In the

United States Court of Appeals

For the Seventh Circuit

No. 12-3398

IN RE:

PATRICK J. RYAN,

Debtor-Appellant.

PATRICK J. RYAN,

Plaintiff-Appellant,

v.

UNITED STATES OF AMERICA,

Defendant-Appellee.

On Appeal from the

United States Bankruptcy Court for the

Northern District of Illinois, Eastern Division.

No. 11 B 34346—A. Benjamin Goldgar, Judge.

ARGUED APRIL 15, 2013—DECIDED JULY 8, 2013

Before RIPPLE, ROVNER, and WILLIAMS, Circuit Judges.

ROVNER, Circuit Judge. Patrick James Ryan failed to

pay his federal income taxes for 2006, 2007, 2008, 2009,

and 2010, resulting in outstanding liabilities totaling

at least $136,898.93. In January 2011, pursuant to Internal
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Revenue Code § 26 U.S.C. 6323, the IRS recorded a

notice of federal tax lien against Ryan’s possessions

with the Cook County Recorder of Deeds with respect

to the liabilities for 2006-09.

On August 23, 2011, Ryan filed a voluntary Chapter 13

bankruptcy petition. 11 U.S.C. §§ 1301 et seq. At that

time, he had personal possessions worth $1,625. He

subsequently filed an adversary proceeding entitled

“Complaint to Determine Nature and Extent of Federal

Tax Lien,” in which he admitted that he owed tax

liabilities for 2006 through 2010 and that a federal tax

lien had been recorded for liabilities for 2006 through

2009. He further alleged that his residence had been

sold for delinquent real estate taxes and that he did not

own a bank account, vehicle, or retirement account.

Because the total value of his possessions was $1,625,

Ryan alleged that pursuant to Bankruptcy Code § 506(a),

the IRS’s secured claim for the 2009 tax was limited to

that amount, and that the remainder of the IRS’s claim

was unsecured. 11 U.S.C. § 506(a). Ryan also asserted

that under Bankruptcy Code § 506(d), the amount of the

tax lien that exceeded $1,625 was void. 11 U.S.C. § 506(d).

Section 506(a) of the Bankruptcy Code separates loans

into secured and unsecured portions. In re Wright, 492

F.3d 829, 830 (7th Cir. 2007). As we explained in In re

Howard, 597 F.3d 852, 854 (7th Cir. 2010), “[t]he bankruptcy judge first determines the market value of the

collateral . . . [and] [t]he creditor’s claim is treated as a

secured claim to the extent of that value.” If the value

is less than the unpaid balance of the secured loan, the
No. 12-3398 3

difference is considered an unsecured claim of the

creditor. Id.; 11 U.S.C. § 506(a)(1). Here, the United States

conceded that pursuant to § 506(a), its secured claim was

limited to $1,625 for purposes of plan confirmation, but

maintained that § 506(d) did not authorize the bankruptcy court to void the federal tax lien to the extent

that it exceeded $1,625. The bankruptcy court sided with

the government, holding that § 506(d) as interpreted by

the Supreme Court in Dewsnup v. Timm, 502 U.S. 410

(1992), did not allow Ryan to void, or “strip down” the

lien, and granted judgment on the pleadings under Fed.

R. Civ. P. 12(c). The sole issue on appeal is whether

the bankruptcy court erred in that determination.

Section 506(d) of the Code provides:

(d) To the extent that a lien secures a claim against

the debtor that is not an allowed secured claim, such

lien is void, unless—

(1) such claim was disallowed only under section

502(b)(5) or 502(e) of this title; or

(2) such claim is not an allowed secured claim due

only to the failure of any entity to file a proof of

such claim under section 501 of this title.

11 U.S.C.A. § 506. In Dewsnup, the Supreme Court considered the proper interpretation of that language, and

held that §§ 506(a) and 506(d) did not have to be read

together, and that the term “allowed secured claim” in

§ 506(d) was not defined by reference to § 506(a). Instead,

the Court determined that, consistent with pre-Code

rules that liens pass through bankruptcy unaffected, the
4 No. 12-3398

term “allowed secured claim” in § 506(d) means a claim

that is, first, allowed under § 502 and, second, secured by

a lien enforceable under state law, without regard to

whether that claim would have been deemed secured or

unsecured under § 506(a). Id. at 777-78; In re Woolsey,

696 F.3d 1266, 1273 (10th Cir. 2012). Under that interpretation, Ryan would not be entitled to void the lien

in this case. With the exception of a conclusory argument without adequate development or citation, Ryan

does not dispute that the lien is allowed and secured if

the Dewsnup interpretation is applied to this Chapter 13

context, and that argument is therefore waived (and

is, in any event, meritless). Bank of America, N.A. v.

