Bank of America Bank, NA v. Yvonne Roberts Waits ( 2015 )

Case: 14-11408 Date Filed: 07/16/2015 Page: 1 of 3
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-11408
Non-Argument Calendar
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D.C. Docket Nos. 1:14-cv-00460-WSD,
Bkcy No. 11:bkc-70660-CRM
In re: YVONNE ROBERTS WAITS,
Debtor.
_______________________________________________________
BANK OF AMERICA BANK, NA,
Plaintiff - Appellant,
versus
YVONNE ROBERTS WAITS,
Defendant - Appellee.
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Appeal from the United States District Court
for the Northern District of Georgia
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(July 16, 2015)
ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES
Case: 14-11408 Date Filed: 07/16/2015 Page: 2 of 3
Before TJOFLAT, JORDAN and BLACK, Circuit Judges.
PER CURIAM:
This case is before this Court for consideration in light of Bank of America,
N.A. v. Caulkett, 575 U.S. __, 135 S. Ct. 1995 (2015). We previously affirmed the
district court’s affirmance of the bankruptcy court’s order granting the debtor’s
motion to strip Bank of America’s junior mortgage lien. See Bank of Am., N.A. v.
Waits, 578 F. App’x 827 (11th Cir. 2014). The Supreme Court vacated the opinion
and remanded the case to us for consideration in light of Caulkett. See Bank of
Am., N.A. v. Waits, __ S. Ct. __ (2015). After consideration, we deny Bank of
America’s motion for summary reversal, vacate the district court’s judgment, and
remand for further proceedings consistent with Caulkett and this opinion. 1
In this Chapter 7 case, the debtor, Yvonne Roberts Waits, had two
mortgages on her house, a senior mortgage lien and a junior mortgage lien. The
outstanding balance on the senior mortgage lien exceeded the house’s current
value. Bank of America’s junior mortgage lien was thus completely underwater.
Waits moved to “strip off” Bank of America’s junior lien under § 506(d) of
the Bankruptcy Code, which states, “To the extent that a lien secures a claim
against the debtor that is not an allowed secured claim, such lien is void.” 11
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On June 15, 2015, the parties were directed to file supplemental letter briefs addressing
how the Caulkett decision applies to this case. Bank of America timely filed its brief. To date,
however, this Court has not received a response from Waits, whose brief was due July 13, 2015.
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Case: 14-11408 Date Filed: 07/16/2015 Page: 3 of 3
U.S.C. § 506(d). The bankruptcy court granted Waits’s motion, and this Court
affirmed. We explained our prior precedents in In re McNeal, 735 F.3d 1263 (11th
Cir. 2012), and Folendore v. United States Small Business Administration, 862
F.2d 1537 (11th Cir. 1989), dictated the conclusion that § 506(d) allows a Chapter
7 debtor to void a junior mortgage lien when the senior lien exceeds the home’s
value.
In Caulkett, the Supreme Court vacated two Eleventh Circuit decisions that
followed this same reasoning. The Supreme Court held “a debtor in a Chapter 7
bankruptcy proceeding may not void a junior mortgage lien under § 506(d) when
the debt owed on a senior mortgage lien exceeds the current value of the
collateral.” Caulkett, 575 U.S. __, 135 S. Ct. at 2001.
In light of the Supreme Court’s holding in Caulkett, our holdings in McNeal
and Folendore are overruled. Accordingly, the district court erred in affirming the
bankruptcy court’s grant of Waits’s motion to strip off Bank of America’s junior
lien. We deny Bank of America’s motion for summary reversal, vacate the district
court’s judgment affirming the bankruptcy court, and remand for further
proceedings consistent with Caulkett and this opinion.
VACATED AND REMANDED.
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