Source: https://m.openjurist.org/331/f3d/821/in-re-carmen-bateman
Timestamp: 2020-01-28 14:41:30
Document Index: 468505521

Matched Legal Cases: ['§ 1325', '§ 1322', '§ 502', '§ 1327', '§ 1322', '§ 506', '§ 1322', '§ 1322', '§ 362', '§ 1301', '§ 502', '§ 502', '§ 502', '§ 502', '§ 1325', '§ 1322', '§ 1325', '§ 1325', '§ 1325', '§ 1325', '§ 1322', '§ 1325', '§ 1325', '§ 1327', '§ 1327', '§ 1327', '§ 1327', '§ 1322', '§ 1327', '§ 1325', '§ 1327', '§ 502', '§ 1322', '§ 502', '§ 502', '§ 1325', '§ 1327', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1325', '§ 1327', '§ 1322', '§ 1322', '§ 1322', '§ 1325', '§ 1325', '§ 1322', '§ 1325', '§ 1325', '§ 1322', '§ 1322', '§ 1322', '§ 506', '§ 1322', '§ 1322']

331 F3d 821 In Re: Carmen Bateman | OpenJurist
331 F. 3d 821 - In Re: Carmen Bateman
331 F3d 821 In Re: Carmen Bateman
331 F.3d 821
In re: Carmen BATEMAN, Debtor.
Universal American Mortgage Company, Plaintiff-Appellant,
Carmen Bateman, Defendant-Appellee.
No. 02-11221.
In this bankruptcy appeal, we decide that a secured creditor cannot collaterally attack a confirmed Chapter 13 plan, even though the plan conflicted with the mandatory provisions of the bankruptcy code, when the secured creditor failed to object to the plan's confirmation or appeal the confirmation order. We also hold that a secured creditor's claim for mortgage arrearage survives the confirmed plan to the extent it is not satisfied in full by payments under the plan, or otherwise satisfied under the terms § 1325(a)(5), because to permit otherwise would deny the effect of 11 U.S.C. § 1322(b)(2), which, in effect, prohibits modifications of secured claims for mortgages on a debtor's principal residence. The bankruptcy court confirmed the plan at issue and, after the plan's confirmation, granted the debtor's objection to the creditor's allowed claim, thereby reducing the secured claim for mortgage arrearage to the amount provided for in the confirmed plan, but denied the creditor's motion to dismiss the Chapter 13 bankruptcy. The district court affirmed the bankruptcy court. For the following reasons, we AFFIRM in part and REVERSE in part.
The bankruptcy court sustained Bateman's objection and denied Universal's motion to dismiss, holding in part that "[a]s a matter of substance the Chapter 13 plan provided an objection to the claim which placed a duty on [Universal] to pursue the matter if the $21,600.00 was not acceptable." R1-2-B20 at 2. Because Universal did not object to the Plan as confirmed, the bankruptcy court gave the Plan res judicata effect and found that Universal was bound to the $21,600.00 amount for its claim. In doing so, the bankruptcy observed that:
Id. at 3 (quoting Collier on Bankruptcy, ¶ 1327.01[1][a] (15th rev. ed. 1993)). Noting that Universal
is a successful, organized, mortgage lender and servicer, it elected not to retain an attorney, filed its claim, ignored the Chapter 13 plan, corrected Chapter 13 plan, failed to attend the creditors meeting, the confirmation hearing, and had the right to timely proceed after the Order of Confirmation. Creditor[s,] especially lending institutions like the mortgagee, must follow the administration of the bankruptcy estate to determine what aspects of the proceeding that they may want to challenge.
This appeal pits the procedural requirements and substantive provisions of 11 U.S.C. §§ 502(a), 1322, and 1325 of the bankruptcy code, against the res judicata effect of a confirmed plan under 11 U.S.C. § 1327.3 We now undertake to harmonize these provisions and decide an issue of first impression in this circuit.4 "[D]eterminations of law, whether made by the bankruptcy court or by the district court, [are reviewed] de novo." Equitable Life Assurance Soc'y v. Sublett (In re Sublett), 895 F.2d 1381, 1383 (11th Cir.1990).
