Court Opinion

ID: 995513
Source: CourtListenerOpinion
Date Created: 2013-07-04 00:38:23.084871+00
Date Added: 2024-06-11T11:41:41.726542
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: GRANT HARDEN BAILEY;
LINDA GEORGINA BAILEY,
Debtors.

CHEVY CHASE BANK,
Plaintiff-Appellant,                                                  No. 97-2691

v.

GRANT HARDEN BAILEY;
LINDA GEORGINA BAILEY;
US TRUSTEE,
Defendants-Appellees.

Appeal from the United States District Court
for the Eastern District of Virginia, at Norfolk.
Raymond A. Jackson, District Judge.
(CA-97-808-2, BK-97-20869)

Argued: June 5, 1998

Decided: July 7, 1998

Before MURNAGHAN and MICHAEL, Circuit Judges, and
BUTZNER, Senior Circuit Judge.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Thomas William Repczynski, FITZPATRICK & RAF-
TERY, P.C., Fairfax, Virginia, for Appellant. Glenn Rayburn Tanker-
sley, REGENCY LEGAL CLINIC, Virginia Beach, Virginia, for
Appellees. ON BRIEF: Kevin M. Fitzpatrick, FITZPATRICK &
RAFTERY, P.C., Fairfax, Virginia, for Appellant.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Chevy Chase Bank appeals from the district court's affirmance of
the bankruptcy court's confirmation of the Baileys' Chapter 13 bank-
ruptcy plan. Chevy Chase argues that because it is a secured creditor
with an allowed claim, the plan as formulated could not be confirmed
over its objection. Cf. 11 U.S.C. § 1325(a)(5). Because we conclude
that Chevy Chase does not hold an allowed secured claim, we affirm
the district court.

Chevy Chase makes two arguments on appeal. First, it maintains
that its claim is deemed to be an allowed secured claim under 11
U.S.C. § 502(a) because no party in interest objected to its proof of
claim, which listed the claim as secured. This misconstrues the func-
tion of § 502(a). Had an objection to Chevy Chase's proof of claim
been made, the bankruptcy court would have "determine[d] the
amount of such claim in lawful currency of the United States." See
11 U.S.C. § 502(b) (emphasis added). Accordingly, when no objec-
tion is raised, only the monetary amount of the claim is "deemed
allowed" by § 502(a). The fact that Chevy Chase described its claim
as secured in its proof of claim is irrelevant. The determination of an
allowed claim's secured status is an independent inquiry governed by
11 U.S.C. § 506 that is not affected by the failure to object to a proof
of claim. We therefore hold that a claim does not attain secured status
simply because it is "allowed" under § 502(a).

Second, Chevy Chase argues that the district court erred in ruling
that it did not have a secured claim on the ground that an Article 9

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security interest can never attach in ordinary building materials that
are incorporated into an improvement on land. We agree with the dis-
trict court that the Virginia Code does not recognize a security interest
in such materials. See Va. Code Ann. § 8.9-313(c)(2) (Michie 1991).
Instead, a creditor must obtain "an encumbrance upon fixtures pursu-
ant to real estate law" in order to secure its claim. See id. § 8.9-
313(c)(3). We therefore affirm this second issue on the reasoning of
the district court. See Chevy Chase Bank v. Bailey, Civ. No.
2:97cv808, slip op. at 4-6 (E.D. Va. Nov. 3, 1997).

AFFIRMED

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