Bank of America, N.a. v. Caulkett (575 U.S. 790)
U.S. Supreme Court · decided June 1, 2015 · Supreme Court Database (Spaeth)
- Citation
- 575 U.S. 790 · 135 S. Ct. 1995
- Decided
- June 1, 2015
- Term
- October Term 2014
- Vote
- 9–0
- Majority author
- Justice Thomas
- Issue area
- Economic Activity
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Justice THOMAS delivered the opinion of the Court. Section 506(d) of the Bankruptcy Code allows a debtor to void a lien on his property “[t]o the extent that [the] lien secures a claim against the debtor that is not an allowed secured claim.” 11 U.S.C. § 506(d). These consolidated cases present the question whether a debtor in a Chapter 7 bankruptcy proceeding may void a junior mortgage under § 506(d) when the debt owed on a senior mortgage exceeds the present value of the property. We hold that a debtor may not, and we therefore reverse the judgments of the Court of Appeals. I The facts in these consolidated cases áre largely the same. The debtors, respondents David Caulkett and Edelmiro Toledo-Cardona, each have two mortgage liens on their respective houses. Petitioner Bank of America (Bank) holds the junior mortgage lien — i.e., the mortgage lien subordinate to the other mortgage lien — on each home. The amount owed on each debtor’s senior mortgage lien is greater than each home’s current market value. The Bank’s junior mortgage liens are thus wholly underwater: because each home is worth less than the amount the debtor owes on the senior mortgage, the Bank would receive nothing if the properties were sold today. In 2013, the debtors each filed for Chapter 7 bankruptcy. In their respective bankruptcy proceedings, they moved to “strip off” — or void- — the junior mortgage…
Excerpt of a 12,127-character opinion. The full text and citation network load in the interactive viewer above.