Bank of America, N.A. v. Martin Hall, et al

Filing

Opinion issued by court as to Appellant Bank of America, N.A.. Decision: Affirmed. Opinion type: Non-Published. Opinion method: Per Curiam.

Case: 14-11292

Date Filed: 09/29/2014

Page: 1 of 3

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-11292
Non-Argument Calendar
________________________
D.C. Docket Nos. 3:14-cv-00067-BJD; 6:13-bkc-10498-KSJ
In Re: MARTIN ROBERT HALL,
ROBERTA D. HALL,
Debtors.
__________________________________________________
BANK OF AMERICA, NA,
Plaintiff - Appellant,
versus
MARTIN ROBERT HALL,
ROBERTA D. HALL,
a.k.a. Roberta Schimpf Hall,
Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(September 29, 2014)

Case: 14-11292

Date Filed: 09/29/2014

Page: 2 of 3

Before WILSON, ROSENBAUM, and COX, Circuit Judges.
PER CURIAM:
Appellees, Martin and Roberta Hall, are Chapter 7 debtors. They have three
mortgages on their house. All three liens are held by Bank of America. The
parties do not dispute that the first lien is fully secured; the second, partially
secured; and the third, completely unsecured. The Halls moved in the bankruptcy
court to have the third lien declared void under Section 506(d) of the Bankruptcy
Code. The bankruptcy court granted the motion, and the district court affirmed.
Section 506(d) of the Bankruptcy Code provides, in pertinent part, that ‘[t]o
the extent that a lien secures a claim against the debtor that is not an allowed
secured claim, such lien is void.”

11 U.S.C. §506(d).

This Court held in

Folendore v. Small Bus. Admin., 862 F.2d 1537, 1540 (11th Cir. 1989), that
Section 506(d) permitted a chapter 7 debtor to “strip off” a wholly “underwater”
lien, such as Bank of America’s third lien in this case.
The Supreme Court of the United States rejected the reasoning of Folendore
in Dewsnup v. Timm, 502 U.S. 410, 112 S. Ct. 773 (1992), holding that a lien
partially underwater could not be stripped down to the value of the collateral under
Section 506(d). Nevertheless, bound by this Court’s “prior panel precedent” rule
and reasoning that Dewsnup was not “clearly on point” with Folendore, this Court
in McNeal v. GMAC Mortgage, LLC, 735 F.3d 1263, 1264-65 (11th Cir. 2012),
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Case: 14-11292

Date Filed: 09/29/2014

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declined to follow Dewsnup and other courts that had departed from Folendore.
The McNeal panel held fast to Folendore and allowed the debtor to strip off an
underwater junior lien pursuant to Section 506(d).1 We hold that McNeal and
Folendore are the law in this circuit with respect to the issue presented here.
Accordingly, we affirm the decision of the district court.
Bank of America concedes that the McNeal holding is binding precedent,
but seeks further appellate review of the issue. Should Bank of America choose to
petition this Court for en banc consideration of the issue it raises here, this Court
should seriously consider the petition.
AFFIRMED

1

“Although Folendore addressed the 1978 version of the Bankruptcy Code, the 1984
amendments to the Code did not alter the pertinent language of Section 506(a) or (d).” McNeal,
735 F.3d at 1265, n.3.
3