Vluechamy, 643 F.3d 185, 189-90 (7th Cir. 2011) ; MMG

Financial Corp. v. Midwest Amusements Park, LLC, 630

F.3d 651, 659 (7th Cir. 2011). Instead, Ryan contests

the applicability of the Dewsnup interpretation to the

Chapter 13 context at all.

Ryan maintains that § 506(d) should be interpreted

differently in his case than in Dewsnup because his petition was filed under Chapter 13 whereas Dewsnup

involved Chapter 7. Ryan points out that in defining

the terms in § 506(d), the court focused on the concerns

underlying Chapter 7 bankruptcy and interpreted it

in a manner consistent with those concerns. Unlike

Chapter 7, Chapter 13 involves a different set of concerns, with its goal of reorganization and repayment without necessitating the liquidation of assets. See

Thompson v. General Motors Acceptance Corp., LLC, 566

F.3d 699, 705 (7th Cir. 2009).
No. 12-3398 5

The obvious problem with that argument is that § 103(a)

of the Code states that: “Except as provided in section 1161 of this title, chapters 1, 3, and 5 of this title

apply in a case under chapter 7, 11, 12, or 13 of this

title . . . .” 11 U.S.C. § 103. The exception in § 1161 is

inapplicable here, as it merely provides that certain

sections of the Code do not apply “in a case concerning

a railroad.” Accordingly, § 506(d), which is part of

Chapter 5, applies equally to cases under Chapter 7 and

Chapter 13. In fact, Ryan does not contest that under

§ 103(a), § 506(d) applies to both Chapter 13 and

Chapter 7 petitions, and he does not seek to carve out

an exception to that rule for § 506(d). Instead, his argument is that the language in § 506(d) should be interpreted differently in Chapter 13 than in Chapter 7 cases

because to hold otherwise would be contrary to the

purposes of those statutory vehicles. This argument is

not based on any language in § 506(d) that would signal

differential treatment. In fact, the language of § 506(d)

is straightforward, and does not indicate any intent for

the terms to have meanings that differ based upon the

circumstances. To the contrary, § 103(a) provides clear

evidence that § 506(d) was to apply equally to Chapters 7

and 13.

In a transparent attempt to avoid that straightforward

application, Ryan asserts that the Supreme Court in

Dewsnup was not really interpreting the term “allowed

secured claim” differently in § 506(d) than § 506(a), but

rather was simply adding an anti-modification provision in § 506(d) for Chapter 7 cases. That argument is so

at odds with the plain language of Dewsnup as to be
6 No. 12-3398

created from whole cloth. Nothing in Dewsnup indicated

that the Court was adding an anti-modification provision to § 506(d) that would apply to Chapter 7 cases

alone, and in fact, it would be beyond remarkable for

the Supreme Court to simply fabricate its own statutory

provision. There is no basis in law or fact for this argument.

Ryan is left, then, with arguing that we should

interpret § 506(d) differently in Chapter 13 in order to

fulfill the purposes of Chapter 13, and because a contrary

interpretation would leave him without a remedy. In

support of that argument, Ryan sets forth at length

the deleterious impact that such an interpretation

would have on the bankruptcy code in general and on

individual debtors. There are multiple problems with

this argument. First, many courts and commentators

have noted that Chapter 13 provides alternative means

of voiding liens, and therefore the absence of that option

under § 506(d) does not necessarily leave a petitioner

without any means of achieving that goal. See Woolsey,

696 F.3d at 1278-79 and cases cited therein; 4 Collier on

Bankruptcy ¶ 506.06 [1][c] (16th ed. 2013) (“Collier”). In

fact, Ryan’s interpretation does not achieve statutory

harmony as he suggests, because it could render more

specific language in Chapter 13 irrelevant. As a leading

bankruptcy treatise discussed, § 506(d) applied as Ryan

suggests would provide lien stripping without any of

the safeguards set forth in §§ 1129(b), 1225, and 1325

governing the treatment of secured claims and lien

rights. Collier at ¶ 506.06 [1][c]. For instance, § 1123(b)(5)

permits the proponent of a plan to modify the rights of
No. 12-3398 7

holders of secured claims “other than a claim secured

only by a security interest in real property that is the

debtor’s principal residence . . .,” but that provision

would be entirely subsumed within an interpretation of

§ 506(d) that allowed the adjustment of the lien rights

without any such exceptions or limitations. Id.

