2014 BNH 010 Note: This is an unreported opinion. Refer to LBR 1050-1 regarding citation. 

____________________________________________________________________________________ 

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW HAMPSHIRE

In re: Bk. No. 13-12452-BAH 

 Chapter 13 

James S. Fournier and 

Tina M. Fournier, 

 Debtors 

Robert R. Thomas, Esq. 

Harvey, Kleger & Thomas 

Methuen, Massachusetts 

Attorney for Debtors 

Shawn K. Doil, Esq. 

Perkins Thompson, P.A. 

Portland, Maine 

Attorney for Creditor TD Bank, N.A.

MEMORANDUM OPINION

I. INTRODUCTION

Debtors James and Tina Fournier (the “Debtors”) filed a motion pursuant to Local 

Bankruptcy Rule 3012-1 seeking to void the second mortgage lien on the Debtors’ residence held 

by TD Bank, N.A. (the “Bank” or “TD Bank”) (Doc. No. 18) (the “Motion”). In the Motion, the 

Debtors seek an order that (1) determines the secured status of the Bank’s claim under 11 U.S.C. 

§ 506(a); and (2) modifies the rights of TD Bank as the holder of a residential real property lien 

by voiding the lien as wholly unsecured in accordance with 11 U.S.C. § 1322(b)(2). TD Bank 

objected to the Motion (Doc. No. 19) on the grounds that its claim is not wholly unsecured. The 

Court held a hearing on the Motion on July 10, 2014, in order to take evidence on the issue of 

value. This Court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. §§ 

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1334 and 157(a) and Local Rule 77.4(a) of the United States District Court for the District of 

New Hampshire. This is a core proceeding in accordance with 28 U.S.C. § 157(b). 

II. FACTS

 The Debtors own real estate located at 4 Salem Road in Atkinson, New Hampshire (the 

“Property”), which is their principal residence. The Property is a fifty-five year old, one-story 

ranch with a two-car garage underneath. The Property has eight rooms, including four bedrooms 

and two bathrooms, and contains 1,644 square feet of living area. The Property has a pellet stove 

and a built-in wall unit for air conditioning, which reportedly can cool the whole house. The 

Property consists of .52 acres. It is located on a corner lot, with the street in front of the home 

being a busier road (with a “double yellow line”) and the street on the side of the home, on which 

driveway is situated, being a quieter street that is part of a neighborhood. Both appraisers 

testified that the Property is well maintained, with no deferred maintenance issues, except that 

the Debtors’ Expert (as identified below) testified that railings needed to be installed on the front 

door steps. 

 The Property is subject to a first mortgage obtained in September 2006. The Property is 

also subject to a second mortgage obtained in January 2007. The second mortgage is held by TD 

Bank. The Debtors sought relief under chapter 13 of the Bankruptcy Code on October 4, 2013 

(the “Petition Date”). At the time of the Debtors’ bankruptcy filing, $225,422.94 was owed on 

the first mortgage and $24,818.41 was owed on TD Bank’s second mortgage. The parties 

disagree as to the value of the Property. The Debtors contend the Property was worth 

$220,000.00 as of January 23, 2014, the date of an appraisal performed by Michael V. Correia 

(“Correia” or the “Debtors’ Expert”). TD Bank contends the property was worth $254,000.00 as 

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of February 25, 2014, the date of an appraisal performed by Mark C. Lester (“Lester” or the 

“Bank’s Expert”). The Property is tax assessed at $242,000.00. 

III. DISCUSSION

 The Debtors seek a finding that TD Bank’s mortgage is wholly unsecured so that they 

may void its lien. See Domestic Bank v. Mann (In re Mann), 249 B.R. 831 (B.A.P. 1st Cir. 

2000) (holding that, notwithstanding the anti-modification provision contained in § 1322(b)(2), 

debtors may void residential real property liens that are wholly unsecured as determined by a 

valuation under § 506(a)). TD Bank seeks a finding that the Property is worth more than 

$225,422.94. If the Debtors’ residence is worth more than this amount, then some value exists to 

support TD Bank’s claim, making it a claim that is in fact both secured and secured only by a 

security interest in the Debtors’ principal residence, thereby implicating the anti-modification 

provision of § 1322(b)(2).1 

 In the Court’s view, chapter 13 debtors have the burden to prove that they are entitled to 

strip a lien from the debtor’s principal residence. Johnston v. Suntrust Bank (In re Johnston), Bk. 

