ROBIN S. ROSENBAUM, District Judge.
This matter is before the Court on Appellant Denise Roberts-Dude's appeal of
Appellee JP Morgan Chase Bank, N.A. ("Chase"), holds a third mortgage lien in the approximately amount of $519,000.00 on property located at 1450 Enclave Circle, Royal Palm Beach, Florida, (the "Property"), the residence of Appellant Denise Roberts-Dude. The Property is also encumbered by a first mortgage in favor of Wells Fargo Bank, N.A., in the amount of $769,264.66 and a second mortgage in favor of Wells Fargo Bank, N.A., in the amount of $142,186.28.
During Chapter 11 bankruptcy proceedings, Appellant and Debtor Roberts-Dude filed her Motion to Value Pursuant to 11 U.S.C. § 506(a) and to Bifurcate Pursuant to 11 U.S.C. § 506(d) ("Motion to Bifurcate"). In her Motion to Bifurcate, Roberts-Dude submitted evidence that the value of the Property at that time was $860,000.00. In view of the fact that more than that amount remained due and owing to Wells Fargo on the first two mortgages alone, Roberts-Dude invoked 11 U.S.C. §§ 506(a) and (d) and sought to bifurcate the creditors' claims and strip off the entire unsecured lien of Chase, so it could be treated as a general unsecured claim.
The Property in this case is the subject of a number of purported deeds. On August 20, 2004, the Property was deeded from other parties to Roberts-Dude's husband, Harald Dude, as a single man. See D.E. 2-3 at 105.
On September 6, 2006, Dude recorded a "Corrective Quit-Claim Deed" listing the owners as himself and his "wife as tenancy by the entireties with right of survivorship." Id. at 104. A new deed was again recorded on February 5, 2007. See id. at 100. The February 5, 2007, deed was between "HARALD DUDE AND DENISE ROBERTS DUDE, his wife as tenants by the entireties with right of survivorship," as "Grantor," and Roberts-Dude as "Grantee." Id. It provides that "the [G]rantor ... has granted, bargained and quitclaimed to the ... Grantee and Grantee's heirs and assigns forever 96% of [the Property]...." Id.
Finally, on April 22, 2011, the last purported deed was recorded. This deed was between "HARALD DUDE and DENISE DUDE, husband and wife," as "Grantors," and "DENISE ROBERTS DUDE, a married woman, AS TO AN UNDIVIDED NINETY-EIGHT PERCENT (98%) INTEREST, and HARALD DUDE and DENISE DUDE, husband and wife, AS TO AN UNDIVIDED TWO PERCENT (2%) INTEREST ...," as "Grantees." Id. at 101. In this deed, "Grantors ... granted, bargained and quitclaimed to ... Grantees and Grantees' heirs and assigns forever" the Property. Id. A handwritten legend across the top of this deed states, "Re-recording to include notary and acknowledgment — original OR. BK. 21387,
In support of her Motion to Bifurcate, Roberts-Dude submitted her own Affidavit and the Affidavit of her husband. In her own Affidavit, Roberts-Dude averred that as of April 22, 2011, she has held "an undivided 98% interest in the [Property] with the balance of 2% being held as an `undivided interest' with [Dude] but not as tenants by the entireties." Id. at 98. Roberts-Dude further attested that the Property "is intentionally not held as [tenants by the entirety] as is evidenced in the public records as well as not having the unities of possession, interest, title, time or survivorship." Id. at 99.
Similarly, Dude states in his Affidavit that in executing the February 5, 2007 deed, he "specifically and intentionally omitted ownership by tenancy by the entireties or rights of survivorship." Id. at 104. He further asserts that in executing the April 22, 2011, deed, he "specifically and intentionally omitted ownership by tenancy by the entireties or rights of survivorship" and that the Property "is not held as tenancy by the entireties and does not enjoy the unities of possession, interest, title, time or survivorship." Id.
After reviewing the deed history for the Property and the Affidavits, the Bankruptcy Court reached the following conclusions:
Id. at 26-27.
After the Bankruptcy Court issued its Order on the Motion to Bifurcate, Roberts-Dude converted her bankruptcy from proceedings under Chapter 11 to proceedings under Chapter 7. In view of this development, Chase contends that Roberts-Dude's appeal has become moot since, according to Chase, the strip-down mechanism under Sections 506(a) and (d) is not available under Chapter 7.
Federal courts are courts of limited jurisdiction. Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir.2003). With regard to appeals from bankruptcy courts, district courts enjoy jurisdiction over only three types of orders: (1) final orders, as described in 28 U.S.C. § 158(a)(1); (2) interlocutory appeals issued under 11 U.S.C. § 1121(d), as described in 28 U.S.C. § 158(a)(2); and, (3) with leave of the court, other interlocutory orders, as described in 28 U.S.C. § 158(a)(3) and Rule 8001(b), Fed. R. Bankr.P. Tobkin v. Calderin, No. 12-22692-MC, 2012 WL 3609867, at *1 (S.D.Fla. Aug. 22, 2012).
