                                                                                                                           Opinions of the United
1996 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-29-1996

In Re: Coffin
Precedential or Non-Precedential:

Docket 96-1007




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Recommended Citation
"In Re: Coffin" (1996). 1996 Decisions. Paper 124.
http://digitalcommons.law.villanova.edu/thirdcircuit_1996/124


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                  UNITED STATES COURT OF APPEALS
                      FOR THE THIRD CIRCUIT

                           ____________

                           No. 96-1007
                           ____________

                      IN RE: TRISTAM COFFIN,

                                                   Appellant,

                               vs.

                  MALVERN FEDERAL SAVINGS BANK


                           ____________

           Appeal from the United States District Court
             for the Eastern District of Pennsylvania
                        (D.C. 95-cv-03143)
                           ____________

                       Argued: June 6, 1996

         Before: BECKER and MANSMANN, Circuit Judges, and
SCHWARZER, District Judge

                      (Filed: July 29, 1996)




                               JEFFREY S. WILSON, ESQUIRE
                               (ARGUED)
                               BENSON ZION, ESQUIRE
                               Benson Zion and Associates
                               919 Conestoga Road
                               Building Three, Suite 214
                               Rosemont, PA 19010

                               Attorney for Tristam Coffin,
                               Appellant

                               MARK D. PHILLIPS, ESQUIRE
                               (ARGUED)
                               Malvern Federal Savings Bank
                               24 North New Street
                               West Chester, PA 19380
                               Attorney for Malvern Federal
                               Savings
                               Bank, Appellee
                  _____________________________

                       OPINION OF THE COURT
                  ______________________________


SCHWARZER, District Judge.

          This is an appeal by Tristram Coffin, the debtor, from an order
of the district court
affirming an order of the bankruptcy court. The bankruptcy court's order
denied the debtor's
motion styled as one "to reconsider lien avoidance." Because we and the
district court lack
jurisdiction of this appeal, we remand with directions.
         Coffin was the owner of three parcels of real property on which
Malvern Federal
Savings Bank held mortgages to secure loans it had made to Coffin. When
Coffin fell in arrears,
the Bank foreclosed on one of the mortgages. Coffin then filed a
voluntary petition in the
bankruptcy court under Chapter 13 of the Bankruptcy Code. The Bank filed
a proof of claim
which set forth the arrearages on the three mortgages. Coffin then filed
an Amended Chapter 13
Plan which provided for some of the arrearages. Without objection from
the Bank, the bankruptcy
court on October 19, 1993, confirmed the Plan.
         Nine months later, on June 23, 1994, the Bank moved "for an Order
granting relief
from the automatic stay provided by 11 U.S.C. Section 362 in order that
said creditor may pursue
its state foreclosure remedies to enforce its lien against real property
of the debtor . . . ." On
September 1, 1994, following a hearing, the court (1) directed Coffin to
make payments to the
Bank in addition to those made under the Plan; (2) directed Coffin to file
an amended Plan to
provide adequately for the Bank's secured claim; and (3) ordered the
automatic stay to remain in
place pending further hearing on the motion. In opposition to the Bank's
motion, Coffin then filed
his motion to dismiss as res judicata the Bank's motion for relief from
the automatic stay.
Following a hearing held on December 1, 1994, the bankruptcy court issued
an opinion and order,
denying the Bank's motion for relief from automatic stay and granting
Coffin's motion to dismiss
to that extent. The court found that
         [the Bank] is bound by the Debtor's Confirmed Plan with respect
to
         the distribution to it provided thereunder and therefore relief
from
         stay is not appropriate, there being no default under the Plan.
(Op.
         7.)

The court then added:

         However, we further find that [the Bank's] lien on the Gay Street
         Property is not discharged by this Chapter 13 proceeding and that
         upon lifting of the stay at the conclusion of this case or
sooner, [the
         Bank] will be free to exercise its state law remedies under its
         mortgage and applicable law. (Ibid.)