The issues before us present questions of statutory interpretation and evaluation of the interlocking nature of the bankruptcy code. Provisions within a statute are read to be consistent whenever possible. See Clark v. Uebersee Finanz-Korporation, 332 U.S. 480, 488, 68 S.Ct. 174, 178, 92 L.Ed. 88 (1947). If the two provisions may not be harmonized, then the more specific will control over the general. Green v. Bock Laundry Mach. Co., 490 U.S. 504, 524, 109 S.Ct. 1981, 1992, 104 L.Ed.2d 557 (1989). With these principles in mind, we navigate the intricacies of the bankruptcy code and bankruptcy procedure to decide Universal's appeal and whether Universal's claim survived Bateman's confirmed Chapter 13 Plan.
Title 11, United States Code § 1322 sets forth the mandatory contents of a Chapter 13 plan. Generally, the holder of a secured claim is entitled to protection under the bankruptcy code to the extent of the collateral's value securing the claim. 11 U.S.C. § 506(a). However, § 1322(b)(2) specially prohibits any modification of a homestead mortgagee's rights in the Chapter 13 plan. Because of the protection afforded to mortgagees by § 1322(b)(2), the protected security interest is not compromised even if the interest is undersecured by the value of the property. Nobelman v. Am. Savs. Bank, 508 U.S. 324, 329, 113 S.Ct. 2106, 2110, 124 L.Ed.2d 228 (1993). Thus, even if the residential mortgage is undersecured, the plan is prohibited from reducing the mortgagee's secured claim.5 "At first blush it seems somewhat strange that the Bankruptcy Code should provide less protection to an individual's interest in retaining possession of his or her home than of other assets. The anomaly is, however, explained by the legislative history indicating that favorable treatment of residential mortgagees was intended to encourage the flow of capital into the home lending market." Id. at 332, 113 S.Ct. at 2111-12 (Stevens, J., concurring). "This is not to say, of course, that the contractual rights of a home mortgage lender are unaffected by the mortgagor's Chapter 13 bankruptcy. The lender's power to enforce its rights — and, in particular, its right to foreclose on the property in the event of default — is checked by the Bankruptcy Code's automatic stay provision." Id. at 330, 113 S.Ct. at 2110 (citing 11 U.S.C. § 362); see also 11 U.S.C. § 1301.
Inclusion of creditors for disbursements under a Chapter 13 plan is not an automatic process. If the debtor wants to be discharged of certain liabilities, then the debtor must list the claim amounts and their proposed treatment under the plan. Correspondingly, if a creditor wants to ensure it will be provided for in the confirmed plan, it will file a proof of claim. 11 U.S.C. § 502. "Although the filing of a proof of claim may be a prerequisite to the allowance of certain claims, no creditor is required to file a proof of claim ... [but one] should be filed only when some purpose would be served." Simmons v. Savell, 765 F.2d 547, 551 (5th Cir.1985) (citations omitted). An unsecured creditor is required to file a proof claim for its claim to be allowed, but filing is not mandatory for a secured creditor. See Fed.R.Bankr.P. 3002(a). In fact, a secured creditor need not do anything during the course of the bankruptcy proceeding because it will always be able to look to the underlying collateral to satisfy its lien. In re Folendore, 862 F.2d 1537, 1539 (11th Cir.1989) ("Because an unchallenged lien survives the discharge of the debtor in bankruptcy, a lienholder need not file a proof of claim under section 501."); see also Long v. Bullard, 117 U.S. 617, 620-21, 6 S.Ct. 917, 918, 29 L.Ed. 1004 (1886) (holding that a secured creditor can ignore a bankruptcy proceeding because it can always look to the lien to satisfy its claim).
