Opinion ID: 4186437
Heading Depth: 3
Heading Rank: 3

Heading: The eviction issue

Text: Jahn next argues that he should have been able to evict the Burkes upon the tender of their homestead exemption. Although Jahn concedes that he “has not located a case where this was done before a sale” of a property, he relies heavily on dictum in In re Szekely, 936 F.2d 897 (7th Cir. 1991), concerning whether debtors who remain in their residence after filing for bankruptcy are required to pay rent to the estate. The court in Szekely concluded that, in light of the language of the homestead-exemption law in Illinois, the debtors were entitled to stay in their residence rent-free until they were paid the homestead exemption. The court wrote: “Because the house belongs to the estate, the trustee can pay the Szekelys their $15,000 [homestead exemption] and tell them to skedaddle, and then rent the house to whomever he pleases until he sells it.” Id. at 902. But this quote offers Jahn no support because the Szekelys had not sought the remedy of abandonment (since no one disputed that their residence was an asset of value to the creditors) and they had actually wanted the homestead exemption. Id. at 900 (“[W]e note first of all that the debtors . . . were claiming the right to withdraw from the estate the full amount of the homestead exemption[.]”). The key issue in the Burkes’ case, by contrast, is whether their residence should be in the estate at all, especially where the Burkes were not requesting the homestead exemption. Under these circumstances, there is no authority for the proposition that the trustee can tender the debtors the homestead exemption and cause them to “skedaddle.” See id. at 902. Such an outcome has no basis in precedent or in the Bankruptcy Code. We therefore decline Jahn’s invitation to automatically permit the debtors to be evicted upon the tender of the homestead exemption by the trustee. D. Propriety of an evidentiary hearing and the sufficiency of the evidence Jahn’s final arguments fare no better. He first claims that a “valuation hearing should not have been conducted” at all. But this contention can be disposed of by reference to the abandonment statute itself, which expressly requires the bankruptcy court to hold “a hearing” No. 16-6603 Jahn v. Burke et al. Page 8 upon a motion by a party in interest to compel abandonment. See 11 U.S.C. § 554(b). Jahn’s citation to In re Cult Awareness Network, 205 B.R. 575 (Bankr. N.D. Ill. 1997), is inapposite. In that case, the court did not hold a hearing on the trustee’s request to abandon estate property because “there [was] no dispute about the facts.” Id. at 577 n.3. Jahn concedes that the facts in this case were very much in dispute, and he fails to explain how § 554(b)’s express requirement to hold a hearing should not have applied to the Burkes’ abandonment motion. His argument on this point is meritless. Jahn also argues that the bankruptcy court should not have credited Ramirez’s estimate that the residence in question was worth only $108,000. We apply the clear-error standard of review to such a factual finding. “A finding of fact is clearly erroneous when[,] although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” In re DSC, Ltd., 486 F.3d 940, 944 (6th Cir. 2007) (internal quotation marks omitted). The record here is replete with evidence on which the bankruptcy court could reasonably have concluded that the Burkes’ estimate of value was the more accurate one, especially because the Burkes presented two appraisers who had thoroughly inspected the house, whereas Jahn presented no appraisers, instead relying on a realtor, a home inspector, and himself. We conclude that the bankruptcy court did not commit clear error when it valued the Burkes’ home at $108,000. Because Jahn has conceded that the value of $108,000 would “show [that the residence] had inconsequential value for the estate,” we conclude that the bankruptcy court did not err in ordering the trustee to abandon the property. In a final “Hail Mary” attempt to avoid this result, Jahn filed a supplemental-authority letter following oral argument. He argues that, because the Burkes offered to convert their Chapter 7 case to a case under Chapter 13 and pay the estate roughly $50,000 (albeit by utilizing funds made available by a relative), the bankruptcy court abused its discretion in concluding that the residence was of inconsequential benefit to the estate’s unsecured creditors. Jahn’s last-ditch effort fails for two reasons. First, this is an entirely new argument, and “arguments not raised in a party’s opening brief . . . are waived.” Kuhn v. Washtenaw County, 709 F.3d 612, 624 (6th Cir. 2013). Second, there is a total disconnect between the debtor’s alternative offer and the issue of abandonment. Jahn relies on a single unpublished, out-ofNo. 16-6603 Jahn v. Burke et al. Page 9 circuit decision that reversed an abandonment order, not just because (as Jahn claims) the bankruptcy court abused its discretion in disregarding the debtor’s offer of payment through a proposed Chapter 13 plan, but because “abandonment is not available where the value of the property has not been established.” In re Buerge, No. KS-12-074, 2014 WL 1309694, at  (B.A.P. 10th Cir. 2014). The bankruptcy court in Buerge had altogether “failed to make the requisite holding as to the [property]’s value.” Id. In the case before us, the bankruptcy court ably discharged its responsibility in determining the value of the residence. We find Jahn’s arguments to the contrary unpersuasive.