Bank of America, NA v. Trina Renee Banks

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 13-13867
Non-Argument Calendar
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D.C. Docket No. 3:13-cv-00091-CAR,
BKCY No. 13-03060-JPS
In Re: TRINA RENEE BANKS,
Debtor.
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BANK OF AMERICA, NA,
Plaintiff - Appellant,
versus
TRINA RENEE BANKS,
Defendant - Appellee.
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Appeal from the United States District Court
for the Middle District of Georgia
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(March 11, 2014)
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Before PRYOR, MARTIN, and JORDAN, Circuit Judges.
PER CURIAM:
Bank of America, N.A. appeals from the district court’s order and final
judgment affirming the bankruptcy court’s order in an adversary proceeding
brought by Trina Renee Banks in her Chapter 7 bankruptcy. Ms. Banks has two
mortgage liens on her house; the first has an outstanding balance that exceeds the
current value on Ms. Banks’s house and the second, at issue in this case and held
by Bank of America, is junior to the first lien. Bank of America’s lien is
considered to be wholly “underwater” in that the debt secured by the first lien
exceeds the current value of the house. Accordingly, Ms. Banks sought to have
Bank of America’s junior lien voided under § 506(d) of the Bankruptcy Code. See
11 U.S.C. § 506(d). She did so because binding circuit precedent holds that §
506(d) authorizes a Chapter 7 debtor to “strip off,” i.e. remove in its entirety, a
junior lien where the amount of lien exceeds the value of the house. See McNeal
v. GMAC Mortgage, LLC, 735 F.3d 1263, 1266 (11th Cir. 2012); Folendore v.
SBA, 862 F.2d 1537, 1539 (11th Cir. 1989). Given circuit precedent, the parties
entered a stipulated order, which was entered by the bankruptcy court and affirmed
by the district court, resolving the adversary proceeding in favor of Ms. Banks and
preserving the issue for appellate review.
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Bank of America argues that the Supreme Court’s opinion in Dewsnup v
Timm, 502 U.S. 410 (1992), rejected our circuit’s construction of § 506(d) as laid
out in Folendore and that we should re-visit this issue. However, as Bank of
America also acknowledges, another panel of this Court, in McNeal, recently
rejected that very argument, concluding that Dewsnup was not clearly on point
because it disallowed only a “strip down” of a partially secured mortgage lien and
not a “strip off” of a wholly unsecured mortgage lien, and thus did not abrogate
Folendore. See McNeal, 735 F.3d at 1265-66.
Because we are bound, as a panel, to follow our circuit’s prior decisions in
Folendore and McNeal, we affirm the bankruptcy court’s decision voiding Bank of
America’s lien on Ms. Banks’ house.1
AFFIRMED.
1 By separate order, Bank of America’s petition for initial hearing en banc has been
denied. Bank of America remains free, of course, to seeking rehearing of this panel’s decision.
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