Shannon v. Springleaf Fin. Servs., Inc. (In re Shannon), Case Number 15–41144–LWD

552 B.R. 923 (Mem)

In the Matter of: Theodus R. Shannon, Debtor(s)Theodus R. Shannon, Plaintiff(s)

v.Springleaf Financial Services, Inc., Defendant(s)

Case Number 15–41144–LWD

Adversary Proceeding 15–04052–LWD

United States Bankruptcy Court, S.D. Georgia.

Signed June 23, 2016

Entered June 24, 2016

Jeremiah B. Gastin, Judson C. Hill, Gastin & Hill, Savannah, GA, for Plaintiff.

JUDGMENT BY DEFAULT

Lamar W. Davis, Jr., United States Bankruptcy Judge

Default was entered against defendant. Springleaf Financial Services, Inc., on January 26, 2016. Therefore, on motion of the plaintiff, judgment is entered against that defendant in favor of the plaintiff as follows.

IT IS ORDERED THAT:

Judgment be entered against Defendant, Springleaf Financial Services, Inc., that the Plaintiff owns real property at 9 Sheridan Drive, Savannah, Georgia, 31406, that at the time of filing the fair market value of the real property was approximately $127,800.00, that the balance due to first mortgage holder was approximately $137,068.00 at the time of filing, that the Defendant has a claim against the Plaintiff for approximately $5,836.30 secured by a second mortgage against the real property, that there is no equity in the real property to secure the debt to the Defendant, that the Defendant's claim is wholly unsecured and thus is dischargeable in Chapter 13 bankruptcy, and that the lien recorded in the Superior Court of Chatham County, Georgia in Book 288G, Page 592 shall be marked cancelled upon the entry of a discharge in the Chapter 13 case.¹

1 This judgment, based on Defendant's default, resolves this dispute only, in light of current precedent, but should not be read as a ruling on the merits in light of unresolved questions following the recent Supreme Court decision in Bank of America, N.A. v. Caulkett , –––U.S. ––––, 135 S.Ct. 1995, 192 L.Ed.2d 52 (2015)

See In re Davis 547 B.R. 480 (Bankr.S.D.Ga.2015) [Court followed existing 11 ^th Circuit precedent in the Tanner case, allowing a “strip off” but observed that language in the recent Caulkett decision by the U.S. Supreme Court conceivably could lead to a re-examination of the Tanner line of cases: ‘secured claim’ in § 506(d) mean[s] a claim supported by a security interest in property, regardless of whether the value of that property would be sufficient to cover the claim.]

In re Etheridge 546 B.R. 896 (Bankr.S.D.Ga.2016) [Approved Consent Order stripping a mortgage lien in recognition of the fact that there was no controlling precedent contrary to that result.] But Court refused to follow these courts which have limited the holding in Caulkett to Chapter 7 cases, observing:

Caulkett holds that “secured claim” in § 506(d) means a “claim supported by a security interest in property regardless of whether the value of that property would be sufficient to cover the claim”. Caulkett, 135 S.Ct. at 1999. Conceding the obvious, Caulkett was a Chapter 7 case and the language of Chapter 13 at issue differs in prohibiting modification of “rights of holders of secured claims” which are “secured only by a security interest in real property” that is the debtor's principal residence ...

Still I cannot fathom how the slight difference in phraseology between the term “secured claim”, defined by Caulkett. following Dewsnup to mean a claim supported by a security interest in property regardless of its value—and “secured claim” ... secured only by a security interest in debtors residential real property in Chapter 13—could

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