Here, Roberts-Dude properly seeks review under 28 U.S.C. § 158(a)(1). D.E. 1 at 1. Roberts-Dude timely filed this appeal, and, except for Chase's contention that the issue on appeal has become moot, the parties do not dispute jurisdiction. This Court has agrees that it enjoys jurisdiction.
In reviewing bankruptcy-court judgments, a district court functions as an appellate court. In re JLJ Inc., 988 F.2d 1112, 1116 (11th Cir.1993). Factual findings by the bankruptcy court are reviewed under the limited and deferential clearly erroneous standard. In re Club Associates, 951 F.2d 1223, 1228 (11th Cir.1992) (citing In re Sublett, 895 F.2d 1381, 1384 (11th Cir.1990)); In re Goerg, 930 F.2d 1563 1566 (11th Cir.1991); see Fed. R. Bankr.Pro. 7052, 8013; Fed. R. Bankr.Pro. 8013 ("[f]indings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous"). District courts may not make independent factual findings on appeal. In re JLJ Inc., 988 F.2d at 1116. If the bankruptcy court is silent or ambiguous as to an outcome determinative of a factual question, the case must be remanded to the bankruptcy court for the necessary factual findings. Id. (citing In re Cornelison, 901 F.2d 1073, 1075 (11th Cir.1990); In re Sublett, 895 F.2d 1381, 1384 (11th Cir.1990)).
In contrast, the legal conclusions by the Bankruptcy Court are reviewed de novo. In re Club Assoc., 951 F.2d at 1228-29 (citations omitted). Thus, this Court reviews the Bankruptcy Court's factual findings in this case for clear error and its legal conclusions de novo. In re Globe Manuf. Corp., 567 F.3d 1291, 1296 (11th Cir.2009); In re Club, 951 F.2d at 1228-29.
Chase suggests that the conversion of the bankruptcy case from a Chapter 11 proceeding to a Chapter 7 proceeding after the Bankruptcy Court entered the Order on the Motion to Bifurcate renders this appeal moot because the strip-off relief that Roberts-Dude seeks under Sections 506(a) and (d) is not available in Chapter 7 proceedings. In support of this position,
Since Chase filed its brief, however, the Eleventh Circuit has issued its final version of In re McNeal as a published opinion in the Federal Reporter. See id., ___ F.3d ___, 2012 WL 8964264 (11th Cir. 2012). As a result, the decision is binding on the district courts of this circuit.
In In re McNeal, the Eleventh Circuit noted that "[a] few bankruptcy court decisions within [the Eleventh Circuit] ... have treated Folendore as abrogated by Dewsnup...." 2012 WL 8964254, at *2. But, the Eleventh Circuit explained, Folendore still controls on the issue of whether the stripdown and strip-off relief permitted by Sections 506(a) and (d) remains available to a Chapter 7 debtor with a completely unsecured claim. Id. The court reasoned,
Id., ___ F.3d at ___. In view of the binding precedent that In re McNeal and Folendore represent, the Court cannot conclude that the conversion of the proceedings in this case to occur under Chapter 7 precludes the strip-off relief that Roberts-Dude seeks with regard to the Chase third mortgage. Accordingly, this appeal is not moot.
Roberts-Dude contends that no part of the Property is owned by Roberts-Dude
With regard to the deed history, Roberts-Dude argues that the omission of the phrase "tenants by the entirety" from the 2007 and 2011 conveyances demonstrates the intent of Roberts-Dude and her husband that they no longer possess the Property in any part as tenants by the entirety. She points to the Affidavits as further evidence of the intent in 2007 to cease holding the Property as tenants by the entirety.
A review of the 2007 and 2011 deeds reveals that, while neither deed expressly states that the Property is deeded in any part to Roberts-Dude and Dude as tenants by the entirety, nor does either deed expressly provide that the Property is not deeded to Roberts-Dude and Dude as tenants by the entirety. Moreover, the 2007 deed, which states that it is between Roberts-Dude and Dude "as tenants by the entireties," as "Grantor," and Roberts-Dude as "Grantee," conveys only 96% of the Property to Roberts-Dude and does not purport to make any changes to the remaining 4% of the Property expressly identified as being held by Roberts-Dude and her husband as "tenants by the entireties." Thus, contrary to the contentions of Roberts-Dude and Dude in their Affidavits, the actual language of the 2007 deed conveys an intention to retain 4% of the Property to continue to be held by Roberts-Dude and Dude as "tenants by the entireties."