No. 12-51263, Adv. No. 12-05066, 2013 WL 1844751, at *5 (Bankr. W.D. Va. Apr. 12, 2013) 

(concluding that the burden should be placed on the debtor in this context given the economic 

motivations of the parties and the legal principle that parties seeking relief or seeking to change 

the status quo bear the burden of proving that they are entitled to such relief); Young v. Camelot 

Homes, Inc. (In re Young), 399 B.R. 480, 486 (Bankr. D. Me. 2008) (stating that chapter 13 

debtors bore the burden of proving the value of the judgment creditor’s collateral, where the 

debtors sought to confirm a plan that crammed down the creditor’s claim); but see In re Heritage 

 

1

 Section 1322(b)(2) provides in relevant part that debtors, through a plan, may “modify the rights of 

holders of secured claims, other than a claim secured only by a security interest in real property that is the 

debtor’s principal residence.” 11 U.S.C. § 1322(b)(2). 

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Highgate, Inc., 679 F.3d 132, 139-40 (3d Cir. 2012) (noting that a three-way split of authority 

exists in allocating the burden of proof as to the value of secured claims under § 506(a), with 

some courts placing the burden on the debtor, some placing the burden on the creditor, and some 

shifting the burden by placing the initial burden on the debtor and the ultimate burden of 

persuasion on the creditor, and concluding that the burden shifting paradigm should apply); In re 

Bethoney, 384 B.R. 24, 31 (Bankr. D. Mass. 2008) (stating that the debtor bears the initial 

burden of proof in a motion under § 506(a) seeking to bifurcate a secured creditor’s claim 

secured by the debtor’s vehicle). 

 Here, each party presented appraisal evidence through the testimony and report of a 

licensed appraiser. The appraisers both used the same method for valuing the Property, the sales 

comparison approach.2

 Both appraisers testified competently and had equivalent qualifications, 

with each appraiser having significant experience in appraising residential real estate, as well as 

knowledge of the market and the Property. 

 While the Debtors’ Expert valued the Property at $220,000.00, the Bank’s Expert valued 

the Property at $254,000.00. Given that the value of the Property must be $225,422.94 or less, in 

order for the Court to find in favor of the Debtors on the issue of value, the Court would 

essentially need to completely disbelieve the testimony of the Bank’s Expert. In addition, the 

Court would need to find that the margin of error in the Debtors’ Expert’s appraisal is less than 

2.5%. The Court is unprepared to make such findings on this record. See Fraize v. Beneficial 

Mortg. Corp. of NH (In re Fraize), 208 B.R. 311, 313 (Bankr. D.N.H. 1997) (noting that 

“valuation” is “less than an exact science”). Further, a detailed review and analysis of the 

 

2

 “Valuation through the comparable sales approach assumes that the properties valued by the market are 

comparable enough to the subject property that the adjustments by the appraiser are relatively small and 

that the value is primarily determined by the market, not the appraiser.” In re Ferman, 2001 BNH 028, 3. 

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appraisers’ reports and testimony supports the Court’s conclusion that the Debtors’ Property is 

worth more than $225,422.94. 

A. Debtors’ Evidence of Value 

The Debtors’ Expert testified that the value of the Property was $220,000.00 as of 

January 23, 2014,3

 based on a comparable sales analysis. Correia used four comparable sales to 

arrive at this value. In choosing his comparable sales, Correia testified that location was the 

primary factor.4

 Of the four comparable sales, two were located within a mile of the Property 

(Comparable Sale 2 was .36 miles from the Property and Comparable Sale 4 was .62 miles from 

the Property) while two were located more than a mile away (Comparable Sale 1 was 1.74 miles 

from the Property and Comparable Sale 3 was 2.41 miles from the Property). Comparable Sale 1 

was located at 39 Main Street and was one of the more recent sales, having closed on October 

18, 2013 (two weeks after the Petition Date). Comparable Sale 2 was located at 23 Sunset Drive; 

the property had only 1,144 square feet of living area, compared to the Property’s 1,644 square 

feet, and was located in a neighborhood setting, unlike the Property. Comparable Sale 3 was 

located at 33 Island Pond Road and was the oldest sale, having closed back in February of 2013. 

Comparable Sale 4 was located at 6 Meadow Lane. Like Comparable Sale 2, this property was 

considerably smaller than the Property, having only 1,184 square feet of living area, and also was 

located in a neighborhood setting. Per Correia’s report, the adjusted sales prices for these sales 

were as follows: 

 Comparable Sale 1 $217,400.00 

 Comparable Sale 2 $221,500.00 

 

3

 While Lester’s report is dated January 23, 2014, he noted in his appraisal report that “I have performed 

an appraisal of the subject property with an effective date of 10/28/13 and 11/03/13,” both dates being 

within a month of the Petition Date. 

