Parker v. Fed Home Loan Mtge

                 UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit



                             No. 95-30344
                           Summary Calendar
           IN THE MATTER OF:    LEONARD O. PARKER, JR.,
                                          Debtor.


                       LEONARD O. PARKER,

                                           Appellant,



                                VERSUS


                FEDERAL HOME LOAN MORTGAGE CORP.,

                                           Appellee.




          Appeal from the United States District Court
              for the Eastern District of Louisiana

                       (    94-CV-2503 R   )

                           October 26, 1995

Before HIGGINBOTHAM, DUHÉ, and EMILIO M. GARZA, Circuit Judges.
PER CURIAM:1

     Appellant Leonard O. Parker, Jr. sought confirmation of his

proposed Chapter 13 plan in bankruptcy court. The bankruptcy court

denied confirmation, finding that the plan impermissibly modified

     1
         Local Rule 47.5 provides: "The publication of opinions
that have no precedential value and merely decide particular cases
on the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession."
Pursuant to that Rule, the Court has determined that this opinion
should not be published.
Appellee Federal Home Loan Mortgage Corporation’s secured claim in

violation   of    11   U.S.C.   §   1322(b)(2).    Appellant   appeals   the

district court’s affirmation of the bankruptcy court’s decision.

We dismiss for lack of jurisdiction.               The bankruptcy court’s

judgment is not final. Therefore, we, and the district court, lack

jurisdiction.

                                     FACTS

     Appellant and his wife purchased a residence.          To finance the

purchase, the Parkers obtained a personal loan from Federal Home

Loan Mortgage Corporation.

     Years later Mr. Parker sought relief from the bankruptcy court

under Chapter 13.         Federal Home filed a proof of claim for

$90,584.64, which included the principal due on the mortgage on

Parker’s property, past due payments, foreclosure costs advances,

property    tax   advances,     late    charges,   and   attorney’s   fees.

Appellant’s plan proposed to reduce Federal Home’s secured claim to

the fair market value of the property (approximately $70,000),

decrease the interest rate, reduce the monthly payments, extinguish

Mrs. Parker’s liability on the Note and Mortgage, and transfer Mrs.

Parker’s interest in the Property to Mr. Parker.

     Federal Home and the Chapter 13 Trustee objected to the plan,

claiming that it impermissibly modified the secured claim in

violation of 11 U.S.C. § 1322(b)(2).         The bankruptcy court denied

confirmation and the district court affirmed holding that pursuant

to 11 U.S.C. § 1322(b)(2), Appellant could not modify Federal

Home’s claim


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                                 DISCUSSION

     Parker raised in both the bankruptcy and district courts, and

raised before us, three arguments in favor of modifying Federal

Home’s claim under 11 U.S.C. § 1322(b)(2). Although the bankruptcy

and district courts addressed the merits of two of Appellant’s

claims,2 one potentially dispositive issue remains.

     Appellant argues that the advances made by Federal Home to

pay property taxes and foreclosure costs constitute additional

security interests that remove Federal Home’s claim from the scope

of   11   U.S.C.   §   1322(b)(2).       Section   1322(b)(2)   prohibits

modification of “a claim secured only by a security interest in

real property that is the debtor’s principal residence.” Appellant

contends that the advancements are not secured by the debtor’s

residence, thereby divesting Federal Home of its section 1322(b)(2)

protection.

     Because   neither    the    bankruptcy court nor    district court

considered this issue, and the case was not dismissed by the

bankruptcy court, their judgments are not final and we do not have

appellate jurisdiction.         28 U.S.C. § 158(a) governs bankruptcy

appeals from the district court to the court of appeals.          We can

review only final judgments entered by district courts reviewing

bankruptcy orders.     28 U.S.C. § 158(d).    Under 28 U.S.C. § 158(a),


      2
         The bankruptcy and district courts addressed Appellant's
arguments that Federal Homes' mortgage may be modified under 11
U.S.C. § 1322(b)(2) because his property serves the dual purpose of
residence and office space and because his personal liability was
discharged in the Chapter 7 proceeding, leaving only an in rem
obligation.

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district courts have jurisdiction to hear appeals only from final

orders of bankruptcy judges.        We therefore have jurisdiction only

if the underlying bankruptcy court order was final.               See In re

Delta Servs. Indus., 782 F.2d 1267, 1268 (5th Cir. 1986).

       “In order to be final in character, an order by a bankruptcy

court must resolve a discreet unit in the larger case.”3               In the

Matter of Greene County Hospital, 835 F.2d 589, 595 (5th Cir.

1988).     In addition, a final order must “conclusively determine

substantive rights of parties.”           In re Delta Servs. Indus., 782

F.2d at 1270.    Because the bankruptcy court did not fully resolve

whether Appellant’s plan may be modified pursuant to 11 U.S.C. §

1322(b)(2), its order was not final.               Therefore, we, and the

district court, lack jurisdiction.

       For the foregoing reasons, Appellant’s appeal is dismissed for

lack of jurisdiction.      We remand this case to the district court

with   instructions   to   vacate   its    order   and   to   remand   to   the

bankruptcy court for further proceedings.




       3
        Although 28 U.S.C. § 1291 provides interpretive guidance,
courts view finality more flexibly under section 158(d) than under
section 1291. In re Delta Servs. Indus., 782 F.2d at 1269. Under
section 1291, a judgment that does not dispose of all issues in a
case is not final. Brown v. New Orleans Clerks and Checkers Union
Local No. 1497, 590 F.2d 161, 163-64 (5th Cir. 1979).

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