As for the 2011 deed, the handwritten legend on the top of the deed claims that the deed was executed as a "re-recording to include notary and acknowledgment" of the 2007 deed. That, in and of itself, suggests that no material change was intended by the 2011 deed. On the other hand, despite this language, the 2011 deed quitclaims an undivided 98% interest to Roberts-Dude, as opposed to the 96% interest under the 2007 deed, and, instead of remaining silent with regard to the remaining 2% of the Property, the deed purports to convey "an undivided ... 2% ... interest" to "Harald Dude and Denise Dude, husband and wife."
Thus, the Court must determine (1) whether the language in the 2011 deed, in light of the deed history, reflects the existence of a tenancy by the entirety with regard to the 2%, and, if so, (2) whether the Court may consider any evidence outside the documents themselves in evaluating whether, under the 2011 deed, 2% of the Property is held by Roberts-Dude and her husband as tenants by the entirety. In analyzing these issues, the Court observes first that the nature of a debtor's interest in property is determined by state law. In re Sinnreich, 391 F.3d 1295, 1297 (11th Cir.2004) (citing Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979)).
Under Florida law, where real property is owned by a husband and wife, "the ownership in the name of both spouses vests title in them as tenants by the entireties." Beal Bank SSB v. Almand & Assocs., 780 So.2d 45, 54 (Fla.2001) (citation omitted). As a result, "[a] conveyance to spouses as husband and wife creates an estate by the entirety in the absence of
As the Bridgeview Bank Court explained, if a rebuttable presumption applied to the title of real property, substantial problems with titles would result: "Which title insurer could feel secure in insuring property having a conveyance to a husband and wife in the chain of title, if that title could be rebutted by evidence extrinsic to the deed itself? The integrity of the title to real property could be called into question when titles could be overturned in litigation by rebuttable presumptions." 84 So.3d at 1156.
These Florida cases clarify that where a deed is titled in the name of two people as husband and wife — even if the deed does not use the phrase "tenancy by the entirety" — the estate is a tenancy by the entirety, and it matters not what extrinsic evidence may exist of the husband and wife's contrary intentions in titling the deed in their names as husband and wife. Only in the case of fraud does an exception to this rule exist.
Here, the 2011 deed titles an "undivided... 2% ... interest" in the Property in the name of "Harald Dude and Denise Dude, husband and wife." As a result, by its terms, the deed creates a tenancy by the entirety in 2% of the Property. Nor do Roberts-Dude's and Dude's Affidavits affect the analysis. Under Florida law, unless fraud is involved — and no such allegation exists in this case — extrinsic evidence of the parties' intentions in titling their property in a certain way is irrelevant to whether the parties, in fact, created a tenancy by the entirety.
Finally, Roberts-Dude's argument that a partial interest in the Property cannot be held by a tenancy of the entirety lacks merit. In this respect, Roberts-Dude asserts that the Property cannot be held in part by a tenancy of the entirety because such a situation results in the lack of at least one of the six unities required to own property as a tenancy by
The problem with Roberts-Dude's analysis arises from the fact that Roberts-Dude and her husband do, in fact, share a unity of interests in the 2% interest of the Property. In other words, both Roberts-Dude and Dude enjoy precisely the same interests in the 2% of the Property deeded to them as husband and wife. Indeed, the deed itself describes the conveyance of an "undivided" interest to Roberts-Dude and Dude as husband and wife.
The fact that 98% of the Property is not held jointly by Roberts-Dude and her husband does not make the 2% that is any less of a tenancy by the entirety. As the Eleventh Circuit's predecessor court has explained,
Winchester v. Wells, 265 F.2d 405, 408 (5th Cir.1959) (quoting 41 C.J.S. Husband and Wife § 31f, p. 454); see also In re Mitchell, 344 B.R. 171, 174 (Bankr.M.D.Fla.2006) (citing Winchester, 265 F.2d at 407). In accordance with this rule, Florida courts have repeatedly described as tenancies by the entirety interests of less than 100% in property titled in the names of a husband and wife. See, e.g., Lauck v. Maissen, 347 So.2d 795, 797 (Fla. 2d DCA 1977) ("the appellant made and recorded a deed of the remaining undivided 55 percent interest in the ranch land to the Maissens as husband and wife, thereby creating a tenancy by the entirety"); Losey v. Losey, 221 So.2d 417 (Fla.1969) (where parents held tenancies by the entirety in properties and conveyed 25% interests in those properties to each of their three children, describing in partnership agreements that the parents and three children held an "equal" interest in the properties, the remaining 25% of the properties continued to be held by the parents by a tenancy of the entirety); Aderhold v. Aderhold, 983 So.2d 43 (Fla. 1st DCA 2008) (concluding that husband and wife took a one-half interest in the property as a tenancy by the entirety and that the husband's mother held the other one-half undivided interest in the property). Roberts-Dude and her husband's tenancy by the entirety in the 2% interest in the Property is no different, and the mere fact that Roberts-Dude, rather than a third person, holds the remaining 98% of the Property does not somehow render inapplicable the Florida rules governing tenancies
For the foregoing reasons, it is hereby
