FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T MAY 11, 2012 J OHN L EY CL ERK [DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

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__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNos . 1: 10 -cv -0 16 12 -TCB; 09 -BKC- 78 17 3- PWB

InRe: LORRAINE MCNEAL, Deb to r.

----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---- LORRAINE MCNEAL, Pl ai nt iff -Ap pe ll an t, ve rs us GMAC MOR TGAGE, LLC, HOMECOMI NGS FINANCIAL, LLC, a GMAC co m

pa ny, Defen da nt s- App el le es .__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ _ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt fo r th e North ern Dis tri ctof Ge or gi a

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ _ (Ma y 11 , 20 12 ) Befo re TJ OFLAT, ED MONDSON, an d C ARNES, Cir cu itJu dg es . PER CURI AM: Lorr ai ne McNea l ap pe al s t he di st ric t co urt’s af firm an ce o f th e b an krup tc y co urt’s d en ia l o f McNe al ’s “ Mo ti onto Dete rm in e th e Sec ur edSta tu s o f Cl ai m .” Inhe r m ot io n, M cNeal so ug htto “ st rip off ” a se co ndpri or it y

li enonhe r ho m e, 1 pu rs ua ntto 11 U.S.C. § 5 06 (a) a nd(d) . Rev ers ib le erro r ha s b eensh own ; we rev ers e an d re m an d fo r ad di ti on al pro ceed in gs . McNe al fil eda vo lu nt ary pe ti ti onforba nkrupt cy un de r Ch ap te r 7 o f th e Ban kr up tc y Co de . In h er p et it io n, M cNeal rep orte d t ha t h er h om e was subjec t t o two m ortg ag e li en s: a fi rs t p rio rit y li enin th e am ou ntof $ 17 6,4 13 he ldby H SBC an d asec on d p rio rity

li eninth e am ou ntof $ 44 ,44 4 h el d b y Hom eco m in gs Fi na nc ia l, LLC, a s ub si di ary of GMAC Mo rtg ag e, LLC (co ll ect iv el y , “ GMAC”) . In bankruptc y

terms, a “ strip down” of a n underse cure d lien reduc es the lien to the va lue 1 of the c ollatera l to which it attaches a nd a “strip of

f” r emoves a

wholly unsecur ed lien in its entirety . 2McNe al als o re po rte d t ha t h er h om e’s fai r m ark etva lu e was $1 41 ,41 6. Th e p art ie s

do no t d is pu te th es e fac tu al all eg at io ns . McNe al th enso ug htto “ st rip off ” GMAC’s s eco ndpri or it y li en , pu rs ua ntto se ct io ns 50 6( a) an d 5 06 (d ). McNea l co nt en de d t ha t, b ecau se th e se ni orli en ex ceed edth e h om e’s fai r m ark etva lu e, GMAC’s jun io r li enwas wh ol ly uns ecu red an d, t hu s, v oi d u nd er s ect io n 5 06 (d ). The b an krup tc y co urt d en ie d the m ot io n, co nc lu di ng th atsec ti on 50 6( d) di d n otpe rm ita Ch ap te r 7 d eb to r to “ strip off ” a who ll y un se cu redli en . The d is tri ctco urt af firm ed . Whe n t he di st ric t co urt af firm s t he ba nkrupt cy

co urt’s o rd er, we rev ie w on ly th e b an krup tc y

co urt’s d eci si on on ap pe al . Edu c. Cred itMg m t. Co rp . v. Mo sl ey , 49 4 F .3d13 20 , 13 24 (11 th Cir . 20 07 ). Andwe rev ie w th e b an kr up tc y co urt’s le ga l co nc lu si on s d e n ov o. Hem ar In s. Co rp . of Am . v. Co x, 3 38 F.3d12 38 , 12 41 (1 1t h C ir. 2 00 3) . Tha t GMAC ’s jun io r li enis bo th “ al lo wed ” u nd er 1 1 U.S.C. § 50 2 a nd who ll y un se cu redpu rs ua ntto sec ti on 50 6( a) i s u nd is pu te d. To d et erm in e whe th er 2

11 U.S.C. 

### § 506(a) provides in per tinent part: 2 An allowed c laim of a c reditor se cure d by a lien on prope rty

in which the esta

te has an inter est . . . is a sec ured c laim to the ext ent of the va lue of such c reditor’ s interest in such prope rty

. . . and is an unsec ured c laim to the ext ent that the value of such c reditor’ s interest . . . is less than the amount of suc h allowed c laim. 3su ch anall owe d -- bu t wh ol ly uns ecu red-- cl ai m is vo id ab le , we m

us t t he n l oo k t o se ct io n 5 06 (d ), whi ch pro vi de s t ha t “ [t]o the ex te ntth ata li ensec ur es a cl ai m ag ai ns t a d eb to r th atis no t an all owe d s ecu redcla im , su ch li enis vo id .” See 1 1 U.S.C. § 5 06 (d ). Sev eral co urts have de te rm in edth atth e Uni te d S ta te s Supr em e Co urt’s de ci si on in Dewsn up v. Timm , 11 2 S . Ct. 7 73 (19 92 ) -- wh ic h c on cl ud edth ata Ch ap te r 7 d eb to r co ul d n ot“ st rip do wn” a pa rti al ly securedli enun de r se ct io n 50 6( d) -- al so pre cl ud es a Ch ap te r 7 d eb to r fro m “ strip pi ng off

