A credi- adversary proceed- in this succeeding from always protect can itself from an un- tor leading though proceedings even deprivation lawful of its lien because its comply lien did not impairment of its deprived interest cannot be with- Rules. The critical notice requires out due which procedural Rules is whether issue pro- opportunity to be heard and such they were satisfied and adoption of protect against adequate tections are were. deprivation proper- unconstitutional my view of this case I understand that for the ty. only EMC has itself to blame place what the encourage could debtor of its lien. loss an unlawful lien-avoid- debtor believed was majority that the contends *17 in the into his or her realize ance process not receive due because EMC did unwary that an creditor would be hope Bankruptcy Mansaray-Ruffin violated the prevent off-guard and not to caught adversary pro- initiating Rules not all, After a debtor plan’s confirmation.' Thus, according lien. ceeding to avoid its creditor not believe that the would might majority, pro- had the due to the “EMC provi- to the unlawful pay proper attention that, unless Mansa- right is it cess On the other hand sion of the assume CreditInform, result" it wás "not our function to Gay 511 F.3d desirable In v. (3d Cir.2007), the FAA to applied so" and that the reach of is "[i]f a in which we do case Congress and not the courts Congress wrote it be confined then Arbitration Act as Federal body do so." Inasmuch as provision providing should be the upheld a contractual process violation though there was not a due notice even other courts had arbitration proceedings resulting in the confirma- provisions in cases found arbitration similar unconscionable, plan we take the tion of the amended should we indicat before them to be Gay approach here and hold that if there is to "their respect to the other cases that ed with so that a logically a modification of section 1327 reasoning applied could result in a be always bind "each plan does not narrowing application of the significant of the Congress courts then arid not the the view that creditor” We therefore were of FAA.’' narrowing "might a made the modification. be should whether or not adversary pro- invalidate a From a ray-Ruffin commenced lien. constitutional ceeding required by perspective, the Rules and served it makes no difference wheth- summons, and a its lien complaint extinguish it with a er a debtor’s seeks a could not be invalidated.” rights simply creditor’s lien reduce the value of the creditor’s secured claim. Just certainly respect majority’s I While Congress require has decided to view, I I nevertheless dissent because see process more than the Fifth Amendment a that ma- escape no from conclusion requires to deprive creditor of a lien jority equating requirements is of con- does not mean that re- Constitution process requirements due stitutional quires Instead, process. enhanced Rules; thus, Bankruptcy it effective- above, I stated all that the Constitution ly using proxy is the Rules as a for due requires deprive person process.in this case. But this linking is and an opportunity hearing. notice for a unjustified as a nonconstitutionally pre- case, requirements And in this those clear- can proxy scribed be both over-and under- ly majority fairly were met and the cannot respect inclusive satisfying with consti- say they were not met. See, requirements. e.g., tutional United Smith, (3d v. States reaching my par- result I have taken Cir.2008) (stating police that a officer’s reference, majority’s ticular note of the impoundment of .a car pursuant to stan- “[b]y way analogy,” to a situation in procedures likely, dardized will most but which a plaintiff seeks commence a civil always, satisfy not the Fourth Amend- action with a motion filed the court requirement, ment’s “reasonableness” and mailed to a defendant. majority conversely, an impoundment that is indicates that we would not permit de- contrary to a procedure standardized or in judgment fault to be entered on the basis absence of a standardized procedure is not procedure. completely agree not violation). per se Fourth Amendment precluded because due of law en- situations, may Therefore there try judgment but rather because its them, certainly this case is one of where entry procedural would violate rules. has been notwithstanding met event, majority’s hypothetical debtor’s violation of the situation is in any way analogous Rules. that here. merely seeks Through Code and to a confirmed uphold plan and there is not Congress Rules and the courts have im- slightest suggestion in the record that posed procedural stricter requirements on procedural the Code’s requirements notice debtors who seek to invalidate liens than for the confirmation of her plan were not *18 process due requires. By raising law Nothing satisfied. could be clearer than these standards above the floor set Code’s that the “confirmed clause, Fifth process due Amendment’s plan the debtor and each creditor.” bind[s] Congress and the recognized courts have 1327(a). proper Section A analogy to the that the invalidation of a lien “is a matter majority’s hypothetical situation would be ” of particularly great consequence.... if had seeking been Rules, under the a debtor initi- must procedurally enforce an order from a de- adversary proceeding, ate with all of its fective but she