[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

________________________ No. 13

- 1 3013

________________________ D.C. Docket No s . 5:13

- cv - 00068

- CAR , 12

- 51926

In re: PHILLIP JEFFERSON BROWN, Debtor.

__________________________________________________________________ SANTANDER CONSUMER USA, INC., as assignee of Thor Credit Corp. , Plaintiff

- Appellant ,

versus

PHILLIP JEFFERSON BROWN , Defendant

- Appellee

.

________________________ Appeal from th e United States District Court for the Middle District of Georgia

________________________ (March 27 , 2014) Case: 13-13013 Date Filed: 03/27/2014 Page: 1 of 122 Before WILSON, Circuit Judge, BUCKLEW , * and LAZZARA ,** District Judges. BUCKLEW, District Judge : Santander Consumer USA, Inc. , as assignee of Thor Credit Corp. (“Santander”) appeals the district court’s affirmance of the bankruptcy court’s order overruling Santander’s objection to the confirmation of Phillip Jefferson Brown’s plan under Chapter 13 of the United States Bankruptcy Code , which proposed that Brown s urrender his vehicle under 11 U.S.C. § 1325(a)(5)(C) to satisfy Santander’s claim. The bankruptcy court held 11 U.S.C. § 506(a) (1) and (a)(2) determined the vehicle’s value and hence the amou nt of Santander’s secured claim, which would be satisfied by Brown’s surrender of the vehicle

. The issue before this Court is whether § 506(a)(2)’s valuation standard applies when a Chapter 13 debtor surrenders his vehicle under § 1325(a)(5)(C). We hold that it does, and we affirm.
I. We have jurisdiction because t he district court’s affirmance of the bankruptcy court’s decision is a final appealable order. 28 U.S.C. § 158(d)(1). Brown’s plan was confirmed at the time of the district court’s order , which

________________________ * Honorable Susan C. Bucklew, United States District Judge for the Middle District of Florida, sitting by designation. ** Honorable Richard A. Lazzara, United States District Judge for the Middle District of Florida, sitting by designation.

Case: 13-13013 Date Filed: 03/27/2014 Page: 2 of 123 definitively concluded that § 506(a)(2) governed th e valuation of Brown’s vehicle
surrender ed u nder § 1325(a)(5)(C). See In re Colbourne , No. 12

- 14722, 2013 WL 5789159 , at *1 n n.3

- 4 (11th Cir. Oct. 29, 2013) (per curiam) . The district court’s decision is “final and ended this part of the litigation on the merits,” leaving the bankruptcy court with nothing left to decide

. T & B Scottdale Contractors, Inc. v. United States , 866 F.2d 1372, 1375 (11th Cir. 1989).
II.
In July 2007, Brown purchased a 37

- foot 2006 Keystone Challenger recreational vehicle. Brown entered into a loan agreement secured by the recreational vehicle. In July 2012 , Brown filed for Chapter 13 bankruptcy. Santander , the owner of the loan agreement, filed a proof of secured claim in th e bankruptcy court for $ 36,587.53 , the outstanding payoff balance due at the petition date. Brown’s modified Chapter 13 plan propos ed surrendering the vehicle in full satisfaction of Santander ’s claim

. Santander objected to the confirmation of the plan

. At the confirmation hearing on September 27, 2012, the parties disagreed on the method for valuing Brown’s vehicle. 1 Brown argued that § 506(a)(2)’s replacement value standard governed his vehicle’s valuation , which in turn

1 At that time, Santander had possession of the vehicle but had not sold it.

Case: 13-13013 Date Filed: 03/27/2014 Page: 3 of 124 determined the amou nt of Sa ntander’s secured claim. Brown contended that if his vehicle’s replacement value exceeded his debt, surrendering his vehicle would satisfy Santander’s entire claim (and his debt) under § 1325(a)(5)(C) . Santander argued that a surrendered vehicle’s value should be based on its foreclosure value, not replacement value. On December 3, 2012, the bankruptcy court overruled Santander’s objection, holding that § 506(a)(2) required valuing Brown’s vehicle based on its replacement value. The bankruptcy court fou nd that while the Supreme Court’s 1997 decision in Associates Commercial Corp

