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Kosttlan v. Schoenmann (In re Kostlan)

Kapnick v. Schoenmann (in re Kostlan), AP No. 13-1506 (9th Cir. BAP, Aug, 4, 2014) (unpublished).
The order of the bankruptcy court is VACATED, and the matter is REMANDED for the bankruptcy court to make a co-liability determination as a required element under 11 USC 502 (e) (1) (B).
Procedural context:
The appellants appeal from an order of the bankruptcy court, which disallowed their claim.
The appellants guaranteed payment of a mortgage loan, which was secured by a deed of trust, taken out by the debtor. The appellants' obligation to the lender was independent of the obligation of the debtor to the lender. Subsequently, the debtor executed a guaranty reimbursement agreement with the appellants, by which the debtor promised to reimburse the appellants for any and all expenses or payments incurred by them in connection with the mortgage loan. The debtor promised to remain so obligated for as long as the appellants remained liable under their guaranty to the lender, and also gave the appellants a junior deed of trust. The debtor defaulted. The lender had not made a demand on the appellants. Subsequent to the debtor filing for bankruptcy, the lender filed a proof of claim based on the mortgage loan and the associated deed of trust. Subsequently, the appellants filed a proof of claim, asserting a secured claim in an unknown amount based on the reimbursement agreement and the junior deed of trust. The trustee abandoned the property subject to the mortgage. The lender's claim was disallowed. The trustee's motion to have the appellants claim disallowed was granted by the bankruptcy court.
Dunn, Jury, and Kurtz.

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