The opinion
The court incorporates by reference in this paragraph and adopts as the findings and orders
of this court the document set forth below. This document was signed electronically at the
time and date indicated, which may be materially different from its entry on the record.
Russ Kendig
Sarees United States Bankruptcy Judge
Dated: 04:09 PM May 31, 2019
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
IN RE: ) CHAPTER 13
)
ELAINE M. MILLS, ) CASE NO. 18-42365
)
Debtor. ) JUDGE RUSS KENDIG
)
)
)
) MEMORANDUM OF OPINION
) (NOT FOR PUBLICATION)
)
)
)
)
Elaine Mills (‘Debtor’) filed a Chapter 13 bankruptcy petition on November 23, 2018.
She filed her Chapter 13 plan on that same date. U.S. Bank N.A. as trustee for Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificate Trust 2002-1 (‘Creditor’) filed
an Amended Objection to Confirmation of Plan on April 5, 2019, asserting that Debtor’
manufactured home was in fact her primary residence, and thus the cramdown included within
the plan was not permitted. A confirmation hearing was held on April 11, 2019, and the matter
was taken under advisement. The parties were given an additional week to provide supplemental
briefs if they so desired.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b) and the
general order of reference entered in this district on July 16, 1984. This is a core proceeding
under 28 U.S.C. §§ 157(b)(2), and the court has authority to issue final entries.
This opinion is not intended for publication or citation. The availability of this opinion,
in electronic or printed form, is not the result of a direct submission by the Court.
FACTS
Creditor holds the first mortgage on Debtor’s residence, a manufactured home located at
7493 Hillcrest Drive, Andover, OH 44003. Three months before the commencement of this
case, USB was granted summary judgment in the Ashtabula County Court of Common Pleas
(case no. 2017 CV 00606). Debtor’s Chapter 13 plan, filed on November 23, 2018, attempts to
cram down the claim to its secured value of $3,064.93, at an interest rate of 0%. Creditor filed
Proof of Claim #7, on February 1, 2019, which listed an arrearage of $23,969.68 and a balance of
$77,083.80 on the mortgage. Creditor filed an Amended Objection to Confirmation on April 5,
2019, arguing that the home meets the requirements to consider it real estate and Debtor’s
primary residence, thus making the claim ineligible to be modified.
DISCUSSION
The Bankruptcy Code provides that a chapter 13 plan may modify the rights of holders of
secured claims, unless such claim is “secured only by a security interest in real property that is
the debtor’s principal residence.” 11 U.S.C. § 1322(b)(2). The Code does not, however,
provide a definition of the key phrase in this provision: real property. See 11 U.S.C. § 101. In
order to assess whether and when a manufactured home qualifies as real property, the court must
look instead to state law.
In Ohio, the category of “real property” generally does not include manufactured or
mobile homes, with narrow exceptions. O.R.C. Ann. § 5701.02(A). In order for a
manufactured home to be considered real property, it must (1) be “affixed to a permanent
foundation . . . and [be] located on land owned by the owner of the home,” and (2) the certificate
of title must have “been inactivated by the clerk of court of common pleas that issued it.”
O.R.C. Ann. § 5701.02(B)(2). The Sixth Circuit has held that when either of these requirements
is not met, a manufactured home will not be considered real property under Ohio law, and will
thus be subject to modification. See, e.g., Reinhardt v. Vanderbilt Morg. & Fin., Inc. (In re
Reinhardt), 563 F.3d 558 (6th Cir. 2009). More to the point, the Sixth Circuit has definitively
held that a debtor’s “failure to surrender the title to their mobile home” is “dispositive” in the
determination of the property’s status. Wallingford v. Green Tree Servicing, LLC (In re
Wallingford), 524 Fed. Appx. 205, 209 (6th Cir. 2013).
2
Both Creditor and Debtor in this case refer to the explicit language used in the Judgment
Entry from the Ashtabula County Court of Common Pleas as support for their positions.
Creditor emphasizes that the state court held that it had the first and best lien on the
manufactured home, and that the home was indeed affixed to the subject property; however,
notably missing from the judgment is any definitive determination that the home had been
converted to real property. Debtor points to this lack of a specific finding, and also underscores
that the judgment does explicitly make note of the fact that the certificate of title had not yet been
surrendered. In Rem Judgment Entry at 3, U.S. Bank, N.A. as Trustee for Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificate 2002-1 v. Mills, et al., 2017 CV
00606.
This court finds Debtor’s point well-taken and finds that the manufactured home in
question cannot thus be considered real property, as it does not meet the state law requirements.
The tile was not surrendered and the home remains personal property. The cramdown proposed
in the Chapter 13 plan is therefore permissible under § 1322(b)(2).1
Creditor raises the concern that the instant dispute would be more appropriately handled
through an adversary proceeding, and in fact worries that not doing so “seems procedurally
improper.” Creditor refers for support to Bankruptcy Rule 7001, which establishes one type of
adversary proceeding as “a proceeding to determine the validity, priority or extent of a lien or
other interest in a property, but not a proceeding under Rule 3012 or Rule 4003(d).” Bankr. R.
7001(2) (emphasis added). This matter falls squarely under Rule 3012, which addresses the
determination of the amount of a claim. The disputed cramdown arises from Section 3.2 of the
Chapter 13 Form Plan, the language of which states that “[t]he debtor(s) request that the court
determine the value of the secured claims listed below.” It is not procedurally improper to
address the plan’s treatment of secured claims through the confirmation hearing format, as that is
clearly how the Rules, Code and Plan intended such questions to be treated.
The court will overrule the objection by separate order.
# # #
Service List:
Elaine M. Mills
P.O. Box 133
Williamsfield, OH 44093
Robert L. Herman
P.O. Box 21
1 The court need not address Creditor’s Rooker-Feldman argument, as there is no collateral attack being attempted
in this instance: the Court of Common Pleas did not make a determination one way or another regarding the status of
the subject property, and so this court’s determination that the manufactured home does not constitute real property
is not a rejection of any state court judgment.
3
Kinsman, OH 44428
Glenn E. Algie
3962 Red Bank Road
Cincinnati, OH 45227
Michael A. Gallo
5048 Belmont Avenue
Youngstown, OH 44505
4