. v. Rash , 520 U.S. 953 , 117 S. Ct. 1879 (1997) supported applying a foreclosure value standard to Brown’s surrendered vehicle, Rash preceded the Bankruptcy Abuse Prevention and
C onsumer Protection Act of 2005’s (“BAPCPA”) addition of § 506(a)(2), which require d the replacement value standard. The court concluded Santander would have a secured claim to the extent of the vehicle’s replacement value , and that Brown’s surrender of the vehicle would satisfy that claim under § 1325(a)(5)(C). Following a valuation and confirmation hearing, the bankruptcy court determined that the vehicle’s replacement value at least equaled the debt and confirmed Brown’s Chapter 13 plan. 2 Santander appealed the bankruptcy court’s

2 Santander challenges only the bankruptcy court’s decision to apply § 506(a)(2)’s replacement value standard in this case, not the court’s finding regarding the vehicle’s replacement value.

Case: 13-13013 Date Filed: 03/27/2014 Page: 4 of 125 decision to apply the replacement value standard to the district court, which rejected Santander’s arguments and affirmed the bankruptcy court’s decision.
III. “The factual findings of the bankruptcy court canno t be set aside unless they are clearly erroneous; however, conclusions of law made by either the bankruptcy court or the district court are subject to de novo review.” In re Graupner , 537 F.3d 1295, 1299 (11th Cir. 2008). A. Under § 1325(a)( 5), a plan’s treatment of an “allowed secured claim” can be confirmed if: the secured creditor accepts the plan, the debtor retains the collateral and makes payments to the creditor , or the debtor surrenders the collateral. 11
U.S.C. § 1325(a)(5) (A)

- (C). In this case , Brown exercised the surrender option under § 1325(a)(5)(C).
T he term “allowed secured claim” refers to § 506(a). Rash , 520 U.S. at 957 , 117 S. Ct. at 1883 (“The value of the allowed secured claim is governed by § 506(a) of the Code.”); Graupner , 537 F. 3d at 1296. Section 506(a) (1) bifurcates a secured creditor’s allowed claim into secured and unsecured portions based on the underlying collateral ’s value and addresses how to determine such value: An allowed claim of a creditor secured by a lien on property in which the e state has an interest . . . is a secured claim to the extent of the value of such cr editor’ s interest in the estate’s interest in such property

. . . and is an unsecured claim to the extent that the value of Case: 13-13013 Date Filed: 03/27/2014 Page: 5 of 126 such credito r’ s interest

. . . is less than the amount of such allowed claim. Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property . . . . 11 U.S.C. § 506(a)(1) (200 6 ) (emphasis added).
In Rash , the debtor proposed to retain the collateral under § 1325(a)(5)(B), while valuing the collateral based on its foreclosure value. 520 U.S. at 957 , 117 S.
Ct. at 1883

. However, t he Supreme Court interpreted “disposition or use” as requiring different valuation standards depending on whether the collateral was surrendered or retained

. Id . at 962, 117 S. Ct. at 1885

. Rash held that the proper standard was replacement value, not foreclosure value , in the retention context

. Id

. After Rash , BAPCPA added § 506(a)(2) . Like § 506(a)(1)’s last sentence, § 506(a)(2) refers to § 506(a)(1)’s bifurcation provision and addresses how to determine value. Unlike § 506(a)(1), § 506(a)(2)’s scope is limited to certain cases
and expressly mandates a repla cement value standard : If the debtor is an individual in a case under chapter 7 or 13, such value with respect to personal property securing an allowed claim shall be determined based on the replacement value of such property as of the date of the filing o f the petition without deduction for costs of sale or marketing. With respect to property acquired for personal, family, or household purposes, replacement value shall mean the price a retail merchant would charge for property of that kind considering the age and condition of the property at the time value is determined.
11 U.S.C. § 506(a)(2) (200 6 ) (emphasis added)

. Thus, when § 506(a)(1) and (a)(2) both apply, a creditor holding an undersecured claim would have a secured claim

Case: 13-13013 Date Filed: 03/27/2014 Page: 6 of 127 equal to the collateral’s judicially

- determined replacement value and an unsecured claim to the extent the debt exceeds the collateral’s replacement value.
T he parties do not dispute that Brown is an individual in a C hapter 13 case with property fall ing with in the scope of § 506(a)(2). Nevertheless, they dispute whether § 506(a)(2) applies . Santander contends § 506(a)(2)’s replacement value standard does not apply whe re , as here, the debtor exercises the surrender option under § 1325( a ) (5)(C). Brown contends it does.
B. We begin with the text of the Bankruptcy Code. In re Allied Mech. Servs.,
Inc ., 885 F.2d 837, 838 (11th Cir. 1989)

