LAUREL M. ISICOFF, Bankruptcy Judge.
This matter came before me on July 5, 2017, on Motion of Creditor the Bank of New York Mellon F/K/A the Bank of New York, as Trustee to Reopen Debtor's Bankruptcy Case and to Compel Surrender of Mortgaged Property (the "Motion") (ECF #32). Bank of New York Mellon ("BONY") seeks to reopen the Debtors' 2009 bankruptcy case in order to compel the Debtors to surrender their real property located at 8781 S.W. 213
On December 21, 2005, Richard Kurzban, executed and delivered to BONY's predecessor-in-interest an adjustable rate note in the principal amount of $240,000 (the "Note"). On that same date, Richard and Dalain Kurzban executed and delivered to BONY's predecessor-in-interest a mortgage (the "Mortgage" and together with the Note the "Loan") that encumbers the Property. The Debtors defaulted on that Loan.
BONY initially filed a foreclosure action against the Debtors on June 4, 2008 (the "First Foreclosure").
Over five years after dismissing the First Foreclosure, on May 29, 2016, BONY filed a second foreclosure action in the Circuit Court of Miami-Dade County (the "Second Foreclosure")
In seeking its relief, BONY relies on the Eleventh Circuit Failla opinion. In Failla the Eleventh Circuit ruled that debtors who were involved in a foreclosure proceeding during their bankruptcy case and indicated on their bankruptcy schedules an intent to surrender the property subject of the foreclosure proceeding could not oppose the foreclosure proceeding in state court after the issuance of their discharge. The Eleventh Circuit affirmed the district court's opinion which concluded that:
In re Failla, 542 B.R. 606 (S.D. Fla. 2015) (referencing In re Failla, 529 B.R. 786 (Bankr. S.D. Fla. 2014)).
However, the Eleventh Circuit did not rule that a debtor's decision to surrender lasted in perpetuity no matter what might occur subsequent to that decision. What if the secured creditor subsequently took some action in the foreclosure proceeding the consequence of which would constitute forfeiture of its right to foreclose? What if, after the bankruptcy case, and during the pendency of the foreclosure case, the lender and debtor entered into a loan modification? What if, as in this case, the creditor voluntary dismissed its foreclosure action after the decision to surrender was made and entered into negotiations with the debtor to modify the loan?
In this case I don't need to address any circumstance other than the last. BONY made the decision to abandon its foreclosure efforts and enter into modification negotiations with the Debtors. It was seven years after the Debtors received their bankruptcy discharge, five years after the First Foreclosure was dismissed, and only after those modification efforts proved unsuccessful
This is an easy case. There is absolutely no basis under the Failla decision to support the relief that BONY has sought. A debtor's decision to surrender may be binding in a foreclosure action pending, or ripe for filing, at the time of the bankruptcy case in which the intent to surrender is made, but it certainly is not binding in a subsequent foreclosure action, which action, under applicable non-bankruptcy law, can only relate to defaults that did not even exist at the time the decision to surrender was made. As there is no purpose in reopening this bankruptcy case, BONY's motion is DENIED.