sure- procedural trapping's, to invalidate a lien. ly doing no thing is such as she never procedures But these proxies brought adversary are not proceeding to avoid process required the constitutional due seeking to the lien. reiterate she is motion to granted that the debtor’s My ment confirmation. an order of enforce the lien and denied the creditor’s is that we are vacate complex and is not point aspect of to revoke the confirmation order. process the due motion concerned with adversary proceeding; nonexistent Id. proceed- with the we are concerned rather that majority The contends this case leading to confirmation ings “Fesq distinguishable Fesq from a conclusion compels law Our case a determination as to the did not involve case. In In re met in this process was due lien or other validity of the creditor’s the debtor filed Fesq, requires Rule matter for which lump pay- sum single for a provided “Fesq and thus proceeding” of a $7,050 in full satisfaction ment process the due con- implicate does not that was a lien on the $69,166.59judgment our decision in this cerns that animate (3d 113, 114 house. debtor’s majority’s conclusion But case....” Cir.1998). file an did not The creditor in affirmed a Fesq be correct: we cannot objection which both denied the creditor’s ruling then it. Id. The debtor confirmed court to revoke the confirmation order motion lien, the creditor’s motion to vacate filed a the debtor’s motion to invali- granted a cross-motion creditor filed and the Fesq, lien. 153 F.3d at date the creditor’s order. confirmation vacate the Thus, the result in that case is 114-15. mo- the debtor’s granted court in to the one that we should reach identical motion. Id. the creditor’s tion and denied The same due concerns this case. from the appealed creditor at 115. The yet Fesq as here and present were and the motion to vacate denying its order there that the debtor’s bound found appeal, Id. On court affirmed. district the creditor. decision on based our affirming we Moreover, majority even if the is correct 1330(a), states which language of section not involve the invalidation Fesq did at in interest request party of a that “[o]n only involved of a lien but instead the date of days after any time within of the amount of a secured modification ..., entry of an order of claim, is immaterial in a this distinction hearing, the court and a and after notice situation, inquiry. In either if such order may revoke such order a creditor’s adversely affects debtor’s by fraud.” We noted Szostek’s procured interest, being the distinction finality important is an recognition what, I ask under only degree. stated that bankruptcy law and goal of distinction, would majority’s proposed is a meas- “[Revoking a confirmation order Mansaray-Ruffin had proper result expectations legitimate upsets ure that valued EMC’s in her that she stated Interpret- and creditors. of both debtors Apparently the ma- secured claim $1? 1330(a) limiting provision aas ing Section Mansaray-Ruffin’s find that jority would only very disruption such permits and that the plan bound EMC cases.” egregious category of narrow upon payment of would be satisfied omitted). hen (footnote at 120 Fesq, 153 F.3d situation, all, Man- After such $1. “fraud is the held that Accordingly, we *19 in providing saray-Ruffin would not be for revoca- relief available only ground for upon avoided the lien would be plan that order.” 13 confirmation tion of ultimate out- yet, And the confirmation. Fesq in did not the creditor Id. Because scenario and hypothetical the come in both was order that the confirmation assert in both sitúa- be the same: this case would fraud, judg- affirmed the we procured order, tions, effectively Bankruptcy lose its lien vived the clear- EMC would Court’s ly exchange respect a fraction of its claim annuls the order with to in for the distinguishable I cannot understand how the ma- lien. this case is not amount. Fesq from jority acknowledge that is on that basis. can hypothetical satisfied in the situation but Furthermore, majority’s the view will case, procedures when the and not this open many post-confirmation to the door in both situations are identical.12 outcome attempt challenges that to undermine the Fesq majority provisions plans The also contends that of confirmed without ex- “quite simply, plicitly plans, because “revocation” those distinguishable seeking [the not seeking is not the revocation of result that is desirable it will because creditor] work the in important the Court’s confirmation or- interest fi- Rather, Szostek. asking nality recognized der. it is us to declare that that in I ask majority’s the confirmed did not invalidate the what time constraints under the I disagree ruling it now holds.” bringing lien that with will limit creditor from majority’s of this Al- such post-confirmation challenge? the assessment case. EMC styled though adversary as an proceeding waited almost nine months confirma- after lien, got bringing to determine the status of the tion it EMC’s before around to the certainly complaint case most seeks revoke the in this case. How long Court’s confirmation order to delayed could EMC have before the majority extent order confirmed that would have that it concluded was Mansaray-Ruffin’s plan bring avoided the lien. too adversary pro- late for it this action, majority’s stepping The after the ceeding? majority