If the secured creditor wants to receive payments under the confirmed plan, it must file the proof of claim in a timely manner. See In re Baldridge, 232 B.R. 394, 395-96 (Bankr.N.D.Ind.1999). The debtor also has an interest in ensuring that a proof of claim is filed, if the secured creditor neglects to do so, because the debtor is the party seeking the protection of the bankruptcy court and the ultimate benefit of the discharge of his or her liabilities. Under § 502(a), "[a] claim or interest, proof of which is filed under section 501 of [Title 11], is deemed allowed, unless a party in interest ... objects." A proof of claim filed pursuant to Federal Rule of Bankruptcy Procedure 3001 "shall constitute prima facie evidence of the validity and amount of the claim." Fed.R.Bankr.P. 3001(f).
The prima facie evidence of a proof claim can be rebutted if the debtor files an objection pursuant to Federal Rule of Bankruptcy Procedure 3007. If an objection is made as to the amount or validity of the claim, the bankruptcy court will conduct a hearing to determine such, and, if appropriate, will disallow the claim. 11 U.S.C. § 502(b). Although § 502(a) does not provide for a time limit to file an objection, it must be filed prior to plan confirmation. In re Justice Oaks II, Ltd., 898 F.2d 1544, 1553 (11th Cir.1990); In re Starling, 251 B.R. 908, 909-10 (Bankr. S.D.Fla.2000).
The bankruptcy court decided ex post facto, however, that "[a]s a matter of substance the Chapter 13 plan provided an objection to the claim which placed a duty on the mortgagee to pursue the matter if the $21,600.00 was not acceptable." R1-2-B20 at 2. We disagree. See In re White, 908 F.2d 691, 694-95 (11th Cir.1990) (per curiam) (refusing to permit a bankruptcy court to determine the validity of a lien in connection with fixing valuation for purposes of confirmation when it did not follow procedure pursuant to Rule 3007).
Section 1325(a) requires the bankruptcy judge to confirm a plan if it meets certain requirements, one of which is that the proposed plan conforms with the requirements of Chapter 13 and the applicable provisions of Title 11. § 1325(a)(1). According to the plain statutory language, § 1322 is a mandatory provision contemplated by § 1325(a)(1) and the confirmed plan should comply with it. Section 1325(a)(5), in turn, references secured creditors and mandates plan confirmation if (1) the secured creditor accepts the plan; (2) the plan provides that the secured creditor retain its lien and be paid the full amount of the allowed claim; or (3) the debtor surrenders the property securing the claim to the creditor. Thus, there are three options to the treatment of a secured creditor's claim that compel confirmation of a plan, none of which were present in the facts here. First, Universal, by filing a proof of claim contrary to the amount indicated in Bateman's first plan, did not indicate its acceptance of the plan to the detriment of its lien by declining to further participate in the confirmation proceedings. Confirmation would have been proper under § 1325(a) if Universal conceded to the treatment of its claim under the Plan. Universal did not accept the Plan, however; rather, after receiving the first plan, it filed a proof of claim with a different, higher amount. Because there was no objection to the proof of claim, Universal did not need to act further and the claim was "deemed allowed." We will not permit Universal's reliance on the terms of the bankruptcy code, and Universal's subsequent silence on the matter, to act as an acceptance under § 1325(a). There is no indication that Universal accepted the Plan and we will not treat its actions as comprising such. It is also undisputed that neither Universal was provided for in full pursuant to its allowed claim and § 1325(a)(5)(B), nor was the property surrendered to it. Accordingly, Bateman cannot claim that the Plan's confirmation was proper at the outset or was entitled to confirmation because it did not meet the mandatory provisions of § 1322 and Universal did not accept, nor was it alternatively sufficiently provided for, under § 1325(a)(5).7
Universal argues that because the Plan did not meet the requisites of § 1325, which it maintains are mandatory for confirmation, the Plan cannot be afforded res judicata effect under § 1327. Title 11, U.S.C. § 1327(a) provides that "[t]he provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan." Thus, § 1327 gives res judicata effect to a confirmed Chapter 13 plan. A leading treatise makes clear that the binding effect ... extends to any issue actually litigated by the parties and any issue necessarily determined by the confirmation order, including whether the plan complies with sections 1322 and 1325 of the Bankruptcy Code. For example, a creditor may not after confirmation assert that the plan ... is otherwise inconsistent with the Code in violation of section 1322(b)(10) or section 1325(a)(1).
