Case ID: br_194/html/0544-01.html
Source: Caselaw Access Project
Author: {"author": "ALBERT S. DABROWSKI, Bankruptcy Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re Emad S. AHMED, Judith G. Ahmed, Debtors.
    Bankruptcy No. 93-53790.
    United States Bankruptcy Court, D. Connecticut.
    April 15, 1996.
    Frederick A. Dlugokecki, Naugatuck, Connecticut, for Debtors.
    William J. Ward, Naugatuck, Connecticut, for Respondent G & L Excavating, Inc.
   MEMORANDUM OF DECISION ON MOTION TO AVOID JUDICIAL LIEN

ALBERT S. DABROWSKI, Bankruptcy Judge.

This Memorandum of Decision is a companion to a Memorandum of Decision and Order on Objection to Claims of Exemption (hereafter referred to as the “Exemption Opinion”) also entered this day. In the Exemption Opinion this Court determined the extent of the Debtors’ entitlement to a homestead exemption pursuant to C.G.S. § 52-352b(t). This Memorandum of Decision undertakes the analytically distinct exercise of determining whether the Debtors may avoid the lien of a creditor whose claim arose prior to October 1,1993.

I. JURISDICTION

The United States District Court for the District of Connecticut has jurisdiction over the instant matter by virtue of 28 U.S.C. § 1334(b); and this Court derives its authority to hear and determine the matter on reference from the District Court pursuant to 28 U.S.C. § 157(a), (b)(1). This is a “core proceeding” pursuant to 28 U.S.C. § 157(b)(2)(0), inter alia.

II. BACKGROUND

On November 29, 1993, the Debtors commenced the instant bankruptcy case through the filing in this Court of a joint voluntary petition pursuant to 11 U.S.C. § 302(a). Relief on said petition was simultaneously ordered by this Court. Details concerning the Debtors’ Schedules and Statements are set out at length in Section II of the Exemption Opinion and all facts set out in that Opinion are incorporated herein.

On July 29, 1994, the Debtors filed their “Motion to Avoid Judicial Lien Impairing Exemption”. The Motion seeks to avoid a lien purportedly held by G & L Excavating, Inc. (hereafter referred to as the “Respondent”) on the Residence. In support thereof the Motion alleges the following facts, which are not contested in the context of this matter. On July 9, 1993, the Respondent obtained a prejudgment attachment (hereafter referred to as the “Attachment”) on the Residence in the amount of $15,000.00 through the recording of a duly authorized Certificate of Attachment. The value of the Residence is $180,000.00, and is encumbered by Respondent’s $15,000.00 attachment and two prior mortgages in favor of Naugatuck Savings Bank which secure claims totalling $137,-819.12.

As noted in the Exemption Opinion, the Debtors have most recently claimed an exemption in the Residence pursuant to C.G.S. § 52-352b(t) in the amount of $42,180.88— their perceived equity in the Residence over and above the mortgage interests of Nauga-tuck Savings Bank. The Debtors claim that the Attachment is a judicial lien that impairs their claimed homestead exemption in the Residence, and consequently, they are entitled to avoid the fixing of that lien pursuant to Section 522(f) of the Bankruptcy Code. The Respondent argues that avoidance of its lien is not available to the Debtors because, inter alia, they are not entitled to claim a homestead exemption pursuant to C.G.S. § 52-352b(t) as against its claim.

III.DISCUSSION

‘ A debtor’s ability to avoid the fixing of a judicial lien springs from the provisions of Section 522(f) of the Bankruptcy Code, which provided, in relevant part, that

(f) Notwithstanding any waiver of exemptions, the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is—
(1) a judicial lien....

11 U.S.C. § 522(f) (1993) (emphasis supplied).

It is undisputed that the Attachment is a “judicial lien” within the meaning of Section 522(f). See 11 U.S.C. § 101(36). It is also undisputed that if the Debtors “would have been entitled” to an exemption under C.G.S. § 52-352b(t), then the Attachment impairs that exemption entitlement. Thus the pivotal question posed in this Section 522(f) matter is whether the Debtors “would have been entitled” to an exemption under C.G.S. § 52-352b(t).