. Section 506(a)(2)’s text

— “ [i]f the debtor is an individual in a case under chapter 7 or 13, such value

. . . shall be determined based on the replacement value ”

— expressly requires applying a replacement value
standard in cases falling within its ambit. And t he cases that fall within the scope of § 506(a)(2) ’s ambit include those involving a Chapter 13 debtor’s personal property or property for personal, family, or household use

— precisely the kind at issue here. Section 506(a)(2), by its plain terms, applies to this case. We disagree with Santander’s textual argume nts. Santander argues that applying § 506(a)(2) ’s replacem ent value standard when a debtor surrenders property under § 1325(a)(5)(C) would misapply Rash and violate § 506(a)(1)’s “disposition and use” language

. Specifically, Sa ntander contends that apply ing a

Case: 13-13013 Date Filed: 03/27/2014 Page: 7 of 128 replacement value standard would ignore Rash’s holding that different valuation standards should apply depending on the collateral’s “disposition or use,” with
foreclos ure value governing surrender and replacement value governing retention

. But Santander fails to acknowledge that Rash preceded BA PCPA’s addition of § 506(a)(2), which expressly requires applying the replacement value standard in this case. And while § 506(a)(2)’s replacement value standard mandate seemingly contradict s § 506(a)(1)’s broader “dispositi on and use” valuation language, a well

- established canon “ of statutory construction [is] that th e specific governs the general. ” RadLAX Gateway Hotel, LLC v. Amalgamated Bank , 132 S. Ct. 2065, 2071 (2012) ( internal quotati on marks omitted). Here, § 506(a) (2) specifies how to value certain property in C hapter 7 and 13 cases, while § 506(a) (1) is more broadly worded and says nothing about C hapter 7 and 13 cases. When a case falls within § 506(a)(2)’s ambit , its specific requirements control. Id

. (“The general/specific canon is

. . . applied to statutes in which a general permission or prohibition is contradicted by a specific prohibition or permission. To eliminate the contradiction, the specific provision is c onstrued as an exception to the general one.”). Santander’s corollary argument is that § 506(a)(2) only applies to cases where the debtor exercises the retention option under § 1325(a)(5)( B ). But t his requires us to read a limitation into the statute that does not exist in the plain text

.

Case: 13-13013 Date Filed: 03/27/2014 Page: 8 of 129 Congress expressly limited § 506(a)(2) to certain C hapter 7 and 13 cases ; it could have also limited § 506(a)(2) to cases where the debtor retains or “uses” the collateral. Congress did not, and neither will we. Santander also asserts that § 506(a) (2) only applies to retained property under § 1325(a)(5)(B) , because BAPCPA only added § 506(a)(2) to codify Rash ’s holding that replacement value should govern in the retention context

. We acknowledge that c ases have described § 506(a)(2) as a codification of Rash , see,
e.g., In re Martinez , 409 B.R. 35, 40 (Bankr. S.D.N.Y. 2009), but they do not hold that § 506(a)(2) is limited to the facts of Rash

. Nor does the text of § 506(a)(2) support that conclusion

. Santande r also suggests that it is improper to conduct any valuation at all , because Rash “does not state that the court is to pre

- determine the value of surrendered vehicles under § 506(a) based on foreclosure value, or any other value standard.” (Ini . Br. 12.) However , as Sa ntander concedes, § 506(a)(1) bifurcation applies. (Reply Br. 2.) Because bifurcation is premised on the collateral’s valuation, “[i]t was permissible for [Brown] to seek a valuation in proposing [his] Chapter 13 plan. ” Nobelma n v. Am. Sav. Bank , 508 U.S. 324, 328 , 113 S. Ct. 2106, 2110 (1993) (“ Petitioners were correct in looking to § 506(a) for a judicial valuation of the collateral to determine the status of the bank’s secured claim.”). C. Case: 13-13013 Date Filed: 03/27/2014 Page: 9 of 1210 Nor are we persuaded by Santander’s arguments that applying § 506(a)(2) in the surrender context would be absurd

