In Re Larry Michael Barnes and Janice Kay Barnes, Husbandand Wife, Debtors.larry Michael Barnes and Janice Kay Barnes, Husband Andwife, Appellees, v. Knutson Mortgage Corporation, Appellant, 5 F.3d 545 (10th Cir. 1993)

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US Court of Appeals for the Tenth Circuit - 5 F.3d 545 (10th Cir. 1993)

Sept. 29, 1993

Before ANDERSON, BARRETT, and TACHA, Circuit Judges.


After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered submitted without oral argument.

Appellees Larry and Janice Barnes ("debtors") filed a Chapter 13 Bankruptcy Petition on June 9, 1992. In their Proposed Plan, debtors sought to bifurcate the claim of Appellant Knutson Mortgage Corporation ("Knutson"), the holder of a note secured by a mortgage on the debtors' principal residence, into a secured claim equal to the stipulated fair market value of the residence and an unsecured claim equal to the balance remaining under the note.

Knutson objected to the Proposed Plan, and the Bankruptcy Court for the Western District of Oklahoma denied confirmation of the Plan, following the reasoning of the Fifth Circuit in Nobelman v. American Savings Bank, 968 F.2d 483 (5th Cir. 1992), aff'd, 113 S. Ct. 2106 (1993), and concluding that bifurcation is not permitted. The debtors appealed to the district court, which reversed the ruling of the bankruptcy court, holding that Eastland Mortgage Co. v. Hart (In re Hart), 923 F.2d 1410 (10th Cir. 1991) (per curiam), permitted such bifurcation. Knutson timely appealed.

We abated this appeal pending the Supreme Court's decision in Nobelman v. American Savings Bank, 113 S. Ct. 2106 (1993), involving the same issue--i.e. the permissibility of bifurcating an undersecured mortgage under sections 506(a) and 1322(b) (2) of the Bankruptcy Code into a secured claim equal to the fair market value of the residence and an unsecured claim equal to the balance owing to the mortgagee. A unanimous court in Nobelman held that 11 U.S.C. 1322(b) (2) "prohibits a Chapter 13 debtor from relying on section 506(a) to reduce an undersecured homestead mortgage to the fair market value of the mortgaged residence." Id. at 2108.

The parties have filed briefs stating their views with respect to the holding in Nobelman. As we have held in Independence One Mortgage Corp. v. Wicks (In re Wicks), No. 92-6134, --- F.2d --- (10th Cir., Sept. 28, 1993), Nobelman applies to cases pending on appeal at the time of its issuance and therefore applies to this case. Nobelman effectively forecloses the debtors' bifurcation argument, as the debtors have conceded in their supplemental brief.

For the foregoing reasons, the order of the district court is REVERSED and the case is REMANDED for proceedings consistent herewith.


This order and judgment has no precedential value and shall not be cited, or used by any court within the Tenth Circuit, except for purposes of establishing the doctrines of the law of the case, res judicata, or collateral estoppel. 10th Cir. R. 36.3