8 Collier on Bankruptcy, ¶ 1327.02[1][c] at 1327-5 (15th rev. ed. 2003) (footnotes omitted).
We set forth in In re Justice Oaks II, Ltd., and reiterate here, that res judicata refers to "claim preclusion" in the sense Bateman seeks to apply the doctrine, meaning, "[i]f the later litigation arises from the same cause of action, then the judgment bars litigation not only of `every matter which was actually offered and received to sustain the demand, but also [of] every [claim] which might have been presented.'" 898 F.2d 1544, 1549 n. 3 (11th Cir.1990) (quoting Baltimore S.S. Co. v. Phillips, 274 U.S. 316, 319, 47 S.Ct. 600, 602, 71 L.Ed. 1069 (1927)). "Preclusion under § 1327 is somewhat harsher than common law issue preclusion, however. At common law the litigation of an issue is precluded only if that issue was actually litigated and decided and if the determination of that issue was necessary to the judgment in a previous action between the parties." In re Starling, 251 B.R. at 910 n. 2 (quoting In re Sanders, 243 B.R. 326, 328 (Bankr.N.D.Ohio 2000)). Confirmation of a Chapter 13 plan by a bankruptcy court of competent jurisdiction, in accordance with the procedural requirements of notice and hearing of confirmation, "is given the same effect as any district court's final judgment on the merits." In re Justice Oaks II, Ltd., 898 F.2d at 1550 (citing Stoll v. Gottlieb, 305 U.S. 165, 170-71, 59 S.Ct. 134, 137, 83 L.Ed. 104 (1938)).8 Universal's proof of claim and the Plan's listed distribution amount, however improper, was within the definition of claim preclusion because it very well might have been and, as we have articulated should have been, presented before the bankruptcy judge prior to the Plan confirmation. See In re Starling, 251 B.R. at 910. The Plan was improperly confirmed because it conflicted with § 1322's mandatory provisions. Had Universal objected to or appealed from the Plan's confirmation, it would have prevailed without question, given the facts presented to us. Universal, however, did not do so and § 1327 binds creditors to the provisions of the Plan. The Plan provided that Universal be paid monthly a certain amount to fulfill the "disputed" claim. Universal cannot now, years later, urge us to dismiss the Chapter 13 petition and unravel the Plan's execution when it otherwise retains its lien in full.
We are persuaded by the reasoning in Simmons that a secured creditor's lien survives a contrary plan confirmation. 765 F.2d at 559. In Simmons, the creditor secured by a statutory construction lien filed a proof of claim with the bankruptcy court. During the course of the confirmation proceedings, neither the debtor nor the trustee objected to the proof of claim prior to confirmation. Nevertheless, the Chapter 13 plan listed the creditor's claim as unsecured but disputed. The Fifth Circuit held that the notation in the confirmation plan "cannot be deemed to constitute... an objection." Id. at 552 ("The purpose of filing an objection is to join issue in a contested matter, thereby placing the parties on notice that litigation is required to resolve an actual dispute between the parties."). The court stated that the plan was erroneously confirmed by the bankruptcy court because, not only did it not appropriately provide for the creditor's proof of claim, the plan did not meet any of the prerequisites under § 1325(a)(5) in that the secured creditor did not accept the plan, the plan made no provision that it retained its lien, and the plan did not propose the surrender of the property.9 Id. at 554.
After delineating the parameters of the dispute over the meaning of the terms "claim or interest," and having observed that the legislative history of section 1327(c) offers no insight regarding this issue, a leading commentator writes that "[m]atters are further confused by the fact that there appears to be no sound reason for lifting liens by operation of law at confirmation under chapter 13." 5 Collier on Bankruptcy ¶ 1327.01[3], at 1327-5. Nor are we able to discern any reason for such an effect. Therefore, we agree with the In re Honaker[, 4 B.R. 415 (Bankr.E.D.Mich.1980),] court's conclusion that "[t]he reading of Section 1327 urged by [the debtor] would have the Debtor materially improve his financial position, by unencumbering [secured] assets, through the simple expedient of passing his property through the estate. This result has little to recommend it." [Id.] at 417 ... It would be anomalous indeed were we to permit [the debtor] a windfall for his mischaracterization of [the creditor's] claim in the plan. ...
