In this appeal, the State Bank of Florence (“Bank”) appeals an order of the bankruptcy court denying its motion for relief from stay to continue a foreclosure action against Richard K. Miller (“Debtor”), and denying its objection to confirmation of the Debtor’s chapter 13 plan.
The issues presented by this appeal are (1) whether the bankruptcy court erred when it undertook a determination of whether the Bank holds a claim against the Debtor despite the Debtor’s lack of written objection to the Bank’s proof of claim; (2) whether the bankruptcy court erred in determining that Michigan, not Wisconsin, law applies to the dispute between the Debtor and Bank; (3) whether the bankruptcy court erred when it determined that the Bank’s bid in a Michigan foreclosure extinguished the debt owed by the Debtor to the Bank and prevents the Bank from continuing a judicial foreclosure action in Wisconsin; (4) whether the bankruptcy court abused its discretion when it denied the Bank relief from stay; (5) whether the bankruptcy court erred when it determined that the Bank lacks standing to object to confirmation of the Debtor’s plan; and (6) whether the bankruptcy court deprived the Bank of its due process rights under the Fifth Amendment to the United States Constitution.
The Bank made a unilateral mistake by bidding the entire amount owed to it by the Debtor at the Michigan foreclosure sale. It is required by Michigan law to pay, or credit, the Debtor the full amount of its bid. The Bank has conceded that the amount bid was the entire amount owed, and it has, therefore, been paid in full. Pursuant to Bankruptcy Code Section 558, the Debtor is entitled to offset the Michigan sale credit bid of $413,560.27 against the Wisconsin judgment of $407,914.04, thereby satisfying the Wisconsin judgment. As such, the Debtor no longer owes the Bank any money, and the bankruptcy court did not abuse its discretion in denying the Bank relief from stay to seek to set aside the Michigan foreclosure sale and to proceed with executing on its Wisconsin foreclosure judgment. In addition, while the bankruptcy court technically erred in overruling the Bank’s objection to confirmation of the Debtor’s Amended Plan for lack of standing, such error is harmless because consideration of the merits of the objection would also result in overruling the objection as the Debtor is entitled to effect a setoff under his proposed plan. Therefore, the bankruptcy court did not err in overruling the Bank’s objection to confirmation of the Debtor’s Amended Plan.
Affirmed.
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