provides guid- The no finding confirmation and that the lien sur- ance on aspect this its decision.13 majority dispute my 03-1297) ruptcy (Adversary 12. The does not under- Court Case No. 19, standing opinion apparently Complaint of its would on December 2003. The did permitted Mansaray-Ruffin have confirming to substan- not seek revoke the order Indeed, tially by fixing dilute the lien its at amount Plan.... it could not do so because (1) one dollar in her need presently past 180-day One not be a was well prophet to time-period seeking foresee that hereafter in this Cir- confirma- revoke bankruptcy proceedings cuit though debtors seek- tion even EMC was in- presence to invalidate liens in some cases effective- formed of the content ly filing adversary will eliminate them without order confirmation well within time- (2)[EMC] proceedings simply by reducing period; their value in did not and could not plans hope allege requisite to a nominal amount procuring fraud in their that somnolent creditors such as EMC will order. (citations omitted). Appellant’s not to the reduction. Br. at 7-8 majority 13. indicates notwithstand- ing my regarding pro- concern its "failure to From the time that she sent letter of guidance delayed vide as to whether EMC 27, too February indicating to EMC long months—after confirmation before she rescinded the loan at until —nine issue Decem- filing adversary proceeding,” Mansaray- Proceeding ber when the at issue Ruffin, though complaining delay, "has filed, any respond EMC failed to pointed authority briefed this issue or statements Debtor's that she considered support proposition that nine months mortgage loan to rescinded and the long was too should have barred and/or securing Proceeding loan it invalid.... The disagree majority EMC’s claim.” issue, filed almost nine months [was] clearly Mansaray-Ruffin’s briefs re- after and after contents cite: been the Plan had reiterated twice letters no took action of kind in the case to EMC over six months before.... filing complaint until the of a Bank- at 13-14. *20 collater- post-confirmation raise a McKay, 732 EMC to majority relies on In re The Mansaray-Ruffm’s plan. that Mansa- al attack on proposition the for EMC be- does not bind plan ray-Ruffin’s sum, that because conclude adver- separate not did initiate cause she met, Mansa- requirements were lien. challenge to EMC’s sary proceeding binds EMC ray-Ruffin’s plan confirmed McKay in In re we reversed regard In this plan provision though the included even confirming the court’s orders bankruptcy Bankruptcy adopted violation provisions included plans debtors’ My approach the due Rules. to the against them because avoiding liens gives case effect to proper in this issue adversary pro- not initiated had debtors goal promotes important the section at the liens. 48. ceedings to avoid or- finality confirmation ders, encourages active from this creditors to be McKay distinguishable But major- bankruptcy process. the the support participants no all for case and is at Moreover, reasoning it is faithful to the way and in no is inconsistent ity’s result that we forth almost 19 McKay, the creditor In re Szostek set this dissent. with and years ago “although prior its liens to confirma- objected to the treatment of confirming the tion the court and trustee do timely the orders appealed responsibility verify Chap- did that a precisely what EMC have plans, debtors’ Therefore, complies preclusive plan effect ter 13 with the do. the not after the is con- plans provisions, under U.S.C. Code afforded confirmed finality the apply policy favoring and the interest firmed the did not bank- stronger in Szostek was confirmation is than the finality that we articulated case, contrast, obligations EMC court’s and trustee’s ruptcy In this absent. compliance the object appeal verify plan’s from the confirma- with Code.” did Thus, applies foregoing F.2d at 1406. For the rea- section 1327 tion order. sons, finality i.e., the I would reverse the District Court’s EMC and need for bind — affirming of a con- the Court’s protect integrity order the need post-confirmation finding chal- that EMC’s lien survived decision firmed permit bankruptcy process.14 reason lenges outweighs — brought Appellee dispute ... that ... it time that EMC these cannot complaint object plan, which have proceedings its could not did not very precisely jure it and to be a action to revoke was sent to set forth been amended de underlying claim the exact treatment of the confirmation of amended correspon- plan; attempting indirectly and that it received to do what it could was again describing longer directly. thereafter dence no do any way con- which it did not in treatment point respect more to this I make one with filed at issue test until it Mansa- particular nine months confirmation. almost after gener- ray-Ruffin’s bankruptcy proceedings in Rep. Br. at Appellant’s valid but delay of now EMC’s lien remains Mansaray-Ruffin al. As Clearly briefed the has authority it did not supported argument and it with plan providing amended satisfac- her 180-day reference was to .11 U.S.C. proceed- brought these its lien until dealing tion of period of revocation rea- ings previously had no Obviously, order for fraud. of a confirmation for, avoid the to seek to rescind or otherwise delay important son very nine-month above, part or in had indicated lien in whole as she point effect was seek- out EMC in as I original contemplated doing in her that she order to revoke beyond scope this case It is the order confirmed that Mansa- extent that might decide now be us to whether she ray-Ruffin’s avoided the lien. before
