In Re: Norma A. Thompson, Debtor. Chase Manhattan Mortgage Corporation, Successor Chemical Residential Mortgage Co. v. Norma A. Thompson, Debtor-Appellee, Molly T. Whiton, Trustee-Appellee, Office of U.S. Trustee
Docket: 02-5034
Court: Court of Appeals for the Second Circuit; December 8, 2003; Federal Appellate Court
Chase Manhattan Mortgage Corporation loaned Norma A. Thompson $143,036 in 1996, secured by her three-unit property in Hartford, Connecticut, including rights to rental income. Following Thompson's Chapter 13 bankruptcy filing on May 2, 2000, with an outstanding debt of approximately $138,900.88 to Chase, she moved to bifurcate Chase's claim under 11 U.S.C. § 506(a), seeking to "strip down" the secured claim to the property's fair market value of $75,000, declaring the remainder unsecured. Despite agreeing on the property's value, Chase contended that its secured claim should exceed this amount due to its interest in future rental income.
On November 16, 2000, the bankruptcy court ruled that Chase's secured claim was limited to $75,000, rejecting its argument regarding rental income as it was considered part of the property's fair market value. Thompson's second amended Chapter 13 plan was confirmed on January 23, 2001, allowing her to retain the property while paying Chase's claim, resulting in the discharge of Chase's unsecured claim. Chase's appeal to the district court was affirmed, leading to their further appeal to the Second Circuit.
The Second Circuit affirmed the lower courts' rulings, agreeing with the valuation and reasoning provided. They deemed Chase's arguments as meritless and noted a jurisdictional question regarding the timeliness of Chase's notice of appeal, which was set aside in light of the decision on the merits.