Ryan argues that the alternative remedies identified

by those courts and commentators are not in fact

available here and that even if generally available, they

are not options for him because the United States has

not waived its sovereign immunity with respect to those

provisions. There is no support for basing statutory

interpretation on the government’s decision to waive,

or not waive, sovereign immunity. In fact, that argument reveals the underlying problem with Ryan’s

position here. He encourages us to read the terms in a

manner that maximizes the Congressional intent, but

for Ryan that is dependent here on the Chapter involved and the government’s decision not to waive sovereign immunity. Our role in interpreting a statute

does not extend to rewriting that statute based upon

the individual circumstances of each litigant to ensure

that Congressional purposes are attained. It is the

province of the legislature to choose language that maximizes its own purposes, and for the courts to give that

language its plain meaning or, where it is ambiguous,

to interpret it in the manner most consistent with the

statutory language as a whole, its purpose, and in a

manner that will render it constitutional.

The Supreme Court in Clark v. Martinez, 543 U.S. 371

(2005), addressed a similar argument that a statute
8 No. 12-3398

should be given differing meanings based on divergent

applications, and the court held that the language of a

statute should be read consistently. In Clark, the Court

considered a statute that provided that aliens “may be

detained beyond the removal period” if they were

(1) inadmissible under 8 U.S.C. § 1182, (2) removable

under 8 U.S.C. §§ 1227(a)(1)(C), (a)(2), or (a)(4), or

(3) determined to be at risk to the community or unlikely

to comply with an order of removal. Id. at 377. In an

earlier opinion in Zadvydas v. Davis, 533 U.S. 678 (2001), the

Court had held that for aliens in the second category,

the provision authorized detention only as long as reasonably necessary to remove the aliens from the country. The question in Clark was whether that construction

applied to aliens in the first category as well. 543 U.S.

at 377-78. The Clark Court noted that in Zadvydas it had

stated that “[a]liens who have not yet gained initial

admission to this country would present a very different

question.” Id. at 378. In fact, the Court in Clark did not

contest that the statutory purpose and the constitutional

concerns that influenced the statutory construction in

Zadvydas were not present for aliens in the first category

such as the ones before it in Clark. Id. at 380. 

The Court nevertheless held that such disparity

cannot justify giving the statute a different meaning for

one set of aliens than another, noting that “[i]t is not at

all unusual to give a statute’s ambiguous language a

limiting construction called for by one of the statute’s

applications, even though other of the statute’s applications, standing alone, would not support the same

limitation.” Id. Because the operative language of the
No. 12-3398 9

statute applied without differentiation to all three categories of aliens, the Court held that the meaning must

be consistent because “[t]o give these same words a

different meaning for each category would be to invent

a statute rather than interpret one.” Id. at 378.

Section 506(d) similarly does not distinguish claims

under Chapter 7 from those under Chapter 13. The language is uniform and does not lend itself to any

differential treatment, and § 103(a) renders the provision applicable to Chapter 7 and Chapter 13 without

distinction. Similar to the situation in Clark, because

the statute applies to Chapter 7 and Chapter 13 without

distinction, to give those words a different meaning for

Chapter 13 than Chapter 7 would be to invent a statute

rather than interpret it.

Ryan relies on court decisions that have refused to

extend the interpretation of “secured” in § 506(d) to other

provisions within § 506, but the two arguments are not

congruous. It is rare enough to interpret the same

language differently in distinct statutory sections, but is

an entirely different matter for a court to give a term a

different meaning in the same statutory provision. See

Woolsey, 696 F.3d at 1277 and cases cited therein. It is

the latter argument that the Court rejected in Clark. Id.

The Tenth Circuit in Woolsey, 696 F.3d 1266, addressed

the precise issue before us today in a thorough decision,

concluding that the Dewsnup interpretation of § 506(d)

applied equally to a Chapter 13 petition and in fact

our analysis above parallels that court’s decision. Although noting the substantial criticism directed at the
10 No. 12-3398

Dewsnup opinion, and the rejection of that interpretation

in other bankruptcy sections, the Woolsey court held

that under Clark, the language should be given a consistent interpretation. Id. at 1272-78. In light of § 103(a),

which applies the provisions of § 506(d) to Chapter 13

as well as Chapter 7, and Clark, the Woolsey court held

that there was no reasoned basis to give § 506(d) one

meaning in the Chapter 7 context and a different

meaning in the Chapter 13 situation. Id. at 1277. In fact,

the Woolsey court emphasized the danger of such

differing interpretations, stating:

Not only is the rule against multiple interpretations

of the same statute well entrenched, it is of special

importance. Without it, even a statutory term used

but a single time in a single statute risks never

settling on a fixed meaning. And this surely would

leave citizens at sea, only and always guessing at

what the law might be held to mean in the unique

“fact situation” of the next case—a result in no

little tension with the rule of law itself.

Id. at 1277-78. We agree with Woolsey, and join it in

holding that the Court’s interpretation of § 506(d) in

Dewsnup applies in Chapter 13 cases as well. Ryan

fails to raise or properly develop any other meritorious

arguments. Accordingly, the decision of the bankruptcy

court is AFFIRMED.

7-8-13