4

 All of the comparable sales used by both the Debtors’ Expert and the Bank’s Expert were of properties 

located in Atkinson, New Hampshire, the same town in which the Property is located. 

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 Comparable Sale 3 $220,400.00 

 Comparable Sale 4 $220,000.00 

The Debtors’ Expert made various adjustments to his comparable sales, based on their 

smaller living areas, finished basements, energy efficient items, and smaller garages. The 

Bank’s Expert did not challenge these individual adjustments. Accordingly, the Court sees no 

basis upon which to question them. Correia made no adjustments for the difference in age 

between the Property and the comparable sales, which appears reasonable, as the difference in 

age was no more than ten years for any property. 

Lester did challenge the comparable sales used by the Debtors’ Expert on other grounds. 

He disagreed with several of Correia’s view adjustments, arguing instead that he should have 

made location adjustments or no adjustments at all. In addition, Lester noted that Comparable 

Sale 1 was marketed in a vacant state, which he indicated would tend to depress the selling price. 

Further, he testified that Comparable Sale 4 was sold by a couple who had just moved the 

home’s former occupant (a family member) into an assisted living facility and did not want to 

carry the home through the winter. The Bank’s Expert testified that the selling broker had 

informed him that Comparable Sale 4 sold for less than it was worth. 

B. TD Bank’s Evidence of Value

The Bank’s Expert testified that the value of the Property was $254,000.00 as of February 25, 

2014,5

 based on a comparable sales analysis. Lester used three comparable sales to arrive at this 

value. Comparable Sale 1 was located at 65 Walker Street, which, at a distance of 0.65 miles is 

the closest to the Property of his three comparable sales. Its lot size of 1.68 acres was 

considerably larger than the Property’s lot size of .52 acres. Comparable Sale 2 was located at 

29 Maple Avenue, which is 1.66 miles from the Property. The gross living area of this property 

 

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 Correia did not testify that the value the Petition Date would have been any different. 

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was only 1,044 square feet, or approximately 37% smaller that the Property. Comparable Sale 3 

was located at 3 Hovey Meadow Road, one mile from the Property. Like the Property, 

Comparable Sale 3 was a ranch-style home, with square footage of 1,488, which is closer in size 

to that of the Property. 

 The adjusted sales prices for the comparable sales used by the Bank’s Expert are as 

follows: 

 Comparable Sale 1 $254,000.00 

 Comparable Sale 2 $269,000.00 

 Comparable Sale 3 $250,545.00 

Like the Debtors’ Expert, the Bank’s Expert made various adjustments to his comparable sales, 

based on their smaller living area, finished basements, energy efficient items, and smaller 

garages. The Debtors’ Expert did not challenge these individual adjustments. For that reason, 

the Court sees no basis upon which to question them. 

Unlike the Debtors’ Expert, the Bank’s Expert made no adjustment for the differences in 

lot size (Comparable Sale 1 had 1.68 acres, Comparable Sale 2 had 1.75 acres, and Comparable 

Sale 3 had 1.15 acres). He testified that greater lot size does not always translate into higher 

value because what matters is how much of a lot is usable, i.e., “lot utility.” For example, Lester 

testified that while Comparable Sale 3 was on a larger lot than the Property, its terrain was more 

rolling, provided no additional overall privacy to the homeowner, and had limited utility. He 

explained that when extra land is in the back of a property and consists of woods, the extra land 

does not create more value. The Debtors’ Expert did not discredit that point of view. 

Although the difference in age between the Property (fifty-five years old) and Lester’s 

Comparable Sale 1 (forty-one years old) and Comparable Sale 3 (thirty-six years old) was 

significant, fourteen years and nineteen years respectively, Lester made no age adjustments. He 

testified that no such adjustments were necessary because the properties were of the same 

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“effective” age and condition as the Property. He noted that the Property was in good condition; 

a conclusion which is supported by the photographs of the Property that were submitted with the 

appraisal reports. Lester testified further that the Property contains an addition, suggesting that 

the entire property is not fifty-five years old, but only the original home. 

C. Court’s Conclusion as to Value 

In the Court’s view, Debtors’ Comparable Sale 1 is the most similar to the Property—

despite its distance of 1.74 miles from the Property—and provides the Court with the Debtors’ 

best indicator of value, based on its lot size, the amount of living space, and its amenities, e.g., 

garage size and location, patio/deck, and fireplace. Comparable Sale 1 sits on a .57 acre lot 

compared to the Debtors’ .52 acre lot. Comparable Sale 1 has 1,568 square feet of living space 

compared to the Property’s 1,644 of living space. And, like the Property, Comparable Sale 1 has 

a two car garage underneath, a comparable deck/patio, and a fireplace. 

