Case: 14-10518 Date Filed: 09/03/2014 Page: 1 of 4
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-10518
Non-Argument Calendar
________________________
D.C. Docket No. 6:13-cv-01933-JA,
Bkcy No. 6:13-bk-07503-KSJ
In re ALEXIS LOPEZ
Debtor.
________________________________________________
BANK OF AMERICA,
Plaintiff-Appellant,
versus
ALEXIS LOPEZ,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(September 3, 2014)
Case: 14-10518 Date Filed: 09/03/2014 Page: 2 of 4
Before WILSON, ROSENBAUM, and FAY, Circuit Judges.
PER CURIAM:
Bank of America appeals the bankruptcy judge’s order in a Chapter 7
bankruptcy proceeding that allowed Alexis Lopez to “strip off” Bank of America’s
second-priority lien. We affirm.
Lopez has two mortgage liens on his house. The first has an outstanding
balance that exceeds the current value of the house. The second mortgage lien at
issue in this case is held by Bank of America and is junior to the first lien. Bank of
America’s lien is considered to be wholly “underwater,” because the debt secured
by the first lien exceeds the current value of the house. ROA at 67.
Lopez moved to have Bank of America’s junior lien extinguished under §
506(d) of the Bankruptcy Code. See 11 U.S.C. § 506(d).1 The bankruptcy judge
granted Lopez’s motion and concluded binding circuit precedent holds § 506(d)
authorizes a Chapter 7 debtor to “strip off” (remove in its entirety) a junior lien,
where the amount of debt securing the senior lien exceeds the value of the house.
McNeal v. GMAC Mortgage, LLC (In re McNeal), 735 F.3d 1263, 1264-66 (11th
1
Section 506(d) provides:
To the extent that a lien secures a claim against the debtor that is not an allowed
secured claim, such lien is void, unless—(1) such claim was disallowed only
under section 502(b)(5) or 502(e) of this title; or (2) such claim is not an allowed
secured claim due only to the failure of any entity to file a proof of such claim
under section 501 of this title.
11 U.S.C. § 506(d).
2
Case: 14-10518 Date Filed: 09/03/2014 Page: 3 of 4
Cir. 2012) (per curiam) (holding a wholly unsecured junior lien may be stripped
off or voided under 11 U.S.C. § 502(d)); Folendore v. SBA (In re Folendore), 862
F.2d 1537, 1539 (11th Cir. 1989) (interpreting 11 U.S.C. § 506(a) and (d) and
concluding that an allowed claim that was wholly unsecured was voidable under
the plain language of 11 U.S.C. § 506(d)).
Bank of America appealed to the district court. It subsequently moved for
summary affirmance in view of our binding precedent and noted a challenge to
McNeal’s reasoning would more appropriately be heard by this court or the
Supreme Court. The district judge granted the motion. Bank of America now
seeks the appellate review that its motion for summary affirmance was intended to
expedite.
Bank of America argues the decision of the Supreme Court in Dewsnup v.
Timm, 502 U.S. 410, 112 S. Ct. 773 (1992), abrogated our construction of § 506(d)
in Folendore. As Bank of America acknowledges, however, we rejected that
argument in McNeal and concluded Dewsnup was not clearly on point, because it
disallowed only a “strip down” of a partially unsecured mortgage lien, rather than a
“strip off” of a wholly unsecured mortgage lien.2 McNeal, 735 F.3d at 1265-66.
2
A “strip down” of an unsecured lien reduces the lien to the value of the collateral to which it
attaches, while a “strip off” removes a wholly unsecured lien in its entirety. McNeal, 735 F.3d at
1264 n.1.
3
Case: 14-10518 Date Filed: 09/03/2014 Page: 4 of 4
Because we are bound to follow our prior published decisions in Folendore
and McNeal, we affirm the bankruptcy judge’s decision voiding Bank of
America’s lien on Lopez’s house. See World Holdings, LLC v. Fed. Republic of
Germany, 701 F.3d 641, 650 (11th Cir. 2012) (“[T]he holding of the first panel to
address an issue is the law of this Circuit, thereby binding all subsequent panels
unless and until the first panel’s holding is overruled by the Court sitting en banc
or by the Supreme Court.”) (citation and internal quotation marks omitted)).
AFFIRMED.
4