Appendix amends that claim a larger and asserts 13 PLAN AMENDED CHAPTER a secured claim. The Debtor has been THE DEBTOR OF paying regular mortgage payments to estate liqui- If the were Debtor’s plan EMC outside of in the event that 7 of the dated under her claim challenge of the of EMC would Code, unsecured creditors would not re- However, not be entirely successful. upon any Those will payments. ceive creditors plan, confirmation of this in which the not receive under the terms of this less claim of be fixed an EMC will unse- plan. cured claim in amount of unless $1000 2. The Debtor shall submit to the su- claim, object able to this the Debtor of the pervision pay- and control Trustee EMC, making will cease payments in monthly ments the amount for $10 will obliged satisfy EMC its mort- of the through first months gage against upon the Debtor’s home July, monthly and thereafter $50 discharge of its debt as filed or allowed. plan. the final 26 months any judicial 5. The Debtor will avoid prosecuted 3. The has Debtor ad- lien against realty held residential her versary proceeding which avoided the to- Gray. Sherran claim tally undersecured of AFBA-IB 6. The arrange- Debtor shall make Bankcard Center. to pay ments the various claims of City planned 4. The to file a Debtor further (“the City”) of Philadelphia directly to the to avoid in whole or City outside in part allegedly claim arising secured 7. The claims of the Debtor’s creditors mortgage from held against the first her are in Plan as classified this follows: residential realty by Mortgage Corp. EMC A. Class One: Administrative claims. (“EMC”). However, EMC has not filed a These unpaid claims include attor- proof of claim in this bankruptcy case. ney’s fees and Trustee’s fees. The Debtor therefore file an will unse- in proof cured of claim amount of B. Class The claim Two: of EMC. EMC, on behalf of and will $1000 resort to This claim be dealt shall with as de- an adversary proceeding against in paragraph plan EMC scribed only in the successfully event treated as an claim. unsecured bring adversary proceeding brilliantly able to claim” it she did not to the treat- originally anticipated bringing but if ment fairness of its lien in the amended anything should opportu- contemplation means she have the instead in bided its time nity bringing proceedings. point to do so as EMC its conduct in not these I out in objecting regard to the amended led her this scenario is not farfetched as acquiesced according
believe that it Mansaray- elimination of to the amended Indeed, though prosecute its lien. even adversary proceeding think that it is Ruffin did likely merely negligent that EMC not another creditor which she success- challenging fully the amended it is conceiva- avoided the creditor’s claim. challenge ble that Mansaray- laugh Mansaray-Ruffin's to avoid the EMC could off originally contemplated bringing bring Ruffin threat lien, avoid its EMC saw when in the amended avoid its lien the basis of the Truth on Act, 1667F, Lending §§ bring would 15 U.S.C. 1601 to adversary proceeding only preferring litigate if EMC the Truth amended instead to issue, Lending necessary, $1000 claim she would file on its Act in a state behalf “larger and did not assert or a secured court foreclosure action. *22 except of all listed The claim AFRA. claims creditors C. Three: Class claims, Two, including Five Class Class paragraph in claim will As noted Three, claims, claim, and shall Four be dis- unsecured be- be treated as an those charged, any liens which claim- entirely undersecured and cause it is ants have or had shall be void and shall be of this claimant has any security interest marked on records. any so court been avoided. D. Four: The secured claim of Class paragraph Gray. As noted
Sherran paid,
this claim will not be or can be avoided.
either has been The claims
E. Five: secured Class District of City & Philadel- School QUEEN, Jr., Appellant Robert Samuel (“the taxes, real City”) for estate phia sewer, munic- v. statutory and a water and Debtor shall make an ipal The lien. MINER, Jonathan C. Warden. City outside of the agreement with No. 08-1049. claims. liquidate these (F). All other unsecured Class Six: Appeals, United States Court Debtor, in claims addition Third Circuit. claims, and Class Three Class Two Summary for Possible Action Submitted ultimately al- timely filed which are lowed. LAR Pursuant Third 27.4 and Circuit [15] The payments received by the IOP 10.6 Feb. 2008. the Debtor shall distribut- Trustee from 25, 2008. Filed: June One claimants ed first to allowed Class full; secondly, any they paid until are
arrearages to the Class Two claim- allowed
ant, pro Six claimants thirdly to Class
rata. the estate
8. Title of the upon Debtor confirma-
shall revest Plan, Debtor
tion of and the shall have possession the use and right
the sole
same. may Upon application,
9. Debtor timing of payments
alter the amount
under this stay shall automatic remain until
full effect this case force and
closed. of this or oth- completion
11. Upon amended, all duty
er paragraphs erroneously “7.” numbered two consecutive