130 B.R. at 321 (referring to the lack of due process afforded the creditor because it did not have notice of the objection to its proof of claim). The concurrence interpreted § 1327(a) to bind the parties to the distribution amount under the plan, but not the amount of the claim determined by § 502(a). Id. at 322. Thus, the debtor could not satisfy the lien until the entire claim amount was paid, whether pursuant to the plan or otherwise. Id. The concurrence relied, in part, on the language of § 1322(b)(10) which, by implication, prohibits the confirmation of a plan inconsistent with Title 11 — one such inconsistency being "for a plan to effectively determine the amount of a secured claim," a result inconsistent with § 502(a) and Rule 3007. Id. at 322. Both the majority and the concurring judges agreed that a proof of claim pursuant to § 502(a) controlled the amount of the creditor's allowed claim, even if the plan amount differed, and held that the plan could not reduce an arrearage claim.
The facts here compel an identical result: Universal's secured claim is unaffected by the Plan and survives the bankruptcy unimpaired.10 See In re Thomas, 883 F.2d 991, 997 (11th Cir.1989) (holding that a secured creditor's lien survived a Chapter 13 discharge even though it had not been provided for in the plan and the secured creditor had not filed a proof of claim).
Universal had the opportunity to object to the Plan's treatment of its claim at the confirmation hearing or appeal the confirmed plan and, had it done so, the Plan could not have been properly confirmed over its objection. See § 1325. Universal, albeit within its rights, filed a proof of claim to be provided for by the Plan, yet, chose not to involve itself in the Chapter 13 proceedings and bypassed these opportunities to correct the discrepancy before the Plan was confirmed. Furthermore, Universal continued to accept the payments even though it should have been apparent that they were less than adequate to satisfy its arrearage claim. Universal arguably had reason to remain disengaged from the proceedings because it assumed its properly filed proof of claim was sufficient to protect its interests absent a notice of objection by Bateman. Because it did not vindicate its rights at the appropriate stages of the Chapter 13 process, however, Universal cannot now argue for a dismissal of the petition at its near conclusion without assuming some responsibility for letting the discrepancy go this far unchallenged. Accordingly, we decline to unravel three years of diligent execution of the Plan to correct a discrepancy that every party in interest — Bateman, Universal, the trustee, and even the bankruptcy judge — should have noticed and rectified before the Plan was confirmed. Were we to do so, the prejudice afforded Bateman and the other parties in interest would far exceed the possible benefit to Universal at this juncture. This is so, for the most part because, going forward from the conclusion of the plan, Universal retains its secured claim for the arrearage. Bateman will not benefit from a windfall from a plan that should not have been confirmed in the first place. Because we decide that Universal's claim is unimpaired under the confirmed plan, it is not inequitable and is, in fact, synchronous to give the Plan its full intended res judicata effect under § 1327. Also, in pragmatic terms, this action would be disastrous to Bateman and her pursuit of financial solvency and would afford Universal little more in remedial terms than it already possesses by nature of its secured claim under § 1322. Moreover, although Universal was not required to "show up" at the Chapter 13 confirmation proceedings or file the proof of claim for its secured claim, it did inject itself into the proceedings by seeking payment under the Plan to satisfy its secured claim for arrearage, as it was entitled to do. By electing to do so, Universal assumed some level of responsibility for ensuring that the Plan accounted for its claim in full, or at least objecting to or appealing from the confirmation if it did not. By failing to do so, Universal "ignore[d] the confirmation hearing only at [its] peril." 8 Collier on Bankruptcy ¶ 1327.02[1][a] at 1327-4 (15th rev. ed.2003). The extent of that peril, however, demands clear definition within the terms of the bankruptcy provisions, as discussed supra. Accordingly, the district court's order affirming the bankruptcy court's denial of Universal's motion to dismiss is AFFIRMED.