” a wh ol ly un se curedjun io r li ensu ch as t he li enat i ss ue in th is ap pe al . See, e.g ., Ry anv. Hom eco m in gs Fin . Netwo rk , 25 3 F .3d77 8 (4 th Cir . 20 01 ); Tal be rt v . Cit y Mo rtg . Serv ., 34 4 F .3d55 5 (6 thCir . 20 03 ); Las ki n v . Firs t Nat ’l Ban k o f Key st on e, 22 2 B.R. 8 72 (B.A.P. 9th C ir. 1 99 8) . Butth e p res en t co nt ro ll in g p rece de ntin th e Elev en thCir cu itrem ai ns ou r de ci si on in Fo le nd or e v . Uni te d S ta te s Sm al l Bu s. Adm in ., 86 2 F .2d15 37 (11 th Cir . 19 89 ). In F ol en do re, we co nc lu de d t ha t an al lo wedcla im

th atwas wh ol ly uns ecu red-- jus t as GMAC’s cl ai m is he re -- was vo id ab le un de r th e p la in lan gu ag e o f se ct io n 5 06 (d ). 86 2 F .2dat 1 53 8- 39 . 3

Although F olendore addre ssed the 1978 ver sion of the B ankruptc y Code, the 1984 3 amendments to the Code did not alter the per tinent languag e in sec tion 506(a) or (d). 4A few ba nkrupt cy co urt d eci si on s wi th in ou r ci rcu it-- in cl ud in g t he de ci si on un de rlyin g t hi s ap pe al -- h av e tr eat edFo le nd or e as ab ro ga te d b y Dewsn up . See, e.g ., In re McNea l, No . A09 -7 81 73 , 20 10 Ban kr . LEXIS 13 50 , at *9 -1 2 (B an kr . N.D. Ga. Apr. 9 , 20 10 ); I n re Swaffo rd , 16 0 B .R. 24 6, 2 49 (Ban kr . N.D. Ga. 199 3) ; In re Windha m , 13 6 B .R. 87 8, 8 82 n.6 (Ban kr . M.D. Fla. 1 99 2) . Bu t Fo le nd or e -- n otDewsn up -- co nt ro ls in th is cas e.

“ Und er o urpri orpa ne l p rece de ntrul e, a la te r pane l m ay de pa rt f ro m an earl ie r pa ne l’s d eci si on on ly whe n t he in te rv en in g S up rem e Co urt d eci si on is ‘clear ly on p oi nt .’ ” Atl . Sou nd in g C o., In c. v. To wns en d, 4 96 F.3d12 82 , 12 84 (1 1t h C ir. 2 00 7) . Becau se Dewsn up di sa ll owe d o nl y a “ st rip do wn” of apa rti al ly se cu redm ortg ag e li enan d d idno t ad dr es s a “ st rip off ” o f a wh ol ly uns ecu redli en , itis no t “ cl earl y

onpo in t” with t he fact s i n F ol en do re o r wit h t he fact s atis su e in th is ap pe al . Alt ho ug h t he Supr em e Co urt’s re as on in g i n Dews nup s eem s t o re ject t he pl ai n l an gu ag e an al y si s tha t we u se d i n F ol en do re, “ ‘[t]here i s, o f co ur se , an im po rta ntdi ffer en ce b etween th e h ol di ng in a cas e an d t he reas on in g t ha t s up po rts th atho ld in g.’” Atl . Sou nd in g C o., In c., 49 6 F .3dat 1 28 4 (c it in g C rawfo rd -El v . Bri tt on , 11 8 S . Ct. 1 58 4, 1 59 0 (1 99 8) ). “ [T]hatth e rea so ni ng of a n i nt erv en in g hi gh co urt d eci si on is at o dd s wi th th atof o urpri orde ci si on is no ba si s fo r a p an el 5to de pa rt f

ro m ou r pr io r de ci si on .” Id . “ As we h av e st at ed , ‘ [o ]bed ie nc e to a Supr em e Co urt d eci si on is on e th in g, ex trapo la ti ng fro m it s i m pl ic at io ns a ho ld in g on anis su e th atwas n otbe fo re tha t Co urt i n o rd er t o upe ndset tl edcir cu itlaw i s an ot he r th in g.” Id. In fact , th e Supr em e Co urt -- no ti ng th e am bi gu it ie s i n t he ba nkrupt cy

co de an d t he “ th e d iff

ic ul ty of in te rp ret in g t he st atut e in a si ng le op in io n t ha t wo ul d app ly to al l p os si bl e fac t s itua ti on s” -- li m it edit s Dews nup de ci si on ex pr es sl y

to th e p reci se is su e rai se d b y th e fac ts of t he cas e. 11 2 S . Ct. at 77 8. Bec au se -- u nd er Fo le nd or e -- GMAC ’s li enis vo id ab le un de r se ct io n 50 6( d) , we rev ers e an d re m an d fo r ad di ti on al pro ceed in gs co ns is te ntwith t hi s de ci si on . REVERSED AND REMANDED.

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