from the United States District Court for the Middle District
of Florida D.C. Docket No. 8:16-cv-00051-EAK-MAP
WILLIAM PRYOR and JULIE CARNES, Circuit Judges, and ANTOON,
National Bank of Oneida, N.A. ("First National")
brought this action against Donald Brandt to collect the
remaining amounts due on several loans after the real estate
securing those loans was sold and the proceeds of those sales
did not cover the outstanding balances. Brandt, who had
earlier filed a Chapter 11 bankruptcy petition, moved to
dismiss First National's claims on the ground that First
National could not state a claim for a deficiency because it
had not complied with certain provisions of Brandt's
previously confirmed Chapter 11 plan. The district court
agreed with Brandt and dismissed all of First National's
deficiency claims that related to loans made before Brandt
filed his Chapter 11 petition. First National appeals that
the parties had filed their briefs in this appeal, Brandt
moved the bankruptcy court to dismiss his Chapter 11 case.
The bankruptcy court granted the motion to dismiss. Given
this dismissal of his underlying bankruptcy petition, none of
Brandt's debts or liabilities were discharged and the
automatic stay was terminated. Brandt and First National
disagree as to whether that dismissal has any effect on this
case, but neither party has meaningfully briefed the issue.
In light of what is potentially a significant development in
the case, we vacate the district court's dismissal of
First National's deficiency claims and remand for the
district court to consider, in the first instance, whether
the dismissal of Brandt's Chapter 11 case without a
discharge has any effect on First National's ability to
pursue its deficiency claims in this case.
Brandt's Bankruptcy Proceedings
2009, Brandt filed a voluntary Chapter 11 bankruptcy
petition. When he filed the petition, Brandt owned, managed,
and rented approximately 50 single-family homes and duplexes
in Ohio, Tennessee, Arizona, and Florida. He was also in the
business of selling and developing raw land in Tennessee.
Brandt's creditors was First National Bank. Brandt owed
First National more than $1.3 million on real-estate loans.
First National filed eleven proofs of claim in Brandt's
bankruptcy case-ten for the real-estate loans and one for a
car loan that is not at issue in this appeal. In its proofs
of claim, First National asserted that its real-estate loans
were fully secured. Brandt did not object to any of First
National's proofs of claim. See 11 U.S.C. §
502(a) (providing that a claim is deemed allowed unless a
party in interest objects).
filed his Chapter 11 plan in February 2010. He grouped all of
First National's real-estate loans into a single
class-Class 19-"to the extent allowed as . . . secured
claims[s] under" 11 U.S.C. § 506. No other claims
were included in that class.
plan further provided that Brandt would issue a promissory
note to First National secured by $150, 000 worth of real
estate. In exchange for Brandt assuming this
additional obligation, First National would deem Brandt
current on his real-estate loans through August 2010. Brandt
would then resume his payments to First National in September
plan also established Class 45-a single class of all
unsecured claims allowed under 11 U.S.C. § 502. In its
description of Class 45, the plan stated: "Any
secured creditor who has filed a secured claim and claims an
entitlement to an unsecured claim must file an amended claim
seeking entitlement to an unsecured claim by 30 days after
the confirmation hearing (including any continued
dates)." (Bolded emphasis in original).
bankruptcy court confirmed Brandt's Chapter 11 plan on
December 31, 2011. Believing itself oversecured at that time
as to its claims, First National did not amend its proofs of
claim within 30 days after confirmation to claim an
entitlement to an unsecured claim.
February 2013, which was a little over a year later, Brandt
had defaulted on his obligations to First National: both on
the pre-petition real-estate loans and on the post-petition
promissory note. First National moved the bankruptcy court to
lift the automatic stay so it could foreclose on the real
estate securing its loans to Brandt. The bankruptcy court
granted the requested relief.
National subsequently sold the real estate securing its
loans. After applying the proceeds to the outstanding
balances on Brandt's loans, Brandt still owed First
National more than $1.2 million. According to First National,
more than $180, 000 of that $1.2 million deficiency was
related to the post-petition promissory note, while the rest
related to the pre-petition real-estate loans.
hearing on November 3, 2015, First National moved the
bankruptcy court to lift the automatic stay to allow it to
pursue in personam relief against Brandt. Brandt did
not oppose the motion. Accordingly, the bankruptcy court
granted the motion and lifted the automatic stay specifically