         The Bank did not appeal from the order denying relief from the
automatic stay.
Coffin, however, although the prevailing party on the motion (the court
having granted his
dismissal motion and having entered no order adverse to him), filed a
motion styled as one "to
reconsider lien avoidance." The court, describing this motion as "framed
in a somewhat cryptic
manner since it suggests that a motion for lien avoidance was the subject
of the motions that are at
the heart of this request for reconsideration" interpreted the motion as
"challeng[ing] this Court's
legal conclusion that the Bank's liens . . . survive the bankruptcy
discharge . . . ." (Op. 1. n.1) The
motion was denied. Coffin then appealed to the district court which,
stating "the issue in this
appeal . . . [to] concern[] whether certain liens survive a bankruptcy
proceeding," (Op.1.) affirmed.
         It is not necessary for present purposes to examine the
bankruptcy court's reasoning
that led to its "finding" that the Bank's mortgage lien had not been
discharged by the confirmed
Chapter 13 Plan. The threshold question is whether that "finding," and,
in turn, the order denying
reconsideration and the district court's order affirming it, constitute
appealable orders. 28 U.S.C.
   158(a)(1), 1291, 1292(a).
         While the analysis takes us outside of conventional appealable
order jurisprudence,
it is nonetheless firmly grounded on principles of justiciability and
ripeness. The bankruptcy
court's "finding"--that the Bank's lien was not discharged and that at the
end of the case it would
be free to exercise its state law remedies under its mortgage--was an
advisory opinion. Its order
denying Coffin's "cryptic" motion for reconsideration decided no actual
controversy between the
parties: Coffin had not moved for an order of lien avoidance (it is
doubtful that he could have done
so in any event, see 11 U.S.C.   522(f)); the issue of whether the lien
survived was not before the
court for adjudication; and the "finding" it made did not determine
whether the Bank would
succeed in a subsequent foreclosure action in state court. If the lien
survived, it survived by reason
of the prior proceedings, including the confirmed Plan, not because of the
court's "finding." Were
the Bank to go to state court to foreclose on its mortgage, its right to
do so would have to be
determined by that court in light of its interpretation of the terms of
the Confirmed Plan, as well as
the terms of the mortgage, applicable state law and, of course, that
court's findings of fact. To put
it differently, had the bankruptcy court made a "finding" that the Bank's
lien did not survive, the
state court in the foreclosure proceeding would clearly not be precluded
from ordering a
foreclosure, if under applicable law the lien remained enforceable; such a
finding, not being
necessary to the decision, would be mere dictum and not give rise to res
judicata or collateral
estoppel.
         "The oldest and most consistent thread in the federal law of
justiciability is that
federal courts will not give advisory opinions." 13 Wright, Miller,
Cooper, Federal Practice and
Procedure,   3529.1, p. 293 (2d ed. 1984). We have addressed the question
when a justiciable
controversy exists--although under the rubric of ripeness--in the context
of suits for declaratory
relief. Although the parties did not invoke the declaratory relief
statute, 28 U.S.C.   2201, the case
before us in its present posture is somewhat analogous to one seeking a
declaration of rights. In
Step-Saver Data Systems, Inc. v. Wyse Technology, 912 F.2d 643 (3rd Cir.
1990), plaintiff sought
a declaration that its suppliers are responsible for any liability that
plaintiff may have to its
customers as a result of the pending customers' suits. The district court
dismissed the complaint
and this court affirmed. It defined certain basic principles guiding the
determination whether an
actual controversy exists, "[t]he most important of . . . [which] are the
adversity of the interest of
the parties, the conclusiveness of the judicial judgment and the practical
help, or utility of that
judgment." Id. at 647. Here, while there is no question of the adversity
of the interest of the
parties, conclusiveness of judicial judgment and any utility of that
judgment are totally lacking.
The determination of whether the Bank's lien is enforceable will
eventually have to be made by
another court in foreclosure proceedings and the bankruptcy court's advice
will have no legal
effect. See Id. at 649 n.9.
         That the Bank may have asked the bankruptcy court to interpret
the Plan with
respect to the question of the survival of its lien, and that the parties
advanced opposing positions,
does not alter the conclusion that what the court said in this respect was
an advisory opinion. That
seems clear under Step-Saver, where plaintiff asked for a declaration of
non-liability but the
complaint was dismissed for lack of a ripe controversy. Nor does it
matter that foreclosure may be
imminent since the fact remains that the "finding" of the bankruptcy court
is an advisory opinion
that will not have a judicial effect on the outcome of the future
foreclosure proceedings.
         Both parties urge us to take jurisdiction to resolve matters that
would help them
move on, but jurisdiction cannot be conferred by consent. While we are
sympathetic to their
plight, it is of their own making, resulting from the parties' lack of
care and attention given the
Chapter 13 proceedings, including the formulation of the Plan. The
present problem could and
should have been anticipated by appropriate provision in the Plan. The
bankruptcy court retains
jurisdiction of the case, however, and it is the proper forum to resolve
post-confirmation problems
in appropriate proceedings. See 11 U.S.C.     1328, 1329. Presumably the
court will now grant a
discharge, close the case, and thereby free the Bank to test the
continuing validity of its lien by
bringing a foreclosure action.
         Accordingly, we remand the matter to the district court and
direct it to remand it to
the bankruptcy court. That court should enter an order vacating so much
of its opinions as purports
to find that the Bank's lien survived.