The Court is convinced that this question is controlled and ultimately resolved by its decision sustaining the Respondent’s objection to exemption as set out in the Exemption Opinion. Nonetheless, the Court provides this Memorandum of Decision to address directly the implications of Owen v. Owen, 500 U.S. 305, 111 S.Ct. 1833, 114 L.Ed.2d 350 (1991), an authority which arguably is germane only in a lien avoidance context. Then Chief Judge Robert L. Krechevsky’s opinion in Morzella noted in a footnote that the pure exemption objection issues involved in that case did not “involve any of the issues addressed by the Supreme Court in Owen_” In re Morzella, 111 B.R. 485, 489 n. 4 (Bankr.D.Conn.1994). While Chief Judge Alan H.W. Shiff discussed Owen at length in his opinion in In re Duda, 182 B.R. 662, 670-71 (Bankr.D.Conn.1995), he did so only to dispose of the debtors’ misplaced argument that Owen somehow compelled the provision of the homestead exemption, even in the absence of a hen avoidance contest. Id.

Owen is a pure hen avoidance case decided under Section 522(f). A shallow reading of Owen could lead one to conclude that hens can be avoided even when the subject exemption claim has been denied as against the hen creditor’s claim, as in the instant case. In fact, when one follows Owen s analytical process precisely, it becomes clear that hen avoidance is inappropriate 'under the facts of the instant case. In this regard, this Court cites with favor the well-reasoned discussion contained within Chief Judge Shiffs Opinion in Duda, to wit:

... Owen directed bankruptcy courts considering hen avoidance proceedings to “ask first whether avoiding the hen would entitle the debtor to an exemption, and if it would, then avoid and recover the hen.” [Owen, 500 U.S.] at 312-13, 111 S.Ct. at 1837.
* * * * * *
... The first step under the Owen analysis is to determine whether, ignoring the particular hen in question, the debtor is entitled to an exemption, [citations omitted]. In Owen, had the judicial hen in question never existed, the debtor would have been entitled to claim the full homestead exemption. An attribute of the hen, i.e. that it attached before the property acquired homestead status, was the basis for the creditor’s argument that it was not subject to avoidance.
By contrast, in these cases are no circumstances under which the debtors would have been entitled to claim a $75,000 homestead exemption because state law defined the exemption so that it was not available to these debtors on the petition date as against pre-effective date claims. Because the Act is by its terms inapplicable to unsecured claims that predate its effective date, the unavailability of the exemption does not depend upon the existence of a particular judicial hen. [citation omitted].

Duda, 182 B.R. at 670-71.

Although the foregoing analysis of Chief Judge Shiff was expheitly addressed to the impact of the claimed homestead exemption upon the unsecured claims that were at issue in the cases before him, the analysis is equally dispositive as to the secured claim at issue in the instant case. Simply put, in the present case, Owen’s pivotal question — “whether avoiding the hen would entitle the debtor to an exemption” — must be answered in the negative. Avoidance of the Attachment would not entitle the Debtors to a homestead exemption under C.G.S. § 52-352b(t), since even if the Attachment were avoided, the homestead exemption is unavailable as against creditor claims, such as the Respondent’s, which arose prior to October 1, 1993, as this and other courts of Connecticut jurisdiction have unanimously held.

IV. CONCLUSION

For the foregoing reasons, the Debtors’ Motion to Avoid Lien Impairing Exemption shall be DENIED. 
      
      . Familiarity with the Exemption Opinion is assumed; and all defined terms therein cany the same meaning if and when used in this Memorandum of Decision.
     
      
      . Given the nature of the Court’s disposition of the instant matter, it is unnecessary for the Court to address the Respondent’s alternative arguments, to wit: (1) that the Debtors were estopped or otherwise barred from changing their exemption scheme election from federal to State; and (2) that the Debtors are barred from bringing the instant motion by virtue of this Court’s denial for failure to prosecute of a previous lien avoidance motion premised upon a claim of homestead exemption under the federal exemption scheme.