. Santander argues that it would be absurd
because it allow s debtors to surrender collateral in full satisfaction of the debt.
T his overstates the effec t of § 506(a)(2)

. Surrender would satisfy the creditor’s secured claim, not the entire debt. If a creditor holds an undersecured claim, the creditor would still have a n unsecured claim to the extent the debt exceeds the collateral’s judicially

- determined replacement value. Santander also argues that applying § 506(a)(2) would be absurd because it eliminate s creditors’ contract and state law rights to liquidate and pursue an unsecured claim for any defi ciency

. But state law does not govern if the Bankruptcy Code requires a different result

. See Butner v. Un ited States, 440 U.S.
48 , 55, 99 S. Ct. 914, 918 (1979 ); Raleigh v. Ill. Dep’t of Revenue , 530 U.S. 15, 20 , 120 S. Ct. 1951, 1955 (2000) ( holding that creditors’ rights are “ subject to any qualifying or contrary pr ovisions of the Bankruptcy Code ”). Here, the Bankruptcy Code is contrary to state law, as an unsecured claim under § 506(a)(1) and (a)(2) equals the amount that the debt exceeds the property’s replacement value

— not the amount of post

- sale deficiency. Thus, state law cannot apply. During oral argument, Santander cited Graupner , 537 F.3d 1295 , and
contended that applying § 506(a)(2) would be unfair to secured creditors and contrary to the legislative intent to benefit secured creditors

. But Graupner did not

Case: 13-13013 Date Filed: 03/27/2014 Page: 10 of 1211 address § 506(a)(2); it addressed the “hanging paragraph” at the end of § 1325(a)

— a provision added by the BAPCPA to preclude § 506(a) bifurcation

. See 11 U.S.C. § 1325(a)(*); In re Barrett , 543 F.3d 1239, 1243 (11th Cir. 2008). In finding that the purpose of the hanging paragraph was to benefit secured creditors, Graupner noted the title of the BAPCPA section that added the hanging paragraph : “Giving Secured Creditors Fair Treatment in Chapter 13

. ” 537 F. 3d at 1297

- 98,
1302.
T he effect of § 506(a)(2) is different than that of the hanging paragraph

. 3
Further , to the extent the title of the enacting BAPCPA section

— “Fair Valuation of Collateral”

— is indicative of the legislative intent for adding § 506(a)(2), our construction is consistent. See Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 , Pub. L. No. 109

- 8, § 327, 119 Stat. 23 , 99 (2005). Congress may believe that a replacement value standard provides a “fair valuation ” for cases falling within the scope of § 506(a)(2). Santander’s assertion that it is unfair to secured creditors is a policy argument that cannot overcome the plain

3 The court in In re Rodrig uez , 375 B.R. 535 (B.A.P. 9th Cir. 2007) speculated that the hanging paragraph was added to protect secured creditors from § 506(a)(2)’s va luation stand ard. Id. at 544 (“We suspect, but do not decide, that there is one very important reason why Congress chose to suspend section 506 from its application to section 1 325(a)(5)(C)’s surrender option

. . . . Section 506(a)(2)’s applicability is no t limited to the retention, anti

- cramdown option of section 1325(a)(5)(B). Thus, without the hanging paragraph, upon s urrender of a 910 vehicle, the ‘replacement value’ would be used to reduce the total amount owed to the 910 creditor, rather than the amo unt actually realized on liquidation. That would inevitably lead to a smaller deficiency claim. By rendering section 506(a)(2) unavailable following surrender, there is no artificially inflated reduct ion of the total debt . . . .” (footnote omitted) ).

Case: 13-13013 Date Filed: 03/27/2014 Page: 11 of 1212 textual indication of § 506(a)(2 ) : that Congress did not intend to limit § 506(a)(2)
to ca ses where the debtor retains collateral under § 1325(a)(5)(B). See Lamie v.
U.S. Trustee , 540 U.S. 5 26, 542 , 124 S. Ct. 1023, 1034 (2004) (“I f Congress enacted into law something different from what it intended, then it should amend the statute to conform it to its intent.

. . . In the meantime, we must determine intent from the statute before us.” ).
T he district court’s order affirming the ban kruptcy court is AFFIRMED. Case: 13-13013 Date Filed: 03/27/2014 Page: 12 of 12