However, to the extent that Universal had any rights to act against Bateman pursuant to the terms of the mortgage, it retains those rights despite the terms of the Plan. See Cen-Pen Corp. v. Hanson, 58 F.3d 89, 92-93 (4th Cir.1995) (citing In re Honaker, 4 B.R. 415, 417 (Bankr. E.D.Mich.1980)) (refusing to permit a debtor, by "[t]he simple expedient of passing their residence through the bankruptcy estate," to enjoy a "greater interest in the residence than they enjoyed prior to filing their Chapter 13 petition.").12
Universal filed the claim with the bankruptcy court file and did not serve the claim on the other parties. Bateman would have us give credence to this fact, as did the bankruptcy court and the district court, to indicate that Universal was attempting to sidestep procedure and fair dealing. Universal comported with the procedural requirements that existed in 1996; however, in December 1998, the local bankruptcy rules were amended to require service of a proof of claim on the parties, ostensibly to serve the interest of heightened communication between parties. M.D. Fla. Bankr.R. 3002-1(E). At the time of the pendency of the Chapter 13 case, Universal was under no obligation other than to file the proof of claim, as it did
Although Universal does not argue that the Plan did not conform to § 1322, which provides for the mandatory provisions of a confirmed plan, we will address the effect of § 1322(b)(2), prohibiting the modification of Universal's secured mortgage claim. As discussedinfra, whether the Plan was confirmed in violation of § 1322 or § 1325 is irrelevant to the disposition of this case, because the res judicata effect of § 1327 prohibits the collateral attack of a confirmed plan. Stoll v. Gottlieb, 305 U.S. 165, 172, 59 S.Ct. 134, 137-38, 83 L.Ed. 104 (1938). We decide this case within the context of the special treatment afforded mortgage lenders by § 1322(b)(2) and do not express an opinion as to the result with regard to a general secured creditor.
Often a debtor will be in default under the mortgage prior to filing a Chapter 13 petition, resulting in a mortgagee's secured claim for arrearage. Under 1322(b)(5), the debtor can "cure" such arrears of a mortgage without improperly "modifying" the secured creditor's rights in violation of § 1322(b)(2)In re Hoggle, 12 F.3d 1008, 1010 n. 3 (11th Cir.1994) (holding that a confirmed plan can be modified to cure pre or post-petition defaults, so long as it meets the requirements of § 1322(b)(5)) (citing 5 Collier on Bankruptcy, ¶ 1322.09[1], at 1322-19 (15th rev. ed.1993)). The effect of 1322(b)(2) and (5) is to potentially split the treatment of mortgagee's secured claim by the plan — one secured claim for the mortgage going forward and one secured claim for the arrearage — but it does not compromise the amount of the aggregate secured claim or the rights of the secured creditor to recover the arrearage. Nobelman, 508 U.S. at 331-32, 113 S.Ct. at 2111.
We will not lecture on the various roles and responsibilities delegated to and required of each party in interest participating in a Chapter 13 plan confirmation; however, we deem it necessary to urge all parties to carefully execute their responsibilities such that every confirmed plan will result in a synthesis of the interests of all participants in a consistent manner. The interest of one party is not to the exclusion of all others; rather, every party, most importantly the debtor who is seeking the protection of the bankruptcy court, benefits from a confirmed plan that includes accurate and thorough treatment of all claims. Moreover, it is the independent duty of the bankruptcy court to ensure that the proposed plan comports with the requirements of the bankruptcy codeSee In re Gurst, 76 B.R. 985, 989 (Bankr.E.D.Pa.1987); In re Harris, 62 B.R. 391, 393 n. 1 (Bankr. E.D.Mich.1986); In re Bowles, 48 B.R. 502, 505 (Bankr.E.D.Va.1985).
