Will A Surrender in Bankruptcy
Terminate Defenses in Florida
Foreclosure?
By Robert C. Meyer
http://robertcmeyer.com/
F
ocusing
exclusively
upon
Florida bankruptcy case law, a
Chapter 7 bankruptcy debtor’s
“Statement of Intention” 1 may have
important consequences in a state
foreclosure. Rulings slowly evolved
to deliver the present majority opinion
which concludes that the bankruptcy
surrender – through the “Statement
of Intention” – requires the debtor to
cease defending a state foreclosure
proceeding.
Because of this
jurisprudential evolution, bankruptcy
filings must be seriously reviewed
by state court attorneys handling
foreclosure defenses as the debtor’s
representation in the Bankruptcy Court
may not only trump the foreclosure
defenses; but, may subject foreclosure
defense counsel to contempt hearings
before the Bankruptcy Court. And, not
surprisingly, a recent decision in the
Southern District of Florida upended
this majority position by showing a
different perspective in what appears
to be to the debtor’s advantage.
Surrender
The original concept arises from
the term “surrender.” Because this term
is not defined in the Bankruptcy Code,
statutory analysis is required. The
Middle District of Florida Bankruptcy
Court’s Judge Jennemann succinctly
stated in Plummer, “Where the words
in the statute are not defined terms,
the court should look to their ordinary
dictionary-defined meaning. Black’s
Law Dictionary defines ‘surrender’
as ‘[t]he act of yielding to another’s
power or control’ or ‘[t]he giving up of
a right or claim.’”2 Judge Jennemann
concluded her statutory analysis of
the term “surrender” by stating that
“identical words used in different parts
of the same act are intended to have the
same meaning.”3 From such, Judge
Jenneman discovered a Fourth Circuit
opinion identifying the term “surrender”
to mean “the relinquishment of all rights
National Association of Consumer Bankruptcy Attorneys
Spring 2016
in property, including the possessory
right, even if such relinquishment does
not always require immediate physical
delivery of the property to another.”4
Previously, the Middle District
of Florida Bankruptcy Court’s Judge
Briskman observed in Cornejo that, “
. . . the debtor relinquishes its interest
in the collateral when an intention
to surrender is communicated and
the collateral becomes part of the
bankruptcy estate.”5 The ensuing
conflict reviewed the issue of what duty
is imposed upon the debtor when the
surrender occurs.
Tender is Not Surrender
Although it is understood that
“surrender” identifies the debtor’s intent
to relinquish interest in the property,
creditors pushed further and argued
that surrender requires more: either
to tender the property to the creditor
or to cease defending the foreclosure
lawsuits regarding the same property.
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