In the Court’s view, TD Bank’s Comparable Sale 3 is the most similar to the Property 

and provides the Court with TD Bank’s best indicator of value, based on its proximity to the 

Property, the amount of living space, and its amenities, e.g., garage size and fireplace. 

Comparable Sale 3 was located within one mile of the Property, had 1,488 square feet of living 

space compared to the Property’s 1,644 of living space, and, like the Property, contained a two 

car garage underneath and a fireplace. 

 While Correia’s Comparable Sale 1 and Lester’s Comparable Sale 3 are the most 

reasonably similar to the Property, the Court believes that one further adjustment to the value of 

those properties is necessary, as the Court believes that similar adjustments should be made 

when adjusting for differences in reported square footage. While the appraisers made similar 

adjustments for finished space in the basements of the comparable sales, they used different per 

square foot multipliers when adjusting the main floor living space. Lester testified that he used 

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$35.00 per square foot to adjust for the 156 square foot difference between the Property and 

Comparable Sale 3. Correia used $25.00 per square foot to adjust for the 76 square foot 

difference between the Property and Comparable Sale 1. Using an average of $30 per square 

foot to adjust for these differences, the living space adjustment for Lester’s Comparable Sale 3 

would be $4,680.00, instead of $5,500.00, and the living space adjustment for Correia’s 

Comparable Sale 1 would be $2,280.00, instead of $1,980.00. Based on these adjustments, the 

Court arrives at the following adjusted sales price for each of the comparable sales: 

 Debtors’ Comparable Sale 1 (39 Main Street) 

 Sale price (10/18/2013): $210,000.00 

 View (traffic/busy street): +$10,500.00 

 Gross living area: +$2,280.00 

 Basement/finished: -$2,500.00 

 Energy eff. items: -$2,500.00

 Adjusted Sale Price: $217,780.00 

 TD Bank’s Comparable Sale 3 (3 Hovey Meadow Rd.) 

 Sale price (6/28/2013): $264,045.00 

 Better location: -$15,000.00 

 Gross living area: +$4,680.00 

 Lot size (1.15 acres): None6

 Basement/finished: -$5,000.00 

 Energy eff. items: +$1,000.00

 Adjusted Sale Price: $249,725.00 

 As the Court noted earlier, both experts testified competently and credibly, neither one 

providing successful challenges to the assumptions and analysis of the other. Accordingly, the 

Court gives equal weight to the values of their comparable sales, as further adjusted by the Court. 

Thus, taking an average of $217,780.00, the adjusted sales price for Correia’s Comparable 1, and 

 

6

 Even if the Court were to make an adjustment for lot size (like the Debtors’ Expert did for the one 

comparable sale that was significantly larger than the Property), that adjustment of -$5,212.00 (-.63 acres 

x $8,270.00) would not affect the outcome in this case. The adjusted sales price would be $244,513.00, 

which, when averaged with the adjusted value for the Debtors’ Comparable Sale 1, would result in a 

value of $231,146.50. This is still more than $225,422.94. 

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$249,725.00, the adjusted sales price for Lester’s Comparable 3, the Court finds that the value of 

the Property was at least $233,752.50 as of the Petition Date.7

 Because this exceeds the amount 

owed on the first mortgage on the Petition Date, TD Bank’s lien is secured in part by its 

mortgage on the Property. 

IV. CONCLUSION

 The Court concludes that the Property is worth more than $225,422.94. Accordingly, 

value exists to support TD Bank’s claim. For that reason, the Court will deny the Motion 

seeking to void the TD Bank’s second mortgage lien on the Debtors’ residence. TD Bank’s 

claim shall be treated as secured in accordance with 11 U.S.C. § 506(a). The Debtors may not 

modify the rights of TD Bank under 11 U.S.C. § 1322(b)(2). This opinion constitutes the 

Court’s findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy 

Procedure 7052. The Court will issue a separate order consistent with this opinion. 

 ENTERED at Manchester, New Hampshire. 

Date: September 8, 2014 /s/ Bruce A. Harwood

 Bruce A. Harwood 

 Chief Bankruptcy Judge 

 

7

 While not making any adjustment based on the vacant state of Debtors’ Comparable Sale 1, the Court 

does give credence to Lester’s contention that a property’s vacant state can depress its selling price. 

Accordingly, the Court could find that the adjusted sales price for Debtors’ Comparable Sale 1 should be 

even higher, resulting in an even higher valuation. 

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