The parties dispute whether the provisions of § 1325 are mandatory to an extent that would warrant vacating a confirmed plan and dismissing the bankruptcyCompare In re Szostek, 886 F.2d 1405, 1411 (3d Cir.1989) (holding that § 1325(a) is not mandatory, but rather "sufficient," whereas § 1322 is mandatory) with In re Nenonen, 232 B.R. 803, 805 (M.D.Fla.1998) (noting that § 1325(a) provisions are mandatory in the context of a direct appeal from a confirmation order). This question, however, appears to be settled by Associates Commercial Corp. v. Rash, 520 U.S. 953, 956, 117 S.Ct. 1879, 1882, 138 L.Ed.2d 148 (1997): "To qualify for confirmation under Chapter 13, the [debtors'] plan had to satisfy the requirements set forth in § 1325(a) of the Code." Because our decision rests on a different ground, we do not decide that issue.
AlthoughIn re Justice Oaks II, Ltd. applied to a Chapter 11 bankruptcy case, in In re Clark, 172 B.R. 701, 704 (Bankr.S.D.Ga. 1994), the court applied In re Justice Oaks in the Chapter 13 context. We also find it appropriate to do so here.
The issue was not addressed under § 1322(b)(2) because the secured claim was not a mortgage on a principal residence. The mandatory language of § 1322 makes the analogous result in Simmons even more compelling
Bateman refers us to the decision inIn re Duggins, 263 B.R. 233 (Bankr.C.D.Ill.2001), in support of its argument that the Plan, as confirmed, is res judicata, and therefore, established Universal's claim at the $21,600.00 amount. The bankruptcy court in In re Duggins held that an undersecured creditor was bound to the confirmed plan's valuation of the underlying collateral, even though it filed a proof of claim evidencing a higher valuation just before the plan's confirmation, because the creditor had adequate notice of the plan's valuation of the collateral, and the proof of claim would not be permitted to substitute for a timely objection to the confirmation plan. Id. at 244.
The case In re Duggins is distinguishable in terms fatal to Bateman's argument. First, the secured claim in In re Duggins was for a television set, id. at 235, which is not afforded the same protection as a mortgage on a principal residence by § 1322(b)(2). Thus, the secured claim was bifurcated pursuant to § 506(a) and secured only to the extent of the collateral's value; the remainder was relegated to unsecured status. Id. at 236 (citing Assocs. Commercial Corp. v. Rash, 520 U.S. 953, 117 S.Ct. 1879, 138 L.Ed.2d 148 (1997)). Section 1322(b)(2) prohibits such treatment of mortgages on principal residences. Second, the dispute centered around the valuation of the collateral, not the amount of the claim itself. The bankruptcy court concluded that the claims process did not assign to a collateral valuation the same evidentiary effect of a proof of claim as to the amount of the claim itself. Id. at 238. The collateral's valuation was better determined in the confirmation process, and therefore the creditor was bound by the plan's valuation. Id. Because of these distinctions, we do not find the language in In re Duggins to be applicable to the issue before us.
We stated inIn re Thomas that, although the lien survived, the creditor "lost its right to recover any deficiency it may have from the estate or from the debtors." 883 F.2d at 997 (citing, inter alia, In re Burrell, 85 B.R. 799, 800-01 (Bankr.N.D.Ill.1988)). In re Thomas involved a secured interest on a mobile home which is not real property and not subject to the anti-modification provision of § 1322(b)(2). 8 Collier on Bankruptcy, ¶ 1322.06[1][a][ii] at 1322-24.1 (15th rev. ed. 2003). Thus, the language in In re Thomas, does not apply here. We also take this opportunity to distinguish In re Tepper, 279 B.R. 859 (Bankr.M.D.Fla.2002), which held that a secured claim for a tax lien as modified under a confirmed plan binds the secured creditor to the treatment afforded under the plan. Id. at 864. Based upon the language of § 1322(b), which prohibits the modification of a mortgagee's interest, we will not extend the reasoning in In re Tepper to enable a discharge resulting from an explicitly prohibited modification.